IP & Antitrust 2017

Last verified on Thursday 28th September 2017

France

Julie Catala Marty
Franklin
  1. 1.

    Applicable rules

    Does competition law apply to the obtainment, grant, acquisition, exercise and transfer of intellectual property rights?

  2. There are no French competition law provisions that specifically apply to intellectual property rights (IPRs). When dealing with IPR issues, the French Competition Authority (FCA) applies both French and European competition law rules established by the French Commercial Code (CC) and the Treaty on the functioning of the European Union (TFEU).

    In principle, competition law does not apply to the existence of IPRs. Article 345 of the TFEU provides that:

    [t]he Treaties shall in no way prejudice the rules in member states governing the system of property ownership (Joined cases 56 and 58/64, Consten and Grundig v Commission, 13 July 1966; FCA, RMC Info, 30 April 2002).

    However, it is well established by both European and French case law that competition law applies to the exercise of IPRs (FCA, Opinion Nautical Press Group, 25 February 1997 and Sanofi-Aventis, 17 May 2010; Joined cases 241/91 and 242/91, RTE and ITP v Commission, 6 April 1995).

    In this regard, the exercise of IPRs may fall within the prohibition of agreements and concerted practices which have as their object or effect the prevention, restriction or distortion of competition (articles 101(1) TFEU and L 420-1 CC).

    For instance, the exercise of an IPR may lead to the distortion of competition, where the exclusivity clauses contained in a coproduction contract are intended to hinder potential competitors from entering the market (FCA, TF1, 22 December 1999).

    However, several Commission regulations may allow agreements involving IPRs containing restrictions of competition to escape from the prohibition laid down by article 101(1) TFEU (eg, block exemption regulation on research and development agreements, on technology transfer agreements (see question 5), etc).

    Moreover, since IPR holders are granted exclusive rights, the exercise of these rights could also be subject to articles 102 TFEU and L 420-2 CC in case of an abuse of a dominant position (see questions 6 and 7). 

  3. 2.

    Competent authorities

    Which authorities are responsible for the application of competition law to intellectual property rights? What enforcement powers do they have? Are there any special procedures for conduct that concerns intellectual property rights?

  4. With regard to litigation, both the FCA and specialised French courts apply competition law, including when IPRs are concerned:

    The FCA

    The FCA is responsible for the public enforcement of antitrust law.

    The FCA has no special procedures for anticompetitive practices involving IPRs. It therefore treats them like any other type of anticompetitive practices and may either impose fines (up to 10 per cent of the group turnover) or hand down injunctions or interim measures to put an end to these practices, which can be appealed to the Paris Court of Appeal.

    In addition to its decision-making power, the FCA may, on its own initiative or upon request, issue opinions and recommendations regarding the competitive functioning of markets.

    The commercial courts

    The commercial courts and first-level civil courts of Bordeaux, Fort-de-France, Lille, Lyon, Marseille, Nancy, Paris and Rennes have exclusive jurisdiction over private cases involving competition law issues.

    A conflict of jurisdiction may arise where a private case raises both competition law and intellectual property law issues, as several first-level civil courts have exclusive jurisdiction over disputes relating specifically to IPRs.

    Indeed, the French Intellectual Property Code provides that the First-Level Civil Court of Paris has exclusive jurisdiction over patent-related cases, and 10 first-level civil courts share jurisdiction over intellectual property, trademark, design and copyright cases (Bordeaux, Lille, Lyon, Marseille, Nancy, Nanterre, Paris, Rennes, Strasbourg and Fort-de-France).

    With regard to merger control decisions adopted by the FCA, no specific procedure exists regarding IPRs. Its decisions in this matter are appealable to the Conseil d’Etat.

  5. 3.

    Market definition

    How are markets involving intellectual property rights defined?

  6. With regards to markets involving any type of IPR, the Commission and the French Competition Authority apply the general approach to define what a relevant market is for the purposes of competition law (the Commission’s notice on the definition of relevant markets for the purposes of European competition law – 97/C 372/03). According to this approach, a relevant market has both a product and a geographic dimension. More precisely, a relevant product market comprises "all those products and/or services which are regarded as interchangeable or substitutable by the consumer".

