Competition concerns related to Intellectual Property in Information Communication Technology Standardisation in European Union : Patent ambush

This study discusses the competition law concerns arising in context of technology standardisation agreements, in the field of information communication technology in specific. It is possible to promote interoperability of technologies through standardisation agreements, which is especially significant in the field of information communication technology. The risk of anticompetitive collusion increases when undertakings co-operate. Anticompetitive collusion is prohibited under the Article 101 TFEU. There are however even more significant competition law risks in the context of standardisation agreements specifically related to intellectual property rights, namely the patent ambush. Patent ambush has been considered to be an abuse of a dominant position, regulated under the Article 102 TFEU. The dynamics of competition is distorted when technologies protected by proprietary rights are adopted as industry standards. Distributors and manufacturers have to acquire a license from the right holder in order to operate on the market. Proprietary right might constitute a significant barrier to enter the market if access to the essential patent is being prevented by refusal to license or prohibitive royalty rates. The competition law Articles have not been completely adequate to catch the patent ambush as the application of Article 102 TFEU requires the existence of dominance. It is not however completely certain whether the dominant position can be derived by the virtue of the standard essential patent. In addition to the competition law articles in the Treaty, in 2010 the Commission adopted Guidelines on the application of Article 101 to Horizontal Co-operation Agreements, whereby it pursues to provide framework of guidance to the operation of standardisation organisations in order to avoid competition concerns. To this end the Guidelines provide a self-assessment framework for the organisations. The Guidelines recommend adoption of IPR policies to improve the possibilities of receiving information concerning standard-essential patents and FRAND licensing terms. The Guidelines is a so called soft law instrument, with recommendatory effect. The possibility of binding legal effects of the recommendatory instrument will be assessed. In specific the relationship between the soft law instrument and the self-regulatory mechanisms of standardisation organisations will be considered. The research question of this work is how efficiently is it possible for this current regulation to control the problems of patent ambush related to the opportunism of right holders whereby the dominant position is abused in the context of standardisation agreements. Within this analysis the contributions of stakeholders submitted in the Public Consultation round organised by the Commission will be assessed as the expectation of the subjects of legislation, which have been clearly out-stated in the Public Consultation round organised by the Commission prior to adoption of the Guidelines. Also the policy goals stated by Commission itself will be assessed. The realization of the expectations of the stakeholders as well as the policy goals named by Commission will be assessed in the light of the recent case law. When considering the effectiveness of the regulation it is necessary to take into account the need to maintain a balance between the protection of the effective competition while protecting the interests of the right holders. The protection of intellectual property rights has been considered important in the promotion of innovation and technological development. There is a great amount of legal literature discussing the possible future legislative conduct in order to control the problems related to opportunism of right holders. The suggestions vary from limitation of availability of injunctive relief to the total abolition of the exclusivity of patents and from allowing the SSOs to organise negotiations of licensing terms to direct application of unilateral conduct liability. This work gathers together and compares the suggestions assessing their possibilities to provide the right balance between protection of the interest of right holders while maintaining the effective competition. In the assessment a special consideration, that has to be borne in mind is that standardisation organisations cannot impose their members with burdensome obligations. Furthermore their possibilities to sanction the member from breaching the rules are limited as standardisation is, by definition, a form of voluntary co-operation of undertakings. It is also necessary to note that IPR policies of SSOs only reach their members. These factors have to be taken into consideration in order to find the balanced solution to regulate the patent ambush problem.