Intellectual Property and Antitrust 2011
Published in “Getting the Deal Through – Intellectual Property and Antitrust 2011”
1. Intellectual property law
Under what legislation are intellectual property rights granted? (Please describe the basic contours of these rights, as well as any non-statutory IP rights.) Are there restrictions on how IP rights may be exercised, licensed or transferred? Do the rights exceed the minimum required by the WTO Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs)?
Intellectual property rights are mainly regulated by the following Romanian normative acts:
- Law no. 8/1996 on copyright and related rights, as further modified and completed (“Copyright Law”);
- Law no. 64/1991 on patents, as republished (“Patents Law”) and Government Decision no. 547/2008 for the approval of the Regulation for implementation of Law no. 64/1998 on patents;
- Law no. 350/2007 on utility models (“Utility Models Law”) and Government Decision no. 350/2007 for the approval of the Regulation for implementation of Law no. 350/2007 on utility models;
- Law no. 84/1998 on trademarks and geographical indications, republished (“Trademarks Law”) and Government Decision no. 833/1998 for the approval of the Regulation for implementation of Law no. 84/1998 on trademarks and geographical indications (“Trademarks Regulation”).
- Law no. 129/1992 on the protection of designs and models, republished (“Designs Law”) and Government Decision no. 211/2008 for the approval of the Regulation for the implementation of Law no. 129/1992 on the protection of designs and models;
- Law no. 16/1995 on the protection of topographies of semiconductor products, republished (“Topographies of Semiconductor Products Law”) and the Order no. 6/2007 of the State Office for Inventions and Trademarks (“SOIT”) for the approval of the Norms for the implementation of Law no. 16/1995 on the protection of topographies of semiconductor products, republished;
- Law no. 255/1998 on the protection of new plant varieties, republished (“New Plant Varieties Law”) and Government Decision no. 984/2007 for the approval of the Regulation for implementation of Law no. 255/1998 on the protection of new plant varieties.
In general, the industrial property rights (copyright and related rights not included) are acquired under Romanian IP legislation through various registration procedures. There are also exceptions of industrial property rights protected without registration, such as notorious trademarks.
Copyright Law protects the moral and patrimonial rights conferred by creation of original works, irrespective of the concrete manner of expression, value or destination and irrespective of any registration formalities.
As a general rule, IP rights may be freely exercised, licensed or transferred by their legitimate owners.
However, there are certain restrictions and exceptions, such as:
- related to the exercise of copyright and related rights – the private copy exception, the right to reproduce copyright protected works within judicial, parliamentary or administrative proceedings or for public safety purposes etc.
- regarding the transfer of rights – moral rights cannot be transferred or waived. Also, the non-exclusive assignee of economic rights related to copyright may not further transfer the acquired rights, without the express consent of the assignor.
- related to the exercise of the rights over patents, the Patents Law provides for several situations in which mandatory licenses may be granted upon request by interested third parties by the Bucharest Tribunal. The mandatory licenses may be transferred only together with the part of the undertaking or of the business assets that beneficiate of the respective use.
- similarly to the Patents Law, the Topographies of Semiconductor Products Law provides for several situations in which mandatory licenses may be granted upon request by interested third parties by the Bucharest Tribunal. The mandatory licenses may be transferred only together with the patrimony affected to their application.
- related to the exercise of rights over trademarks, anyone with a legitimate interest may request the court to deprive a trademark owner of his/hers rights if, without legitimate reason, the mark was not effectively used in Romania within an uninterrupted period of five years as of the registration of the trademark within the Trademarks Register or if this use has been suspended for an uninterrupted period of five years. Regarding the transfer of rights – identical or similar trademarks having the same registered owner and used for identical or similar goods or services may be assigned only as a whole and to one person, under the sanction of nullity of the assignment. SOIT may refuse to register a trademark assignment if it results in an obvious manner that by such the public will be induced in error as to the nature, quality or geographical origin of the products or services for which the trademark has been registered, except where the beneficiary of the assignment accepts to limit the trademark assignment to the products and services for which the trademark is not misleading.
- A non-exclusive licensee that has been granted the right to exploit a patented new plant variety may not transfer to third parties the acquired right.
