Distinction between Complementary and Substitute Patents as a Matter of Competition Law - Observations from Comparative Perspective

MIPLC Master Thesis Series (2010/11)

82 Pages Posted: 23 Mar 2013

See all articles by Nobuyuki Hamanaka

Nobuyuki Hamanaka

Ministry of Economy, Trade and Industry (METI)

Date Written: 2011

Abstract

A patent pool is a mechanism through which multiple patent holders jointly license their patents and many patent pools have been established in many industries, especially in the modern information industries where an issue of interoperability has a significant influence and a blocking situation with patents owned by multiple patent holders could easily arise. This establishment of patent pools has been done mainly in connection with standard setting activities because a patent pool works as an effective solution to the “the tragedy of anticommons” situation stemming from such blocking situation. While a patent pool thus basically bring procompetitive benefits by integrating complementary patents, clearing the blocking situation and reducing transaction costs for multiple licenses, on the one hand, it may also raise competition concerns in certain circumstances because it is usually established and operated in a cooperative manner among business entities including competitors and further tends to acquire dominant position, especially when connected to technical standards, on the other hand.

Assessment of competitive effects of a patent pool is usually done by considering several factors and one of such factors accepted internationally is the ‘complementarity’ or ‘essentiality’ criterion, according to which a patent pool would be regarded as procompetitive if it includes only complementary or essential patents whereas it would cause anticompetitive risks otherwise. However, several problems can be seen in the practice of the complementarity and essentiality criteria; for example, strict application of these criteria would prohibit all inclusion of nonessential patents, even if such inclusion would bring procompetitive effects practically.

This thesis is aiming to explore other possible approaches for assessing competitive effects of a patent pool, which could be a complement or an alternative to the practice of the complementarity and essentiality criteria. For this purpose, firstly I surveyed comparatively the competition law practices in the US, the EU and Japan, focusing on the complementarity and essentiality criteria, and then analyzed similarities and differences among their practices and discussed underlying rational behind and problems seen in the current practices. Secondly I scrutinized the conditions on which inclusion of nonessential patents in the pool would not necessarily cause competitive harms, in light of the underlying competition rational and relevant US and EU cases. Finally I clarified such conditions to some extent and made some improvement proposals to the current practices.

Keywords: MIPLC, Patent Law, Patent Pools, Standards, Complementarity and Essentiality Criteria

Suggested Citation

Hamanaka, Nobuyuki, Distinction between Complementary and Substitute Patents as a Matter of Competition Law - Observations from Comparative Perspective (2011). MIPLC Master Thesis Series (2010/11), Available at SSRN: https://ssrn.com/abstract=2236097

Nobuyuki Hamanaka (Contact Author)

Ministry of Economy, Trade and Industry (METI) ( email )

3-1 Kasumigaseki, 1 Chome
Chiyoda-ku
Tokyo, 100-8901
Japan

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
370
Abstract Views
1,983
Rank
147,500
PlumX Metrics