Intellectual Property Law versus Anti-Monopoly Law EU-China IPR2 Project Conference on intellectual property related issues in the judicial application of competition law Dalian, June 10-11, 2010 Federal Court of Justice Karlsruhe - Germany Dr. Matthias Zigann District Court Judge Law Clerk with the Xth (Patent) Senate of the Federal Court of Justice

Intellectual Property Law versus Anti-Monopoly Law 2 I.Aim of Intellectual Property Law II.Aim of Anti-Monopoly Law III.Aim of Industrial Standards IV.Conflicts 1. Monopolistic behaviours 2. Patents Pools

Intellectual Property Law versus Anti-Monopoly Law 3 I. Aim of Intellectual Property Law Encouragement of innovation and disclosure thereof → Fair remuneration for creator/inventor → Substantial investment → Risky endeavor → C osts of not successful projects → S tipulate innovations by others No competition by imitation → Exclusive right to exploit the disclosed innovation → Right to prevent third parties from using the invention → Right to grant or to refuse a licence → Even if market-dominating position

Intellectual Property Law versus Anti-Monopoly Law 4 II. Aim of Competition Law Ensure and protect effective competition on the market → Consumer welfare → Efficient allocation of resources → Prevention, restriction or distortion of competition is forbidden Regarding intellectual property rights → IPR promote dynamic competition → IPR also promote innovation and competitive exploitation → No “competition by imitation” but “competition by substitution”

Intellectual Property Law versus Anti-Monopoly Law 5 III. Aim of Industrial Standards Achievement of interoperability and product compatibility → Patent pools → Everybody who wants to get on the market has to use the standard → And therefore to purchase a pool licence → Examples: JPEG (Joint Photographic Expert Group) MPEG (Moving Picture Expert Group) GSM (Global System for Mobile Communication) SDRAM (Synchronous Dynamic Random Access Memory)

Intellectual Property Law versus Anti-Monopoly Law 6 IV. Conflicts 1. Monopolistic behaviors related to intellectual property rights → Non-disclosure of software interfaces - Microsoft → Refuse to licence as a TV channel TV program details to others - Magill → Refuse to licence the design of body panels which are protected by a design patent - Volvo → Discount or kick-back payments in return for exclusive coverage of demand - Intel → Impose obligations onto the licencee which are not related to the licenced intellectual property right - Windsurfing International

Intellectual Property Law versus Anti-Monopoly Law 7 IV. Conflicts 2. Especially regarding patent pools → Everybody has to use the patents incorporated into the standard/pool → Patent owner via standard/pool in market dominating position → Because access to product market is dependent on the adherence to the standard → Danger: No competition by imitation and no competition by substitution → Wrongly claim a patent to be essential to a standard (possible solution: claim for declaration of non-essentiality) → Wrongly not disclose patents related to a standard (possible solution: patent ambush defence). → Discriminatory or unfair licencing practices (possible solutions: claim for a compulsory patent licence or compulsory licence defence in patent infringement proceedings)

Intellectual Property Law versus Anti-Monopoly Law 8 Thank you very much for your attention! © IPR2 / Dr. Matthias Zigann 2010