Abstract
The debate on how to promote competition vis-à-vis the exclusivity of patent law has acquired new accents with the necessity to have access to standard essential patents for the Internet of Things. Patent ambush or patent thickets may be obstacles to more connectivity in sectors such as automated driving. Yet, the Court of Justice raised the bar for intervention in the Huawei case on compulsory licenses as a defence against patent violation claims. The European Commission, in its quest to enable the Internet of Things, has therefore turned away from enforcement of the abuse of dominance provisions in patent cases by proposing other tools in its 2017 communication on standard essential patents. The proposals – more transparency for licensing, more open source – may be read as preparation for regulation. The proposals have deficits, too. To remedy the problem, the Commission most probably will introduce sectoral regulation. It may be more fruitful to pursue a competition-oriented path by: (a) a competition-law control of IoT platforms, (b) an innovation-oriented merger policy as started with Dow/Dupont, and (c) the use of interim measures in the specific IoT context according to Art. 8 of Regulation 1/2003 with presumptions of dominance and abuse.
This is a preview of subscription content, log in via an institution to check access.
Similar content being viewed by others
Notes
As is stated in the Commission’s technology-transfer guidelines, COM, Guidelines on the application of Art. 101 TFEU to technology-transfer agreements, 2014/C 89/03, para. 7. On the delicate relationship cf. Devlin (2016), pp. 5 et seq.
Bekkers et al. (2017).
German Federal Supreme Court, 6.5.2009, KZR 39/06 [41 IIC p. 337 (2010)] – Orange Book Standard. Cf. H. Ullrich (2010), vol. 41 IIC p. 337.
CJEU, 16.7.2015, C-170/13, ECLI:EU:C:2015:477 [IIC 46:965 (2015), https://doi.org/10.1007/s40319-015-0411-3] – Huawei Technologies/ZTE Corp. On this case cf. Batista and Mazutti (2016), p. 244.
European Commission, Setting out the EU approach to Standard Essential Patents, 29.11.2017, COM (2017) 712 final. On the influences beforehand see Cappuyns and Vanherpe (2017) p. 122.
Shapiro (2001), p. 3.
Notably Machlup (1958).
Moser (2016).
Cf. Devlin (2016), p. 59.
De Rassenfosse et al. (2008).
De Rassenfosse et al. (2008), at 102.
The Economist, 8 August 2015.
The Economist, 8 August 2015, available at https://www.economist.com/leaders/2015/08/08/time-to-fix-patents.
De Toma and Kreifels (2016), pp. 586 (587).
Vestager (2015).
Vestager, ibid.; cf. Podszun (2010), pp. 437–443.
ECJ, 6.4.1995, joined cases C-241/91 P and C-242/91 P – Magill.
ECJ, 31.8.2004, C-418/01, ECLI:EU:C:2004:257 – IMS Health.
CFI, 17.9.2007, Case T-201/04, ECLI:EU:T:2007:289, paras. 331–333.
CFI, 17.9.2007, Case T-201/04, ECLI:EU:T:2007:289, para. 647. Critical of this development, Hou (2012), p. 451.
German Federal Supreme Court, 6.5.2009, KZR 39/06, [41 IIC 337 (2010)] – Orange Book Standard; CJEU, 16.7.2015, C-170/13, ECLI:EU:C:2015:477 – Huawei Technologies/ZTE Corp.
CJEU, 6.12.2012, C-457/10 P, ECLI:EU:C:2012:770 – AstraZeneca, see Podszun (2014), pp. 281–294.
Reckitt Benckiser Healthcare (UK), Case CE/8931/08, UK OFT, Decision No. CA98/02/2011, 12 April 2011.
ICA, Decision No. 23194 of 11 January 2012. A431 – Ratiopharm/Pfizer.
COM, 28.11.2008, Pharmaceutical Sector Inquiry Preliminary Report, available at: ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/preliminary_report.pdf; COM, 16.7.2008, Executive Summary of the Pharmaceutical Sector Inquiry Report, available at: http://ec.europa.eu/competition/sectors/pharmaceuticals/inquiry/communication_en.pdf.
