Competition Law, Technology Transfer and the TRIPS Agreement: Implications for Developing Countries

361 Pages·2010·1.53 MB·English

by  Tu Thanh Nguyen

Competition Law,
Technology Transfer
and the TRIPS
Agreement
Implications for Developing Countries
Tu Thanh Nguyen
Faculty of Law, Lund University, Sweden and Ho Chi Minh City
School of Law, Vietnam
Edward Elgar
Cheltenham, UK • Northampton, MA, USA
©Tu Thanh Nguyen 2010
All rights reserved. No part of this publication may be reproduced, stored in a
retrieval system or transmitted in any form or by any means, electronic, mechanical or
photocopying, recording, or otherwise without the prior permission of the publisher.
Published by
Edward Elgar Publishing Limited
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Edward Elgar Publishing, Inc.
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Acatalogue record for this book is available from the British Library
Library of Congress Control Number: 2009941282
ISBN 978 184980 125 6
Typeset by Cambrian Typesetters, Camberley, Surrey
Printed and bound by MPG Books Group, UK
2
0
Contents
Abbreviations x
Preface xiii
1 Technology transfer and competition rules under the TRIPS
Agreement 1
1.1 Introduction 1
1.1.1 Overview 1
1.1.2 Principles of the TRIPS Agreement 5
1.1.3 Effect of the TRIPS Agreement at the domestic law
level 7
1.2 The TRIPS Agreement and international technology transfer 11
1.2.1 Property rules of IPRs 11
1.2.1.1 Economic and legal justifications for IPRs 11
1.2.1.2 Intellectual property protection: property
rules v. liability rules 18
1.2.2 IPRs and technology transfer 24
1.2.3 Technology transfer-oriented provisions of the TRIPS
Agreement 28
1.3 The TRIPS Agreement and competition rules 32
1.3.1 IPRs and competition law 32
1.3.2 Pre-TRIPS Agreement 39
1.3.3 Competition rules in the TRIPS Agreement 42
1.3.3.1 Introduction 42
1.3.3.2 Interpretation 45
1.3.3.3 Overview of application and disposition 52
1.4 Concluding remarks 58
2 Application of competition law to technology transfer in
developed countries – US and EU perspectives 59
2.1 Background 59
2.1.1 Introduction 59
2.1.1.1 Development of the IP–antitrust law intersection
in the US 59
2.1.1.2 Development of the IP–competition law
intersection in the EU 64
v
vi Competition law, technology transfer and the TRIPSAgreement
2.1.2 Principles 68
2.1.2.1 Anti-competitive agreements: per serule and
rule of reason 68
2.1.2.2 Monopolization or abuse of a dominant
position: a two-pronged test 71
2.2 Anti-competitive price practices 77
2.2.1 Royalty concerns 78
2.2.1.1 Excessive royalties 78
2.2.1.2 Post-expiration royalties 82
2.2.1.3 Total sale royalties 84
2.2.1.4 Remarks 86
2.2.2 Restrictions on product prices 86
2.3 Anti-competitive non-price practices 90
2.3.1 Grantback 90
2.3.2 Tying and package licensing 92
2.3.3 Non-challenge clause 97
2.3.4 Exclusivity in technology transfer agreements 99
2.3.4.1 Exclusive licensing 99
2.3.4.2 Exclusive dealing 103
2.3.5 Output restrictions and other non-price restrictions 104
2.4 Refusal to transfer technology 105
2.4.1 Refusal to license in the US 106
2.4.1.1 Trinkoand traditional views 106
2.4.1.2 Post-Trinko development: eBayand Credit
Suisse 109
2.4.1.3 Kodak, Xerox and others: a split among US
courts of appeals 114
2.4.1.4 Remarks 118
2.4.2 Refusal to license in the EU 119
2.4.2.1 Refusal to deal in the EU: introduction 119
