1.Introduction 1
1.1.The Previous Focus On Initial Innovation 1
1.2.The Need to Account for Follow-On Innovation 4
1.3.The Regulatory Problem and the Policy Levers 5
1.4.Methodology and Structure 6
2.The Relationship between IP and Antitrust Laws 8
2.1.A First Look: Two Types of IP 9
2.1.1.A Common Dynamic Benefit: Incentives to Create Markets 10
2.1.2.Similar Static Costs: Preventing Competition by Imitation 12
2.1.3.A Different Dynamic Cost: Blocking Follow-On Innovation and Improvements 13
2.2.A Closer Look: The Anti-Competitive Potential of IP Rights 14
2.2.1.IP Laws and the Basic Rights of IP Holders 14
2.2.2.The Anti-Competitive Potential of Conduct Involving IP 19
2.3.Approaches to the Relationship between IP and Antitrust 24
2.3.1.Approach Ⅰ: Absolute IP Domination 25
2.3.2.Approach Ⅱ: Inherency and the Specific Subject Matter as Legal(istic) Filters 26
2.3.3.Approach Ⅲ: Balancing Different Means to Enhance Consumer Welfare 32
2.4.A Positive Economic Analysis of the IP/Antitrust Interface 46
2.4.1.Preventing Competition by Imitation (Reward Mechanism) 47
2.4.2.Other Functions of IP and their Relation to Antitrust 58
2.5.IP or Antitrust? Some Meta Rules 60
2.5.1.Approach Ⅰ: ‘Pure' IP Solution 60
2.5.2.Approach Ⅱ: Antitrust as a Discretionary ‘Fine-Tuning' Device 61
2.5.3.Approach Ⅲ: Comparative Cost-Benefit Analysis According to the Competition Problem 63
2.6.Which Antitrust Rules? Some Principles 65
2.7.Conclusion 67
3.The Concepts of Monopolisation and Abuse: What is the Correct Test? 68
3.1.The Tests Used under § 2 Sherman Act and Article 102 TFEU 70
3.2.Obstacles to Cross-Fertilisation? 72
3.2.1.Exploitative Abuses 73
3.2.2.The Elements of § 2 Sherman Act and Article 102 TFEU 74
3.2.3.Leveraging 75
3.2.4.What is to be Protected? Market Structure vs Consumers 76
3.2.5.Enforcement 79
3.3.Analysis of Potential Standards 79
3.3.1.The Relationship between the Standard and Conduct-Specific Rules 80
3.3.2.The Cost-Error Approach as Heuristic 81
3.3.3.The Conduct Element—Suggested Standards 85
3.4.Conclusion 95
4.Refusals to Deal which May Impede Follow-On Innovation 96
4.1.The Traditional Typology of Refusals to Deal 98
4.1.1.Vertical Complementary and Horizontal Refusals to Deal 98
4.1.2.Concerted Refusals to Deal 102
4.1.3.‘Naked' vs ‘Constructive' and Conditional vs Unconditional Refusals 102
4.1.4.Discriminatory Conditions of Supply 103
4.1.5.Termination of Supply 105
4.1.6.Refusal to Deal as an Instrument or as a Corollary of Other Anti-Competitive Conduct 106
4.2.Cumulative Innovation and Bargaining Rules 109
4.2.1.Repercussions of Mandatory Rules on the Incentive to Innovate 111
4.2.2.Cases for IP Reform: Patent Thickets, Holdup, and Royalty Stacking 112
4.2.3.Self-Correction of Innovation Regimes? 114
4.3.A Typology of Refusals to Deal involving IP 115
4.4.Scenario 1: Impeding Research into Follow-On Innovation 116
4.4.1.IP Solutions 116
4.4.2.Antitrust in Innovation Markets? 117
4.5.Scenario 2: Impeding the Marketing of Follow-On Innovation 119
4.5.1.The Potential Case for Antitrust: Foreclosure of Competition by Improved Products 120
4.5.2.Some Conditions of an Antitrust Rule 121
4.5.3.Comparison to Alternative IP Solutions 122
4.5.4.Which Antitrust Solution: Leveraging Test or Essential Facilities Rule? 124
4.6.Scenario 3: Refusal to Give Interoperability Information 125
4.6.1.Gatekeepers on Markets with Network Effects 127
4.6.2.Protection through Trade Secrecy 131
4.7.Scenario 4: Refusal to License IP which Protects a Standard 132
4.8.Scenario 5: Refusal to Supply Products on the Basis of IP 133
