Intellectual Property rights create exclusive rights – often limited in duration – which protect investments in research and some creative ideas. Innovation and technological progress are key drivers of economic growth in the industrialised world. As IP rights protect so much knowledge-based capital, it is unsurprising that they have taken on an increasingly important and extensive role in economic activity – and in market competition as well. In this context, the interaction between competition and IP law has been growing in prominence as the economy digitalises and the importance of intangible assets in the overall economy increases.
Competition authorities worldwide have taken enforcement actions that affect IP rights, with the aim of minimising the anti-competitive effects of IP rights while respecting their existence and the societal goals they are meant to promote. Examples of such competition enforcement actions include but are not limited to: pay-for-delay agreements and anti-competitive settlements in patent litigation relating to prospective entry by generic suppliers in the pharmaceutical sector; the possibility of anti-competitive conduct in the context of standard-setting processes; and IP-related issues assessed in merger reviews. Competition authorities have also been involved in IP processes and policy, mainly through advocacy efforts to ensure that IP law is more pro-competitive.
While some competition authorities, such as those in the European Union and the United States, have been very active in IP-related issues, others have less experience and could further develop their work in this area. This is particularly the case in most jurisdictions in LAC, which suggests that it is timely to address the topic in the OECD-IDB Latin American and Caribbean Competition Forum (LACCF).
This note builds on and complements past OECD work on the topic and related issues, focusing on LAC jurisdictions. Indeed, over the years, the OECD has conducted extensive work on the relationship between competition and IP. In particular, in June 2023 the OECD Council adopted the OECD Recommendation on Intellectual Property Rights and Competition [OECD/LEGAL/0495], which consolidated and replaced two earlier Recommendations adopted in 1978 and 1989. The Recommendation sets out the key principles applicable in competition enforcement cases involving IP‑related business practices and provides guidance on how to assess such cases, to ensure a correct functioning of markets and adequate incentives to innovate. Several sessions held by the OECD Competition Committee have also discussed the matter, including the Roundtables on Competition and Innovation: A Theoretical Perspective (2023[2]), The Role of Innovation in Competition Enforcement (2023[3]), and Licensing of IP rights and Competition Law (2019[4]) as well as the Hearing on Intellectual Property and Standard Setting (2014[5]). In addition, various discussions have taken place on institutional arrangements and co-operation with other government bodies, such as the Roundtable on Interactions between Competition Authorities and Sector Regulators (2022[6]).
This note is organised as follows:
Section 2 provides an overview of the interplay between competition and IP law, highlighting the objectives and pillars of each policy area, key competition law principles and approaches to IP law, as well as the institutional set-up in which this interaction takes place.
Section 3 presents relevant competition enforcement issues related to IP that have emerged in LAC jurisdictions, covering both anti-competitive practices and merger control.
Section 4 examines IP-related competition advocacy and co-operation between competition authorities and IP agencies across the LAC region.
Section 5 sets out the key findings and conclusions.