Think Piece

Interaction between Intellectual Property and Competition Laws

January 2016
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An issue with great relevance today is the increasing interaction between intellectual property (IP) and competition. At first sight, IP and competition laws may seem to follow divergent objectives since one grants temporary monopolies and the other seeks to protect the market from monopolistic behaviours. However, a deeper observation leads to the finding that they share common rationales, which makes them interact in a complementary manner to each other in many cases. Both reasonable IP protection and effective antitrust enforcement are part of the global innovation system. The similarities and tensions between IP and competition are constantly present in the application of these bodies of law. Therefore, the interaction that IP and competition may have on different grounds should be analysed and taken into account by each jurisdiction to adequately face the new challenges that this phenomenon has brought to the trade system.

This paper touches on some initiatives that seek to address these interactions in broad terms, proposing different paths to be followed to make IP and competition enhance each other’s virtues and work together towards the development of social welfare. Further, it cites some examples of tensions that may arise when IP interacts with competition law and how they might be resolved in different ways according to the particularities of each jurisdiction.

There is a set of practices that can be recommended for promoting the approach in each country in the long term, based on different observed practices. The first course of action is to enhance the relation between competition and IP agencies. This may be done at different levels—from bringing IP and competition promotion functions into a single office, to promoting an informal more fluent relation among offices. A second policy priority recommendation is to develop long-term initiatives of analysis of the joint challenges of IP and competition, disregarding the form that IP and competition institutions relations may take. A third recommended line of action in the relation between agencies, in the long term, may be the publication of different type of soft law instruments that address these topics. This includes publishing joint guidelines and also memos from each authority. Finally, it may also be desirable that the relation between IP and competition be taken to the next level by formally considering the impact that IP norm setting may have on competition.

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