The following Competition practice note Produced in partnership with Bristows LLP provides comprehensive and up to date legal information covering:
Intellectual Property Rights (‘IPRs’) enable their owner to exclude third parties from use of the relevant protected subject matter. Excluding, or threatening to exclude, third parties in this way typically raises no concerns under competition law. However, in those relatively unusual circumstances where the IPR owner holds a ‘dominant position’ (ie a position of economic power that enables it to behave, to a large extent, independently of effective competition pressures), exercising such exclusionary rights may generate tensions with competition law. IPRs take a number of forms (eg trademarks, copyrights, patents) and tensions can arise in a number of circumstances. Conflicts most frequently arise in relation to patents and software copyrights.
EU case law establishes that a dominant position confers a special responsibility on the dominant entity. The special responsibility requires the entity to refrain from forms of competition which are not ‘on the merits’. The amorphous scope of this concept generates a potentially ‘open list’ of possible abuses. Distinguishing between anti-competitive exclusionary conduct and ‘normal’ reliance on the exclusionary rights conferred by IPRs can frequently raise substantial difficulties. The analysis requires an assessment not of ‘form’ but rather of ‘effect’. For example, a ‘refusal to license’ even by a dominant company is typically perfectly lawful, but a refusal to license may potentially constitute an abuse where it harms
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