Business Innovation and the Law Perspectives from Intellectual Property, Labour, Competition and Corporate Law
Perspectives from Intellectual Property, Labour, Competition and Corporate Law
Edited by Marilyn Pittard, Ann L. Monotti and John Duns
Chapter 18: EU competition law, and research and development agreements
Not all forms of horizontal agreement, that is, undertakings operating at the same level of production or distribution, are harmful to competition. For example, cooperation between non-competitors, cooperation between competitors that cannot independently carry out the activity in question, and cooperation concerning an activity far removed from the marketing level such as a pure research and development, are unlikely to be seen as anti-competitive. Although agreements between actual or potential competitors are generally viewed with suspicion by competition authorities, competing undertakings sometimes pool their resources with multiple aims such as to develop a new product or to engage in research and development that would be impossible without cooperation. Research and development agreements are a type of horizontal agreement which usually carry long-term risky investments whereby the parties to the agreement decide to carry out jointly a number of tasks which are necessary in order to turn an idea into an industrial product and thus enable more and better products to be brought to the market and facilitate greater consumer choice. Research and development agreements range from outsourcing research and development activities to the marketing of completely new products that resulted from the research and development. The agreements may take the form of a mere cooperation between two or more parties or an agreement to set up a jointly controlled company which will carry out the research and development. EU competition law is generally supportive of research and development agreements as otherwise innovation may be impeded bearing negative effects on the competitiveness of undertakings, particularly EU undertakings competing on the global market.
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