Past Event

Intellectual Property and Competition Policy in Europe and Japan

Intellectual property (IP) is a cornerstone for incentivising innovation initiatives. It defines a framework within which firms and individuals can produce creations of intellect.

Date: March 14, 2017, 12:30 pm Topic: Innovation & Competition Policy

SUMMARY

In her introductory presentation, Reiko Aoki, Commissioner at the Japan Fair Trade Commission, provided an overview of the main characteristics of Japanese competition and intellectual property law, highlighting the (few) differences with the EU framework. According to Prof. Aoki, competition policy and the exercise of IP rights are intrinsically related. On one hand, by stimulating R&D and innovative activities of companies, IP rights certainly have a positive effect on competition in the existing and newly created market. On the other, the exercise of IP right may have negative effect on competition if IP holder refuses to license its technology or imposes strictly restrictive conditions.  Maintaining the balance between these two opposing forces may not be always easy, given the changeable nature of any competitive context and firms’ conducts. In this regards, the Japan Fair Trade Commission has recently updated its Guidelines for the Use of IP under the Anti-Monopoly Act. This revision was mainly motivated by the emergence of new issues related to the Standard Essential Patent (e.g., Apple vs. Samsung case in Japan).

The presentation of Prof. Aoki was followed by an interesting discussion with three panellists.

Prof. Kühn noted that, while the is strong evidence that efficient property rights systems enhance economic growth, the marginal impact of the IP system remains unclear in the literature. Taking as example the size of smartphone screen (Samsung vs. Apple), he advised not underestimating the importance of imitation as driver of innovation.  Wondering whether our system may overprotect IP, he argued that the existing trade-off between innovation incentives and ex-post competition is different across industries. In this regard, he pointed to ICT and biotech as cases in which the complementarity of patents is probably hindering innovation. Answering to the question posed by Georgios Petropoulos whether excessive competition may end up slowing innovation, Prof. Kühn explained that there is now a consensus about the positive effect of competition. The intuition presented is straightforward: if one looks at “patents as races to the next big thing”, having multiple competitors will push all of the racers, even the following ones, to innovate and avoid “arriving last”. For this reason, merger control will remain, in his opinion, an essential instrument to guarantee the existence of multiple players participating to the innovation “race”.

Michael Koenig, from DG-GROW, highlighted how competition and IP policy, only by complementing each other, can guarantee the correct balance between innovation incentives and ex-post competition. He also stressed that IP is not goal for itself, the monopoly it creates is acceptable as long as it translates into innovation and growth. To ensure this outcome, three major conditions are necessary. Firstly, the right legal toolbox must be available and updated to the market developments. Toolbox must be accessible by all type of companies, also SMEs. Enforcement must be effective across the EU. He then presented the recent and ongoing initiatives of the Commissions along these three lines. The unitary patent title across EU should be at its final stage of discussion. An important novelty to harmonise the existing diverging national laws is the new EU directive “on the protection of undisclosed know-how and business information (trade secret) against their unlawful acquisition, use and disclosure”. There are also ongoing discussions about the creation of European-level insurance schemes for litigation and IP theft for SMEs. In his conclusions, Dr. Koenig warned that the advent of Internet of Things is likely to deeply affect the licensing environment of SEPs, given that mobile connectivity will become essential part of many products so far completely unrelated.

Peter Alexiadis concluded the panel discussion with a series of considerations, based on his wide experiences as a practitioner in this field, on the relationship between competition and IP law. In his view, there is certainly a tension between the two. Competition policy mainly deals with a short-term issue, generally analysed with a static approach of prices. While IP policy has instead a much longer-term perspective with a focus on allocative efficiency. However, he claimed that there is also a certain degree of complementarity, which may vary over time. According to Mr. Alexiadis, indeed, there are cycles of over- or under-enforcement and over- or under-protection. Understanding where we are now and where we are heading is not trivial. Also because IoT will be a true game changer that Competition and IP policy will eventually have to face and (hopefully) manage.

Answering to a question from the audience on the differences in the patenting frameworks between EU-Japan as a potential source of problem for innovative companies, the panellists recalled that there is IP chapter in the negotiations of the Free trade agreement with Japan and there’s a positive convergence given the substantial common grounds.

Event notes by Filippo Biondi, Research Assistant.

Video and audio recording


Event materials

Reiko Aoki – Presentation

Schedule

Mar 14, 2017

12:30-13:00

Check in and lunch

13:00-13:20

Presentation

Reiko Aoki, Commissioner at the Japan Fair Trade Commission

13:20-14:00

Panel Discussion

Chair: Georgios Petropoulos, Research Fellow

Peter Alexiadis, Founding partner of Gibson, Dunn & Crutcher Brussels office

Michael Koenig, acting Head of Unit for Intellectual Property and Fight Against Counterfeiting, European Commission, DG GROW

Kai-Uwe Kühn, Professor of Economics, University of East Anglia

14:00-14:30

Q&A

14:30

End

Speakers

Peter Alexiadis

Founding partner of Gibson, Dunn & Crutcher Brussels office

Reiko Aoki

Commissioner at the Japan Fair Trade Commission

Michael Koenig

acting Head of Unit for Intellectual Property and Fight Against Counterfeiting, European Commission, DG GROW

Kai-Uwe Kühn

Professor of Economics, University of East Anglia

Georgios Petropoulos

Research Fellow

Location & Contact

Bruegel, Rue de la Charité 33, 1210 Brussels

Matilda Sevon

matilda.sevon@bruegel.org

Read about event More on this topic

Past Event

Past Event

The impact of Brexit for Research & Innovation in Europe

This event featured a new and interactive format, with a restricted and high-level on-site audience and in parallel, it has been livestreamed on our website to remain public and attract the widest participation.

