Safeguards against Unfair Competition under Multilateral Agreements :

A number of multilateral agreements in the field of intellectual property deal with unfair competition in intellectual property transactions.

The Paris Convention for Protection of Industrial Property provides for efficient protection against unfair competition. Article 17 of the Berne Convention for the Protection of Literary and Artistic Works makes clear that the Convention does not prohibit the application of national administrative control – this formulation may apply to competition laws. The Paris Convention allows the grant of compulsory licences to prevent abuses resulting from the exercise of the exclusive rights conferred by patents.

WTO agreement on Trade-related Aspects of Intellectual Property Rights expressly recognise the role of competition policy in ensuring that IPRs promote economic growth and innovation. Article 40.2 of the TRIPS agreement provides that “Nothing in this Agreement shall prevent members from specifying in their legislation licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having an adverse effect on competition in the relevant market”. It allows member countries “to adopt, consistently with the other provisions of this Agreement, appropriate measures to prevent or control such practices … in the light of the relevant laws and regulations of that member …”. The repression of anti-competitive practices associated with IPRs is therefore assigned to national competition laws and policies.

In this context, the need for international cooperation has also been emphasized under TRIPs agreement. In particular, consultations among member countries are envisaged, inter alia through the supply of publicly available non-confidential information. In this regard, Article 8 stipulates that appropriate measures consistent with the provisions of the Agreement may be needed to prevent the abuse of IPRs or practices which unreasonably restrain trade or adversely affect the transfer of technology.

Article 40 affirms the right of member countries to specify in their legislations licensing practices or conditions that may in particular cases constitute an abuse of intellectual property rights having adverse effects on competition in the relevant market and to adopt, consistently with other provisions of the Agreement, appropriate measures to prevent or control such practices which may include, for example, exclusive grantback conditions, conditions preventing challenges to validity, and coercive package licensing. This article also includes a provision under which a member state seeking competition policy action against a firm under the jurisdiction of another member state can seek consultations with that member, which is required to cooperate through the supply of relevant publicly available non-confidential information and confidential information, subject to domestic law and to agreements for safeguarding confidentiality of such information.

Article 31 of TRIPs agreement lays down conditions limiting the use of patents without authorization of the IPR holder, including both uses by Governments or by third parties i.e. through compulsory licenses. However, certain exceptions from these conditions are made if the unauthorized use is permitted in order to remedy a practice determined to be anti-competitive after judicial or administrative process.