I was recently invited to present at the annual conference of a highly regarded European-based information and communications technology (ICT) think tank. Among the presenters were Microsoft’s general counsel, Barclays Bank’s data & privacy senior counsel, and Hewlett Packard’s European projects director. The forum focused on the currently trending ‘hot button’ legal topics in the ICT space including privacy, confidentiality & ‘Big Data’ data, rights and intellectual property in software. The inspiration for this article came from an after-conference dinner discussion during which I had the opportunity to exchange thoughts with a US-based anti-trust (competition) ICT lawyer and a UK-based ICT Intellectual Property lawyer, both very highly regarded in their particular areas of expertise. This note briefly highlights the developing and very interesting interplay between competition law and the law of intellectual property.

These comments of course only barely scratch the surface of what I consider to be one of the most important legal dynamics of our times.

Competition law is essentially a body of rules deployed by our lawmakers to promote, maintain and protect “fair” commercial competition within the marketplaces to which they apply. In addressing this year’s conference on Antitrust in Technology in Palo Alto (US), the European Commission’s directorate general for competition observed that “vibrant competition is a pre-requisite for enduring economic success. It is through competition that innovative firms, products and ideas reach the market.” It is against this background that the competition regulators of most developed markets are endowed with awesome powers of investigation and sanctioning in support of their overarching mandate to maintain and protect fair and balanced competition in the ultimate interests of consumer welfare.

Intellectual property law, on the other hand, confers exclusive intellectual proprietary rights (‘IPRs’) in the creative and innovative products of intellectual innovative endeavour. IPRs (primarily patents and copyright) play an integral role in the ICT sector.

For example, copyright affords the computer programmer exclusive rights over software written by him/her (expressed as source code) theoretically putting her in a monopoly position as it relates to this software. The operative element of IPRs in this regard is the monopoly conferred by the rights which put their owners in a position to charge a price for permission (that is, a licence) to use the proprietary innovation in question.

So at first look, intellectual property law and competition law appear to be fundamentally conflicted. IPRs are concerned with granting monopoly rights entitling the rights holder to exclude others (including her competitors) from using the material to which the rights relate and to charge whatever prices he can command for permitting such use. On the other hand, competition law seeks to maintain a level playing field between and among competitors preventing abusive conduct by an entity or entities with significant market power.

The key to reconciling the two lies with their mutually central objective of promoting commercial innovation. In the US, this objective is reflected in the constitutional roots of IPR (Article I, Section 8, of the US Constitution,) which grants Congress the power “to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writing and discoveries”. In Europe, this objective is reflected in the EC’s Digital Agenda which advocates that the evolution of copyright law regarding the online world of digital contents will propel the development of the information society. Competition law’s focus on innovation is reflected in most of the applicable legislation and related guidance. For instance, in the EU, the competition authority’s officially published guidelines specifically highlight innovation as an individually important parameter of competition deserving of protection alongside low prices, high quantities, high product quality and variety.

Indeed, in many notable instances, commercial conduct which would otherwise have been considered anti competitive has been excused by competition authorities on the basis of the innovation benefits of the conduct in question.

Intuitively, one might think that an ICT supplier is free to contract with and supply its data and IP-protected technology to whomever it wishes and, conversely, that it can refuse to supply as it wishes for any reason.

However, this is not necessarily so. In certain circumstances, a technology company runs the risk of breaching competition law where it seeks to reinforce its own position by refusing to deal with another entity whether by way of integration or otherwise. Companies that cooperate with each other to manipulate market supply and prices also run the risk of breaching competition rules.

These issues are being seen more frequently in the the context of increasingly common competition disputes involving the world’s ICT giants which continue to bring the relationship between competition law and intellectual property sharply into focus. A number of high profile “refusal to supply” cases have seen competition authorities around the world issuing compulsory licensing orders compelling dominant firms such as Microsoft to license their proprietary technology to their competitors where a refusal to do so was expected to have a materially distortive or abusive effect on competition.

Jamaica has its own competition law regime which seeks to give effect to many (but by no means all) of the competition law principles of the US and Europe.

It is critically important for large and small companies alike to ensure that they are at least generally aware of their rights and obligations under the competition rules. The large company, and associations of companies, should seek to ensure that their commercial arrangements and relationships are not susceptible to challenge as unlawfully anticompetitive. The small company, which may feel that it is being unfairly marginalised by larger competitors, should look to competition law for a potential remedy.

Randolph Cheeks is the Principal of the boutique business law firm Cheeks & Co. He is a commercial lawyer with particular expertise in the areas of ICT and competition law. He may be contacted via e-mail to clientsupport@cheeks-co.com or via the contact form at www.autodatajamaica.com