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Refusal to License- Intellectual Property Rights as Abuse of Dominance

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Claudia Schmidt

Refusal to license intellectual property rights (IPRs) are an ongoing topic within the enforcement of Article 102 TFEU (ex Article 82 EC). Nevertheless, so far an economic founded instrument to analyse these cases is missing. To close this gap, the Innovation Effects and Appropriability Test will be developed throughout this book. Innovation research has been showing that firms rely on more appropriation mechanisms than only IPRs. The availability of these alternative instruments depends on the involved technologies, the kind of innovation, the concerned industry and so on. Consequently, it is in the centre of the Innovation Effects and Appropriability Test to analyse whether the dominant firm could rely on other appropriation instruments to protect its innovation and to recoup its investments in R&D.

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5 Towards a New Test to Assess Refusal to License Intellectual Property Rights Cases 135

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5 Towards a New Test to Assess Refusal to License Intellectual Property Rights Cases In the last chapter we established some criteria that can be applied within the framework of competition policy to analyse the abuse of dominance in regards to intellectual property rights. However, we also found out that it is almost im- possible to quantify all information required for a balancing. For a correct bal- ancing it is not sufficient to know what kind of effects may arise due to a com- pulsory license and due to a refusal to license, instead it is essential to quantify these effects. Against this background, in this chapter I will now develop a test that is based on the idea of the Incentives Balance Test but that is simpler in the sense that it does not require a balancing and therewith, no quantification. In do- ing so, I will refer to the criteria exposed in Chapter 4. The chapter starts with a review of the criteria that had been applied previ- ously to detect the anti-competitive effect and a discussion of whether those cri- teria are defensible from an economic perspective or whether they need some modification. In so doing, we will refer to the criteria outlined in Chapter 2 within the description of the European Union caselaw. While having abstained from an evaluation in Chapter 2, in this section we will scrutinize the criteria from an economic perspective. This step is necessary to assess which require- ments should be applied...

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