Tuesday, May 11, 2010

Some highlights from the WIPO Symposium on Intellectual Property and Competition Policy

The program has slightly changed because Ricardo Machado Ruiz, Commissioner, Administrative Council for Economic Defense (CADE), Ministry of Justice, Brasilia could not attend (volcanic ash).
Some very subjective, sketchy notes (parts in blue are my forthright adds):

WIPO:
- trying to bring together two communities (ipr experts/competition experts; national competition authorities/national ip offices)
- ipr-competition not antagonistic
- well-balanced ip also very important
- WIPO's mandate to work on the interface ip/competition stemming from the Development Agenda in particular, Recommendations 7 23 and 32 (briefly: technical cooperation on the interface between iprs and competition policies; promote pro-competitive ip licensing practices; exchange of national and regional experiences and info, see also document CDIP4_CDIP/4/4 Rev. - Project on Intellectual Property and Competition Policy).
-- outcome envisaged: no formal conclusions or recommendations
-- new division on ip/competition established
-- technical assistance (already requested by Syria)
- iprs are not monopolies, they are not a "necessary evil" but, and foremostly, a differentiation/identification tool (i.e. not
only about creations and inventions)
-- insofar, at the very core of competition and rivarly,
- iprs inherently procompetitive, but only in the right dosage (inter alia, Magill based on a "wrong" copyright)
-- not easy; necessary trials and errors, institutional/legal experiments, picking out the efficient solutions
- difference between an abuse of ip that results into anticompetitive effects and another which does not (reference to a case concerning a patent for irradiating food stuff increasing its vitamin c content and the legal issues thereof involving the important principle of access to health)
- interoperability ip/comp.


WTO:
- very supportive of WIPO's project
- TRIPs allows for a certain freedom in this area, but countries very often are not using it
-- but TRIPs leaves some questions unanswered (e.g., evaluative standards to anticompetitivess)
-- WIPO, WTO, OECD should provide some more help in this respect
-- collective guidelines could be helpful, based on enforcement experience, study and reflection
- ipr/comp interwoven
-- well designed ip systems already address (most) competition concerns internally (i.e., patentability criteria)
- TRIPs, articles 40, 31, 31.k, 8.2
-- art. 40.2 permissive rather than prescriptive (list non-exhaustive)
-- art. 31 (compulsory licences)
--- detailed conditions
--- protecting the legitimate interest of the right holder
-- art. 31.k (competition
policy "shortcut"): "...use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive"
--- unanswered question:decision taken by the head of a national competition authority is an "administrative process"?
- but compulsory licences not always the appropriate remedy
- clash of remedies possible
-- e.g. Microsoft
--- compulsory licence in the EU, "leak" across other jurisdictions

---- before deciding on remedies, possible repercussions should be carefully investigated
- Problems
-- clusters of blocking patents
-- standards-reinforced patents
-- gene patents
-- grantbacks, but depending on circumstances
- overtime convergence on some issues not easy but possible (globalized world - risk of spillover effects)
-- conflicts likely to be increasingly significant, also at the remedies level
--- NCAs likely to oppose "hard" convergence

UNCTAD:
- Recommendation 40 ("To request WIPO to intensify its cooperation on IP related issues with United Nations agencies, according to Member States’ orientation, in particular UNCTAD, UNEP, WHO, UNIDO, UNESCO and other relevant international organizations, especially the WTO in order to strengthen the coordination for maximum efficiency in undertaking development programs")
- Development Agenda as a major event at the WIPO
- in the 80's only 20 national competition authorities (from now on: NCAs), now more than 100 (many in developing countries)
-
Competition Law and Policy (Programme)
-- background papers to Intergovernmental Expert Meetings
---
COMPETITION POLICY AND THE EXERCISE OF INTELLECTUAL PROPERTY RIGHTS (TD/B/COM.2/CLP/22/Rev.1)
-- technical assistance on demand
-- Peer Review on competition legislation(voluntary)
--- "model" advise on provisions impacting iprs
---- complementarity iprs/competition
---- different tools
---- exclusivities to stimulate innovation,
----- in case of market power, not prohibited per-se, but they could have anticompetitive effects
-- Model Law on Competition (2007)
--- Chapter II, II (a) Scope of application: "goods, services or intellectual property"
- IP field
-- UNCTAD's mandates in this field
--- Accra Accord
--- Rec. 40 Development Agenda (above)
--- WHO's Global Strategy and plan of action on public health, innovation and intellectual property (2008)
-- "wider" lense, not only violations of competition provisions
--- foster generic competition immediately after patent's expiry
--- create a competitive environment for generics

