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Refusals to Deal in Information and Communications Technology

Refusals to Deal in Information and Communications Technology. IAN EAGLES University of Auckland BILETA 2004 DURHAM . THE PROBLEM. Refusals to Deal in ICT The Wider Interface Debate Talking Past Each Other Formalism versus Empiricism Law versus Economics Intent versus Result

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Refusals to Deal in Information and Communications Technology

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  1. Refusals to Deal in Information and Communications Technology IAN EAGLES University of Auckland BILETA 2004 DURHAM

  2. THE PROBLEM • Refusals to Deal in ICT • The Wider Interface Debate • Talking Past Each Other • Formalism versus Empiricism • Law versus Economics • Intent versus Result • Action versus Inaction

  3. REFUSALS TO LICENSE • Unilateral or Collusive? • Explicit or Implied? • Absolute or Conditional? • Sustained by: - intellectual property - contract with third parties - technological locks

  4. REGULATORY CHOICES • Retreat Before the IP Right • Presumption of Vice • Presumption of Virtue • Regulatory Neutrality • between legal rights • between high and low technnology • between market players • Case by Case Analysis

  5. THE SOUNDBITE WARS • IP and Competition Law Share Same Goal • Sacrosanct Property Versus Regulated Monopoly

  6. MORE SOUNDBITES • What The Law Creates It Shall Not Destroy - statutory versus non statutory - property versus contract • property versus obligation • expansion of rights • Regulation Equals Destruction

  7. MORE SOUNDBITES • Rights Define Markets - legal monopoly = market power • IP rights never create market power • right to use implies right to refuse

  8. YET MORE SOUNDBITES • Different Markets Need Different Rules • IP is more vulnerable than other rights • time and technology will rescue us • the judge as science fiction writer • fast change is double edged

  9. LEGAL EXITS FROM THE ECONOMIC MAZE? • Inside or Outside the Scope of Grant • Exclusionary Intent Delegitimises Refusal • Cross Market Objectives

  10. SCOPE OF GRANT TESTS • Sword or Shield? • Absolute or Presumptive? • Evidentiary or Substantive? • Expressly granted or deduced penumbra? • Trans Market Leverage • substitutability versus complementarity • mapping right against market

  11. INTENT BASED TESTS • Predatory purpose as an abuse of IP right • Presumptive or Absolute? • Past Virtue Negates Present Right • Achievable Result Versus Wishful Thought • Hypothetical Non Monopolist • parsing the statute in Australia and NZ • legitimate business explanation in US • subset of essential facilities, or • independent source of liability

  12. The Search for Unifying Principle in European and UK Law • Four illustrative cases • Volvo v Veng • Magill • IMS • Intel • Exceptional Circumstances or Essential Facility?

  13. Exceptional Circumstances • Prediction or Rule? • Parsing Magill • Cumulative or Alternative? • The Forensic Context • the unlovely defendant • infringement versus enforcement • interlocutory indeterminism

  14. IP as an Essential Facility? • American Genesis • Antitrust before Economics • Four Part Test - control by monopolist • duplication not feasible • access by rival blocked • no harm to facility owner • Collective or individual control?

  15. Beating EF Back into its Box • Ramping Up the Control Threshold • downstream competition hobbled or eliminated? • permanence of obstacle? • Unwillingness to Find Constructive Refusal • Actual Access Defeats Claim • Courts’ Unwillingness to Act as Quasi Regulator

  16. Essential Facilities in EU Law • Refusals to Deal under ART 82 • dominant firm • prior dealing • Limited Powers of Direct Regulation • Port and Ferry Cases

  17. Essential Facilities in EU Lawcontinued • Judicial Correctives • Night Services • Oscar Bronner • Use in IP Context • Tierce Ladbroke • IMS

  18. Essential Facilities: A Conceptual and Practical Dead End • An Economics Free Zone? • Duplication Impossible to Rule Out in Technology Intensive Markets • IP Embedded in Industry Standard • De Facto Deference to Right Holder • Formal Evasion Disguises Substantive Breach

  19. CONCLUSION • IP is not special • Define markets not rights • Measure market power • Avoid retreat into formalism • Certainty comes at a price • Inaction is not better than Action

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