On The TRIPS Agreement Patent License Under The Anti-monopoly Regulation

This four-chapter dissertation focuses on the proper interface of patent licensing and antitrust under TRIPS Agreement. Chapter one starts with new challenges of the intersection between intellectual property (IP) and antitrust in New Economy and discusses why patent licensing should be scrutinized by antitrust. I argue the relationship between IP and antitrust is complementary. They share the same ultimate goal of enhancing consumer welfare. To reach this goal, it is needed to strike the appropriate balance between the benefits of patent protection and technology transfer, as well as between awards of initial innovation and follow-on innovation. By analyzing the exclusive rights conferred by the TRIPS Agreement, I argue patent owners shall have the right to license and refuse to license. To ensure the IP-antitrust interface, other legal regimes which are commonly confused with antirust merit attention. I argue the origins and development of patent misuse doctrine in U.S. and compulsory licensing as the remedy of antirust in general.Chapter two focuses on how anti-competitive practices related to patent licensing are regulated at international level. Before the enactment of TRIPS Agreement, international community made great efforts to have the Article 5A(2) of Paris Convention, the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Practices, the Chapter 4 of Draft International Code of Conduct on Transfer of Technology , and the Article 6 of Draft International Antitrust Code in order to deal with the dilemma among competition, protection of IP and technology transfer in global markets. The efforts turned out to fail basically because a worldwide consensus could not easily be achieved. The dilemma remains after the enactment of the TRIPS Agreement. An examination of the competition provisions in the TRIPS Agreement confirms the authority of the WTO Members to develop their own antitrust policy regarding IP-related anti-competitive practices, provided this is done consistently with the TRIPS principles of IP protection. Recognizing that IP protection may confer market power and that market power may lead to its abuse, TRIPS Agreement explicitly provides that Members may maintain laws deemed necessary to prevent abuse of intellectual property rights, including the prevention of anticompetitive conduct, and that Members may order compulsory licensing to remedy anticompetitive practices. TRIPS Agreement provides for a consultation and discovery procedure when a Member has reason to suspect that a firm of another Member is violating its antitrust law by anticompetitive IP licensing.Chapter three focuses on how WTO developed Members (U.S. and E.U.) and developing Members (China and Taiwan) regulate anti-competitive practices related to patent licensing by their antitrust laws and regulations at domestic level. By outlining the authorities, legal framework and IP-licensing-related antitrust legislations of China, U.S., E.U. and Taiwan respectively, it is shown that more efforts have to be done by China authorities to further clarify how Article 55 of Antimonopoly Law shall be explained and enforced. Although there is trend of convergence or IP-antitrust laws, especially in the area of IP licensing, in U.S. and E.U., I argue differences remain in theoretical and practical areas. A comparative study of IP-licensing-related guidelines of U.S., E.U. and Taiwan highlights the possible modes and contents which China may adopt in its own legislation.Chapter four is divided to two parts trying to highlight some controversial issues on IP-antitrust interface, which are respectively related to restrictive and exclusive conduct of patent owners. The first part starts with the cases regarding the disputes arising from Philips' CD-R patent licensing practices. These cases are the perfect examples of how licensees and licensors find remedies by means of antitrust, patent misuse defense and compulsory licensing. It also shows the interaction of these means in real cases. By analyzing the antitrust scrutiny of patent pools in U.S. and E.U., I argue whether "essentiality" criteria properly serve the function of guiding when antitrust shall intervene in particular cases. Also, it is unclear whether and to what extent antitrust shall intervene in disputes of the licensing fees set by the pools. The second part discusses whether and to what extent antitrust shall intervene in refusal to license cases. By examining leading cases and guidelines, it seems to show a split of pro-IP and pro-competition approaches taken by U.S. and E.U. In U.S., there are conflicts between the rulings in Xerox and Kodak II cases. The Trinko decision makes it clear that the duty to deal imposed by antitrust existed only in extreme situation identical to the Aspen case and essential facility doctrine has never been recognized by the Supreme Court. In E.U., the "exceptional circumstances" doctrine shows the application of essential facility doctrine in IP areas; however, it is doubtable whether it is applicable to cases regarding of refusal to license by a patent owner. In Conclusion, I briefly summarize my comments in each chapter and try to make suggestions to IP-licensing-related antitrust regulation in China.