The 'Unexceptional Circumstances' Test: Implications for FRAND Commitments from the Essential Facilities Doctrine Under Article 102 TFEU
39 Pages Posted: 11 Sep 2013
Date Written: July 5, 2013
Concerns over the global expansion of intellectual property (IP) rights and the notorious practice of tactical maneuvering on behalf of dominant undertakings in standard setting processes have placed talks about “fair, reasonable and nondiscriminatory” (FRAND) licensing terms at the heart of the current competition law regime. The acronym FRAND, also referred to as RAND in the United States (without the “fair” requirement), has been infamously difficult to define especially in relation to compulsory licensing and royalties determination. The concept gained excessive attention with the start of the Microsoft litigation in 2004. There, the EU competition authorities investigated, inter alia, whether the software giant had provided access to its interoperability information, i.e. its essential facility, on “fair, reasonable and nondiscriminatory” terms. Despite the wide attention paid to the issue in the legal and academic circles, clarifications from the courts and the Commission on the actual meaning of a FRAND commitment have been rather limited. Due to its apparent vagueness and lack of a well-established method for calculating licensing fees, the existing literature has been predominantly economics-oriented.
In an attempt to solve this fundamental ambiguity problem, the thesis fills an existing gap in the literature on “fair, reasonable and non-discriminatory” terms by drawing on a fundamental feature that a FRAND violation and a refusal to license share. Due to the indispensability of the intellectual property held by the inventor and the indispensability of the essential facility in refusal to license IP right cases, the technological creations (or information as was the case in Microsoft) appear to be vital for the survival of both the standardization process in the first case and the competitors in the second case. Drawing on this link, the thesis investigates the competition authorities’ reading of the essential facilities doctrine in an effort to extrapolate a meaningful guidance as regards a future FRAND violation. The present thesis therefore centers on the unduly benign approach towards the rivals of dominant undertakings evident in the present reading of the “exceptional circumstances” test. Furthermore, it assesses the overly aggressive application of Article 102 TFEU and the gradual shift in priorities and in balancing of efficiencies in the decisions of the competition authorities.
Keywords: Fair, Reasonable, Non-discriminatory, FRAND, RAND, intellectual property, patent pool, innovation, research, competition law, anti-trust, European Union, European law, Microsoft
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