The IP rights granted under Romanian IP legislation exceed, in certain cases, the minimum provided under the TRIPs Agreement (e.g. the initial registration term and each renewal term of trademarks is of ten years, which is above the minimum of seven years provided under the TRIPs Agreement; similarly, the validity period of designs is of ten years and can be renewed for three successive periods of five years, above the minimum ten years provided under the TRIPs Agreement etc.).
2. Responsible authorities
Which authorities are responsible for administering IP legislation? (Please describe their roles briefly.)
Mainly, Romanian Copyright Office (ORDA) and Romanian State Office for Inventions and Trademarks (SOIT).
ORDA is a specialized central public administration body subordinated to Romanian Government, having legal personality, being the sole authority for regulation, evidence through national registries, survey, authorization, arbitration and technical-scientific expertise in the copyright and related rights field.
SOIT is a specialized body of the central public administration subordinated to Romanian Government, being the sole Romanian authority empowered to grant protection for industrial property, in accordance with the national legislation in the field and with the provisions of the conventions and international treaties to which Romania is a party.
In addition, an important role in protecting IP rights is held by the customs authorities, which may retain goods infringing intellectual property rights and/or suspend the clearance operations for such goods.
3. Proceedings to enforce IP rights
What types of legal or administrative proceedings are available for enforcing IP rights?
Generally, an IP right owner may enforce his/hers rights in civil and/or criminal proceedings. Thus, for example, such may file criminal complaints against infringers, actions for cancellation of conflicting IP rights, civil actions in infringement or unfair competition with the possibility of claiming damages for the incurred prejudices. Also, the IP right owner may seek temporary measures by way of a preliminary injunction, under the provisions of the Romanian Civil Procedural Code.
The owners of intellectual property rights may also file with the National Customs Authority, applications for customs action, based on which, the customs authorities may retain the goods likely to infringe the intellectual property rights that made the object of the application and/or may suspend the clearance operations for such goods.
In addition, the industrial property rights owners may oppose in administrative proceedings before SOIT against the registration of conflicting industrial property rights. SOIT’s decisions issued in these proceedings may be further appealed in front of the competent courts.
What remedies are available to a party whose IP rights have been infringed?
A party whose IP rights have been infringed may seek civil and/or criminal remedies. Thus, for example, such may request the court to prohibit the unlawful use of his/hers IP rights and to pay damages for the incurred prejudice (to the extent a prejudice is proved). Also, the IP owner may request the court to order, on the expense of the infringer, the seizure and destruction of the infringing goods and of the equipments/instruments/materials used for their manufacturing. In addition, the infringer may be compelled to disseminate the information on the decision rendered by the court, through different means of communication, such as display or publication of the decision or additional publicity measures adapted to the particular circumstances of the case, including a large advertising.
Also, if not filed, a customs application may be filed based on which, as mentioned herein above, the customs authorities may retain the goods likely to infringe the intellectual property rights that made the object of the application and/or may suspend the clearance operations for such goods. The goods proved to infringe IP rights may be destroyed or offered free of charge to institutions, organizations etc., under certain conditions, among which the consent of the IP owner.
5. IP legislation and competition
Does IP legislation make any specific mention of competition or contain provisions on the anti-competitive or similar abuse of IP rights? (If so, please describe those provisions that relate to competition.)
Yes. According to the Patents Law, in order to remedy a practice determined, by means of a judicial or administrative procedure, to be anti-competitive, a mandatory license may be granted for inventions in the field of semiconductor technology.
The Topographies of Semiconductor Products Law provides that, a mandatory exploitation license may be granted by the Bucharest Tribunal to persons who, despite all efforts, did not acquire the right holder’s authorization to exploit a protected topography, if such license is required in emergency situations related to violation of the Competition Law no. 21/1996, republished.
According to Plant Varieties Law, the rights conferred by patents for new varieties and their exercise must not violate the legal provisions regulating competition.
