Mapping the intersection of intellectual property and competition law : misusing market power when refusing to license biomedical patents

This thesis considers the conflict between intellectual property and competition law. There have been many attempts by noted scholars, regulatory authorities and courts to resolve this conflict, and determine how competition laws should be applied to dealings in intellectual property. Issues at the interface of intellectual property and competition law are exemplified by bargaining breakdowns in high technology, innovative industries. This thesis examines an issue arising from the balance between intellectual property and competition law in the context of a particular industry. Specifically, it analyses competition law regulation of refusals to license patents within the Australian medical biotechnology industry. A foundation for this analysis is provided through consideration of some characteristics of the medical biotechnology industry. This preliminary material allows the conclusion that there are a number of preconditions that make the Australian medical biotechnology industry particularly prone to refusals to license patents. Against this backdrop, the issue of refusals to license patents is considered in an empirical context. The thesis presents the results of an empirical study that investigated the preponderance of restrictive licensing practices within Australian medical biotechnology. While the potential for refusals to license exist within this industry, the empirical data suggests that this issue is occurring to only a limited extent in practice. This evidence is relevant to the analysis contained in the remainder of the thesis, because it assists in informing policy debate over the appropriate parameters for competition law in monitoring refusals to license intellectual property. The issue of regulation of refusals to license patents is far from resolved in the literature or by the judiciary. This thesis proposes that the issue is one that must be approached flexibly, and any attempt to circumscribe rigid rules for analysis is likely to fail. As such, it considers the role competition law plays in regulating dealings in intellectual property, and establishes a flexible framework for assessing the legality of refusals to license patents. This framework provides a basis for examining existing legislative provisions under which refusals to license will be evaluated. There is no Australian case law dealing with the issue of refusals to license intellectual property. The analysis contained in this thesis therefore proceeds from first principles. A refusal to license a patent will be dealt with pursuant to s 46 of the Trade Practices Act 1974 (Cth). The existing law and its limitations are considered in some detail, and it is concluded that recent judicial interpretations of this provision have rendered it virtually redundant. Due to the lack of judicial guidance in relation to this issue in Australia, some comparative case law from the United State and European Union is examined. Consideration of this case law provides some basis for assessing the flexible framework established in the thesis, and it would be taken into account if an Australian court were required to consider the issue of refusals to license intellectual property. The thesis considers the likely application of s 46 to refusals to license patents in medical biotechnology. It concludes that although there may be some circumstances where a refusal to license a patent will be anti-competitive, s 46 will not operate to provide redress. General deficiencies in the section are likely to be intensified where dealings in intellectual property are at issue. Accordingly, it argues that legislative amendment is necessary to rectify these problems, and makes a number of recommendations to this effect. It also considers the relevance of the empirical evidence presented in shaping regulatory policy