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Intellectual Property, Market Power and the Public Interest

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Edited By Inge Govaere and Hanns Ullrich

The main objective of the contributions to this book is to bring together two seemingly different strands of thought: the competition-law analysis of the exercise of intellectual property, and the discussion about the proper limits of protection, which at present takes place inside the intellectual property community. Both are burdened with their own problems, particularly so in Europe, where market integration and the divide between exclusionary and exploitative abuses ask for a more dimensional approach, and where the shaping of intellectual property protection is under not only the influence of many interests and policies, but a multi-level exercise of the Community and its member states. The question is whether, nevertheless, there is a common concern, or whether the frequently asserted convergence of the operation and of the goals of competition law and intellectual property law does not mask a fundamental difference – namely that of, on the one hand, protecting freedom of competition against welfare-reducing restrictions of competition only, and, on the other, limiting the protection of exclusive rights in the (public) interest of maintaining free access to general knowledge. The purpose of the workshop held in 2007 at the College of Europe, Bruges, and whose results are published here, was to ask which role market power plays in either context, which role it may legitimately play, and which role it ought not to play. A tentative answer might be found in the general principle that, just as intellectual property does not enjoy a particular status under competition law, so competition law may not come as a white knight to rescue intellectual property protection from itself. However, the meaning of that principle differs according to both the context of the acquisition and the exploitation of intellectual property, and it differs from one area of intellectual property to the other. Therefore, an attempt has also been made to cover more facets of the prism-like complex of problems than is generally done.

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PART I. REINFORCING INTELLECTUAL PROPERTY PROTECTION THROUGH MARKET POWER

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PART I REINFORCING INTELLECTUAL PROPERTY PROTECTION THROUGH MARKET POWER 13 CHAPTER 1 The Relationship Between the Legal Exclusivity and Economic Market Power Links and Limits Josef DREXL Director, Max Planck Institute for Intellectual Property Competition and Tax Law; Honorary Professor for European and International Economic Law, University of Munich Introduction When inviting the speakers, the organisers of this conference asked a question that is of utmost importance. This question is: Does a right- holder’s market power make a difference when the right-holder claims intellectual property protection? This question is most often discussed with regard to the rules of competition law banning abuse of market dominance in the context of a refusal to license. It seems that the conference goes beyond that issue by also trying to clarify the inherent techniques of intellectual property rights systems for responding to the challenge of potentially adverse effects of intellectual property rights on competition. The following analysis will discuss the fundamentals of the very complex relationship between intellectual property rights and market power. Here already, the organisers of the conference deserve praise for their wisdom in directing our interest away from the legal setting of norms that control abuse of market dominance (or monopolisation in US terms) and in focusing today’s discussion on market power in more general terms. The answer to the question of whether right-holders have to respect competition law just like other dominant firms would of course be negative if conferral of market power were an inherent feature or even an...

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