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Last night at UCL: IP vs Competition

By Johanna Gibson, David Pearce, Jeremy Phillips and Ilanah Simon.

Yesterday the IPKat attended the first of the UCL / Howrey LLP Competition Law & Intellectual Property Lecture Series, entitled 'The Role of Economic Analysis in Intellectual Property Law: Implications for Competition Law'. In the hotseat were Professor Bruno van Pottelsberghe de la Potterie (Université Libre de Bruxelles, former Chief Economist of the European Patent Office) and Professor Michael Meurer (Boston University School of Law) with Trevor Soames (Howrey) and Professor Damien Geradin (Tilburg University & Howrey) providing commentary.

The big underlying question was whether antitrust law should be regulating IP, or whether IP needs to 'get its own house in order'. Both speakers identified points where IP should be sorting itself out, though there was no indication of how competition law might step in to help with the process.

Both speakers pointed to major systemic problems with the patent systems in Europe and the US. Prof van Pottelsberghe pointed to the fragmentation of the European patent system, and the costs involved in obtaining a patent before the EPO. Moreover, in the US, it appears to be easier to get a patent (raising possible quality concerns regarding examination). All this makes it more attractive to apply for a US patent, than to use the EPO route initially. At the same time, although the value of patents are going up, the number of filings and the number of claims per application are going up. Also, applicants are finding ways to play the system to maximize the strategic benefits from their patents, filing divisionals being a favourite.

According to Prof Meurer, the US patent system doesn't seem to be doing too much better. He argued that, except for in the chemical and pharma industry, patents appears to be imposing greater costs on businesses than they confer benefits, meaning that they effectively act as a form of tax on business. He compared patents to tangible property and identified notice as a big difference. One seldom accidentally builds on other people's land because one checks the rights out before starting building. This is a far more difficult exercise with patent law, thanks to 'fuzzy' claims in previous patents, the difficulty of accessing information, the facts that patents aren't 'possessed' in the way that tangible property is and the search costs involved in verifying that one is not infringing other people's patents. In many industries, there's just too much prior art to make a search cost-effective, and in the US, the willfulness doctrine (which leads to treble damages) means that it's better to just not know about previous inventions.

The IPKat says that it all makes for a sorry tale. He takes a crumb of comfort from the fact that the speakers appeared to be condemning the patent system, rather than patent law itself. The Kat wonders who's in the best position to sort out such structural failures. He suspects it's not IP lawyers alone. He also notes that attempts to sort out some of the problems (take the European patent as a way of solving fragmentation) are scuppered not by IP-related concerns, but rather greater political concerns, such as language. On the wider issue of the IP/competition law interface, the Kat wonders how much of a role there is for competition law to play. Of course there will always be individual cases of abusive behaviour involving IP, but equally well, there are cases of abusive behaviour involving tangible property and other resources. In general, IP law is alert to the needs of the market, competitors and consumers, and has in-built limits that kick in at a point where antitrust wouldn't even get involves because the effect is limited to individual actors rather than the market as a whole.

Full post as published by IPKat on May 07, 2008 (boomark / email).