Summary Overview
Although competition and patent regimes share the same goals of innovation and related economic and consumer benefits, tensions at the interface between these areas of law are reaching unprecedented levels. The challenge is to permit the legitimate exercise of patent rights while continuing to enforce competition laws where anti-competitive practices involve patent rights. But what happens where both regimes are implicated and yet neither effectively controls conduct that harms innovation and imposes economic costs? How do we compare the cost/benefit trade-off of addressing the problem via the competition system, patent system or both? When intellectual property laws are being used to impede innovation should competition law intervene?
This article considers a gap between patent law and competition law that is being exploited by "patent trolls", firms whose business is the acquisition and assertion of patents against parties who are already using the patented technology. First, we frame the discussion by considering the interaction of competition law and patent law and how the interaction can, in theory, impact innovation. Then we look at the example of patent trolls and how they are taking advantage of an absence of competition and patent law enforcement: what they are, the reasons for their recent emergence and the main arguments in defence of patent trolling. Next we examine the economic cost and harm to innovation caused by patent trolls in the context of wider issues in competition and patent law and policy, including asymmetry of litigation risk, the hold-up problem and the growing valuation of patents based on the right to exclude rather than the economic value of the underlying invention. Finally, we survey the efforts to stem patent abuse, including patent trolling, through market, judicial, legislative and regulatory means. Regardless of the source of the solution, be it patent or competition law or policy, patent trolling highlights a clear need for reform to achieve the innovation goals of both the competition and patent regimes. Law makers, enforcement agencies, regulators and the courts need to bridge the ever-widening gap.
Click here to read the full publication
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