Incidental legislation as the Government Ordinance no. 52/1997 on the legal regime of franchise, republished, provides that the franchise agreement must be concluded with the observance of the principle that non-compete clauses are to be included in the agreement in order to protect the know-how. In this sense, in case of an exclusivity agreement, the franchisor may impose a non-compete clause in order to prevent the transfer of the know-how transmitted during the agreement. After termination of the agreement, post-contractual relations between parties must be based on fair competition rules. The franchisor may impose firm obligations to the former beneficiary, ensuring, thus, protection of business confidentiality and, in particular, preventing the use of the know-how by competitors.
6. Remedies for deceptive practices
With respect to trademarks, do competition or consumer protection laws provide remedies for deceptive practices in addition to traditional ‘passing off’ or trademark infringement cases?
Law no. 11/1991 on fighting against unfair competition qualifies the followings as criminal offences sanctioned with imprisonment or fine:
- the use of a trademark in such a manner that it is likely to create confusion with another trademark lawfully used by a trader;
- the placement on the market of counterfeited products, whose commercialization prejudices the holder of the trademark and misleads the consumer with respect to the quality of the product/service;
- the manufacturing, importation, exportation, storage, offering for sale or selling goods/services bearing false mentions regarding trademarks for the purpose of misleading the other traders and the beneficiaries.
In addition to the criminal sanctions, the offender may also be compelled to pay damages for the caused prejudice.
In what concerns consumers protection legislation, Law no. 363/2007 on fighting against unfair practices of traders in their relation with consumers and the harmonization of regulations with the European consumers protection legislation, qualifies as misleading commercial practices any trading activity, including comparative advertising, which creates a confusion with another product, with the trademark, name, or other distinctive signs of a competitor, thus determining the average consumer to take a trading decision that he would not otherwise have taken. The use of misleading commercial practices is qualified as minor offence sanctioned with a fine. The authorities may also suspend the trader’s activity until the cease of the misleading practice, as a complementary sanction.
In addition to the above, it must be noted that, misleading advertising is qualified as minor offence under Law no. 158/2008 on misleading and comparative advertising, and sanctioned with a fine.
7. Technological protection measures and digital rights management
With respect to copyright protection, is WIPO protection of technological protection measures (TPMs) and digital rights management (DRM) enforced in your jurisdiction? Does legislation or case law limit the ability of manufacturers to incorporate TPM or DRM protection limiting the platforms on which content can be played? Could TPM or DRM protection be challenged under the competition laws?
The TPMs and DRM are provided under Art. 1385 of Copyright Law and may be freely used by the right holders. However, the right holders using such protection measures have the obligation of ensuring to the beneficiaries of certain exceptions expressly provided by law, (e.g. of the right to reproduce copyright protected works within judicial, parliamentary or administrative proceedings or for public safety purposes etc), the necessary measures that enable the legal access to the works or to any other object of the protection., having though the right to limit the number of copies made within these conditions.
In case the exercise of the right to use TPMs and DRM would violate competition laws, than such might be challenged accordingly.
8. Industry standards
What consideration has been given in legislation or case law to the impact of the adoption of proprietary technologies in industry standards? (For example, are there any conditions imposed on a patentee of such technology to ensure that it is available to anyone who wishes to use the standard? Has there been any case law dealing with the issue of ‘patent hold-up’ or ‘patent ambush’?)
The standardisation activity is mainly regulated in Romania under Government Ordinance no. 39/1998 on the national standardisation activity, as approved by Law no. 355/2002. The national standardisation body is the Romanian Standards Association (ASRO), a private legal entity of public interest, organized as a non-profit association and a member of CEN, CENELEC, CEI, ISO and ETSI (observer member of the latter).
One of ASRO’s main attributions is to elaborate and approve national standards. Government Ordinance no. 39/1998 does not expressly regulate the adoption of proprietary technologies in industry standards, but only provides that ASRO is the owner of the copyright over the national standards and the owner of the trademarks attesting conformity with the national standards.
ASRO is the sole entity authorized to distribute, through selling, the national, European and international standards, and to supervise the respect of copyright over such. Any unauthorized reproduction or copy, distribution of standards, translation or creation of derivative works, without ASRO’s prior written consent, represents a copyright infringement.
9. Competition legislation
What legislation sets out competition law? (Please describe this legislation very briefly.)
