Heinemann, Andreas --- "The Contestability of IP-Protected Markets" [2008] ELECD 245; in Drexl, Josef (ed), "Research Handbook on Intellectual Property and Competition Law" (Edward Elgar Publishing, 2008)

Book Title: Research Handbook on Intellectual Property and Competition Law

Editor(s): Drexl, Josef

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781845420475

Section: Chapter 3

Section Title: The Contestability of IP-Protected Markets

Author(s): Heinemann, Andreas

Number of pages: 26

Extract:

3 The contestability of IP-protected markets
Andreas Heinemann



1 Introduction
IP protection and contestability? At first sight, this subject seems to be para-
doxical: the very sense of an IPR is excluding others from the use of the
protected knowledge. IPRs are granted in order to protect their owners from
contestability. On the other hand, every IPR has a well-defined scope. It does
not in itself confer market power or even dominance, but only gives exclusive-
ness over certain knowledge. Others keep the right to develop substitutes, to
`invent around' or to be active in neighbouring markets not covered by the
exclusive right in question. Typically, it is in the interest of the IPR owner to
make the most of her privilege. The fundamental problem consists in telling the
difference between what is allowed and what is prohibited in this respect. Or to
put it another way: how far does the scope of reward for an IPR go? This chap-
ter will show that ­ under certain conditions ­ the owner of an IPR cannot make
use of the whole spectrum of rights granted to her under IP legislation. The
chapter will analyse which limits should be set to the freedom of an IPR holder.
Even IP-protected markets have to stay open to a certain extent, not only in the
long run, but also in the face of abusive short-term strategies. Restrictions on
the freedom of the IPR holder are not only compatible with the model of
dynamic ...