Intellectual property rights, enforcement costs and EU competition law

Abstract

Cases in the intellectual property rights (IPR)–Competition Law intersection have raised the issue of costs of enforcement of IPRs when dealing with the assessment of whether competition law has been breached. Importantly, a systematic underestimation of enforcement costs may be problematic for the protection of underlying investments behind intellectual property as well as obstruct the cooperation between an IPR holder and its licensees, in particular as regards patent rights. Cases on reverse payments indicate that payments by a patent holder to a generic manufacturer under a settlement agreement may well be legitimate in order avoid enforcement costs while not restricting competition. The hard stance on no-challenge clauses and termination clauses under the technology transfer block exemption regulation (TTBER) can destabilize the relation between two parties that would benefit from increased certainty when cooperating to commercialize new technology. In cases regarding the failure of parties to agree on fair and reasonable and non-discriminatory-licensing of standard essential patents, a correct approach has probably been taken in Huawei. However, it is doubtful to what extent the judgment is based upon a balancing exercise that explicitly factors in enforcements cost. Accordingly, it is argued that the current framework of analysis of cases in the intersection is inadequate to proper assess enforcement costs of IPRs.