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The Essential Facilities Doctrine – What was Wrong in Microsoft?

IIC-International Review of Intellectual Property and Competition Law, 43(4), 251-271

21 Pages Posted: 20 Mar 2012 Last revised: 24 Jan 2013

Liyang Hou

Shanghai Jiao Tong University (SJTU) - KoGuan Law School

Date Written: March 19, 2012

Abstract

The essential facilities doctrine is designed to oblige dominant undertakings to make available their important facilities, including intellectual property rights, for other undertakings. It requires a delicate balance of, on the one hand, protecting the exclusivity of ownership and on the other hand encouraging other undertakings’ incentive to innovate. The balance that was nicely struck in the previous cases nevertheless was abandoned in the Microsoft judgment. In that case, the General Court made two mistakes: First, it wrongly defined the primary market as client PC operating systems that was in no accordance with the request of Sun, i. e. the interoperability information with Windows client PC operating system. This broader market definition made the General Court struggle in justifying the increasing market shares of Linux products through unnecessarily expanding the scope of ‘‘eliminating all the competition’’ from the requesting undertakings to ‘‘eliminating all effective competition’’. Secondly, the General Court improperly interpreted ‘‘new products’’ hindered by a refusal to grant a license as also including products with ‘‘technical development’’. This arbitrary extension encroaches upon the very substance of the system of intellectual property rights.

Suggested Citation

Hou, Liyang, The Essential Facilities Doctrine – What was Wrong in Microsoft? (March 19, 2012). IIC-International Review of Intellectual Property and Competition Law, 43(4), 251-271. Available at SSRN: https://ssrn.com/abstract=2025777

Liyang Hou (Contact Author)

Shanghai Jiao Tong University (SJTU) - KoGuan Law School ( email )

Huashan Road 1954
Xuhui District
Shanghai, Shanghai 200030
China
+86-21-6293-4632 (Phone)

HOME PAGE: http://law.sjtu.edu.cn/TeacherDetail123.aspx

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