23 July 2014
Recent developments (in particular the Motorola / Samsung decisions relating to the use of standard essential patents, alluded to on this blog here) may suggest that competition law and IP are unhappy bedfellows, with the former hampering IP right holders' ability to obtain injunctive relief in respect of their patent rights. Last week's judgment by Mr Justice Henderson in the High Court provides something of a corrective. In Carewatch Care Services v. Focus Caring Services et al, a competition law defence was raised in respect of a claim that the defendants had breached post-termination restrictions in a care home franchise agreement.
The raising of 'euro-defences' in general commercial litigation is sometimes viewed as something of a try-on. Generally, it is all too rare to see the limits to the competition rules, with competition authorities all too rarely giving reasoned analysis as to why certain agreements or practices do not infringe.
Here, there was no criticism of Focus for having raised the competition law defences, but those defences did not hinder the claimant’s enforcement of the contractual restrictions. Applying Pronuptia de Paris, as suitably adjusted for a services, rather than a distribution, franchise, Henderson J robustly dismissed those defences. He particularly emphasised the need for the franchisor to have the ability to protect its know-how and reputation in a setting characterised by the intensely personal relationships between carer and care-home resident - to do otherwise would be to allow the former franchisee to benefit from the knowledge imparted to it by the franchisor to set up in competition with it. An injunction restraining breach of the post-termination restrictions was therefore allowed.
9 July 2014
Some of you may remember that a couple of months ago I posted on this blog some thoughts about how competition enforcement might in some instances affect innovation, and speculating on the impact that the focus on short term efficiencies might have on the approach of competition policy and how that might differ from the approach of IP in seeking to stimulate innovation (here). I haven’t yet had the chance to follow up with some further considered thoughts on this topic, but the issue is not something that has gone away. For example, Sophie and Osman recently posted a discussion which touched on this issue in the context of the changes to the Technology Transfer Regime (here) and Sophie’s post on DG Alexander Italianer’s “Brave New World” speech (here) touches on similar themes . Of course Bristows is not the only place where we wonder about the relationship between competition law and IP and/or innovation. I thought that readers of this blog might be interested in a couple of recent articles in the Wall Street Journal which explore more broadly the topic of the Commission’s use of its competition enforcement powers (here and here). While the WSJ looks at various sectors, including issues such as the use of competition enforcement in relation to the tax practices of multinationals in Europe, it is interesting that several of those commenting do draw attention to the possible clash between innovation and “innovative enforcement” and particularly to the interface with IP. Doubtless the continuing debate about how the Commission should deal with complaints such as those against Google and that by ZTE against Vringo (here) will continue to stimulate such discussions - as will the decisions against Lundbeck and various generics last year and against Servier and various generics earlier this month.
Any thoughts on whether the Commission is getting the balance right, and on the impact of these decisions on how companies actually think about innovation would be most welcome.