Examining The Connection Of Competition Law And Intellectual Property Rights
Every nation’s trade and economy are supported by IPR, which ensures that intangible properties like creative works, trademarks, and inventions are not exploited by unauthorized parties. Ideas and innovations are particularly vulnerable to exploitation in a digitalized society like ours. Such ideas and developments are protected by intellectual property laws, which ensure that they are not pirated or stolen.
Furthermore, Intellectual Property has an influence on a company’s commercial growth. To begin with, protecting your intellectual property (trademarks, inventions, and trade secrets) may contribute to a brand’s originality and distinction. As a result, a company can leverage its intellectual property to seek franchise agreements from other companies. Obtaining franchise agreements may help a firm develop commercially in the long run. Second, Intellectual Property (IP) systems can be used to make money. Patenting ideas, for example, may incentivize the creators, resulting in a steady source of money. This revenue stream can potentially be used to fund more research and development. This stream of income can also be invested in further research and development, thus boosting the scope for innovation.
Competition law, on the other hand, establishes rules and laws governing market competition in order to prevent companies from engaging in anti-competitive behavior. Predatory pricing (imposing excessive prices on products or services that the consumer has no option but to purchase), price fixing (a collaboration between rivals to set comparable prices for products or services), and bid rigging are examples of anti-competitive activities (selection of winners of a contract in advance).
Maintaining competitiveness in commercial environments
Because of the rapid change in economic environments, a link has been established between competition law and intellectual property rights. As previously stated, intellectual property rights (IPR) governs a company’s or individual’s exclusive rights to intangible assets such as trademarks, patents, trade secrets, and creative works. Competition law, on the other hand, governs mergers and acquisitions and protects commercial settings from anti-competitive behavior. In addition, IP is pro-competitive.
This implies that IP systems would support consumers in making informed decisions about the goods and services offered on the market from rival brands. IP guarantees that each brand is different in nature; without it, brands would try to imitate each other’s business strategies and other features. To summarize, intellectual property guarantees that commercial environments are competitive. One of the major functions of competition law is to encourage competition in commercial environments. As a result, IP and competition legislation may work together to ensure brand competitiveness in business environments.
Examining the relationship between intellectual property and competition law
While both IP and competition law have comparable purposes, the interface between the two creates a number of issues. For example, when IP rules are applied to non-distinctive parts of a brand, such as patents, trade secrets, or other aspects of a business that do not contribute to its uniqueness, exclusivity results. Enforcing IP rules on such characteristics would basically confer exclusive or monopoly over them. Typically, competition law concepts and policies oppose the over-extension and application of IP rules across all aspects of a business.
At the same time, insufficient IP enforcement can cause plenty of problems in commercial environments. Ineffective IP enforcement, for example, may have a negative influence on corporate competitiveness. When features of a company that contribute to its uniqueness are not protected by IP rules, replication and imitation are likely to occur. Inadequate competition between businesses will come from the copying and replication of different distinguishing features associated with a business, which is essentially against the rules of competition law. Thus, an inference can be drawn that there is a need to draw a balance between IP and competition law for both its principles to co-exist. IP is pro-competitive. Hence, IP enforcement that would balance the interests of both competitors as well as inventors and creators will facilitate adequate competition in commercial environments.
The TRIPS Agreement’s Importance in IPR and Competition Law
The World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights is an international agreement involving all World Trade Organization signatory nations. The TRIPS Agreement’s main goal is to allow member nations to offer a high degree of protection for their intellectual property. The TRIPS Agreement also explains how to regulate unfair competition and how it relates to intellectual property rights. According to Article 40 of the TRIPS Agreement, any licensing practice or conditions linked to Intellectual Property Rights may have a significant influence on commerce and may also operate as a barrier to technology transfer.
Furthermore, Article 40.2 of the TRIPS Agreement allows members to identify any kind of IP rights misuse that might have a detrimental impact and to take steps to prevent it. Article 40.2 of the Agreement also allows its members to take action against practices such as exclusive grant backs and forced package licensing, among others. The procedures described in Article 40.2, however, are not exhaustive.
IPR and competition laws are intended to control commercial environments while also supporting a common goal. IP rules guarantee that each business is distinct while also ensuring that creators are adequately paid. Competition law, on the other hand, seeks to create a balance between the rights of producers and customers while prohibiting anti-competitive behavior. IP laws, it has been stated, may result in the monopolization of a specific innovation or creation, which may be contradictory to competition law principles. There are, however, rules and agreements in place to control this. Thus, it can be concluded that inherently, IP laws and competition laws can coexist in commercial environments.
