ANDREY KASHEVAROV: SOME COUNTRIES STILL HAVE COMPETITION-RESTRICTING ANTIMONOPOLY IMMUNITIES FOR INTELLECTUAL PROPERTY

Some post-Soviet countries have exceptions for applying the norms of the antimonopoly law upon the results of intellectual activity, which leads to restricting competition and monopolizing the market

On 16 May 2019, the programme ofPetersburg International Legal Forum - 2019 included a discussion on patent changes and relations between the antimonopoly law and intellectual property rights. The event was attended by representatives of FAS, the Ministry of Economic Development, Rospatent [the Federal Service for Intellectual Property], judiciaries, and large industrial and pharmaceutical companies.

Deputy Head of FAS Andrey Kashevarov presented the regulator’s position on the procedure for applying the antimonopoly law to results of intellectual activity and a FAS initiative to abolish antimonopoly immunities.

Most of the modern market economies build their systems for regulating IP objects on the basis of the priority of protecting public interests (competition protection) over the private interests of the right-holders.

For instance, foreign laws * do not contain exceptions for applying the antimonopoly norms to results of intellectual activity in case of abusing that leads (can lead) to competition restriction and market monopolization.

In Russia the situation is different, which can create unreasonable advantages for the right-holders (predominantly, foreign companies) to the detriment of developing competition on the markets.

“What countries still have antimonopoly immunities today? It is a rhetorical question. Only in some post-Soviet states, which is explained by their synchronized development”, explained Andrey Kashevarov. “In the current conditions, a lot of complex technological goods are equipped with software. Relationship between vendors and buyers do not stop after selling the goods. Incidents occur when suppliers request an additional agreement for software support, referring to the IP right. Consumers complain about overrated prices fixed in these agreements. Such actions must be evaluated by the regulator and can hardly be recognized fair”.

FAS has increasingly more cases where respondents attempt to justify legitimacy of their anticompetitive actions with references to the antimonopoly immunities for intellectual property. For example, “Teva Pharmaceutical Industries” Ltd. tried to avoid supplying “Copaxone”, while “Google Inc.” abused its dominance pre-installing its applications on mobile devices and smartphones.

Apart from these example, in practice there are situations when a dominant entity that possesses exclusive rights can set recruitments in the licensing agreement on purchasing something that is not relevant to the subject-matter of the agreement or restrict use of results of intellectual activity, or prohibit counteragents to enter into other agreements with competitors of the right-holder, or it can create discriminatory conditions, fix monopolistically high price, etc.

“Antimonopoly immunities are often used to restrict competition and it is getting harder and harder to suppress abuses committed by the right-holders. Amendments to the Competition law in the part of intellectual property, that FAS is working on, will stabilize the situation”, emphasized Deputy Head of FAS Andrey Kashevarov.

The amendments invalidate Part 4 Article 10 and Part 9 Article 11 of the Federal Law “On Protection of Competition” and extrapolate the bans specified in these Articles to the actions (omissions) and agreements that apply exclusive rights to results of intellectual activity.

“The proposed amendments enable applying the antimonopoly norms to unfair owners and do not decrease the protection level for the exclusive rights of their holders”, pinpointed Andrey Kashevarov.

Reference:
*Many foreign states have determined the procedures for applying the antimonopoly law to actions and agreements on using the exclusive rights for results of intellectual activity (No. 316/2014 Regulations of the European Commission “On the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of technology transfer agreements” of 21.03.2014; 2007 the Guidelines for the Use of Intellectual Property under the Antimonopoly Act, Japan Fair Trade Commission, etc.)