Protection of Public Interests or the Private Interests of Right Holders?
St. Petersburg International Legal Forum discussed what comes first
On 17 May 2019, Russia’s Federal Antimonopoly Service (FAS) held its session “Intellectual Property and Antimonopoly Regulation”. Globally, such regulation is subject to the provisions of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). In the Russian Federation, antitrust laws do not apply to intellectual property and related agreements.
The session moderator, deputy head of the FAS Sergey Puzyrevsky, believes that this may create unjustified advantages for right holders at the expense of competition.
The discussants acknowledged that the abolition of immunities would not strip right holders of their exclusive rights, would not destroy the “legal monopoly” on the use of intellectual property, nor would it result in less investments. However, a balance between private and public interests is needed.
Experts concurred that the approaches to the work of competition authorities have to change. Alexey Ivanov, director of the HSE-Skolkovo Institute for Law and Development, said: “It is important what methods we use to manage the new relations. The antimonopoly regulator is not a typical controller, nor a road inspector. What is important is not how fast the market player is driving, but what kind of influence it exerts on others. The regulator itself must learn how to use big data effectively in order to explore the market, must itself undergo a digital transformation and ensure equal access to information for all players.”
Session participants also discussed the introduction of compulsory licensing in cases where the abuse of rights by the rights holder may run contrary to public interests: the defence and security of the state, the life and health of its citizens. Such provisions are contained in international agreements and are used by other states.
Timofey Nizhegorodtsev, head of the Department for Control over Social Sphere and Trade of the Federal Antimonopoly Service of Russia, raised the issue of compensation under compulsory licensing. According to him, the size of payments is a key issue of this right.
Mr Nizhegorodtsev noted that cases of compulsory licensing when the importation of a product is physically restricted are “exotic.” Globally, this mechanism is used when there are abuses in markets with inelastic demand as a way to balance the risks of unjustified pricing. One example of such a market, according to Mr Nizhegorodtsev, would be pharmaceuticals, where “the abuse of intellectual property rights to prevent competitors from entering the relevant markets and to establish predatory prices is often the ordinary course of business.”