WIPO Journal - World Intellectual Property Organization

Although the TRIPS Agreement has been known as a significant international IP agreement, if we read
art.8 carefully it is not hard to find that the “abuse of IPRs” has been used as a competition law term
(breach of competition law) rather than an IP law one. As a United Nations study has pointed out, art.8
to a large extent reflects the view of many developing countries, such as India, during the Uruguay Round
negotiations, that “a main objective of TRIPS should be to provide mechanisms to restrain competitive
abuses brought about by reliance on IPR protection”. 8
This is further reaffirmed by some specific anti-competitive provisions in the TRIPS Agreement. For
example, art.31 specified the conditions for compulsory licensing of patents as parts of measures to remedy
anti-competitive practices. Moreover, the TRIPS Agreement includes a special section on the “control of
anti-competitive practices in contractual licences”, which focuses on anti-competitive licensing practices
and conditions that restrain trade. 9 Article 40 of the TRIPS Agreement imposes an obligation on Member
States to act on “licensing practices or conditions pertaining to IPRs, which restrain competition” if they
“have adverse effects on trade and may impede the transfer and dissemination of technology”. 10
It is also noteworthy that these provisions have a narrower scope of application than art.8, and both are
related to “compulsory licensing”. However, this does not mean the TRIPS Agreement has limited the
remedial measures that each Member State may impose. As a United Nations study has pointed out, the
TRIPS Agreement has not placed significant limitations on the authority of WTO Member States to “take
steps to control anticompetitive practices”. 11 In addition to “compulsory licensing”, Member States may
apply other remedies against anti-competitive conducts, such as injunction, damages and fines. 12 Indeed,
in practice, many major countries in the world (such as EU and the United States 13 ) have used competition
laws to regulate IP abuses and provided a full range of competition law remedies for IP abuse conducts.
In summary, the term of “IP abuse” in the TRIPS Agreement has been used in an anti-competitive sense.
The TRIPS Agreement mainly uses competition law as a main legal instrument to prevent and provide
remedies for IP abuse activities. Since the TRIPS Agreement only sets up general principles for dealing
with IP abuse, anti-competitive activities and technology transfer issues, it mainly relies on Member States
themselves to make specific law and policies to “define the concept of abuses through appropriate domestic
measures” 14 and to set up specific principles to determine and prevent IPR abuses. (More details on how
individual countries, such as the EU and the United States, use competition laws to regulate IP abuse
activities will be introduced in the next section.)
IP abuse prevention in the EU competition law
Competition Law and IP Abuse Prevention in Australia 219
Although it is the idea of developing countries to include anti-competitive provisions for prohibiting IPR
abuse and promoting technology transfer as part of the objectives and principles of the TRIPS Agreement, 15
regulators in most developing countries have not developed sophisticated laws and policies to enforce
competition law in the IP area. In fact, some countries, such as China, have only set up their competition
laws recently. 16 By contrast, in developed countries, particularly in the United States and the EU countries,
sophisticated laws and policies on co-ordinating the nexus between IP and competition laws and enhancing
technology transfer have developed over the past two decades. In comparison with the US laws, it seems
8
UNCTAD-ICTSD, Resource Book on TRIPS and Development (2005), p.127, at http://www.iprsonline.org/unctadictsd/ResourceBookIndex.htm
[Accessed March 30, 2011].
9
TRIPS Agreement art.40.
10
TRIPS Agreement art.40.1. See also UNCTAD-ICTSD, Resource Book on TRIPS and Development (Cambridge: Cambridge University Press,
2005), p.554.
11
UNCTAD-ICTSD, Resource Book on TRIPS and Development, 2005, p.128.
12
Frederick M. Abbott, “Are the Competition Rules in the WTO TRIPS Agreement Adequate?” (2004) 7(3) J. Int’l Econ. L. 693.
13
More details will be introduced in later sections.
14
UNCTAD-ICTSD, Resource Book on TRIPS and Development, 2005, p.548.
15
UNCTAD-ICTSD, Resource Book on TRIPS and Development, 2005, p.543 (introducing negotiation history of art.8).
16
China also uses the competition law to regulate IP abuse. See Chinese Anti-Monopoly Law art.55.
(2011) 2 W.I.P.O.J., Issue 2 © 2011 Thomson Reuters (Professional) UK Limited