IP Related Competition Issues Prof. Dr. Peter Chrocziel Freshfields Bruckhaus Deringer Frankfurt am Main DF379116

Patent Enforcement by Market Leaders: Patent = Dominant Position ? Enforcement = Abuse ?

General Question: Does competition law interfere with the exploitation of IP rights? Yes - —Compulsory licensing —Restrictions on the terms of a license

Article 82 and Compulsory Licensing Can refusal to license be an abuse of a dominant position ? Yes: —Magill: a dominant copyright owner abused its position simply by refusing to license its rights to others But: —Narrow terms of judgment —Tiercé Ladbroke and Oscar Bronner The future and IMS

The background - Magill The facts Copyright confers the exclusive right of reproduction Refusal to license is not in itself an abuse of dominance Refusal would be an abuse in „exceptional circumstances“: —Preventing the appearance of a new product —No justification for the refusal —Reserving a secondary market (TV guides)

“Exceptional Circumstances” - a Tough Test Tiercé Ladbroke —Licensor not present on secondary market (betting) —Televised racing not “essential” for bookmakers —Refusal to license did not prevent a new product Oscar Bronner —No elimination of competition on downstream market —Access (to distribution system) not “indispensable” IMS - a new meaning for “exceptional circumstances” ?

IMS The facts - a refusal to license the ‘1860’ brick structure The Commission found —A prima facie infringement of Article 82 —Criteria for interim measures were satisfied The finding based on: —Refusal being likely to eliminate all competition in the relevant market —Refusal incapable of objective justification —Access being indispensable, i.e. no actual or potential substitute

Recent News: Shift to Patents Liberal application of principles by national courts Rotterdam court Düsseldorf court

Exceptional Circumstances Magill list not exhaustive Magill list exemplary No new product necessary No exclusion of all competition necessary

Magill in Light of Bronner - Rotterdam - Competition in same market Customer should have choice

Magill in Light of Bronner - Düsseldorf - No actual or realistic substitute product available Exclusion of competition by company requesting use Refusal not justifiable

Magill applied to Patents Use of patent indispensable —Technical reasons —Expectations of market Refusal not justifiable —Costs of development amortized —Existing licensees bring no efficient competition