Transcript Presentation title - Competition Law Association

IP and the role of National
Competition Authorities:
A perspective from the OFT
Amelia Fletcher
Chief Economist
Office of Fair Trading
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Introduction
● Some views on the IP/competition law interface,
and hot issues
● The role of the OFT
● The OFT’s work to date with an IP dimension
● The role of NCAs such as the OFT with respect to
IP
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The treatment of IP by competition
authorities: some traditional views?
“I might just as well use this patent as wallpaper if
competition law won’t let me enforce it”
An anonymous patentee (attrib)
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From...worlds in collision...
● “Intellectual Property and Competition Law: When
Worlds Collide”
- Paper by Donald M Cameron, 1997 Annual
Canadian Bar Association Competition Law
Conference
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...to....happy marriage?
● “It is of course a longstanding topic of debate in economic and legal circles how to marry the
innovation bride and the competition groom. In the past some have argued that such a marriage will
unavoidably lead to divorce because of conflicting aims of IPR law and competition law. But I think
that by now most will agree that for a dynamic and prosperous society we need both innovation and
competition. Contrary to what some might think, competition is a necessary stimulus for
innovation. IPR law and competition law have a complementary role to play in promoting
innovation to the benefit of consumers. I therefore firmly belief in this marriage and, like in all
good marriages, the real question is how to achieve a good balance between both policies.”
-
Former EU Commissioner of Competition Mario Monti speaking in Paris, on 16 January 2004
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Some hot issues in the IP and
competition law interface
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Some hot issues in the IP and
competition law interface
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Where the does the OFT come in?
● Mission is to make markets work well for consumers
● Work consists of:
-
Enforcing competition law
•
-
Enforces the Competition Act 1998 (CA98) (and where there is an
effect on trade between EU Member States, Articles 101 and 102 of
the Treaty on the Functioning of the European Union)
Merger control
Analysing markets
Competition advocacy
Enforcing consumer law
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Where does the OFT come in?
● IP is an area of focus for the OFT in its annual
plan:
-
“We also propose to take forward work on intellectual
property rights (IPRs) which, by safeguarding product or
service differentiation and driving innovation, are an essential
part of ensuring strong competition and economic growth.
Competition and consumer policy can be an important
complement to IPRs in driving innovation. Where
appropriate, they can also ensure that IPRs are not
exercised in a manner that acts against the interests of
consumers.”
Page 19 of the 2012-2013 Annual Plan
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OFT activity with an IP and
innovation dimension to date
● No CA98 infringement decisions specifically concerned with the existence or exercise
of IP
● However, a number of OFT Chapter II infringement decisions have related to the
pharmaceutical sector, where IP issues have had to be considered
-
Napp
•
-
Genzyme:
•
-
anti-competitive pricing strategies for pharmaceutical product, post-patent
expiry
margin squeeze with respect to pharmaceutical product
Gaviscon
•
finding withdrawal of Gaviscon Original Liquid with the intention of limiting
pharmacy choice and hindering competition from suppliers of generic
medicines, post-patent expiry (effective patent extension)
● Also an ongoing case under Chapter I, considering allegation of “pay for delay” in the
pharmaceutical sector
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OFT activity with an IP and
innovation dimension to date
● “At the Races”
- collective selling of certain media rights
- infringement decision annulled by the Competition
Appeal Tribunal
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OFT activity with an IP and
innovation dimension to date
● And note, where the OFT has not taken action
under CA98:
- For example, BSI (2003)
•
The British Standards Institution granted an online licence to
Barbour Index plc following an investigation by the OFT into an
alleged abuse of a dominant position.
•
Barbour Index had alleged that BSI was breaching the Competition
Act by refusing to grant it a licence to supply BSI standards online.
•
The OFT closed its case without reaching any conclusion on
whether BSI holds a dominant position or has abused any such
position.
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OFT activity with an IP and
innovation dimension to date
● OFT advocacy work:
-
Commercial Use of Public Information market study (2006)
•
Found that more competition in public sector information
could benefit the UK economy by around £1 billion a year.
•
Made recommendations, including that public sector
information holders should:
– make as much public sector information available as
possible for commercial use/re-use
– ensure that businesses have access to public sector
information at the earliest point that it is useful to them
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OFT activity with an IP and
innovation dimension to date
● OFT advocacy work:
-
Pharmaceutical Price Regulation Scheme (PPRS) market study
(2007)
•
•
Recommended that the current 'profit cap and price cut'
scheme should be replaced with a patient focused value
based pricing scheme
– in which the prices the NHS pays for medicines reflect
the therapeutic benefits they bring to patients.
