On Antitrust Regulation On Tying Involving Intellectual Property

Tying is the one of the main illegal conducts regulated by the antitrust law and unfair competition law. It has been generally believed that tying would result in the foreclosure of the commerce of other competitors in tied product market, as well as other kind of anti-competition effects.The research and regulation on tying has a long history, but, there has been a very important phenomenon in tying cases in recent years, which is that most tying cases involved intellectual property in various ways. One important example is the Microsoft tying cases, which involved copyrights. In EU, Microsoft's tying conduct involved the bundling of Windows and Media player, while in US, Microsoft's tying conduct involved the bundling of Windows and IE. And the sensational Jail-break problem of iPhone also involved the bundling effect of technical measures of intellectual property.Considering the above phenomenon, we cannot help ask the question whether the regulation or analyzing method for tying should be different when it involves intellectual property. And in order to answer that question, this paper tries to analyze the special regulation system for tying involving intellectual property (IP tying).Among the relevant legal areas such as antitrust law, intellectual property misuse doctrine and contract law, the antitrust law is the core of all the relevant laws, and the competition policies behind antitrust law have also provided guidance for other laws. Based on that, this paper contains five chapters. Chapter one made fundamental researches on the concept and characteristics of tying involving intellectual property, as well as a general description about all relevant regulations. Chapter two and three analyzed the competition policies and concrete antitrust rules for tying involving intellectual property. Chapter four made a special study on the antitrust rules relevant to the innovation factor contained in IP tying. And the last chapter discussed Chinese regulations.Chapter one mainly focused on the concept of IP tying. At first, this chapter analyzed the concept of normal tying, and concluded that, since the logic structure of tying conduct involves sales of at least two product, and this two product is connected by tying conduct, which results in the "tying product--tying conduct--tied product" structure, and logically speaking, any part in this structure involves intellectual property, then the whole conduct would be regarded as IP tying. And considering different ways of involvement between IP and tying, there are several types of IP tying that should be given special treatment, namely commingled IP tying, pure IP tying, and technological tying.Chapter two mainly discussed the general theories about IP tying, namely competition policy theories for IP tying. And these theories can be divided into four aspects. The first aspect is about the general relationship between IP policies and competition policies, which can provide basic guidance for theoretical analysis of IP tying. The second aspect is about the anti-competition effect of IP tying, which mainly involves the leveraging theory, as well as the costs suffered by consumers. The third aspect is about the special procompetitive effects for IP tying, which mainly involves the piracy control and protection of information security, the quality control in trademark tying, and several special features involving pure IP tying. The fourth aspect is about the general relationship between IP tying and innovation, which can be further divided into two prongs, and one prong is about the stimulation effect of IP tying on innovation, and the other prong is about the direct innovation effect of IP tying, such as the improvement of bundled products.The third chapter focused on the concrete antitrust rules and relevant antitrust practice against IP tying in US and EU. These rules can be classified according to the basic requirements for the confirmation of illegal tying, namely separate products, coercion, market power, restriction of competition and non-justifications. Among these requirements, the separate products and coercion requirements mainly involve the factual aspect of IP tying, and the market power and restriction of competition requirements mainly involve the evaluation of anti-competition effect, while the procompetitive effect of IP tying mainly involves the exceptions developed for separate products requirement, as well as special justification rules.The fourth chapter analyzed the influence of innovation factor of IP tying in the antitrust regulation, and the analysis was divided into two parts according to the difference between indirect innovation effect (namely pro-innovation effect and anti-innovation effect) and direct innovation effect (namely the product improvement effect or technological tying), and then this chapter summarized the rules of US and EU relating to the determination of innovation effect, and provided a comprehensive analysis on the tying conduct in the Microsoft antitrust cases.The fifth chapter discussed the relevant legislation and practice in China, and makes relevant suggestions. It has been emphasized that in antitrust regulation, we should pay special attention to the special innovation effect involved in IP tying, which mainly includes product improvement, piracy control and relevant innovation incentives effect such as price discrimination theory. However, the last aspect, namely the innovation incentives effect, has caused significant disputes between scholars, so it is not suggested to include that aspect in judicial considerations for now. And this chapter also provided suggestions relevant to other legal areas, and it has been emphasized that under certain circumstances, we can rely on the principle of equity, and that can act as supplementary means for antitrust regulation.