2.4.2.2 Volvoand Renault: initial cornerstones 120
2.4.2.3 Magill, IMS Healthand Microsoft v.
Commission: new guidance 121
2.4.2.4 Remarks 128
2.5 Contractual restrictions on downstream purchasers 128
2.5.1 US perspective 129
2.5.1.1 Implications of Quanta 129
2.5.1.2 Federal Circuit’s judgments revisited
through the Quantaprism 136
2.5.2 EU perspective 145
2.5.2.1 Community exhaustion 145
2.5.2.2 Contractual restrictions on downstream
purchasers in the EU 150
Contents vii
2.5.3 Remarks 154
2.6 Compatibility with the TRIPS Agreement 155
2.6.1 Arguments against TRIPS compatibility 155
2.6.2 Arguments for TRIPS compatibility 157
2.7 Concluding remarks 159
3 Application of competition law to technology transfer in
developing countries 161
3.1 Background 161
3.1.1 Overview 161
3.1.2 Current models in developing countries 166
3.1.2.1 Overview 166
3.1.2.2 Normative models 169
3.2 Certain specific cases 174
3.2.1 Microsoft tying cases 174
3.2.1.1 Microsoft Korea 175
3.2.1.2 Microsoft Taiwan 178
3.2.1.3 Microsoft Croatia 179
3.2.1.4 Remarks 180
3.2.2 Refusal to license pharmaceutical patents cases 180
3.2.2.1 Background 180
3.2.2.2 Hazel Tau v. GlaxoSmithKline and
Boehringer Ingelheim 184
3.2.2.3 TAC v. Bristol-Myers Squibb 188
3.2.2.4 TAC v. MSD & Merck 189
3.2.2.5 Remarks 192
3.2.3 Abbott’s withdrawal of drug registration application 199
3.2.3.1 Section 25(3) complaint 200
3.2.3.2 Section 28 complaint 202
3.2.3.3 Remarks 202
3.2.4 Philips’Taiwan package licensing case 204
3.2.4.1 Background 204
3.2.4.2 Other cases involved 206
3.2.4.3 Remarks 210
3.3 IPRs, technology transfer and competition law in Vietnam
– a case study 212
3.3.1 Background 212
3.3.1.1 Overview 212
3.3.1.2 IPlaw in Vietnam 214
3.3.1.3 Competition law in Vietnam 216
3.3.2 Technology transfer-related competition law issues
in Vietnam 226
viii Competition law, technology transfer and the TRIPSAgreement
3.3.2.1 From the perspective of IPlaw 226
3.3.2.2 From the perspective of competition law 230
3.3.2.3 Relevant cases 233
3.3.3 Remarks 243
3.4 Obstacles for developing countries 244
3.4.1 Internal obstacles 244
3.4.1.1 Lack of capacity 244
3.4.1.2 Deficiency of legislation 244
3.4.1.3 Absence of competition culture 246
3.4.1.4 Lack of cooperation between competition
authorities and IPauthorities 246
3.4.2 External obstacles 247
3.4.2.1 Argentina–US mutually agreed solution 247
3.4.2.2 Communications from the EC relating
to the anti-monopoly law of China 250
3.4.2.3 Bilateral agreements and TRIPS-plus standards 251
3.5 Concluding remarks 254
4 Prospects of technology transfer-related competition law
in a global context 256
4.1 Alternatives and challenges 256
4.1.1 Enforcement outsourcing 256
4.1.2 International cooperation between competition
authorities 260
4.1.3 Harmonization through international forums 267
4.1.3.1 WTO 267
4.1.3.2 OECD 271
4.1.3.3 UNCTAD 272
4.1.3.4 ICN 273
4.1.3.5 Other international forums: WIPO and WHO 274
4.1.3.6 Remarks 275
4.2 Prospects for the technology transfer-related competition
provisions of the TRIPS Agreement 276
4.2.1 Over-enforcement and under-enforcement 276
4.2.2 IPR-related trade and competition 278
4.2.3 Dispute settlement 280
4.3 Concluding remarks 283
5 Implications for developing countries 286
5.1 Purposes and principles 286
Contents ix
5.2 General implications 290
5.2.1 Importance of IPR-related competition law in
technology transfer and economic growth 292
