Innovation and Access: Legal Strategies at the Intellectual Property Rights and Competition Law Interface

Abstract

Innovation is a commercially risky and legally perilous process. It is risky because large sunk costs are often required to initiate and sustain research, product development and other steps involved in the offering of the product and winning of the market. At the cusp of commercial success however, firms have to contend with uncertainty as to whether the manner in which they exploit any intellectual property (IP) rights they have, or may be acquiring, will pass the scrutiny of competition laws. In the wake of a recent Microsoft decision in the European Union and developments elsewhere, companies have had to reassess their corporate strategies, not merely at a local or regional level, but because of the nature of IP exploitation today, on a global scale as well. This paper begins with a reflection on how courts and competition authorities regard various legal strategies implemented in the exploitation of IP rights. The discussion includes an evaluation of the legitimacy of regulatory responses to these strategies as well as the regulatory schism that impacts trans-border IP strategies. The paper then considers how firms can maximise the value of their IP within the present regulatory environment by influencing the normative framework of competition policy. The limits of this influence are explored and the paper concludes with a discussion on how global trends are likely to shape the strategic landscape arising out of the interface between IP and competition law in the years ahead.

Keywords: Innovation, business strategy, intellectual property, competition, antitrust, Microsoft, RAND, China, multinationals, cultures