OECD:
- iprs and competition not conflicting
- good competition policy, well run and designed provides for incentives to innovate
-- short-term not always central
- patent system to be procompetitive
-- room for disruptive innovation
-- role of venture capitalists
- both ip system and effective competition ideally provide for innovations
-- but iprs used in defensive (patent portfolio and patent deals) and strategic way
--- competition policy should not "destroy" the value of iprs, but the relationship can at times be complicated
- IF too easy to obtain and enforce, high penalties
-- from a societal point of view, the same level of innovation could be obtained giving less away
-- very expensive for other firms
-- entry barriers high
-- R&D deterred
- IF ipr too difficult to obtain, penalties toothless
-- incentives inefficiently low
--- not worth to invest
-- complex design of secrecy
--- disclosure and diffusion insufficient from a societal perspective (forcep's example: invention non patented and kept secret)
- IF competition policy too strong
-- iprs targeted because of their success
-- too low incentives, no licensing agreements
- IF competition policy too weak
-- licensing as masquerade for cartels
-- standard organizations ambushed
- balanced approach: a tough policy question, to be answered in a real world setting
-- patent surge, not only because of increased innovation
--- harm to competition?
--- innovation stifled?
-- courts, NCAs to "rebalance" this?
--- expertise needed to do this very high in the face of limited resources available
---- delays, risk of slowing down innovation (overkill)
-- Ip law needs fixing
--- some improvements, grant rates are coming down
- Actions
-- dialogue with patent agencies
-- OECD's role
--- reports
--- seminars, hearings, fora (see 2010 Global Forum on Competition)
- Some selected topics
-- licensing arrangements
--- most of them at least neutral from a comp policy perspective - technology transfer
--- grantbacks
---- positive: risk sharing, financing
---- negative: possibly in case of exclusive, severable improvements (follow-on innovations deterred)
-- patent pools
--- usually at least neutral
--- positive: complementary, essential iprs
--- negative: possibly when substitute iprs
---- market sharing; cover up for price agreements
---- foreclosure of third parties' technologies
- areas of controversy
-- "naked" unilateral refusal to license ip (not refusal + like in mergers)
--- OECD members: diverging answers
---- EU, compulsory licence as remedy
---- US, different philosophy
---- most members
----- compulsory licences generally not suitable
----- ip system not always effective
------- but importance of "working around" granted iprs
-- NCA stating licensing terms (e.g. fees) possibly acting as regulator and not as arbiter.
- "Convergence" very difficult at the global level, more likely are regional patches

US Dep. of Justice, Antitrust Division
- complex issue
- technological innovations as primary driver of economic growth
- distinction between invention and innovation (inno a longer process)
- complementarity
- ip questions everywhere (enforcement, advocacy, business review letters)
-- within merger proceedings particularly difficult
- tools available
-- prior cases
-- guidelines
-- 2007 Report, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition, etc.
- coming next: joint public workshop (DoJ, FTC, US PTO) to Explore the Intersection of Patent Policy and Competition Policy and its Implications for Promoting Innovation
Evolution in the way of thinking about the interface ip/comp
- 70's patents often considered monopolies, licensing stifled
- 80's rule of reason, licensing seen positively as long as different factors of production are combined (other issue: transaction costs, prod costs, free riding)
- 1995 Guidelines
-- no special rules for iprs
-- patents not presumption of market power (Supreme Court agrees in 1996)
-- market power not enough
-- benefits of licensing
--- combination of productive assets
-- focus on certain restraints
-- counterfactual licensing analysis
--- potential comp
--- likely to decrease comp
--- reduction of incentives to innovate
---- but: much less practice sofar with socalled dynamic efficiencies (theoretical challenge)
-- per se area
- 2007 Guidelines
- international convergence on the basis of an increasingly common economic approach

EU Commission, DGCom
- ipr/comp: no real conflict, both promoting innovation
-- open markets a very good incentive for innovation
-- competition policy as an element of a broader legal framework for innovation
--- a market that rewards present innovation without stifling future innovation

- innovation can be very risky,

-- but differences according to the markets under consideration

--- patent, less important in software business (seen often by market participants as obstacles to

- strategic use of patents increased

--pharma sector

--- strategic, possibly anticompetitive

- "probabilistic patents", Shapiro (and Lemley)

-- patents as lottery tickets

- patent reform could take care of it ?