Speakers: Alastair Buchan, Matt Dann, David Earnshaw, Kurt Deketelaere, Maryline Fiaschi, Martin Muller, Christian Naczinsky and Reinhilde Veugelers Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: December 12, 2017
Read article More on this topic More by this author

Blog Post

How the EU has become an immigration area

Natural change of EU28 population (the balance of live births and deaths) has fallen from high positive values in the 1960s to essentially zero recently, while the previous close-to-zero net immigration has turned positive and, since the early 1990s, become a more important source of population growth than natural increase

By: Zsolt Darvas Topic: European Macroeconomics & Governance Date: December 6, 2017
Read article More by this author

Blog Post

Why US investors earn more on their foreign assets than Germans

The United States benefits from large yields on its foreign assets relative to foreign liabilities, while in most continental European countries foreign assets and liabilities yield almost the same. Risk factors can explain only a small part of this difference; tax, intellectual property and financial sophistication issues might contribute to the high yields on US foreign assets.

By: Zsolt Darvas Topic: Finance & Financial Regulation, Global Economics & Governance Date: December 1, 2017
Read about event More on this topic

Past Event

Past Event

Antitrust Concerns in Digital Markets

Following our past events on the topic of antitrust concerns in zero price markets and on big data, digital platforms and market competition, this November we are hosting an event on antitrust concerns in the digital markets.

Speakers: Svend Albaek, Cristina Caffarra, Justus Haucap, Jorge Padilla and Georgios Petropoulos Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 29, 2017
Read about event More on this topic

Past Event

Past Event

Mergers and innovation

At this closed-door, off-the-record event we will discuss the impact that mergers have on innovation.

Speakers: Justus Haucap, Carles Esteva Mosso, Jorge Padilla and Reinhilde Veugelers Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 29, 2017
Read article Download PDF

Working Paper

Returns on foreign assets and liabilities: exorbitant privileges and stabilising adjustments

Large stock of foreign assets and liabilities could foster international risk diversification. US, British and Japanese investors earn high yields on FDI assets, which might also relate to tax, intellectual property and financial sophistication issues. Valuation changes on net foreign assets had a stabilising impact.

By: Zsolt Darvas and Pia Hüttl Topic: Finance & Financial Regulation, Global Economics & Governance Date: November 29, 2017
Read about event More on this topic

Past Event

Past Event

Start-ups' scale-up and innovation

What role is there for policy to address the funding barrier for scaling-up? Do we need a reorientation of the currently pursued policies in European countries?

Speakers: Rudy Aernoudt, Johan Cardoen, François Véron, Reinhilde Veugelers and Louis Papaemmanuel Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: November 21, 2017
Read about event More on this topic

Past Event

Past Event

Crowd Employment

This event aims to discuss the various nuances and diversity that characterize crowd employment.

Speakers: Cristiano Codagnone, Valerio Michele De Stefano, Irene Mandl, Georgios Petropoulos and Amit Singh Topic: Innovation & Competition Policy Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 5, 2017
Read article Download PDF More by this author

External Publication

An innovation deficit behind Europe’s overall productivity slowdown?

Reinhilde Veugelers' chapter in "Investment and Growth in Advanced Economies", conference volume of the European Central Bank’s Forum on central banking in Sintra.

By: Reinhilde Veugelers Topic: European Macroeconomics & Governance, Innovation & Competition Policy Date: October 2, 2017
Read about event More on this topic

Past Event

Past Event

Europe and Japan: Monetary policies in the age of uncertainty

The 5th Bruegel - Graduate School of Economics, Kobe University conference will focus on monetary policy.

Speakers: Kosuke Aoki, Ulrich Bindseil, Grégory Claeys, Zsolt Darvas, Ester Faia, Lex Hoogduin, Martin Hellwig, Miles Kimball, Eric Lonergan, Benoît Mojon, Tamotsu Nakamura, Marianne Nessén, Athanasios Orphanides, Wataru Takahashi, Tokiko Shimizu and Guntram B. Wolff Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 2, 2017
Read article More by this author

Podcast

Podcast

Surprising priorities for Europe and China

Bruegel’s Alicia García-Herrero and Robin Niblett of Chatham House discuss a new joint report on EU-China relations. How easy was it to find common ground with Chinese partners? And what should be the priorities for economic cooperation between Europe and China?

By: The Sound of Economics Topic: Global Economics & Governance Date: September 13, 2017
Read about event More on this topic

Past Event

Past Event

EU-China economic relations: looking to 2025

This event will see the launch of a report on EU-China relations and discuss issues such as trade and investment, industrial cooperation and innovation and global governance

Speakers: Victor Chu, Ian Davis, Alicia García-Herrero, Dame Clara Furse, Tony Graziano, Anatole Kaletsky, K.C. Kwok, Lawrence J. Lau, Ina Lepel, Hanna Müller, André Sapir, Robin Niblett, György Szapáry, Jean-Claude Trichet, Zhang Yansheng, H.E. Ambassador Yang Yanyi, Liu Xiangdong, Gunnar Wiegand, Guntram B. Wolff, Huang Ping and Elena Flores Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 13, 2017
Load more posts