COM, 19.06.2013, COMP/AT.39226 – Lundbeck.
COM, 09.12.2009, COMP/38.636 – Rambus.
Regulation (EU) No. 316/2014 of the Commission, 21.3.2014 on the application of Art. 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements; Guidelines on the application of Art. 101 of the Treaty on the Functioning of the European Union to technology transfer agreements (2014/C 89/03).
COM, Guidelines on the applicability of Art. 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (2011/C 11/01); COM, Guidelines on the application of Art. 101 of the Treaty on the Functioning of the European Union to technology transfer agreements (2014/C 89/03).
COM, Press Release, 6.7.2011, IP/11/842. See Straus (2009), p. 93. Also CJEU, 12.3.2015, C-577/13, ECLI:EU:C:2015:165 – Actavis/Boehringer Ingelheim.
Kerber and Schwalbe (2015), Introduction para. 556.
COM, 9.12.2009, COMP/38.636 – Rambus.
For a definition of hold-up problems cf. COM, Guidelines on Vertical Restraint (2010/C 130/01) para. 107(d) and (e). Cf. Angwenyi (2017), pp. 105, 106.
CJEU, 6.9.2017, C-413/14 P, ECLI:EU:C:2017:632 – Intel.
Podszun (2018), pp. 57 et seq.
Contreras (2018).
Examining the effects based approach in IoT cases: Conde Gallego and Drexl (2019), pp. 135, 148.
Hall et al. (2016), 23 April 2016, VOX CEPR Policy Portal.
Tsilikas (2017), pp. 151, 175.
CJEU, 16.7.2015, C-170/13, ECLI:EU:C:2015:477 – Huawei Technologies/ZTE Corp, para. 48.
CJEU, 16.7.2015, C-170/13, ECLI:EU:C:2015:477 – Huawei Technologies/ZTE Corp, para. 55.
Vestager (2015).
Almunía (2013).
Conde Gallego and Drexl (2019), pp. 135, 137.
COM (2015) 192 final, 6.6.2015, p. 15–16.
Regulation (EU) 2018/302 of the European Parliament and of the Council of 28 February 2018 on addressing unjustified geo-blocking.
Pentheroudakis and Thumm (2015), p. 9.
Conde Gallego and Drexl (2019), pp. 135, 149.
CRA (2016).
IPYLITICS (2016).
Europe Economics (2016).
COM (2017) 712 final, 29.11.2017, p. 1.
McKinsey (2015), p. 4.
In depth on the legal framework in competition law: Conde Gallego and Drexl (2019), pp. 135, 141.
COM (2017) 712 final, 29.11.2017, p. 2: “The evidence however suggests that the licensing and enforcement of SEPs is not seamless and may lead to conflicts”.
COM (2017) 712 final, 29.11.2017, p. 3 et seq.
COM (2017) 712 final, 29.11.2017, p. 5.
COM (2017) 712 final, 29.11.2017, p. 6.
COM (2017) 712 final, 29.11.2017, p. 8.
COM (2017) 712 final, 29.11.2017, p. 8.
COM (2017) 712 final, 29.11.2017, p. 10.
COM (2017) 712 final, pp. 1, 12.
CFI, 17.9.2007, T-201/04, ECLI:EU:T:2007:289 [39 IIC p. 504 (2008)] – Microsoft v. Commission.
COM (2015) 627 final, 9.12.2015.
Regulation (EC) 715/2007 on type approval of motor vehicles with respect to emissions from light passenger and commercial vehicles (Euro 5 and Euro 6) and on access to vehicle repair and maintenance information.
Feldman and Lemley (2015), p. 137.
COM, Case 40099, Google Android, not yet published, cf. press release of 18.7.2018.
Cf. Gurgula (2017), p. 385.
COM, Guidelines on the applicability of Art. 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (2011/C 11/01).