This would enable the NHS to obtain greater value for
money from its existing drug spend and furthermore,
encourage innovation
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OFT activity with an IP and
innovation dimension to date
● Considerable work on mergers…for example:
-
Princes/Premier (clearance – involved branded, own-label
canned foods, divestments of the Fray Bentos brand)
SUP Amisco/Prozone (clearance – pace of dynamic innovation
overcoming any concern about concentration)
GSK/Pfizer (clearance – though key overlaps with respect to
innovation rather than product)
Project Kangaroo (referred by OFT to CC – blocked – video on
demand (VOD) joint venture)
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OFT activity with an IP and
innovation dimension to date
● Analysis of mergers in nascent and/or innovative sectors
has tended to trade off:
-
the likelihood of new entry into a new, fast-moving sector....
against the risk that the merger may ‘tip’ the market one way or
the other
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Striking the right balance
● It is well known that holding an IP right does not confer immunity from
competition law intervention
● However OFT is equally alert to the need for caution when considering
competition interventions dealing with IP
-
Do not wish to undermine incentives for innovation
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Striking the right balance
● Focus on removing anti-competitive obstacles to innovation
-
Focus on dynamic competition, rather than static competition
•
Consider in particular innovation markets
● Particular interest in ensuring that incumbents do not prevent new business
models from developing
-
What matters is the aggregate amount of inventive activity, not the
identity of individual innovators
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IP is global
● National competition authorities such as the OFT need to ensure that they are
well placed when considering IP cases, in terms of being able to obtain
evidence and to impose effective remedies
● Anti-competitive pan-national IP strategies therefore tend be better addressed
by pan-national enforcement
● And note provisions on case allocation in ECN notice on co-operation in the
network of competition authorities
-
Where agreement or conduct affects more than three member states,
then European Commission particularly well placed to deal
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IP is global
● So…is a National Competition Authority such as the OFT
well placed to deal with issues in a global “patent war”?
● Or better placed to deal with IP and competition issues
having a particular focus on, or centre of gravity in, the UK
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Some potential areas of interest...
● These could include:
-
IP and competition questions arising from distribution issues with a UKfocus
Particular interest in issues arising from brands...
•
Note merger decisions, such as Princes/Premier
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Internet retailing and selective distribution
– Consider application of Vertical Agreements Block
Exemption Regulation and guidelines
» For example, issues relating to the on-line pricing of
branded goods
– OFT is attentive to the trade-offs between brand protection
and competition
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Some potential areas of interest
● OFT recognises IP system has built-in safeguards, for example:
-
strict novelty, inventive step, disclosure requirements required for grant
of patent, and
opportunity for counterclaim for revocation in patent litigation
● BUT, competition authorities can have a role in dealing with anti-competitive
means of subverting these safeguards
-
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Consider, for example, improperly obtained IP
•
Compare situation in US anti-trust law with respect to “fraud on the
Patent Office”
•
And note EU cases (AstraZeneca under Article 102 (under appeal,
AG’s opinion on 12 May 2012))
Or “pay for delay” allegations with respect to pharma patents
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Merger control
● Merger control is potentially very important
-
Many mergers are below EU notification thresholds
Focus is on overlaps and prospective effects of merger on competition
Could involve smaller, innovative businesses with IP and technology in
fast-growing markets
•
-
Might also involve transactions involving “Non-Practicing Entities”
•
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Which are therefore below the EU thresholds
Consider impact on innovation
Potential for packages of IP rights to constitute an ‘enterprise’ under UK
merger law?
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Markets work
● OFT can conduct market studies with IP dimension
● Note also the potential effectiveness of suitable market interventions in
domestic markets with an IP dimension...
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Consider for example, section 176 of the Broadcasting Act 1990 (BA90)
•
Requiring certain broadcasters to provide advance information
about their programming to publishers
•
– And provisions allowing reproduction of that information (for
example, Schedule 17 of the BA90)
Arose from an 1985 MMC report (Cmd 9614)
•
...compare Magill....
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Note too, advocacy
● OFT will engage with IP policy makers to
ensure effective consideration of competition
issues in the IP space
-
And vice versa
OFT to engage with the European
Commission on the new Technology
Transfer Block Exemption Regulation
● Ongoing engagement between the IPO and
the OFT
-
OFT welcomes the competition focus of
the Hargreaves report
● IPO and OFT have been in discussions about
working together more effectively
-
will shortly set out how we will do this watch this space!
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So, in conclusion...with IP and
competition, we want to help facilitate:
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Rather than...
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And now...
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