The intersection of competition law and intellectual property rights (IPRs) is one of the most complex areas of competition law. These two areas of law share a potentially conflicting relationship, as competition law restricts the abuse of substantial market power while IPRs may confer market power. Commentators in developed countries have proposed various ways to resolve this conflict. Some of them give primacy to competition law, while others emphasize the importance of protecting IPRs. Yet some others advocate solutions that require balancing the policy considerations underpinning these two bodies of law. The main objective of competition policy and law is to preserve and promote competition, as a means to ensure efficient allocation of resources in an economy, resulting in the best possible choice of quality, the lowest …show more content…
Of the three major types of IPR — patents, copyrights and trademarks — patents grant the strongest protection. A patent gives a patentee the exclusive right of exploitation, which entitles the patentee to exclude others from copying or commercializing an invention that falls within the scope of the patent. Patents are also more likely to endow their owners with substantial market power. An IPR creates market power, and hence potentially raises competition law issues which crucially depend on the availability of substitutes for the product incorporating the protected intellectual property. In the absence of substitutes, the producer of such a product will wield substantial market power. Such exercise of market power can lead to allocative inefficiencies. Tension can arise between IPRs and competition law because IPRs create market power, even monopolies, depending upon the extent of availability of substitute products. IPRs tend to restrict competition, while competition law engenders