4.9.Conclusion 135
5.The Licensing Fee: Determining Liability and the Remedy 136
5.1.The Royalty 138
5.1.1.No Royalty 138
5.1.2.Cost-Based Pricing 139
5.1.3.Same Firm Price Comparison, Market-Based Pricing, and Profit Comparison 140
5.1.4.Efficient Component Pricing Rule (ECPR) 141
5.1.5.Hypothetical Bargaining and Maximum Willingness to Pay 142
5.1.6.At-Least Reasonably Efficient Licensee's Maximum Ability to Pay 143
5.2.The Relationship between Liability and the Remedy Price 145
5.3.Non-Discriminatory Pricing? 146
5.4.The Procedure: Bargaining, Determining the Price, Monitoring, and Enforcement 147
5.5.Conclusion 147
6.An Essential Facilities Test 149
6.1.Condition 1: Harm to Competition 150
6.1.1.Dominant Position 150
6.1.2.No Circumvention or Substitution within a Reasonable Period of Time 157
6.1.3.Elimination or Prevention of Effective Competition on the Adjacent Market 158
6.2.Condition 2: No Ex Ante Investment Defence 160
6.2.1.The Difficulties of Balancing in Innovation Cases 160
6.2.2.Ex Ante Investment 162
6.3.Condition 3: No Ex Post Efficiency Defence 163
6.4.Conclusion 163
7.Cumulative Innovation under US IP and Antitrust Laws 165
7.1.The Initial Innovator's and the Improver's Positions under US IP Laws 165
7.1.1.US Patent Law 166
7.1.2.US Copyright Law 172
7.1.3.US Trade Secret Law 175
7.2.The General ‘No Duty to Deal' Rule under US Antitrust Law 176
7.2.1.No General Duties to Use and License IP Even Pre- Trinko 176
7.2.2.The Effects of Trinko 180
7.3.Potential Exceptions to the No Duty to Deal Rule 181
7.3.1.Essential Facilities Doctrine 182
7.3.2.Unjustified Change in the Pattern of Dealing 187
7.3.3.Monopoly Leveraging Doctrine 189
7.3.4.Margin Squeeze 193
7.3.5.Discriminatory Refusals to Deal 194
7.3.6.Concerted Refusals to Deal 195
7.4.The Remedy 196
7.4.1.Example 1: Kodak Ⅱ 196
7.4.2.Example 2: Microsoft 197
7.4.3.Example 3: Rambus 199
7.5.Future Tendencies 201
7.6.Conclusion 203
8.Cumulative Innovation under European IP Laws and EU Competition Law 205
8.1.The Original Innovator's and the Improver's Positions under National IP Laws in the EU 206
8.1.1.German Patent Law 206
8.1.2.German Copyright and Unfair Competition Law 212
8.1.3.German Trade Secret Protection and Conclusion 217
8.2.Limits to Refusals to Supply Based on IP under Article 102 TFEU 217
8.2.1.Essential Facilities Test 219
8.2.2.Margin Squeeze 235
8.2.3.Refusal to Deal as a Complementary Strategy 238
8.2.4.Discriminatory Refusal to Deal Based on IP 240
8.3.The Remedy 242
8.3.1.Substantive Criteria 244
8.3.2.Procedure 247
8.4.Future Tendencies and Conclusion 247
9.Comparison and International Dimension 249
9.1.Differences between the US and EU Approaches 249
9.2.Potential Explanations for the Differences 251
9.2.1.Constitutional Frameworks 251
9.2.2.Beliefs 252
9.2.3.Interests 253
9.3.The International Antitrust Law of IP 254
9.3.1.The Current TRIPS Approach 255
9.3.2.Is Stronger Harmonisation of the Antitrust Law of IP Needed? 258
10.Summary 260
10.1.IP and Antitrust as the Framework for Cumulative Innovation 260
10.2.The Relationship between IP and Antitrust Laws 260
10.3.Monopolisation and Abuse: What is the Correct Test? 261
10.4.Refusals to Deal which May Impede Follow-On Innovation 261
10.5.The Licensing Fee: Determining Liability and the Remedy 261
10.6.An Essential Facilities Test 262
10.7.Cumulative Innovation under US IP and Antitrust Laws 262
10.8.Cumulative Innovation under European IP Laws and EU Competition Law 262
10.9.Comparison and International Dimension 263
Bibliography 264
Index 293