    In this regard, where IPRs apply to non-substitutable products, they may constitute a relevant product market. For example, the FCA has held that Dobutrex, a patent-protected medicinal product, could constitute a relevant market especially since, given its specificities, the possibility of substitution with other medicinal products and the role played by the purchaser (in the present case, hospital pharmacists) are rather limited (FCA, Lilly France, 5 March 1996).

    More specific considerations may be taken into account by the Commission and the FCA when certain categories of IPRs are involved; for example:

    • with regards to technology rights licensing (such as know-how, patent, design rights, etc), both product markets (ie, products incorporating the licensed technology and their substitutes) and technology markets (ie, the licensed technology and its substitutes) can be defined for the purposes of assessing potential competitive effects of a licence agreement (the Commission’s guidelines on technology transfer agreements, 2004/C 101/02, sections 20–22); and
    • standard essential patents (SEPs) are patents that claim an invention that must be used to comply with a technical standard. In other words, it is technically impossible to manufacture standard-compliant products without using technologies covered by one or more SEPs. Therefore, the Commission has held that ‘each SEP constitutes a separate relevant technology market on its own’ as there is no alternative or substitute for it (COMP/M6381, Google/Motorola Mobility, 13 February 2012, sections 54 and 61).
  7. 4.

    Acquisition and sale

    Does competition law apply to the obtainment or grant and transfer or assignment of intellectual property rights?

  8. In specific circumstances, articles 102 TFEU and L 420-2 CC may apply to the method used by a company for obtaining or granting IPRs. For example:

    • the FCA has held that even a company in a dominant position may file a patent application without abusing its position, unless its only purpose in doing so is to prevent its competitors from entering the market (FCA, Advanced Mass Memories, 21 September 2001); and
    • the Court of Justice held that AstraZeneca abused its dominant position as it ‘deliberately attempted to mislead the patent offices and judicial authorities in order to keep for as long as possible its monopoly’, such behaviour falling ‘outside the scope of competition on merits’ (Case 457/10, AstraZeneca v Commission, 6 December 2012, section 93).

    Moreover, as it constitutes an agreement between undertakings, the transfer or assignment of IPRs may fall under articles 101 TFEU and L 420-1 CC (see question 1; see question 5 regarding technology transfer and licensing agreements; and see questions 11–13 regarding standardisation).

  9. 5.

    Licensing

    How does competition law apply to technology transfer and licensing agreements?

  10. Most technology transfer and licensing agreements do not restrict competition, and create pro-competitive efficiencies as they lead to dissemination of technology and promote innovation. However, some of these agreements can have a stifling effect on competition and therefore, fall under articles 101 TFEU and L. 420-1 CC.

    This applies to those technology transfer and licensing agreements that may affect trade between member states and have as their object or effect the prevention, restriction or distortion of competition.

    This may be the case, for example, for trademark licensing agreements that are granted on an exclusive basis, with an exclusive right to distribute the trademark products in a given member state, thus affording the licensee absolute territorial protection (Case 28/77, Tepea (BV), 20 June 1978).

    Moreover, under articles 101(3) TFEU and L 420-4 CC, technology transfer and licensing agreements are exempted from articles 101(1) TFEU and L 420-1 CC if they meet the following criteria:

    • they contribute to improving the production or distribution of goods or to promoting technical or economic progress;
    • consumers receive a fair share of the resulting benefits;
    • the restrictions they impose are indispensable to the attainment of these objectives; and
    • they do not afford the parties the possibility of eliminating competition in respect of a substantial part of the products in question.

    In accordance with article 101(3) TFEU, the Commission adopted a new regulation for the assessment of categories of technology transfer agreements on 21 March 2014 (Regulation No. 316/2014 – the TTBER and its Guidelines). This Regulation, which aims at creating a safe harbour from the prohibition of anticompetitive agreements for certain types of technology transfer agreements, has replaced the previous TTBER since 1 May 2014.

    The TTBER only covers technology transfer agreements between a licensor and a licensee. If the parties are competitors, the safe harbour only applies if their combined share of the affected technology and product markets does not exceed 20 per cent. If they are not competitors, the safe harbour applies if each party’s market share does not exceed 30 per cent (article 3 TTBER). Whether or not they are competitors is determined with regard to the relevant markets affected at the time the agreement enters into force.

