Strategic Patent Acquisitions as a Competitive Abuse in the EU

Sarah Nørreslet Gimsing

Student thesis: Master thesis

Abstract

The strategic patent acquisitions(SPA) are considered in the legal analysis regarding their abusive characteristics as per the Art. 102 TEUF. The analysis considers SPA throughout the thesis in two types of industry, respectively the technically complex and the technically less complex type of industry.
The conclusion in the legal part provides conditions for, when SPA’s are considered, to be abusive of dominant position, as per Art. 102 TEUF. First, the court distinguishes between SPA in the form of a purchase or an exclusive license, and on the other hand, SPA lead by a successful patent application process. The SPA by purchase or exclusive license provides more strict rules than for the patent application acquisition. By purchase or exclusive license SPA will be considered abusive or at least outside the merits, when the three cumulative elements are present. 1. The purchased technology is the only alternative source accessible by the competitors to enter the market with. 2. The dominant firm effectively removes the technology so it is no longer accessible. 3. The SPA leads to substantial difficulty or delay in the competitors’ entry on the market. For the patent application acquisition the conditions first provides, that there should be “no economic sense” behind the choice of patent acquisition. Furthermore, SPA are a part of a bigger abusive picture, where the overall strategy is to deter competition. The economic analysis provides of the dominant firm and provides conclusions about the firms’ incentives for SPA. The conclusion provides, that first the distinction between the anticompetitive and competitive acquisition is difficult to distinguish between Ex Ante the SPA, furthermore there are anticompetitive incentives to, 1. Displace further SPA, so to protect and expand one products exclusive rights, through the SPA of another inventive technology. 2. The technically complex industries acquire patent rights strategically to make sure the competition can’t get to the technology or by raising competitors’ production costs. The conclusion uses the incentives on the balance between dynamic and static efficiency and conclude that, while there is substantial risk that the patent acquisitions are anticompetitive, it is risky to provide any limits to the patent rights that doesn’t risk affecting the procompetitive patent acquisitions as well. The integrated part considers whether the conditions for abuse regarding the SPA’s leads to less anticompetitive SPA’s without affecting the procompetitive SPA’s. The efficiency analysis concludes that the legal rule is Kaldor-Hicks efficient, because of the assumptions that the patent rights assigned provides the optimum of compromise between static and dynamic efficiency, and that there is no transaction costs from implementing the rules.

EducationsMSc in Commercial Law, (Graduate Programme) Final Thesis
LanguageDanish
Publication date2017
Number of pages65
SupervisorsGrith Skovgaard Ølykke & Cédric Schneider