The Roles of Innovation in Competition Law Analysis
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The Roles of Innovation in Competition Law Analysis

Edited by Paul Nihoul and Pieter Van Cleynenbreugel

Rapid technological innovations have challenged the conventional application of antitrust and competition law across the globe. Acknowledging these challenges, this original work analyses the roles of innovation in competition law analysis and reflects on how competition and antitrust law can be refined and tailored to innovation.
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Chapter 10: Access to justice as abuse of market power? Injunctive relief for standard-essential patents under US antitrust and EU competition law

Viktoria HSE Robertson and Marco Botta

Abstract

Industries often establish technical standards via standard-setting organizations (SSOs) in order to ensure the interoperability of products and future innovations, so-called formal standards. Industry standards can also emerge from the market, in which case they will be referred to as de facto standards. Many of these formal or de facto standards rely on a wide range of innovations that are protected by patent law. Patents that read on technical standards are referred to as standard essential patents (SEPs). Standards are widely regarded as being pro-competitive, especially as they can encourage further innovation. However, there can also be reason for competitive concern in relation to standards: as other intellectual property rights, SEPs establish an exclusive right of exploitation for the patent owner. Within formal standard-setting procedures, a mechanism has been adopted in order to avoid a potential restriction of competition in the market: the SEP owner usually offers to the SSO its ‘commitment’ to license its SEPs to any interested third party under fair, reasonable and non-discriminatory (FRAND) terms and conditions. In the case of de facto standards, no such commitment is made. Both within the EU and the US the question increasingly debated concerns the consequences of the failure by the SEP owner to conclude a licensing agreement with an interested third party. This chapter starts by looking at the vital role that injunctive relief plays in intellectual property law in order to safeguard the patent owner’s exclusive rights. Against this background, it discusses possible anti-competitive consequences that injunctive relief might bring about both in terms of exploitative and exclusionary effects. Thereafter, it analyses whether and under which conditions the seeking of injunctive relief by the SEP owner could represent an abuse of market power, in breach of section 5 of the Federal Trade Commission Act and Article 102 of the Treaty of the Functioning of the European Union. Finally, it discusses the diverging treatment of SEP injunctions on both sides of the Atlantic. The chapter adopts a comparative legal approach in order to highlight the possible convergences or divergences of the approaches taken so far in the US and in the EU on this issue, and the possible cases of mutual learning. The findings are also of interest for other competition law jurisdictions, since the standards adopted by SSOs have an international dimension, and SEP owners increasingly ask for injunctions in various national courts in order to safeguard their rights. Taking into consideration that most of the countries in the world nowadays prohibit the abuse of market power, the current American and European debates on the compatibility of prohibitory injunctions with antitrust/competition law is also likely to take place in other countries of the world in the near future. In particular, the test defined by the CJEU in the Huawei v ZTE ruling could be an inspiration for courts and competition authorities of other jurisdictions called to assess similar issues.

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