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Intellectual Property Rights in a Fair and Competitive Market

Jul 10, 2019

Primarily, Intellectual Property (“IP”) law promotes exclusive control rights of a person over his personal innovations, ideas or creative works. Intellectual property protects and promotes innovation by granting monopoly rights as incentive for innovation while a fair competitive market is such that encourages healthy competition among various suppliers of goods, services and technologies. It is a crucial step in promoting economic expansion by building investor’s confidence in the economy while simultaneously protecting the interests of the consumers.

The major anti-competitive issues dominating the interface between Intellectual Property and Competition Law/policy is the potential abuse of monopoly pricing and abuse of exclusionary licensing restrictions, tie-in agreements, excessive exploitation of IP and other commercial practices that prevent, restrict or distort competition in the relevant market.

It is important to note that IP rights are not in themselves anti-competitive. They can potentially become so only when utilized above the intended scope of exercise or if proven to substantially lessen competition in the relevant market. Thus, the lack of adequate and unambiguous legislation may cause problems for technology companies dealing with technology transfers and licensing agreements.

An example of such is the popular Microsoft case (Microsoft v. Commission T-201/04): The Microsoft case became a landmark case on a modern interaction between intellectual property and competition law in the European Union. The case was instituted as a result of a complaint made by Sun Microsystems alleging that Microsoft refused to supply it with information necessary to inter-operate with Microsoft’s dominant PC operating system. It also alleged that Microsoft tied its Windows Media Player to its Windows 2000 version of its operating system thereby exploiting its dominant position and restricting competition.

In summary, the European Commission (“EC”) held that Microsoft’s ‘refusal to license’ forestalled other tech-firms from developing new products in the markets in accordance with consumer demand. Microsoft’s refusal to license was considered a violation of EC competition law. The Commission found Microsoft liable and imposed a penalty of €497.2 million against Microsoft. Consequently, Microsoft began providing its consumers with the option of using any browser of preference with the windows operating system. 

 Upon review of this case, it is safe to say that Intellectual property and Antitrust/Competition regulations are necessary elements of a progressive economy. As such, it is imperative to have regulations that cater to disputes which may arise from the interface between the protection of intellectual property rights and the competing modern economic demands for healthy competition within economies.


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