The applicable legislation in the field of competition law consists of Law no.21/1996 (the “Romanian Competition Law”), together with secondary legislation, including regulations and guidelines issued by the Romanian Competition Council (the “Romanian Competition Council”).
Romanian Competition legislation has recently undergone significant changes aimed at bringing it in line with EU regulations and case-law of European Courts.
The RCL was substantially amended through the enactment of the Emergency Government Ordinance 75/2010 (“EGO 75”), which entered into force on 5 August 2010.
The most significant changes to the RCL include:
- Self assessment:
- the elimination of the notification system and replacement with the self-assessment procedure in case the conditions for benefiting of a block exemption are not met
- Merger control:
- the application of the “SIEC” (significant impediment of effective competition) test for the assessment of the compatibility of an economic concentration with a normal competitive environment
- the notification of a merger is required prior to the implementation (not anymore in a certain time period from signing)
- the possibility to notify the concentration on the basis of a good-faith intention to conclude an agreement or public announcement of the intention to make a public offering
- an authorization fee amounting to 0.04% of the total turnover reported by the undertakings on the Romanian territory, without exceeding 100,000 Euros.
- Guarantees for the undertakings:
- express regulation of the legal professional privilege
- fines for public administration authorities in cases of procedural infringements of competition rules
- a reduction between 10 to 25% of the fine for acknowledgment of the breach
- criminal liability may also entail the prohibition to hold a position of the nature of that used in committing the breach
- Challenge in court:
- the Court of Appeal will only suspend a Competition Council decision on condition of a bail payment of 30% of the fine set by the decision challenged
- Private enforcement:
- individuals who claim to be harmed by way of an anti-competitive practice are entitled to file a request for damages within 2 years as of the date the decision of the Competition Council on which the claim is based in subsidiary becomes final and binding
10. IP rights in competition legislation
Does the competition legislation make specific mention of IP rights? (If so, please describe those provisions that relate to IP rights.)
The Competition Law does not make a specific mention of IP rights. The compatibility of agreements involving IP is to be analyzed according to the conditions and criteria set by the EU specific regulations as guidelines (e.g., technology transfer).
In the field of merger control, the Romanian Merger Regulation and Guidelines currently in force contain several provisions which make specific mention of IP rights, in line with EU provisions.
The Romanian Merger Regulation implemented the provision of the EC Consolidated Jurisdictional Notice according to which a transaction confined to intangible assets such as brands, patents or copyrights may amount to a concentration if those assets constitute a business with a market turnover. In any case, the transfer of licences for brands, patents or copyrights, without additional assets, can only fulfil these criteria if the licences are exclusive at least in a certain territory and the transfer of such licences will transfer the turnover-generating activity. For non-exclusive licences it can be excluded that they may constitute on their own a business to which a market turnover is attached.
In line with the EU Guidelines on restrictions directly related and necessary to concentration, the Romanian Guidelines provide that non-competition clauses cannot be considered necessary when the transfer is limited to exclusive industrial property rights. In addition, licences of patents, of similar rights or know-how may be considered necessary to the implementation of the concentration and in any event need not be limited in time.
11. Review and investigation of competitive effect
Which authorities may review or investigate the competitive effect of conduct related to IP rights (eg, licensing or transfer of IP rights)? (If multiple authorities have jurisdiction, please describe how they interact.)
The Romanian Competition Council is competent to review and investigate the competitive effect of conduct related to IP rights.
For the purpose of applying articles 101 and 102 TFEU, the Romanian Competition Council may perform inspections upon the request of the EC or of that of national competition authority of an EU Member State, based on the inspection order issued by the president of the Romanian Competition Council.
12. Competition-related remedies for private parties
Do private parties have competition-related remedies if they suffer harm from the exercise, licensing or transfer of IP rights?
A private party having suffered harm from the exercise, licensing or transfer of IP rights may file a complaint with the Romanian Competition Council, the opening of an investigation in such case being possible provided that the complainant shows a direct and genuine harm caused by the alleged breach of competition rules. Following the investigation, the Romanian Competition Council may order the undertakings concerned to cease their anti-competitive practice, may impose interim measures, accept commitments and impose fines.