- standards setting

-- benefits, interoperability, etc

-- but risks of abuse of market power


--- de facto, formal

- Microsoft Europe

-- withholding the interoperability info (not an ip case as such: patents covering interoperability info "found" by MS very late in the proceeding)

-- innovation incentives much discussed in court proceedings
--- issue possibly exceptional because it has to do with interoperability
-- in substance not so different from the US Microsoft decision on remedies (also compulsory licence of interoperability info)

- Rambus

-- patent ambush, standard setting: locked-in (unreasonable royalties) (for a recent comparative approach see Fischmann: Die Pflicht zur Lizenzerteilung in Patent-Ambush-Fällen nach deutschem und europäischem Kartellrecht, GRUR Int 2010, 185)
-- decision on commitments appealed by Rambus' competitors

- Draft Horizontal Guidelines deal extensively with Standardisation Agreements (in part. pp. 66-81)

- Merger analysis

-- dynamic analysis,

innovative efforts

-- to be decided on the facts on each case

- in any case, competition policy should not be less effective in difficult economic times


Friday, May 07, 2010

Swiss Competition Authority: revision of the Communication on vertical restraints launched

Here.

RPM in Finland and Spain

According to the Finnish Competition Authority, the Finnish Market Court should impose a fine of EUR4m on the home goods manufacturer because of mininum resale price maintenance (RPM) on its products, whereas the the Spanish Competition Authority has resolved to open formal proceedings against Montesa Honda, S.A. and six of its dealers for alleged minimum resale prices for Honda motorcycles.

Compulsory Licence for HIV/AIDS Drug

The first granted by Ecuador, see this IP Watch's post.

Google Books as seen from an Italian (librarian) perspective

Antonella De Robbio, 2010 Odissea Google Libri

Bundesgerichtshof: Keine Urheberrechtsverletzung durch Bildersuche bei Google

S. die Pressemitteilung.

Market for live music ticket retailing in the UK: merger of Ticketmaster and Live Nation cleared (again)

See the Competition Commission's Press release and Final Report

In support of the Federal Research Public Access Act

An Open Letter to the Higher Education Community- Read Peter Suber on the bill.

Tuesday, April 27, 2010

EU consultation on cultural and creative industries

Consultation: GREEN PAPER on "Unlocking the potential of cultural and creative industries"

Live from the ICN Conference 2010 (a very personal perspective) - Day One

Some introductory remarks going on... The documents available sofar are worth reading (see also the program)

Almunia speaking:
- Turkey a fantastic country (I totally agree, sadly not part of the EU)
- Crisis, we have to be even more determined
- competition on the merits
- less efficient firms should leave the market, even more so given the current times
- markets should remain open, mergers not to be used as a protectionist tool
- convergency important (stressed as a key message)
- global convergence in legal and economic analysis
- Commission's role (also) of bringing cases useful for many countries
- cross border trade important
- specificities still exist but common principles should be established
- unilateral conduct, role of the ICN
-- share experiences
-- Announcement: ICN discussing this topic in Brussels soon
- each legal system can deliver good results
- merger control has been facilitated
- transparency of decisions important
- reasoned decisions - consistency, predicatbility
- ICN a success story (105 agencies)
- future?
- Almunia's ideas:
-- advocacy worldwide, especially in crisis
-- projects important, if focused
-- convergence worldwide: Best Practices should be developed further
-- help to new agencies
-- full representation of competition authorities should be achieved (some not ICN's members)
Applause

Agency Effectiveness Working Group:
Olavo Chinaglia, Commissioner, Brazil Council for Economic Defense
- earlier: gathering info in order to share
-- manage human resources, etc.
- now: extract general, abstract guidelines (second phase)
- handbook prepared
-- tool to help agencies in their internal work
-next: guidelines have been put into effect?
- but the two phases (collect/assess) connected
-- not stopping gathering info
- next year
-- work on second chapter (presented today)
-- third chapter's draft (on knowledge management)

Advocacy Working Group:
Ed Smith, Director of International, U.K. Office of Fair Trading
- two projects
-- sharing experience (5 seminars, reports available on ICN website)
-- market studies
--- select
--- stakeholders' role
--- manage projects
- feedback
- teleseminars should go on
- update of available toolkits
- across the board (?)
- need to change something? Later we'll know more...
Cartel Working Group: Jozsef Sarai, Section Head, Hungarian Competition Authority
- essential conclusions
-- criminal sanctions the most effective tool
--- incentive for leniency

Merger Working Group:
J. Robert Kramer II, Director of Operations and Civil Enforcement, U.S.
Department of Justice, Antitrust Division
- working on recommended practices going on
-- East-West: inspiration for the working groups
--- new way of working developed
-- market definition and comments accompanying them
--- only a tool (referred to market definition), possibly not decisive
- hypothetical monopolist test incomporated
- ways to implement RP
- supply side substitution (where to put it?)
- Failing Firm
-- carefully assess counterfactual (what would happen if?)
-- links to/role of the parent company?

