The System To Prevent The Abuse Of Intellectual Property Rights

By comparing the system of preventing the IP abuse in some countries, it is found that there are four different systems to define and prevent the IP abuse. In UK Patent Law, where the patented invention is not being commercially worked in the UK, or where a demand for the patented product in the UK is not being met on reasonable terms, it is an abuse of the monopoly and it will lead to a compulsory license or an endorsement of license of right. In American patent litigation, it is a patent misuse if the patentee improperly attempts to extend the scope of the patent. Patent misuse refers to an affirmative defense to an action for patent infringement. If misuse is found, the patent is rendered unenforceable until the misuse is purged. An IP holder will violate the Anti-monopoly law (or Anti-trust law or Anti-restriction of competition law) in different countries if the exercise of the IP rights excludes or retrains the competition. The conducts to exclude or restraint the competition can also be seemed as IP abuse. In addition to above mentioned, if the IP holder makes groundless threats of proceedings for infringement of IP rights or enforces the IP rights in bad faith, it is also an abuse of the IP in UK, USA, Japan, EU and so on. Above all, the IP abuse is the conduct that the IP holder violates laws or public policies when he exercises his IP rights, includes but not limits to following practices: failure to work and refusal to license, working insufficiently and refusal to license, unilateral refusal to license and abuse the market power, conditional refusal to license (vertical restriction), concerted refusal to license (horizontal restriction), unfaithful enforcement of the IP or abuse of the enforcement procedure. In summary, the result of IP abuse is restraining the transfer and diffusion of the technology and information protected by IP rights.The system to prevent the IP abuse is very important to promote the technology transfer and realize the technology progress in a country. From the classic economic growth theory to the new economic growth theory it is shown that the technology progress is important in economic growth. The economy research also shows that the technology progress depends on the mutual functions of resource investment (technology innovation) and knowledge overflow (technology diffusion). Although it is difficult to diffuse the technology, technology transfer will help to acquire the know-how and tacit knowledge and the international technology transfer will help the developing countries realizing the technology progress. But the IP holder will not transfer his technology besides he can benefit much more from it. Usually he will refuse to transfer his technology or set some restrictions in the licensing agreement to maintain his exclusive position and exclude competitions from others. If such IP abusing practices can not be regulated, it will harm to the technology progress and economic growth in a country.The measures to prevent IP abuse are in many ways in different countries and the compulsory licensing is in the core of them. The compulsory licensing can not only prevent the IP holder from impeding the technology transfer but also encourage the innovation for reasonable remuneration to the IP holder. The practices in UK, USA, Canada, EU and Brazil and so on are powerful evidences to show the compulsory licensing is an effective measure to prevent the IP abuse. At the same time, some empirical researches show the hypothesis that compulsory licensing will harms innovation is not true. In fact, the activities of innovation continued at the same or even higher pace than before the advent of a compulsory license. The economic analysis to the effect of a compulsory patent licensing and a legal patent monopoly also shows that a legal monopoly and an automatic compulsory license are equivalent in order to fulfill the goal of promoting or rewarding innovation, but an automatic compulsory license fixing a compensatory royalty rate can improve the accessibility to the patent product. From above, we conclude that compulsory licensing as a key measure to prevent the IP abuse is reasonable in economy.There were many debates in the course of development of compulsory licensing system from Paris Convention to TRIPs. On one hand, compulsory licensing was not only used to prevent the abuse of patent monopoly and other IP rights but also used as a measure in anti-monopoly law to regulate the abuse of IP. On the other hand, some nations especially developed countries limited the issue of compulsory licensing through TRIPs. There are much more difficulties to use the compulsory licensing as a measure to regulate the IP abuse in developing countries. But the developing countries still have much legal space under TRIPs to enact the ground of compulsory licensing in the domestic law. It is still possible to abolish some unreasonable condition of compulsory licensing in the TRIPs.TRIPs provided a comprehensive legal system to prevent the IP abuse, which is including the general principle of preventing the abuse of IP rights, use of the subject matter of a patent without the authorization of the right holder, control of anti-competitive practices in contractual licenses and safeguards against the abuse of IP enforcement procedures. We can set up a legal system including anti-monopoly, compulsory licensing, IP misuse as infringement defense and prevention of the abuse of enforcement procedures. Failure to work the patent and anti-competitive practices can be the ground of compulsory licensing in the Patent Law. In the drafting Anti-monopoly Law, it is important to regulate that IP abuse is not the precondition of anti-monopoly law violation but the result of the violation of the law. To prevent against the abuse of patent litigation, it is necessary to promote the quality of the patent and to reduce the questionable patent.