Irrespective of the sanctions applied by the competition authorities, the natural and/or legal persons maintain their right to full indemnification for the damage caused by an anticompetitive behaviour. The court may also order temporary measures in urgent cases, by way of injunctions, with the aim of preventing imminent damage which could not be remedied, or preserving a right which would be otherwise prejudiced, or for overcoming the difficulties which might occur throughout an enforcement procedure. No such private actions have been filed in Romania so far.
Contractual remedies are also available. Private parties may set aside the contractual terms of agreements involving IP rights which give rise to anti-competitive practices and are prohibited by articles 5 or/and 6 of the Romanian Competition Law (the equivalent of articles 101/102 TFEU) as being void and unenforceable.
13. Competition guidelines
Has the competition authority issued guidelines or other statements regarding the overlap of competition law and IP? (If so, please provide a brief description of these guidelines or statements.)
The Romanian Competition Council has not issued specific statements regarding the overlap of competition law and IP. In terms of legislation, agreements involving the transfer of technology are to be assessed by the Romanian Competition Council pursuant to the EC Block Exemption Regulation No 772/2004 of 27 April 2004 (TTBER).
14. Exemptions from competition law
Are there aspects or uses of IP rights that are specifically exempt from the application of competition law (either by statute or pursuant to case law)? (For example, is the owner’s unilateral exclusion of others from using the owner’s IP exempt from competition law?)
The assessment of vertical agreements containing provisions granting IP rights is performed based on the Vertical Block Exemption Regulation, only when the licensing or assignment of IPRs does not represent the agreement’s core objective and their effect on the market is not similar to the one of non-exempted restrictions. Agreements having for principal object the transfer of IPRs will have to comply with the TTBER provisions.
15. Copyright exhaustion
Does your jurisdiction have a doctrine of, or akin to, ‘copyright exhaustion’ (EU) or ‘first sale’ (US)? If so, how does that doctrine interact with competition laws, for example with regard to efforts to contract out of the doctrine, to control pricing of products sold downstream and to prevent ‘grey marketing’?
The Copyright Law provides the exhaustion of the distribution right after the first sale or the first transfer of the ownership right of the original or a copy of a work, in the internal market, by the right holder or with his consent.
The copyright owner has the exclusive right to authorize or forbid the distribution of the protected work. However, the Copyright Law provides the exhaustion of the distribution right after the first sale or the first transfer of ownership over the work (either original or copy) on the internal market, transfer made by the right holder or with his consent.
The Romanian Competition Council and Romanian Courts would most likely have regard to the well-established case-law of the European Court of Justice (Javico v. Yves Saint Laurent; Levi Strauss & Co and Levi Strauss (UK) Ltd v. Tesco Stores), and decide that should the products protected by IP rights be placed on the market in an EU Member State by the right holder or with its consent, from a competition standpoint, they could be imported from such a Member State to another one and sold, without the distributor in the Member State or the right holder having the possibility to prohibit such import and resale on the basis of territorial protection.
16. Import control
To what extent can an IP rights holder prevent ‘grey-market’ or unauthorised importation or distribution of its products?
Under Romanian legal system, parallel trading is legal/allowed in principle, giving that the Romanian trademark regime is based on an EU/EEA exhaustion system, whereby the trademark owner may not prohibit its use in relation to goods which have been placed on the market within the EU and EEA under that trademark by the owner himself or with his consent.
However, the trademark owner may prevent the resale of its products for legitimate reasons, in particular if the condition of the products is altered or modified after they are put on the market.
It follows from the above that the trademark owner may only prevent parallel imports of products from outside the EU/EEA territory in any of the EU/EEA Member States.
17. Competent authority jurisdiction
Are there circumstances in which the competition authority may have its jurisdiction ousted by, or will defer to, an IP-related authority, or vice versa?
No, the Romanian Competition Law does not provide for such possibility.
18. Powers of competition authority
Does the competition authority have the same powers with respect to reviewing mergers involving IP rights as it does with respect to any other merger?
The Romanian Competition Council has the same powers with respect to reviewing mergers involving IP rights as it does with respect to any other merger.
