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Entertainment, Engineering and Information Technology Industries

Enforcement of Intellectual Property and Competition Law in the Pharmaceutical,

Entertainment, Engineering and Information Technology Industries
Intellectual property rights have as their foremost goal the fostering of dynamic competition and innovation.
Quite obviously, however, those goals can only be achieved if the rights granted are calibrated in an adequate
manner, as regards both the scope of protection and the complexity of their regulatory framework. It is
primarily a task for the legislature to ensure that the course is set right with regard to those parameters.
However, the resulting rules remain to be dead letter, too abstract to grasp in their full potential to impact the
behaviour of market players, as long as they are not enforced in practice. Whether the tailoring of an exclusive
position, or the consequences flowing from its violation, are proportionate and meaningful in view of the
underlying aims, will become apparent only when courts and authorities turn the law in the books into living
reality. Seen from this angle, sanctions and enforcement, and how they are handled in practice, may form a
crucial tool for detection of deficiencies and imbalances within the entire IP system.
It is frequently emphasized in this context that if IP infringements are unchallenged in practice, or if the harm
caused by them regularly remains under-compensated, the objectives pursued by substantive legislation
cannot be met. On the other hand, it is equally important that distortions may also result from the other side
if claims are raised and eventually enforced that hinder competitors from engaging in lawful practices, the
balance reflected in the substantive norms is equally jeopardized.
In addition to purely technical concerns e.g. how to detect infringements and identify those who commit
them the issue concerns a number of legal and economic matters that are closely intertwined. There is an
obvious link between the harm caused by violations of IP rights to national economy and individual enterprises
and the urge to introduce, or reinforce, sanctions and procedures to secure compliance with existing rules.
Figures are regularly cited in the press as well as in legislative documents in order to illustrate the enormous
losses incurred each year through illegal copies. However, those figures are seldom seriously tested.
Furthermore, there seem to be no figures available of the economic harm caused by claims launched by overassertive right-holders against their competitors, who may have to yield simply because they cannot afford to
fight the matter through in court, or because the legal uncertainties are too high. Is it possible at all to arrive at
reliable estimations for both cases? How do the respective sanctions imposed those against infringement as
well as the consequences eventually facing a person who has raised unfounded claims influence the
reaction of those involved? Are they appropriately tailored so as to induce the best possible degree of lawabiding conduct on both sides?
Another important aspect concerns the question whether and when the validity of registered rights is
challenged that might pose a threat to ones own business. Is it more sensible from a legal and economic
point of view to wait for an eventual infringement claim, or is it preferable to charge already in an earlier
stage? What are the factors impacting that choice?
It is obvious already from the few examples given here that the response cannot be the same for all situations,
and for all kinds of rights. A differentiated approach needs to be applied, preferably distinguishing between
specific markets, analysing their economic structure and the sector-specific legal problems raised by
infringement and enforcement of rights. For example, markets such as the following might provide a basis for
such an endeavour: pharmaceuticals, entertainment, engineering and information technology.

Last change: 27.01.2012

Max Planck Institute for Intellectual Property and Competition Law , 2012
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An Institution of the Max Planck Society