Regibeau Rockett (2011) - Assessment Of Potential Anticompetitive Conduct

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Reference

• Regibeau, Pierre and Rockett, Katharine (2011), "Assessment of potential anticompetitive conduct in the field of intellectual property rights and assessment of the interplay between competition policy and IPR protection", Working Paper

@inproceedings{regibeau2011assessment,
  title={Assessment of potential anticompetitive conduct in the field of intellectual property rights and assessment of the interplay between competition policy and IPR protection},
  author={Regibeau, Pierre and Rockett, Katharine},
  booktitle={Prepared for the European Commission, Publications Office of the European Union, ISBN 978-92-79-22210-8},
  year={2011},
  abstract={},
  discipline={Policy Report, Econ},
  research_type={Discussion},
  industry={},
  thicket_stance={},
  thicket_stance_extract={},
  thicket_def={},
  thicket_def_extract={},  
  tags={},
  filename={Regibeau Rockett (2011) - Assessment Of Potential Anticompetitive Conduct.pdf}
}

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Review

Definition of patent thicket

"...patent thickets arise when the IP rights necessary to market a product and do so without significant risk of infringement are held by a large number of different parties."

Discussion

The article reviews literature on the current Competition and IPR protection policy in the U.S. and EU as part of a policy report for the EU Commission.

• There are two main questions with regard to patent thickets:
  • How often do patent thickets occur?
  • What is the magnitude of the resulting inefficiency?
• Firms without a broad patent portfolio tend to be at a disadvantage when it comes to navigating patent thickets.

"...each party is likely to hold private information about the value/robustness (or even existence) of its relevant IPRs. Such asymmetric information can result in significant delays in reaching an agreement. In addition, fear of competition law can prevent the relevant parties from engaging in truly multilateral negotiations, especially if these take place outside of a formal 'standardisation' process."

Social Welfare Consequences

• The literature does not provide clear evidence of whether patent thickets have positive or negative effects on social welfare; referring to Galasso and Schankerman (2008) they conclude that:

"Interestingly, the only rigorous empirical study that we are aware of suggests that the welfare effect of thickets might actually be ambiguous...This means that patent thickets have two opposite effects on the speed with which functional licensing agreements can be reached. On the one hand, the presence of thickets increases the number of required patent negotiations; on the other hand, patent disputes are resolved more quickly."

• The welfare gains from patent pools are directly related to the complementarity of their patents because substitutability implies unnecessary licensing, but extent of these effects is not quantified:

"In other words, while cross-licensing and patent pools might be effective approaches to solving thicket problems, we have no idea of what the corresponding efficiency gains are."

Policy Advocated in Paper

• If a more lenient approach with regards to competition law is the solution, evidence that this would solve actual thickets and provide significant efficiency gains would be needed before such a policy could be recommended.

"The idea is that a more informed antitrust attitude towards some forms of licensing arrangements might help private IP owners get around patent thickets more efficiently. Three types of arrangements seem especially useful in this respect: cross-licensing, patent pools and standard-setting organisations."

• Leniency should be given to pools with greater complementarity, and they should allow members to license independently outside of the pool.

"Rules that would trigger the demise of the pool in case of substantial defections are potentially pro-competitive as they help ensure that welfare-improving pools are formed."