Not IP as such, but still important to IP-ers

Judgment was delivered last week, on 3 May, by the Court of Justice in Case C-375/09 Prezes Urzędu Ochrony Konkurencji i Konsumentów v Tele 2 Polska sp. z o.o., now Netia SA.  The IPKat didn't pick it up since it was a competition decision, not an IP one. However, on taking a peep at the Curia press release, he thinks it's worth sharing his thoughts on it with his readers.  According to the press release:

"In the area of competition, the Commission alone is empowered to make a finding that there has been no abuse on the EU’s internal market   

Authorising national competition authorities to take such 'negative' decisions would risk undermining the uniform application of the competition rules set up by the Treaty 

According to Regulation 1/2003 [Council Regulation 1/2003 on the implementation of the rules on competition laid down in Articles 81 and 82 of the Treaty, which are now Articles 101 and 102 of the Treaty on the Functioning of the European Union, TFEU], where national competition authorities ('NCAs') or national courts apply national competition law to any abuse prohibited by Article 102 of the Treaty [i.e. abuse of a dominant position, which is what IP owners can easily do if they overplay their hand by, for example, requiring licensees to accept obligations that are unconnected with the subject of the licence], they must also apply the provisions of that article. Applying that article in individual cases, NCAs may: require that an infringement be brought to an end, order interim measures, accept commitments, or impose fines, periodic penalty payments or any other  penalty provided for in their national law. Furthermore, where on the basis of the information in their possession the conditions for prohibition are not met they may likewise decide that there are no grounds for action on their part.

At the end of the procedure against Telekomunikacja Polska SA, the President of the Polish NCA found that the conduct of that undertaking did not constitute an abuse of a dominant position.Consequently, he took a decision under national law stating that the undertaking in question had not implemented any restrictive practice, whilst, with regard to the infringement of the Treaty, he brought the procedure to an end. 

Tele2 Polska sp. z o.o., now Netia SA – a competitor of Telekomunikacja Polska SA – challenged that decision. Hearing an appeal on a point of law, the Sąd Najwyższy (Supreme Court of Poland) asked the Court of Justice whether European Union law precludes  an NCA, where it finds that there has been no abuse on the basis of its national law, from taking a decision stating that there has been no breach of the Treaty provisions ('negative decision'). 

The Court recalls first of all that, in order to ensure the coherent application of the competition rules in the Member States, a cooperation mechanism between the Commission and the national competition authorities was set up by Regulation 1/2003, as part of the general principle of sincere cooperation. The Court then observes that, where, on the basis of the information in the national competition authority's possession, the conditions for prohibition are not met, the Regulation indicates clearly that the power of that authority is limited to the adoption of a decision stating that there are no grounds for action. 

Empowerment of national competition authorities to take decisions stating that there has been no breach of Treaty provisions on abuse of a dominant position would call into question the system of cooperation established by Regulation 1/2003 and would undermine the power of the Commission. Such a negative decision on the  merits would risk undermining the uniform application of  the competition rules set up by the Treaty, which is one of the objectives of the Regulation, since such a decision might prevent the Commission from finding subsequently that the practice in question amounts to a breach of those rules. 

The Court therefore considers that the Commission alone is empowered to make a finding that there has been no breach of the prohibition of abuse of a dominant position, even if a relevant provision of the Treaty is applied in a procedure  undertaken  by a national competition authority. Moreover, the Court holds that European Union law precludes national provisions  which provide in such circumstances only for the possibility of adoption, by a national competition authority, of a negative decision on the merits". 

In other words, says the IPKat, if a national competition authority considers that a dominant IP owner has not abused its market power, it can only take a decision that there are no grounds for it to take action. If however the national authority finds that there has been an abuse of a dominant position, it does appear to have the power to take action. While there appears to be a lack of symmetry between the two conditions, this position reflects the supremacy of competition policy over the exercise of intellectual property rights in the law of the European Union.   Merpel notes that there have been some high-profile abuse of dominant position cases brought against IP owners by the Commission, eg Grüne Punkt (trade marks), Microsoft (patents and copyright) and IMS Health (copyright) -- but she wonders how many national competition authorities have much IP work to keep them busy. Does anyone know?

Readers with long memories will
recall the days when Samoa was
part of the Empire on which the Sun
never set ...

Intellectual property owners obsess, quite rightly, about dates and deadlines.  For this reason some of our professional colleagues will be fretting already over the report by the BBC today ("Samoa to jump forward in time by one day") that the South Pacific island nation of Samoa is to move its calendar forward by one day in order to boost its economy. Samoa will do this by switching to the west side of the international date line, which it says will make it easier for it to do business with Australia and New Zealand. This move won't kick in till late 2011: at present, Samoa is 21 hours behind Sydney, Australia but, from 29 December, it will be three hours ahead.

In terms of IP, registered rights, periods within which official responses must be made, the duration of licences, options to renew, restrictive covenants and all sorts of things will all be shortened by one day.  You have been warned.

If you want to check Samoa's IP legislation ...
Patents Act 1972 here 
Industrial Designs Act 1972 here
Trade Marks Act 1972 here