PROTECTING PUBLIC INTERESTS OR PRIVATE INTERESTS OF THE RIGHT-HOLDERS?

St. Petersburg International Legal Forum - 2019 discussed what is the priority

On 17 May, FAS held the “Intellectual property and antimonopoly regulation” session. International regulation in this field is based on the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In Russia, the norms of the antimonopoly law does not extrapolate to results of intellectual activity and agreements on them.

The session moderator, Deputy Head of FAS Sergey Puzyrevskiy, pointed out that it can create unreasonable advantages to the right-holders to the detriment of competition development.

Head of FAS Legal Department Artem Molchanov stated that competition is a constitutional value and emphasized the need to find a clear balance between private and public interests, which, in his view, is the job of the legislator.

He said that the issues is pretty hot and added that there are examples of market monopolization through applying private law, which can be done in the form of imposing goods, additional restrictive services, market entry agreements, and other methods.

Artem Molchanov stressed: “If there problems with competition, tools of antimonopoly control must be engaged”.

Head of FAS Legal Department specially focused on dispelling the myths introducing antimonopoly regulations for exclusive rights. He explained that abolishing immunities will not deprive the right-holders of their exclusive rights and will not destroy “legal monopoly” for use of results of intellectual activity or reduce an interest in investing.

Artem Molchanov wrapped up with the statement that “we must free ourselves from myths and illusions and provide efficient protection of competition in the Russian Federation”.

Sergey Puzyrevskiy agreed that it is necessary to search a balance and underlined the “urge for a correct watershed” between private and public interests.

The session discussed use of forced licensing tools when abuses by right-holders can infringe public interests: state defence and national security, life and health of the population.

Such norms are contained in international agreements and are practices by other states.

Head of FAS Department for Control over Social Sphere and Trade, Timophei Nizhegorodtsev mentioned compensation in forced licensing. In his opinion, the size of payment is the key aspect of this right.

He informed that cases of forced licensing with physical restriction of goods import in a country is an “exotics”, in the world this mechanism is applied for abuses on the market with non-elastic demand to balance the risks of fixing unreasonable prices. As an example of such a market, Timophei Nizhegorodtsev named pharmaceuticals where “abusing intellectual rights to prevent entry of competitors of the markets and fixing predatory prices are frequently methods of doing business”.

“If we do not bespeak adequate compensation at forced licensing in the regulatory acts, Courts will specify the difference at he amount of compensation for the shortfall in income”, added Head of FAS Department for Control over Social Sphere and Trade. “This way we make the institution of forced licensing meaningless: nobody will use it because the principal issues with accessibility of goods in dangerous circumstances will not be resolved”.

Finally, participants reached a unanimous conclusion that amending Russian law in the part of introducing antimonopoly regulation of intellectual property will enhance efficiency of government regulation. It is, however, necessary to ensure the balance of interest of the right-holders and public constitutional rights.

“We have a very good system of checks and balances. Enforcement will reach the balance, the importance of which we have highlighted”, concluded Sergey Puzyrevskiy.