5.2.2 Tailoring and enforcing domestic IPR-related
competition law to suit particular socio-economic
contexts 293
5.2.3 Cooperation between competition authorities and IP
authorities 294
5.2.4 International cooperation in enforcement of
IPR-related competition law 294
5.2.5 Other general implications 295
5.3 Specific implications 296
5.3.1 Refusal to license 297
5.3.2 Excessive pricing 298
5.3.3 Tying 299
5.3.4 Use restriction on downstream purchasers 299
5.4. Summary and final remarks 300
Bibliography 303
Index 327
Abbreviations
AG Advocate General
Antitrust–IPGuidelines US Antitrust Guidelines for the Licensing of
Intellectual Property of 1995, available at
www.usdoj.gov/atr/public/guidelines/0558.pdf
Article 82 EC Guidance European Commission Guidance on the
Commission’s enforcement priorities in applying
Article 82 EC to abusive exclusionary conduct by
dominant undertakings, OJ 2009 C 45/7
ARV Anti-retroviral
BIT Bilateral Investment Treaty (US)
CCHC Competition Case Handling Council (Vietnam)
CCS Competition Commission of Singapore
CDIP Committee on Development and Intellectual
Property (WIPO)
CD-R(s) Recordable Compact Disc(s)
CFI Court of First Instance (EU)
CUTS Consumer Unity & Trust Society (India)
DC District of Columbia
DOJ Department of Justice (US)
DSB Dispute Settlement Body (WTO)
DSU Understanding on Rules and Procedures Governing
the Settlement of Disputes (WTO)
EC European Community (Communities)/Treaty
Establishing the European Community
ECJ European Court of Justice
EFV Efavirenz (anti-AIDS medicine)
EPA Economic Partnership Agreement
EU European Union
FTA Free Trade Agreement
FTAIA Foreign Trade and Antitrust Improvements Act
(US)
FTC Federal Trade Commission (US)
GATS General Agreement on Trade in Services
GATT General Agreement on Tariffs and Trade
ICN International Competition Network
x
Abbreviations xi
ICTSD International Centre for Trade and Sustainable
Development
IDRC International Development Research Centre
(Canada)
IP Intellectual Property
IPR(s) Intellectual Property Right(s)
ISO(s) Independent Service Organization(s)
ITC International Trade Commission (US)
ITO International Trade Organization
KFTC Republic of Korea’s Fair Trade Commission
LDC(s) Least Developed Country (Countries)
MFN Most Favoured Nation (treatment)
MNC(s) Multi-National Corporation(s)
MRFTA South Korea’s Monopoly Regulation and Fair
Trade Act
NAFTA North American Free Trade Agreement
NOIP National Office of Intellectual Property of
Vietnam
OECD Organization for Economic Co-operation and
Development
OUP Oxford University Press
PC Personal Computer
R&D Research and Development
SACC South Africa’s Competition Commission
SSO(s) Standard Setting Organization(s)
TAC Treatment Action Campaign (South Africa)
TFTC Taiwan’s Fair Trade Commission
TIPO Taiwan’s Intellectual Property Office
ToTCode UNCTAD International Code of Conduct on the
Transfer of Technology
TRIPS Agreement on Trade-Related Aspects of
Intellectual Property Rights
TRIPS Council Council for Trade-Related Aspects of Intellectual
Property (WTO)
TTGuidelines European Commission Guidelines on the
application of Article 81 of the EC Treaty to
technology transfer agreements, OJ 2004 C 101/2
TTBER 2004 European Commission Regulation No. 772/2004
on the application of Article 81(3) of the Treaty to
categories of technology transfer agreements, OJ
2004 L123/11
UN United Nations