    The TTBER provides that unless these agreements contain "hardcore" or "excluded" restrictions, they are automatically exempted. If an agreement contains "hardcore restrictions", it is excluded as a whole from the benefit of the exemption and it is likely to infringe article 101 TFEU. If it only contains excluded restrictions, these restrictions alone are excluded from the safe harbour, but not the remainder of the agreement (see question 14). 

    Nevertheless even if a technology transfer agreement is exempted under the TTBER, the Commission may withdraw the benefit of this exemption if it finds that the agreement has effects that are incompatible with article 101(3) TFEU (article 6 TTBER). 

  11. 6.

    Market power and dominance

    In what circumstances is the possession of intellectual property rights deemed to confer substantial market power on the holder such that the rules on unilateral conduct will apply?

  12. Although IPR holders are granted exclusive rights, merely holding these rights does not automatically place them in a dominant market position (Case 24/67, Parke, Davis & Co v Probel, 29 February 1968; Case 78/70, Deutsche Grammophon, 8 June 1971).

    Whether IPR holders enjoy a dominant position depends on certain circumstances and must be assessed on a case-by-case basis.

    It is generally considered that an IPR holder will be regarded as having a dominant position if he or she has the power to impede the maintenance of effective competition, with particular regard to the existence and position of competitors, barriers to entry, etc. (Case 40/70, Sirena Srl v Eda Srl, 18 February 1971; Case T-51/89, Tetra Pak Rausing SA, 10 July 1990).

    As regards IPRs declared as potentially essential to a standard, the Commission has held that ‘there is no presumption that holding or exercising IPR essential to a standard equates to the possession or exercise of market power’ (section 269 of the Guidelines on the applicability of article 101 of the TFEU to horizontal cooperation agreements (Horizontal Guidelines)). However, advocate general Wathelet recently suggested that holding a standard-essential patent ‘could give rise to a rebuttable presumption that the owner of that patent holds a dominant position’ (Opinion of advocate general Wathelet, Case 170/13, Huawei Technologies, 20 November 2014). The Court of Justice did not rule on this point in its judgment (Case C-170/13, Huawei, 16 July 2015), since the existence of a dominant position was not in dispute (the referral from the Dusseldorf Court only related to the existence of an abuse).

  13. 7.

    Unilateral conduct

    In what circumstances may unilateral conduct involving the exercise of intellectual property rights be deemed to be anticompetitive (monopolisation, abuse of dominance, etc)?

  14. It is generally considered that the exercise of an IPR by an undertaking occupying a dominant position on the market is not, in itself, contrary to competition law (FCA, Opinion Nautical Press Group, 25 February 1997; Case 102/77, Hoffmann-La Roche, 23 May 1978).

    Accordingly, the mere refusal by an undertaking in a dominant position to grant a licence does not constitute an abuse of a dominant position (Case 238/87, Volvo, 5 October 1988).

    However, under exceptional circumstances, the exercise of an exclusive right by the IPR holder may constitute such an abuse (joined cases 241/91 and 242/91, RTE and ITP v Commission, 6 April 1995).

    This may be the case when an undertaking refuses to grant a licence and the IPR concerned is considered to be an "essential facility" (Case 418/01, IMS, 29 April 2004), provided that the refusal is:

    • likely to lead to the elimination of effective competition on the downstream market;
    • likely to lead to consumer harm;
    • not objectively justified; and
    • prevents the third party from creating a new product or technical development (including restrictions on technological development, Case T-201/04, Microsoft Corp v Commission, 17 September 2007).

    However, the FCA imposed on Cegedim a fine for having abusively refused to grant a licence for the use of its medical information database protected by IPRs, even if this database did not constitute an ‘essential facility’. In this case, Cegedim refused to sell its database (the benchmark for the sector) to laboratories that were using Euris’ software, although it had granted an access to laboratories that were using other competing software. Therefore, the FCA held that such discriminatory treatment by a company enjoying a dominant position constituted an abuse of dominant position (FCA, Cegedim, 8 July 2014). The Paris Court of Appeal upheld the FCA’s decision (Paris Court of Appeal, 24 September 2015), recently followed by France’s highest civil court (Cour de cassation, 21 June 2017).

    An undertaking occupying a dominant position may also abuse its position when charging excessive royalties for the use of patents obtained by means of an intentional deceptive conduct (COMP/38636, Rambus, 9 December 2009; see question 13).