COM, Guidelines on the applicability of Art. 101 of the Treaty on the Functioning of the European Union to horizontal co-operation agreements (2011/C 11/01), paras. 55 et seq.
German Federal Cartel Office, Press Release, 6.10.2015, BMW, Daimler and Audi can aquire Nokia's HERE mapping service, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2015/06_10_2015_HERE.html; Press Release, 24.1.2017, Bundeskartellamt clears participation of Intel and NavInfo in HERE mapping service, available at https://www.bundeskartellamt.de/SharedDocs/Meldung/EN/Pressemitteilungen/2017/24_01_2017_HERE.html.
Guidelines on the application of Art. 101 of the Treaty on the Functioning of the European Union to technology transfer agreements (2014/C 89/03), concerning evaluation of technology pools under cartel law see 4.4. of the guidelines.
German Federal Cartel Office, 27.3.2018, Case Report “Aufbau einer elektronischen Handelsplattform für Stahlprodukte (XOM Metals GmbH)”, B5-1/18-001, available at https://www.bundeskartellamt.de/SharedDocs/Entscheidung/DE/Fallberichte/Kartellverbot/2018/B5-1-18-01.pdf.
Council of Economic Advisers, Economic Report of the President together with the Annual Report of the Council of Economic Advisers, Transmitted to the Congress February 2016, pp. 42, 207 ff., 217; for the EU see Valletti, Presentation: ‘Concentration Trends in Europe’, 2017, slides 23 et seq., available at https://ecp.crai.com/wp-content/uploads/2017/12/Valletti-Concentration_Trends_TV_CRA-002.pdf.
Council of Economic Advisers, Economic Report of the President together with the Annual Report of the Council of Economic Advisers, Transmitted to the Congress February 2016, p. 209.
On the matter of size of companies and the impact on innovation cf. the Schumpeter-Arrow-controversy and the Neo-Schumpeter-Hypothesis; see Shapiro (2012), pp. 361 et seq.
COM, 27.3.2017, COMP/M.7932 – Dow/Dupont; Horstkotte/Wingerter, IWRZ 2018, 3.
COM, 27.3.2017, COMP/M.7932 – Dow/Dupont, Annex 1.
COM, 11.4.2018, COMP/M.8084 – Bayer/Monsanto.
On competition principles in determining FRAND see Ghidini and Trabucco (2018), pp. 63 et seq.
Cf. Koelman (2006), pp. 823, 832, who spoke out in favour of an “exceptio standardis”, meaning a specific tool for intervention, at this early point. He referred to regulation in telecommunication law as an example.
For some ideas on this cf. Chien (2016).
References
Almunía J (2013) IP Summit Paris 2013. http://europa.eu/rapid/press-release_SPEECH-13-1042_en.htm. Accessed 9.12.2013
Angwenyi V (2017) Hold-up, hold-out and F/rand: the quest for balance. GRUR Int
Batista PHD, Mazutti GC (2016) Comment on ‘‘Huawei Technologies’’ (C-170/13): standard essential patents and competition law—how far does the CJEU decision go? IIC 47:244–253. https://doi.org/10.1007/s40319-016-0447-z
Bekkers CC, Martinelli A, Righi C, Simcoe T (2017) Disclosure rules and declared essential patents, NBER Working Paper No. 23627. https://www.nber.org/papers/w23627. Accessed 17 May 2019
Block J (2017) Achtzehn Monate nach EuGH “Huawei/ZTE”. Die Rechtsprechung der deutschen Instanzgerichte. GRUR
Boldin M, Levine DK (2013) The case against patents. J Econ Perspect 27:3
Cappuyns P, Vanherpe J (2017) The scoop from Europe: Europe takes on FRAND licensing—again, vol. LII Les Nouvelles
Chien CV (2016) Opening the patent system diffusionary levers in patent law. Southern Cal. Law Review 89(4)
Colangelo G, Torti V (2017) Filling Huawei’s gaps: the recent German case law on standard essential patents. ECLR Vol. 12
