IP Licensing and Competition Law – Divergence Between the European Union (EU) and United States
October 3, 2008
This article highlights recent differences in the way the licensing of intellectual property (IP) rights has been handled by the competition law (or antitrust) authorities on both sides of the Atlantic. There is an inherent tension between IP law and competition law. While both laws have similar policy objectives of encouraging technical development and consumer welfare, they approach these objectives differently. IP law grants a limited monopoly for new inventions. IP law thus encourages innovation by allowing owners to restrict the distribution of those technologies once they are invented. Competition law, on the other hand, prohibits anticompetitive agreements and abusive monopoly behavior. Accordingly, competition law seeks to ensure that existing technologies are accessible to competitors and not unfairly restrained by one or a few companies. In this way, competition law encourages innovation within existing technologies and existing markets. In sum, IP law promotes innovation by allowing restrictions on the sale of new technologies while competition law promotes innovation by prohibiting and preventing market restrictions. EU and U.S. regulators both address this tension when confronted with competition problems caused by the use and abuse of IP rights. While antitrust authorities in both jurisdictions often resolve this tension in a similar way, recent case law suggests that the EU tends to favor the enforcement of antitrust laws whereas the United States leans towards protecting IP rights.
Please click here to view the entire White Paper in Adobe PDF format.
(Adobe Acrobat Reader required, available for free download here)