    Another potential abuse of dominant position is the multiplication of IPR lawsuits, such as counterfeiting accusations against competitors entering the market, if these lawsuits are part of a plan to eliminate competition through legal abuse (FCA, Cegedim, 8 July 2014). In this regard, the FCA specified that the exercise of IPRs over medicinal products for the sole purpose of preventing a generic medicinal product from entering the market is an abuse of a dominant position (FCA, Opinion Distribution of Medicinal Products, 19 December 2013; see also question 8). The Paris Court of Appeal recently quashed the FCA’s analysis of an abuse resulting from the use of a brand. The FCA held that the use of the brand image and reputation of an incumbent operator (Electricité de France) by its subsidiary was abusive in the following circumstances (FCA, Photovoltaic solar power, 17 December 2013):

    • brand image and reputation was used on a related market to the one where the brand owner holds a dominant position;
    • brand image and reputation played a decisive role on the related market as a result of the consumers’ lack of expertise;
    • the size of the competitors on the related market was relatively small and they did not enjoy similar brand image and reputation than the incumbent operator;
    • the practices took place on a market where investments were irreversible; and
    • the prohibited practices took place on an emerging market or a market recently opened to competition.

    The Paris Court of Appeal put a halt to the FCA’s aspiration to control the use of an incumbent operator’s brands and logos on related markets recently opened to competition. It held that the FCA’s demonstration was not based on the use of the brand itself, but rather on market characteristics which, according the FCA, increased the benefit of using the incumbent operator’s brand (Paris Court of Appeal, 21 May 2015). The Court of Appeal then asserted that the FCA’s findings were not substantiated since: the fact that the brand is used on a related market is not, as such, a relevant characteristic; no study showed the consumer’s lack of expertise; the FCA did not demonstrate that competitors who did not enjoy brand awareness had difficulties in entering the market; and the importance of the investments necessary was exaggerated. 

  15. 8.

    Patent settlements

    In what circumstances may patent settlements be deemed to infringe competition law?

  16. Patent settlements can be beneficial for competition, especially in the context of technology disputes where they are ‘a legitimate way to find a mutually acceptable compromise to a bona fide legal disagreement’ (section 235 Horizontal Guidelines). However, a patent settlement that benefits only its parties at the expense of consumers may be deemed to infringe competition law.

    In the pharmaceutical sector, "pay-for-delay" agreements have recently come under the scrutiny of the Commission. A pay-for-delay agreement is one under which a generic laboratory agrees to delay the market entry of its generic product in exchange for payment, generally from an originator laboratory. According to the Commission, these agreements may infringe article 101 TFEU (COMP/AT39226, Lundbeck, 19 June 2013; COMP/AT39685, Fentanyl, 10 December 2013; COMP/AT39612, Perindopril, 9 July 2014). In the Lundbeck case, the General Court of the European Union upheld the Commission’s decision and confirmed that the Commission “is not required, in its decisions, to lay down generally applicable legal rules, but only to determine, in each specific case, whether these agreements are compatible with the treaty provisions on competition, giving sufficiently clear and convincing reasons in that respect” (T-472/13, 8 September 2016). The Perindopril case is still pending on appeal. The parties, and especially the originator laboratory Servier, argue that the Commission erred in finding that the agreements delaying the release of the generic drug Perindopril constitute a restriction by object.

    To date, no pay-for-delay cases have come before the FCA. However, the FCA has heard cases of disparagement, which is another practice that aims to hinder the market entry of generic products. In two recent cases, the FCA fined originator laboratories (Sanofi Aventis and Schering-Plough) for disparaging the generic version of their originator medicinal products (FCA, Sanofi Aventis, 14 May 2013 and Schering-Plough, 18 December 2013). In both cases, the FCA found that the originator laboratories had abused their dominant position and consequently breached article L 420-2 CC as well as article 102 TFEU. Both cases were recently brought before France’s highest civil court, which confirmed the two decisions issued by the FCA (Sanofi Aventis, 11 January 2017 and Schering-Plough, 18 October 2016).