Conde Gallego B, Drexl J (2019) IoT connectivity standards: how adaptive is the current SEP regulatory framework? IIC 50:135–156. https://doi.org/10.1007/s40319-018-00774-w
Contreras, JL (2018) Much ado about holdup, University of Illinois Law Review, Forthcoming; University of Utah College of Law Research Paper No. 269, February 13, 2018.https://doi.org/10.2139/ssrn.3123245. Accessed 17 May 2019
CRA (2016) Report on transparency, predictability and efficiency of SSO-based standardization and SEP licensing. https://ec.europa.eu/docsroom/documents/20506/attachments/1/translations/en/renditions/native. Accessed 17 May 2019
De Rassenfosse G, Guellec D, van Pottelsberghe B (2008) Motivations to patent. https://www.researchgate.net/profile/Gaetan_De_Rassenfosse2/publication/237433666_Motivations_to_Patent_Empirical_Evidence_from_an_International_Survey24/links/54edcfc90cf2e2830863813f/Motivations-to-Patent-Empirical-Evidence-from-an-International-Survey24.pdf. Accessed 17 May 2019
De Toma M, Kreifels S (2016) Fachtagung Kartellrecht 2016: Rechtsprechung—Praxistrends—Perspektiven. WuW
Devlin A (2016) Antitrust and patent law. Oxford University Press, Oxford
Eckel G (2017) Anspruch auf Lizenzeinräumung aus FRAND-Erklärungen bei standardessentiellen Patenten – Teil 1. NZKart
Europe Economics (2016) Patent Assertion Entities in Europe. http://publications.jrc.ec.europa.eu/repository/bitstream/JRC103321/lfna28145enn.pdf. Accessed 17 May 2019
Feldman R, Lemley MA (2015) Do patent licensing demands mean innovation? Iowa Law Review 101:137
Ghidini G, Trabucco G (2018) Calculating FRAND licensing fees: a proposal of basic pro-competitive criteria. In: Bharadwaj A, Devaiah VH, Gupta I (eds), Complications and quandaries in the ICT sector. Springer
Gurgula O (2017) Strategic accumulation of patents in the pharmaceutical industry and patent thickets in complex technologies—two different concepts sharing similar features. IIC 48:385–404. https://doi.org/10.1007/s40319-017-0551-8
Hall B, Helmers C, von Graevenitz G (2016) Patent thickets and first-time patenting: new evidence
Hauck R, Kamlah D (2016) Was ist “FRAND”? Inhaltliche Fragen zu kartellrechtlichen Zwangslizenzen nach Huawei/ZTE. GRUR Int
Hausmann H-C (2008) Das Microsoft-Urteil: Zwischen Kartellrecht und gewerblichen Schutzrechten. MMR
Heinemann A (2005) Compulsory licences and product integration in European competition law—assessment of the European Commission’s Microsoft decision. IIC 36:63–82
Heinemann A (2006) Gefährdung von Rechten des geistigen Eigentums durch Kartellrecht? Der Fall “Microsoft" und die Rechtsprechung des EuGH. GRUR
Henningson K (2016) Injunctions for standard essential patents under FRAND commitment: a balanced, royalty-oriented approach. IIC 47:438–469. https://doi.org/10.1007/s40319-016-0474-9
Hou L (2012) The essential facilities doctrine – what was wrong in Microsoft? IIC 43:451–471
IPYLITICS (2016) Landscaping study standard essential patents (SEPs). https://www.iplytics.com/wp-content/uploads/2017/04/Pohlmann_IPlytics_2017_EU-report_landscaping-SEPs.pdf. Accessed 17 May 2019
Kerber W, Schwalbe U (2015) In: Münchener Kommentar, EU-Wettbewerbsrecht, 2nd edn
Koelman KJ (2006) An exceptio standardis: do we need an IP exemption for standards? IIC 37:823–843
Lo Bue M (2017) The High Court judgment on Unwired Planet vs. Huawei Narrows the scope of competition law defence in SEP litigation. Italian Antitrust Review 4(1)
Machlup F (1958) An economic study of the patent system, study for Congress. https://mises.org/sites/default/files/An%20Economic%20Review%20of%20the%20Patent%20System_Vol_3_3.pdf. Accessed 17 May 2019
