1. Does competition law apply to the obtainment, grant, acquisition, exercise and transfer of intellectual property rights?
Competition law applies to the obtainment, grant, acquisition, exercise and transfer of intellectual property rights (IPRs) in the UK. UK competition law is principally found in the Competition Act 1998 (Competition Act), the Enterprise Act 2002 (as amended by the Enterprise and Regulatory Reform Act 2013), and the Consumer Rights Act 2015. The UK legislation does not make specific reference to IPRs. In 2001, the Office of Fair Trading (OFT) published draft guidelines for consultation under the Competition Act on IPRs, but never issued a final guidance document and subsequently removed the draft guidelines from publication.
The Chapter One and Two prohibitions of the Competition Act are the UK equivalent of articles 101 and 102 of the Treaty on the Functioning of the European Union (TFEU). The Chapter One prohibition may apply to such agreements relating to IPRs, if they constitute agreements between undertakings. The European Commission Technology Transfer Block Exemption Regulation (TTBER) may, however, provide a safe harbour for certain licences or assignments of patents, know-how, software copyright or certain other IPRs for the purposes of production of products by the licensee. The Competition Act provides for a parallel exemption to the TTBER, whereby any agreement exempted under the TTBER will also be exempted from a Chapter One violation. Agreements falling outside the scope of the TTBER may, in any event, be exempt on the basis of section 9 of the Competition Act (reflecting article 101(3) TFEU) where the four cumulative criteria provided are met.
The 2001 OFT draft guidelines noted that provisions in an intellectual property (IP) licence imposing minimum resale prices or market sharing could infringe Chapter One. In the Cleanroom laundry services decision (Case 50284, 14 December 2017), the Competition and Markets Authority (CMA) held that trademark licensing agreements allocating territories and customers infringed Chapter One.
The licensing of IP would not infringe the Chapter One prohibition if it did not have an appreciable effect on competition (section 2 of the Competition Act). Moreover, section 39(1) of the Competition Act provides that a ‘small agreement’ (as defined by the legislation) that is not a price-fixing arrangement can benefit from immunity from fines.
The Chapter Two prohibition applies, inter alia, to abusive unilateral conduct involving IPRs. The 2001 OFT draft guidelines noted that refusing, without objective justification, to license an IPR may be abusive, and that tying another product to the licence of an IPR or charging an excessive price may also infringe the Chapter Two prohibition.
In Intel Corp, the Court of Appeal allowed Via’s appeal on the basis that Intel’s refusal to license its latest chipset, despite Via having a licence to earlier versions of Intel’s chipsets, could constitute abusive conduct ( EWCA Civ 1905). Reference should also be made to the EU ‘exceptional circumstances’ refusal to license case law (which will be retained EU law following the Brexit transition period – see question 14). Further, in SanDisk Corp, the High Court held that the bringing of a legal claim by a dominant undertaking to enforce a patent right could be abusive if the action only serves to harass the opposite party and is conceived in the framework of a plan to eliminate competition. Where a patent has been granted, enforcement action would only constitute harassment if the patent is obviously not infringed or the patent holder knows or believes the patent is invalid  EWHC 332 (Ch)).
The Enterprise Act 2002 (as amended by the Enterprise and Regulatory Reform Act 2013) governs UK merger control. Merger notifications are voluntary in the UK but the relevant rules apply when mergers do not fall under the jurisdiction of the European Commission (EC) pursuant to the EU Merger Regulation. The CMA may open an investigation itself if the relevant jurisdictional thresholds are met.
Further to section 60 of the Competition Act, UK courts must currently interpret the provisions in accordance with EU law. Likewise, the UK is currently bound by the obligation, under EC Regulation 1/2003, for its national competition authority to apply and enforce articles 101 and 102 TFEU (and national competition law) directly. The UK remains bound by EU law until the end of the transition period following Brexit.