Abuse of dominant position - Refusal to grant an intellectual property right - IMS - Bronner - Magill - Indispensability - Emergence of a new product - Potential consumer demand - Unjustified refusal - Secondary market - Microsoft - Exceptional circumstances

Do the holder of intellectual property rights have to license their rights to competitors ?

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This article analyses some of the important decisions of the European Court of Justice and the Commission on abuse of dominant position and intellectual property rights. The Court of Justice has recognised that the holder of an intellectual property right, where he is in a dominant position, is likely to abuse that position if he refuses to supply the product of his right to a competitor and the Commission has applied this principle. In the IMS judgment, the Court summarised the Bronner and Magill judgments. It first recalled the necessary condition laid down in the Bronner case: the refusal to supply the product of its right to a competitor can infringe Article 82 of the EC Treaty only if that product is indispensable to the exercise of the activity of that competitor. It then applied the three cumulative and sufficient conditions of the Magill case: (i) the refusal must prevent the appearance of a new product for which there is potential consumer demand; (ii) it must be devoid of justification; (iii) it must be such as to exclude all competition on a derivative market. Compared to the Bronner and Magill judgments, the Court has clarified here that the necessary condition is a precondition for the analysis of any other condition. Furthermore, it has made it clear that the other three conditions are sufficient. Without itself deciding the question of the legality of IMS’s conduct, the Court gave clear guidance to the referring judge. In particular, it considered that the condition relating to the emergence of a new product was not satisfied in the present case since the competitor had no other plan than to reproduce an existing product.

Introduction In certain "exceptional circumstances", the holder of an intellectual property right infringes Article 82 of the EC Treaty when he refuses to license his competitors to use the product of his right [1]. According to the Court of Justice of the European Communities (hereinafter "the Court" ), these circumstances were met in Magill [2]. They were not in IMS [3]. 1. In this contribution, we will first recall the essential features of this case law by also referring to a few judgments which have inspired the Court even though they do not concern the exercise of an intellectual property right, namely Bronner [4] and Commercial Solvents [5].(infra Section I). 2. Next, we will compare this case law with the approach followed by the European Commission (hereafter "the

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  • Arnold & Porter Kaye Scholer (Brussels)

Quotation

Luc Gyselen, Do the holder of intellectual property rights have to license their rights to competitors ? , May 2005, Concurrences N° 2-2005, Art. N° 225, pp. 24-30

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