Unilateral Conduct Working Group:
Markus Lange, Head, International Section, German Bundeskartellamt
- understand/promote convergence
- analysis of refusal to deal
-- questionnaire distributed
-- good cooperation
-- rtd: not specifically defined
-- not only outright, also constructive (unreasonable terms)
-- margin squeeze: topical subject
-- 150 cases about it
--- 300 ms not assessed
-- general rule: freedom to contract
--then, when to intervene (answer tomorrow)?
- need of exchange among agencies felt
- divergencies, but those can still be discussed on substantial terms (ICN's plus point)
- future work
-- new workgroup on unilateral conduct
-- remedies
-- divergencies not to be underestimated
- implementation of past work
- NGA's involvement

Kazuhiko Takeshima, ICN Vice Chair of Advocacy and
Implementation
- report of last year's very intensive work
- more coordination and work in the future
-- needs assessment
-- structure

Mexican Federal Competition Commission

- database of regional networks
- technical assistance
-- template package
-- regulatory barriers (World Bank)
- UNCTAD: translations, participation
- APEC (?)

William Kovacic, ICN Vice Chair of Outreach
- technology
-- blog
--- coverage of activities
--- visitorship increased
---- more intensive use
--- more than 70 countries
--- use should be intensified!
- Outreach toolkit
-- slides on ICN's mission and objectives
-- more detailed revue of workgroups' outcome
-- Studies
--- academics about other networks' experiences (learning)
- Ahead
-- narrative
-- more NGAs' involvement (research centres involved)
-- convergence on good practices
-- dissemination
- ICN University
-- webbased approach
-- common vocabulary
---- not homogeneity
-- demonstration (movie: audio not working)
--- very funny remarks
OECD
- presentation on their activities in the field of competition

Panel: Ahead?
- more "discipline" in choosing projects
- OECD's strength
-- members' experience
-- secretariat's good work
--- regional centres' involvement
-- policies in perspective: material already collected the org. can refer to
-- interdisciplinarity (studies on innovation etc.)
--- complementarities with other policies

ICN's strength vis à vis OECD
- complementarities
-- but: how to invest?
- content, peer reviews
- ICN
-- more practically oriented,
-- perhaps different distribution network
-- different audiences (case level for the ICN)
-- org output's assessment
- possible tensions
-- how to allocate limited resources
- ICN: possibly more "bounding" of its members
- ICN's technical assistance good, possibly even better if coordinated with different orgs (such as OECD)

How to work closer together (ICN-OECD)?
- better transmission of info
-- liason "slightly more formal"
--- what's going on?
-- channels of distribution
- OECD's competition commission
-- somebody in charge of summing up what ICN does
-- outreach/technical assistance, difficult to be more informed (also because ICN doesn't have a Secretariat)
-- more joint events
--- at the content's level
-- pedagogical material
--- repackaging of OECD's material
--- cooperation with the coming ICN's university

Planning for the ICN’s Second Decade: Setting the Stage for Breakout Sessions, Plenary
- Vision, direction, implementation
- Achievements (useful for the future: but how do we measure them?)
-- efforts/contents/infrastructure/backbone for multilateral and bilateral discussions-negotiations among agencies
-- common work on advocacy, important in recession, based on experience (e.g. Japan)
- Respectful understanding of divergencies
-- taking care of economic conditions

Difficul things ahead?
Focus on the Working Groups
ICN's critical factors
- focus on competition
- vertical structure
- stakeholders' and agencies involvement
- structure of the working groups

Future
- Implementation
-- Barriers to better use?
-- communication/education
-- workshops


- Agency Effectiveness
-- quality control
- Inclusiveness
-- more diversed geographically








Monday, April 19, 2010

Thursday, February 25, 2010

IBM on Chin

Here is the tech firm's reply to Prof. Andrew Chin's paper, as well as Chin's Respone to the IBM Memorandum.