19. Analysis of the competitive impact of a merger involving IP rights
Does the competition authority’s analysis of the competitive impact of a merger involving IP rights differ from a traditional analysis in which IP rights are not involved? If so, how?
Mergers involving IP rights are assessed on the basis of the same test as other mergers, that is, in terms of whether they would raise significant impediments to effective competition, in particular through the creation or strengthening of a dominant position.
The presence of IP elements in a concentration is likely to influence the analysis performed by the Romanian Competition Council with respect to the following main aspects:
In terms of the commitments which the parties may propose with a view to rendering the concentration compatible with the common market
To give an example from the Romanian Competition Council practice, the authorisation of a concentration through the acquisition of control over certain trademarks and assets was made subject to the purchaser’s commitment to give up the acquisition of specific trademarks together with the amendment of the non-competition undertaking, with a view to reserve the purchased company the right to manufacture and market, without any limitation from the purchaser’s side of the trademarks at stake.
The likelihood and extent of market foreclosure effects
The Romanian Competition Council’s analysis is focused on whether the control of key technology or IP rights may lead to concerns of foreclosure of competitors which depend on the technology or IP rights as essential input for the activities in a downstream market.
Conditions under which non-competition/non-solicitation/confidentiality clauses may qualify as ancillary restraints
Under the Ancillary Restraints Guidelines, non-competition clauses are justified for periods of up to three years, when the transfer of the undertaking includes the transfer of customer loyalty in the form of both goodwill and know-how. When only goodwill is included, they are justified for periods of up to two years.
In addition, the Ancillary Restraints Guidelines contain detailed rules regarding the granting of licenses of IP rights or know-how by parent companies or vendor to the joint venture or purchaser with a view to ensure the full exploitation of the assets transferred. The conditions required for such agreements to be considered as ancillary restraints mirror those under the EC Notice on Ancillary Restraints.
20. Challenge of a merger
In what circumstances might the competition authority challenge a merger involving the transfer or concentration of IP rights?
A merger involving the transfer or concentration of IP rights may be challenged under the same means of challenge as any other merger. The SIEC test applies to any merger case, irrespective of the transferred business.
21. Remedies to alleviate anti-competitive effect
What remedies are available to alleviate the anti-competitive effect of a merger involving IP rights? (For example, can mandatory licences be imposed?)
To alleviate the anti-competitive effect of a merger, commitments may be proposed by the parties and accepted by the Romanian Competition Council (divestiture – of assets, in particular of brands and licences, carve-outs, re-branding, access commitments).
In line with EU law, the granting of a license will generally not be considered appropriate where a divestiture of a business seems feasible.
SPECIFIC COMPETITION LAW VIOLATIONS
Describe how the exercise, licensing, or transfer of IP rights can relate to cartel or conspiracy conduct (For example, can an agreement between competitors to transfer or license intellectual property constitute an illegal cartel? How have reverse patent settlement payments been treated in your jurisdiction? Patent pools? Copyright collectives? Standard-setting bodies?)
The exercise, licensing or transfer of IP rights can fall within the prohibition of cartels. For example, under the technology transfer block exemption rules, competitors can use cross licensing with reciprocal running royalties as a means of co-ordinating prices on downstream product markets; however, cross licences with reciprocal running royalties will only be treated as price fixing where the agreement is devoid of any pro-competitive purpose and therefore does not constitute a bona fide licensing arrangement. Also, technology pools (which necessarily imply joint selling of the pooled technologies) amounts to a price fixing cartel in case they are composed solely or predominantly of substitute technologies.
23. (Resale) price maintenance
Describe how the exercise, licensing, or transfer of IP rights can relate to (resale) price maintenance (For example, are licensors of IP restrained from setting minimum resale prices for licensees?)
Under the technology transfer block exemption rules, agreements between competitors that have as their object the fixing of prices for products sold to third parties, including the products incorporating the licensed technology, are deemed hard-core restrictions of competition. Price fixing can for instance take the form of a direct agreement on the exact price to be charged or on a price list with certain allowed maximum rebates. It is immaterial whether the agreement concerns fixed, minimum, maximum or recommended prices. Price fixing can also be implemented indirectly by applying disincentives to deviate from an agreed price level, for example, by providing that the royalty rate will increase if product prices are reduced below a certain level. However, an obligation on the licensee to pay a certain minimum royalty does not in itself amount to price fixing.