McKinsey (2015) The internet of things: mapping the value beyond the hype. https://www.mckinsey.com/~/media/McKinsey/Business%20Functions/McKinsey%20Digital/Our%20Insights/The%20Internet%20of%20Things%20The%20value%20of%20digitizing%20the%20physical%20world/Unlocking_the_potential_of_the_Internet_of_Things_Executive_summary.ashx. Accessed 17 May 2019
Moser P (2016) Patents and innovation in economic history, NBER Working Paper 21964. https://www.nber.org/papers/w21964. Accessed 17 May 2019
Nguyen TT (2008) Competition rules in the TRIPS Agreement—the CFI’s ruling in Microsoft v. Commission and implications for developing countries. IIC 39:558–586
Pentheroudakis C, Thumm N (2015) Innovation in the European digital single market: the role of patents, JRC Sciency and Policy Report
Picht P (2017) Unwired Planet v Huawei: A Seminal SEP/FRAND decision from the UK. vol. 12 JIPLP
Picht PG (2018) “FRAND wars 2.0”—Rechtsprechung im Anschluss an die Huawei/ZTE-Entscheidung des EuGH (Teil 1). WuW
Podszun R (2010) Immaterialgüterrecht Geistiges Eigentum und KartellrechtJura
Podszun R (2014) Can competition law repair patent law and administrative procedures? AstraZeneca. vol. 51 CMLR
Podszun R (2017) SEP litigation and Huawei: negotiations in the shadow of competition law. The Antitrust Bulletin 62:786–805
Podszun R (2018) The role of economics in competition law—the “effects-based approach” after the Intel-judgment of the CJEU. EuCML
Podszun R, Franz B (2017) Nach Huawei/ZTE: Die kartellrechtliche Zwangslizenz im Patentverletzungsprozess. ZWeR
Shapiro C (2001) Navigating the patent thicket: cross licenses, patent pools, and standard-setting, NBER conference on innovation policy and the economy, 2001
Shapiro C (2012) Competition and innovation. In: Lerner J, Stern S (eds), The rate and direction of inventive activity revisited. NBER
Straus J (2009) Patentanmeldung als Missbrauch der marktbeherrschenden Stellung nach Art. 82 EGV?. GRUR Int
Surblyte G (2011) The refusal to disclose trade secrets as an abuse of market dominance—Microsoft and beyond. Stämpfli Verlag
Tsilikas H (2017) Huawei v. ZTE in context—EU Competition policy and collaborative standardization in wireless telecommunications. IIC 48:151–178. https://doi.org/10.1007/s40319-017-0560-7
Vestager M (2015) 19th IBA competition conference Florence. https://ec.europa.eu/commission/commissioners/2014-2019/vestager/announcements/intellectual-property-and-competition_en. Accessed 11 Sept 2015
Williams HL (2017) How do patents affect research investments? NBER Working Paper 23088. http://www.nber.org/papers/w23088. Accessed 17 May 2019
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
The author holds the Chair for Civil Law, German and European Competition Law at the Heinrich Heine University Düsseldorf and is director of the Institute for Competition Law there. He is also an Affiliated Research Fellow at the Max Planck Institute for Innovation and Competition, Munich. This text is based on a talk (given in German) at the 2018 Düsseldorf Patent Law Days, organised by Prof. Dr. Jan Busche and Prof. Dr. Peter Meier-Beck to whom the author is grateful for the invitation and inspiration.
Rights and permissions
About this article
Cite this article
Podszun, R. Standard Essential Patents and Antitrust Law in the Age of Standardisation and the Internet of Things: Shifting Paradigms. IIC 50, 720–745 (2019). https://doi.org/10.1007/s40319-019-00831-y
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40319-019-00831-y