BUCERIUS IP CONFERENCE 2013: INNOVATION, COMPETITION AND COLLABORATION

Bucerius Law School, Hamburg, Germany
October 11, 2013


Professor Gustavo Ghidini (LUISS Guido Carli; University of Milan)
Coopetition: The Role of IPRs


Cooperative partnerships instituted on contractual bases amongst competitors (hence: coopetition) help firms to access, acquire and develop knowledge and resources, and thus realize projects, otherwise unattainable or less efficiently attainable by single firms.

In innovation-oriented cooperative ventures, the entitlement of IPRs (patents in particular) interplay with contractual choices, on one hand by enhancing the value of the individual contributions, and on the other, by granting all participants "absolute" (erga omnes) protection against free riders: including against third parties who possibly cooperate, but then violate the contractual duty concerning the use of the patented technology.

In this respect, it must be emphasized that a patentee's faculty to exclude plays a residual role (as Damocles' sword against possible, occasional infringements by either partners or straight free riders) to its verso, the faculty to include. Such faculty enables selecting partners for sharing and for co-working the protected knowledge to the benefit, and in the course of, the permanent entrepreneurial activity of the coopetitive venture.

As an expression of the freedom of contract – a functional profile of "the freedom to conduct business" ex Art. 16 CFREU – coopetitive agreements are subject to a dual set of mandatory rules concerning: a) the relations amongst contractual partners; b) the impact of the cooperative venture on competition.

Rule a) involves fulfillment of reciprocal duties of fairness, also defined by German doctrine as "duties of protection" (Schutzpflichten) grounded in the general principles of "good faith" (Treu u. Glauben) in contract law (see § 241.2 BGB). (In U.S. law, see Restatement (second) of contracts, sec. 205 "Duty of good faith and fair dealing", as also interpreted by Judge J. Robart, Order n. C10-1823JLR in Microsoft v. Motorola, Sept. 24th, 2013; in Italian law, see articles 1337,1366,1375, civil code).

When such duties concern the use of patented technology, the contractual remedies against their violation or the violation of patent-related covenants, are strengthened, as suggested, by those stemming from the patent  entitlement.

As to rule b), the overall pro-competition regime encompasses:

(i) the limits set by the well-known exemption regulations on R&D (n. 1217/2010) and technology-transfer agreements (n. 772/2004), aimed at ensuring that the cooperation does not resolve itself in an agreement in violation of Art.101 TFEU;

(ii) the general principle whereby (in light of Art. 102 TFEU), if the technology shared by the coopetitors confers  "dominance"/market power – as is typically the case of SEPs – coopetitors must make said technology "FRAND-accessible" to third parties, even if competitors.

Finally, the authors leave open to discussion the possibility that access to SEPs might be systemically equated to that claimed by the author of a high-tech derivative invention to use the first, "original" patent, under TRIPS Art. 31.l (and to its effects).