    The FCA recently issued, on its own initiative, an Opinion on the distribution of medicinal products (FCA, Opinion Distribution of Medicine, 19 December 2013) whereby it recalls the above-mentioned case law. The FCA considers that while originator laboratories may legitimately defend the quality of their standard drugs when generics are introduced (by alerting the health authorities of true problems linked to the generic, for example), they may not convey incorrect or unverified information on competing products for the sole purpose of harming their sales.

  17. 9.

    Merger control (jurisdiction)

    In what circumstances will the transfer of intellectual property rights constitute a merger for the purposes of competition law?

  18. Pursuant to article L 430-1 CC, a transaction may constitute a merger if it results in an undertaking acquiring control over another, namely, the ability to exert a decisive influence over the conduct of its business.

    In its merger control guidelines, the FCA specifies that the acquisition of control over assets, such as brands or patents, may be regarded as a merger if these assets constitute the whole or a part of a business with a market presence, to which a turnover can be clearly attributed (section 22 Merger Control Guidelines; see also FCA, Proservia WorkStation Services/Atos A2B, 22 January 2015). 

  19. 10.

    Merger control (substantive)

    In what circumstances will a merger involving intellectual property rights be deemed anticompetitive? Are there any special considerations for mergers involving intellectual property rights or innovation markets?

  20. A proposed merger is likely to harm competition if it creates or strengthens a dominant position or a purchasing power that places suppliers in a situation of economic dependency (article L 430-6 CC).

    Due to their economic value, IPRs are taken into account by the FCA in its competitive assessment of the proposed merger, in particular when IPRs may confer excessive market power on the new entity or constitute barriers to entry.

    Market power can result from the ownership of one or more brands considered by many consumers as ‘essential’ or ‘reputable’ (FCA, Opinion Coca-Cola/Orangina, 29 July 1998; Quartier Français Spiritueux, 13 December 2011).

    Similarly, the number and the reputation of patents held by the new entity should also be taken into account (FCA, Opinion Alfa laval/Vicarb, 20 January 1999).

    If the FCA finds that the proposed merger is likely to raise competition concerns, the parties may propose remedies to obtain the FCA’s consent. Such remedies may involve IPRs: trademark licence (Minister for the Economy, Letter C 2008-100, Bigard/Socopa, 17 February 2009); assignment of trademark (Minister for the Economy, Panzani, 17 May 2002), etc.

  21. 11.

    Standardisation

    How, in general, does competition law treat the development of standards in standard-development organisations (SDOs), and the exercise of intellectual property rights for technology that may be essential to a standard?

  22. In principle, standards promote competition by facilitating interoperability and lowering the cost to consumers of switching between competing products. Therefore, standardisation agreements are often beneficial in that, for example, they encourage the development of new and improved products (section 263 Horizontal Guidelines; FCA, Opinion The revision of the European law rules on horizontal cooperation agreements 25 June 2010) and serve the public interest (FCA, Fire extinguishers, 20 December 2012).

    However, in specific cases, standards may have restrictive effects on competition, in particular by:

    • reducing price competition;
    • foreclosing innovative technologies; and
    • excluding or discriminating against certain companies by preventing effective access to the standard.
  23. 12.

    Standardisation and anticompetitive agreements

    How do competition law rules on agreements, concerted practices, etc, apply to the standardisation process?

  24. Section 7 of the Horizontal Guidelines provides guidance on how the FCA assesses the standardisation process with regard to competition law rules.

    Standardisation agreements aimed at excluding actual or potential competitors or at fixing prices are considered as restricting competition ‘by object’, and fall within the prohibition laid down by articles 101 TFEU and L 420-1 CC.

    Standardisation agreements may also be found to be infringing competition law if they restrict competition ‘by effect’. In that case, it must be determined whether they are eligible for exemption under articles 101(3) and L 420-4 CC.

    Standardisation agreements fall outside of the prohibition of anticompetitive agreements if:

    • participation in standard-setting is unrestricted;
    • the procedure for adopting the standard is transparent;
    • participants remain free to develop alternative standards; and
    • access to the standard is provided on fair, reasonable and non-discriminatory terms (FRAND terms) (COMP/39416, Ship Classification, 14 October 2009).

    More specifically, where standards involve IPRs, participants that wish to include their IPRs in the standard are required to provide a FRAND (Fair, Reasonable and Non-Discriminatory) commitment, namely, to offer to license their essential IPRs to third parties on FRAND terms. This commitment passes onto any transferee of the licenced IPRs.

