Patents and competition law

The complementary nature of intellectual property law and competition law represents one of the key focuses of the partnership between IP TRUST and law firms.

Too often, the term “counterfeit” covers a range of realities:

• infringement of a valid and opposable intellectual property right
• the illicit reproduction of a product that was not necessarily protected by IP law and which resulted in fraudulent and prejudicial behaviour.

Use the term “counterfeit” for infringement of an IP right Counterfeiting can be deliberate, particularly in the field of luxury brands and copyright. In other cases, it is often involuntary and results from a lack of knowledge of the existence of IP rights (particularly a patent), or poor appreciation of the scope and validity of the intellectual property. The punishment for breach of an IP title occurs whether the counterfeiter acted in good or bad faith.

A forgery is the result of culpable and prejudicial behaviour:

• free-riding, unjust enrichment
• misleading consumers
• non-observance of safety standards, regulations and rules.

Even if there has been no infringement of IP rights, it is a civil wrong under tort law: “Any action by a person which causes damage to another obligates said person to correct said damage.” (Article 1382 of the Civil Code). It is also a public order offence, as it destabilises the people involved who have to deal with competitors who do not respect regulations.

“Fighting counterfeiting” involves, on the one hand, infringement of luxury or famous brands and, on the other hand, forgery. The use of a single term creates confusion; it implies that ownership of an IP title protects against forgery. But a forgery can be reprehensible and yet not infringe IP rights.

Similarly, patent infringement is reprehensible but generally does not create risk in terms of product security (paradoxically, if the patent concerns safety elements, non-infringement can represent a greater risk than exact infringement of patented safety elements!).

We are witnessing the development of practices that are similar to racketeering, resulting from accumulation by essentially financial companies (“non-practising entities” or NPEs). These companies, often called patent trolls, offer a service to industrial companies to “regularise” their situation with a licence.

When patent clusters reach several dozens or even hundreds of titles, it is fanciful to check the scope and enforceability of these rights in a traditional way. Accepting “regularisation” conditions is the only way to avoid necessarily costly litigation, whatever the result may be.

An NPE has no retaliatory measures because it does not have a commercial or industrial activity.

On several occasions, IP TRUST has helped companies facing these practices, and has deployed effective and creative measures:

• Declaratory non-infringement actions
• Referral to the European Commission for anti-competitive practices
• Referral to the Competition Council

IP TRUST’s technological and financial analytical capabilities are supported by lawyers with specialised expertise in competition law.