Blocking Patents and the Process of Innovation

Abstract

It is the very essence of patents to prevent others from using the protected invention. This does not mean, however, that there are no legal limits to exclusion. Competition law, for example, has a general scope of application that does not stop before intellectual property rights. In particular, dominant firms must not abuse their dominant position no matter if their market powerMarketpower is based on immaterial or material positions. It is recognized that the acquisition of patents by fraud on the patent officeFraud on the patent office may constitute such an abuse. Moreover, in EU law, the refusal to licence intellectual property rights may, in exceptional circumstances, be qualified abusive as well. This paper goes one step further and asks the question if the mere acquisition of a patent, without any misleading representations to the patent office and independently of subsequent licensing strategies, may, in exceptional circumstances, constitute an abuse as well. It will be shown that this question has to be answered in the affirmative: There are situations where the grant of a patent comes into conflict with the basic rationale of patent protection, which is the encouragement of innovation. A four-prong test is proposed here, which allows identifying situations in which patents abusively block the process of innovation.