    Standardisation agreements are eligible for exemption if:

    • they give rise to significant efficiency gains;
    • the restrictions related to their implementation are indispensable to achieve efficiency gains;
    • efficiency gains are passed on to customers; and
    • they do not eliminate competition.
  25. 13.

    Standardisation and unilateral conduct

    How do competition rules on unilateral conduct apply to the exercise of intellectual property rights for technology that may be essential to a standard?

  26. The market shares of the goods or services based on the standard must be taken into account in assessing the effects of a standardisation agreement. The Commission considers that ‘in the absence of market power, a standardisation agreement is not capable of producing restrictive effects on competition’ (section 277 Horizontal Guidelines).

    A standardisation agreement that might create market power may nonetheless fall outside article 101(1) TFEU or article 420-1 CC if its IPR holders are subject to a FRAND commitment (see question 12).

    FRAND commitments serve, among other things, to prevent IPR holders from charging excessive fees. Under French and EU case law (FCA, Institut national de l'audiovisuel, 10 April 2003; Case 27/76, United Brands Company, 14 February 1978), fees may be considered excessive if they bear no reasonable relation to the economic value of the product supplied and therefore, constitute an abuse of a dominant position.

    Participants in a standard-setting process are also required to disclose their essential IPRs in good faith. This is to avoid ‘patent ambushes’, where a participant asserts proprietary rights over a technology after the standard has been adopted.

    In the Rambus case (COMP/38636, Rambus, 9 December 2009), the Commission provisionally considered that Rambus had engaged in intentionally deceptive conduct in the context of the standard-setting process for DRAM computer chips, which conduct may have led to abuse of its dominant position by charging disproportionate royalties. To end the matter, Rambus made a legally binding commitment under article 9 of Regulation 1/2003 to cap its royalty rates. If Rambus were to break its "article 9" commitment, the Commission could impose a fine of up to 10 per cent of its annual turnover, without having to find an antitrust infringement.

    Furthermore, the Commission has recently held that the seeking and enforcement of an injunction based on a SEP may infringe article 102 TFEU (COMP/39939, Samsung and COMP/39985, Motorola, 29 April 2014). Although, in general, the seeking and enforcement of an injunction is a "legitimate course of action" for a patent holder, in the case of a SEP it may constitute an abuse of a dominant position, especially where:

    • the patent-holder has agreed to license its patent on FRAND terms; and
    • the licensee is willing to enter into such a licensing agreement. 

    In its recent Huawei judgment (C-170/13, Huawei, 16 July 2015), the Court of Justice confirmed the Commission’s general approach according to which seeking injunctions based on an SEP, where a commitment to license on FRAND terms has been given, can be an abuse of a dominant position. In its judgment, the Court of Justice’s highlights two important aspects of the case at hand:

    • the patent at issue is an SEP, which must be distinguished from patents that are not essential to a standard and which normally allow third parties to manufacture competing products without recourse to the patent concerned; and
    • the patent obtained SEP status only in return for the proprietor’s irrevocable undertaking that it is prepared to grant licences on FRAND terms. Since such an undertaking creates legitimate expectations on the part of third parties that the proprietor of the SEP will in fact grant licences on such terms, a refusal to grant a licence on those terms may constitute an abuse.

    In its analysis, the Court of Justice distinguished between two types of actions brought by an SEP owner which has given an irrevocable undertaking to grant a licence to third parties on FRAND terms: those seeking a prohibitory injunction or the recall of products; and those seeking the rendering of accounts and an award of damages.

    With regard to the first type of actions, the Court held that the SEP owner does not abuse its dominant position when:

    • prior to bringing the action, the proprietor has alerted the alleged infringer of the infringement complained about by designating the patent in question and specifying the way in which it has been infringed, and presented to that infringer a specific, written offer for a licence on FRAND terms; and
    • while the alleged infringer has not diligently responded to that offer, it continues to use the patent in question.

    Moreover, the alleged infringer who has not accepted the offer made by the proprietor of the SEP may invoke the abusive nature of an action for a prohibitory injunction or for the recall of products only if it has submitted to the proprietor of the SEP, promptly and in writing, a specific counter-offer that corresponds to FRAND terms.

