VS&H is expert in the application and utilisation of the law surrounding intellectual property rights.  No consideration of the exploitation of those rights is complete without a consideration of the effect of competition law, both at the UK and European level.

Intellectual property rights are, by their very nature, restrictive of competition, which, perhaps paradoxically, is why they are valued so highly by their owners.  In general, the UK and EU legislators have recognised that a degree of relaxation of the rules restricting anti-competitive practices is essential to encourage innovation.  In essence, a deal has been struck between the innovator and the rest of the market (reflected in exemptions from competition law), allowing the innovator a period of monopoly or exclusive use of his right, followed by a general release of the right for use by the rest of the world.   However, depending on the nature of the owner of the rights and the use to which the rights are being put, competition law may step in to restrict the owner.

The operation of competition law operates, inter alia, in two areas:

LARGE ENTITIES - where the owner of a right is in a dominant position in a market (and, as you will imagine, there are a large number of views over what constitutes a market and, having defined that, what constitutes a dominant position), competition law may completely override the relevant intellectual property law and require the owner to licence the right freely to one or more competitors.  Extremely large fines have been levied in the past for such abuses.

RESTRICTIVE LICENCES - competition law renders certain anti-competitive licence clauses void, for example clauses that specify minimum prices that licensed products may be sold to the public or (in some circumstances) clauses that restrict the rights of a licensee to accept unsolicited orders from areas in the EU where the licensee is not licensed to sell.  Careful review is often necessary to ensure that such clauses are not included in licences.  Large fines may be payable in addition to the clauses in the licence being deemed to be void.

VS&H lawyers specialise in the competition law aspects relating to intellectual property transactions but have good background awareness of other competition law issues.  We advise, in particular, larger clients on the risks inherent in their licensing strategies and work closely with specialist barristers to ensure that no boundaries are breached.

For further information please contact:

john.davies@vshlaw.co.uk or

martin.jinks@vshlaw.co.uk