IP SAVES OFT FROM CHEESY PAPERWORK; ABLE AND WILLING

IP saves OFT from cheesy paperwork

Right: Wincanton cheese technology - now being irrevocably licensed to Moody

The UK's Office of Fair Trading (OFT) is a potentially significant player in British IP enforcement, since it is charged with making sure that competition remains a viable option even where the balance of power (including IP rights) is not evenly distributed between market competitors. Till now it has made little impression on IP exploitation. On Monday, though, the OFT issued Press Release 162/06 with the less-than-snappy-title "OFT accepts licensing of an 'up-front buyer' to protect UK competition in cheddar-cheese making equipment sector". The Press Release, in relevant part, reads:

"The OFT has decided today to accept the undertakings offered by Tetra Laval ... to address the competition concerns arising from the anticipated acquisition by Tetra Laval of part of Carlisle Process Systems from Carlisle Companies Inc.

The transaction raised concerns in relation to the supply to UK customers of certain equipment used for the industrial manufacture of cheddar cheese. As a result of the undertakings offered by Tetra Laval, the transaction will not be referred to the Competition Commission.

The OFT considered that the merger of two leading competitors in the supply of vats, cheddaring machines and cheese towers to UK customers would reduce competition and innovation and would result in higher prices and lower levels of service in the sector.

Left: Moody's existing cheese making plant

Instead of a reference to the Competition Commission, the parties have offered to grant an exclusive irrevocable EEA-wide licence of intellectual property (IP) rights relating to cheese equipment sold under the 'Wincanton' brand ... to Moody plc ... For this package to be a viable remedy, it was important to find a buyer that already had the necessary manufacturing capability, expertise and industry contacts to be an effective competitor. The OFT wished to manage this risk up-front by assessing Moody's business case, the licensing agreement, and the detailed terms of the undertakings. Having done so and consulted publicly before accepting the undertakings, the OFT is now satisfied that Moody's significant experience as a supplier of services of equipment to the dairy sector combined with possession of the relevant IP rights makes Moody as effective a competitor to Tetra Laval after the merger as Carlisle was before it".

According to the OFT's Senior Director for Competition, Vincent Smith:

"This ... is the first time we have accepted the licence of intellectual property rights alone as a merger remedy; it is also the first time we requested and have approved an 'up-front purchaser' before accepting undertakings in lieu of reference. This case demonstrates the OFT's flexibility on merger remedies when parties show constructive engagement with the OFT on this issue at an early stage ... [C]ustomers and consumers will be protected from the adverse effects of the merger".

The IPKat can't help feeling that, if Tetra Laval are so willing go grant an irrevocable licence of their IP to a certified viable competitor, they must be getting plenty in return.

Laval cheese without the Tetra here
Make your own cheese here
Swiss cheese plant here


Able and willing

The IPKat has a friend who is currently seeking experience working either with a private practice law firm or in-house as an intellectual property lawyer. Qualified as a solicitor in England and Wales and also as a lawyer in India, he holds First Class degrees both in Electronics and in Law and has specialised in intellectual property at both Masters and Doctoral levels.

Enthusiastic and willing to work, he is willing to provide a CV for any interested party. For further details, email the IPKat at theipkat@yahoo.co.uk.