Monday, September 27, 2010
Posted by D. Daniel Sokol
Richard Taffet (Bingham) discusses The Impact of the Draft EC Horizontal Guidelines on Intellectual Property Rights and Innovation.
The European Commission's Draft Guidelines on the Application of Article 101 of the Treaty on the Functioning of the European Union to Horizontal Co-Operation Agreements (the "Draft Guidelines") have attracted a multitude of comments from many interested parties. This has been particularly the case in relation to Chapter 7 of the Draft Guidelines that addresses "standardization agreements"-i.e., agreements that arise in connection with the development of technical standards that incorporate technology subject to intellectual property rights ("IPRs"). The reason for such a reaction to Chapter 7 may be because the Draft Guidelines seek to address the complex and often controversial issues that exist under competition and intellectual property laws, especially when patented technology is included in technical standards.
This paper will ask whether, in doing so, the Draft Guidelines seek to define problems and propose solutions in a manner that may be interpreted as reflecting a bias against the legitimate and pro-competitive exercise of intellectual property rights. It concludes that, as currently drafted, the Draft Guidelines may, in fact do so, and by so doing may cause the contrary result than intended. Rather than providing certainty for IPR-related conduct in the standards context so that effective standardization may proceed most efficiently, they may undermine the pro-competitive use of IPR in standards and thereby diminish technical innovation through the standards process.