Refusal to Deal and Essential Facilities: Does Intellectual Property Require Special Deference Compared to Tangible Property?

Abstract:     
As a threshold matter, this paper asks whether there is a difference between the refusal to deal line of case-law (Commercial Solvents, Telemarketing) and the essential facilities line of case-law (the airline/airport cases, the port cases, Magill, Ladbroke, Bronner, IMS). It will be argued that there is a direct continuity between the two. More importantly, it will be shown that under current legal standards, refusal to deal/essential facility cases involving intellectual property are subject to a higher standard than non-IP cases (i.e., IP cases are governed by a stricter test which is therefore more favorable to defendants). Is IP entitled to special deference in this context? The proponents of this approach take it for granted that any relaxing of the standard in IP-related essential facility cases would have dire consequences on innovation incentives - but they fail to produce arguments supporting their point of view. In 2002, Michael Katz observed that the arguments for special treatment of intellectual property are incomplete. Indeed, the arguments for imposing less of a duty to deal on intellectual property than on other forms of property have been disappointingly superficial to date.... [M]ore rigorous analysis is needed if one is to take seriously arguments that intellectual property is deserving unique treatment. The purpose of this paper is precisely to make some progress towards such analysis, by presenting a series of arguments against special deference to IP.

Number of Pages in PDF File: 22

Keywords: Essential facilities, intellectual property, patent, copyright, refusal to deal, refusal to supply, antitrust, EU law

JEL Classification: K21, D42, L12, L41

Accepted Paper Series