Intellectual Property and Competition Law - IPRsonline.org

ICTSD Programme on IPRs and Sustainable Development13Acquisition and Enforcement of Intellectual PropertyRightsIt is generally accepted in developed countriesthat holding IPRs does not automatically confermarket power per se 62 . The predominant concept isthat IP and competition laws are complementary:they both aim at promoting innovation andcompetition (Ghidini, 2006, p. 5). However, therespect of IPRs under competition law:“is premised on the assumption that theintellectual property is properly obtained.Problems arise when particular intellectualproperty rights have not been obtained in theproper manner or are not deserved. Patentprotection in the absence of novelty and nonobviousnesscan harm innovation by eliminatingthe incentives for the patent holder and othersto engage in further pursuit of something that isnovel and non-obvious” (Azcuenaga, 1995).The case of patentsThe anti-competitive effects of the granting ofIPRs, particularly patents, have raised growingconcerns. An OECD (Organisation for EconomicCo-operation and Development) report regardingbiotechnology patents, for instance, noted that“the rising tide of biotechnology patents hasbrought concerns that they are being grantedtoo freely and too broadly. Too many patentsthat cover too much ground will not only harmcompetition, but will also stifle innovation bymaking further research riskier, more difficult ormore expensive” (OECD, 2004, 15).The problem, however, is not limited tobiotechnology patents but extends to otherfields, such as pharmaceutical and softwarepatents. Jaffe and Lerner have documented howthe US current patent system:“provides incentives for applicants to file frivolouspatent applications, and for the patent office togrant them. It likewise encourages patent holdersto sue, and those accused of patent infringementto give in and pay under threat, even if the patentat issue is of dubious validity. It does not providegood incentives for the information necessaryto resolve questions about patent validity to bebrought forward and analysed appropriately”(Jaffe and Lerner, 2004, p. 6).The extent to which the application for patentsand their acquisition may be deemed anticompetitivecrucially depends on the room leftto obtain patents on minor developments. Suchroom has greatly expanded in the last twentyyears in some jurisdictions such as in the US 63where the FTC has found:“significant concerns that, in some ways, thepatent system is out of balance with competitionpolicy. Poor patent quality and legal standardsand procedures that inadvertently may haveanticompetitive effects can cause unwarrantedmarket power and can unjustifiably increasecosts. Such effects can hamper competition thatotherwise would stimulate innovation” (FTC,2003a, p. 5).The situation in the US patent office – one of thelargest in the world – exemplifies the weaknessesof patent prosecution and the possible abuses byskilled applicants willing to acquire patents asan anti-competitive tool rather than as a rewardfor genuine innovation. The FTC has noted thatpresumptions in Patent and Trademark Office(PTO) rules tend to favour the issuance of a patent:“[I]f the examiner does not produce a prima faciecase [of obviousness], the applicant is under noobligation to submit evidence of nonobviousness.”(footnote omitted) Similarly, “[O]ffice personnel.…must treat as true a statement of fact made byan applicant in relation to [the asserted usefulnessof the invention], unless countervailing evidencecan be provided that shows that one of ordinaryskill in the art would have a legitimate basisto doubt the credibility of such a statement.”Likewise, “[T]here is a strong presumption thatan adequate written description of the claimedinvention is present when the application isfiled.” (footnote omitted) The PTO’s resourcesalso appear inadequate to allow efficient andaccurate screening of questionable patentapplications (FTC, 2003a, p. 9).