SERGEY PUZYREVSKIY: COMPETITION MEANS COMMON RULES OF THE GAME

“If goods are circulated on the market – common rules should apply to them”, said Deputy Head of FAS at a session on the balance of intellectual property protection and antimonopoly law

One of the main challenges of the modern economy, at both global and national levels, is a significant increase of the value of intellectual property and exclusive rights. Digitalization of economic processes sets new objectives for antimonopoly regulation. The law should keep pace with development of economic relations. Nevertheless, the antimonopoly authority has to deal with the existing immunities from antimonopoly enforcement with regard to abuses and agreements that use results of intellectual activity, which incurs serious risks for the economy.

On 18 May 2018 the program of St Petersburg International Legal Forum has a special session on the balance of intellectual property protection and the antimonopoly law.

The session was opened by Head of FAS Legal Department Artem Molchanov. He said: “Today we brought together experts, representatives of legal communities and practitioners who have different opinions and positions to answer the question: how antimonopoly regulation and intellectual property should intersect, where are the limits of such regulation, is there a need for normal formalization of the  approaches outlined today in the law on competition protection”.

Deputy Head of FAS Sergey Puzyrevskiy presented the view of the antimonopoly authority on “immunities” for intellectual property in the antimonopoly law.

Part 4 Article 10 of the Federal Law “On Protection of Competition” does not apply to actions for exercising the exclusive rights for results of intellectual activity and equated to them means of identification.  Part 9 Article 11 of the Federal Law “On Protection of Competition” does not apply to agreements on granting and alienating rights for use results of intellectual activity or means of identification of a legal entity, means of identification of goods, works, services.

Exemptions in Part 4 Article 10 of the Federal Law “On Protection of Competition” do not allow to apply the antimonopoly norms prohibiting abuse of dominant position and participation in cartels to the right holders that have the dominant market position. It leads to market monopolization and restricts competition.

Abusing the dominant position by right holders may result in refusing to produce or supply socially important goods to the Russian Federation.

Judicial practice allows right holders to control and monopolize market through their exclusive rights: goods legally obtained outside Russia and imported to Russia without a right holder’s consent is considered counterfeit, parallel import is prohibited.

To solve the issue, FAS proposes to eliminate IP “immunities” from the antimonopoly law: Part 4 Article 10 and Part 9 Article 11 of the Federal Law “On Protection of Competition” should be void.

“Another point I wanted to discuss. The Treaty on the Eurasian Economic Union and general competition principles does not specify immunities for actions and agreements related to intellectual rights. National antimonopoly law cannot be softer than the standards formalized by the international law”, commented Sergey Puzyrevsky.

Responding to the main “concerns” about abolishing “immunities” Deputy Head of FAS emphasized: “We do not want to abolish civil law. Let’s turn to Article 1229 of the Civil Code of the Russian Federation which says that a person possessing exclusive rights for results of intellectual activity can use such results at one’s discretion by any means not contrary to the law. All guarantees granted to right holders are regulated by civil rather than antimonopoly law. It means that abolishing “immunities” does not decrease the guarantees for protecting exclusive rights”.

“Competition implies common rules of the game. If goods are circulated on the market, common rules should apply to them. We cannot artificially introduce some exemptions for a particular market player”, explainedDeputy Head of FAS, answering questions from the audience.

“IP immunities often are conducive to market monopolization. If we do not engage proper methods of antimonopoly regulation on the modern markets that predominantly consist of intellectual property, we will lose these markets and will live under monopoly. I am not convinced that this is good”, concluded Sergey Puzyrevsky.

Other speakers were  Professor Josef Drexl, Max Planck Institute; Alexei Ivanov, Director, Institute of Law and development, High School of Economics – Skolkovo; Sergey Paraschuk, Head of MA Programme, Law Faculty,  Moscow State University; Frank Schauff, General Director, Association of European Business; Nikolai Voznesensky, a member of the Antimonopoly Experts Association, Head of antimonopoly practice at Moscow branch of the Partnership; Denis Gavrilov,  General Board Member,  the Antimonopoly Experts Association, a counsel at  Law Offices of “Yegorov, Puginsky, Afanasiev & Partners”.