    The Court also held that the second type of actions brought by an SEP owner cannot be regarded as an abuse of a dominant position, since such actions do not have a direct impact on standard-compliant products manufactured by competitors appearing or remaining on the market.

    As regards royalty calculation, the Court of Justice did not rule on what constitutes a FRAND royalty rate or a FRAND royalty base in its recent Huawei judgment (Case C-170/13, Huawei, 16 July 2015), merely stating that the written offer presented by the proprietor of an SEP to the alleged infringer should specify the royalty and the way in which it is calculated.

    At the French level, the courts have so far never granted a prohibitory injunction on the basis of a SEP (see, for instance, the judgments of the First-Level Civil Court of Paris in Apple v Samsung, 8 December 2011 and Ericsson v TCT, 23 November 2013).

    The First-Level Civil Court of Paris recently ruled, however, that, where a commitment to license a SEP on FRAND terms has been given, a clear willingness from the licensor to block the licensee’s possibility to use the patents in return of a fair and proportionate royalty must be proven to demonstrate an abuse of dominant position (Core Wireless v LG Electronics, 17 April 2015).

  27. 14.

    Recent cases and other developments


  28. The highest French civil court (Cour de cassation) recently issued two decisions clarifying rules on jurisdiction in cases involving competition law and IPRs. The Cour de cassation stated that commercial courts have jurisdiction over unfair competition cases involving patents, as long as the existence, validity or infringement of such patents are not called into question (Sté de Trevillers cartonnages et al. c/ Sté Abzac gestion, 16 February 2016, Sté Enez Sun et al. c/ Sté Europe et communication et al, 16 February 2016).

    It is also worth mentioning that, when he presented the FCA’s annual report for 2016, the President of the FCA declared that the health sector was of high priority and announced that a large sector-wide inquiry was forthcoming, which would include pharmaceutical operators.   

    At European level, the Court of Justice recently ruled that article 101(1) does not preclude the imposition on the licensee, under a non-exclusive licence agreement, of a requirement to pay a royalty for the use of a patented technology, in the event of the revocation or non-infringement of a licenced patent, provided that the licensee is able freely to terminate that agreement (Case C-567/14, Genentech Inc v Hoechst GmbH and Sanofi-Aventis Deutschland GmbH, 7 July 2016). 

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Questions

  1. 1.

    Applicable rules

    Does competition law apply to the obtainment, grant, acquisition, exercise and transfer of intellectual property rights?


  2. 2.

    Competent authorities

    Which authorities are responsible for the application of competition law to intellectual property rights? What enforcement powers do they have? Are there any special procedures for conduct that concerns intellectual property rights?


  3. 3.

    Market definition

    How are markets involving intellectual property rights defined?


  4. 4.

    Acquisition and sale

    Does competition law apply to the obtainment or grant and transfer or assignment of intellectual property rights?


  5. 5.

    Licensing

    How does competition law apply to technology transfer and licensing agreements?


  6. 6.

    Market power and dominance

    In what circumstances is the possession of intellectual property rights deemed to confer substantial market power on the holder such that the rules on unilateral conduct will apply?


  7. 7.

    Unilateral conduct

    In what circumstances may unilateral conduct involving the exercise of intellectual property rights be deemed to be anticompetitive (monopolisation, abuse of dominance, etc)?


  8. 8.

    Patent settlements

    In what circumstances may patent settlements be deemed to infringe competition law?


  9. 9.

    Merger control (jurisdiction)

    In what circumstances will the transfer of intellectual property rights constitute a merger for the purposes of competition law?


  10. 10.

    Merger control (substantive)

    In what circumstances will a merger involving intellectual property rights be deemed anticompetitive? Are there any special considerations for mergers involving intellectual property rights or innovation markets?


  11. 11.

    Standardisation

    How, in general, does competition law treat the development of standards in standard-development organisations (SDOs), and the exercise of intellectual property rights for technology that may be essential to a standard?


  12. 12.

    Standardisation and anticompetitive agreements

    How do competition law rules on agreements, concerted practices, etc, apply to the standardisation process?


  13. 13.

    Standardisation and unilateral conduct

    How do competition rules on unilateral conduct apply to the exercise of intellectual property rights for technology that may be essential to a standard?


  14. 14.

    Recent cases and other developments