Agreements between non-competitors which have as their direct or indirect object the establishment of a fixed or minimum price level to be observed by the licensor or the licensee when selling products to third parties are also deemed competition restrictions by their object. However, the provision of a list of recommended prices to or the imposition of a maximum price on the licensee by the licensor is not considered in itself as leading to fixed or minimum selling prices.
24. Exclusive dealing, tying and leveraging
Describe how the exercise, licensing, or transfer of IP rights can relate to exclusive dealing, tying and leveraging (For example, to what extent can a firm use its IP rights to compel or prevent the use of other products?)
If reciprocal exclusive licensing between competitors is a hardcore restriction (market sharing), non-reciprocal exclusive licensing between competitors is block exempted up to the market share threshold of 20 %, above this market share threshold being necessary to analyze the likely anti-competitive effects. Exclusive licensing between non-competitors is likely to fulfill the exemption conditions, since the right to grant an exclusive license is generally necessary in order to induce the licensee to invest in the licensed technology and to bring the products to market in a timely manner.
Under the technology transfer block exemption rules, tying and bundling are not block exempted above the market share thresholds of 20 % in the case of agreements between competitors and 30 % in the case of agreements between non-competitors. Tying can result in efficiency gains where the tied product is necessary for a technically satisfactory exploitation of the licensed technology or for ensuring that production under the license conforms to quality standards respected by the licensor and other licensees. Tying is likely to be pro-competitive where the tied product allows the licensee to exploit the licensed technology significantly more efficiently.
25. Abuse of dominance
Describe how the exercise, licensing, or transfer of IP rights can relate to abuse of dominance (For example, how can a dominant firm’s conduct with respect to its IP rights constitute an abuse of dominance?)
The classical abuse of dominance involving IP right is the refusal to license, discussed under Q26 below.
26. Refusal to deal and essential facilities
Describe how the exercise, licensing, or transfer of IP rights can relate to refusal to deal and refusal to grant access to essential facilities (For example, is a simple refusal to license IP beyond the scope of competition law? Is mandatory licensing a possible remedy on competition grounds?)
A refusal to licence IP rights would amount to an abuse of dominance under exceptional circumstances.
In addition to the conditions that normally have to be fulfilled in order for a refusal to supply be deemed abusive (indispensability of the input; likely negative effect on competition; lack of objective justification), it must also be shown that the refusal to grant the licence prevents the development of the market for which the licence is an indispensable input, to the detriment of consumers. Such condition would most likely be met if the undertaking requesting the licence intends to produce new goods or services for which there is a potential consumer demand.
The indispensability test applied in the case of IP rights would imply to show that competitors are unable to turn to any workable alternative technology, in particular where the technology has become a standard on the market.
27. Remedies for violations of competition law involving IP
What sanctions or remedies can the competition authority or courts impose for violations of competition law involving IP? (For example, is compulsory licensing available? Fines? Damages? Can divestitures of IP rights be ordered?)
Fines ranging from 0.5% to 10% of the total turnover of the financial year prior to sanctioning may be imposed in case of breach of article 5 of the Romanian Competition Law (the equivalent of art. 101 TFEU) or of article 6 of the Romanian Competition Law (the equivalent of art. 102 TFEU), which, as described above, can also involve IP rights.
Divestiture of IP rights may be proposed by merging parties in order to render the proposed economic concentration compatible with a normal competitive environment.
Where the competition concerns arise from the market position held for IP rights, a divestiture of the IP rights is the preferable remedy as it eliminates a lasting relationship between the merged entity and its competitors. However, the Competition Council may accept licensing arrangements as an alternative to divestiture where, for instance, a divestiture would impede efficient, on-going research or where a divestiture would be impossible due to the nature of the business.
Damages may only be awarded by ordinary courts as per the answer provided under Question 12 above.
The Competition Council may impose as interim measures the grant of a licence, may order the access to an essential facility. Such measures may be imposed on the basis of a prima facie finding of infringement in cases of urgency due to the risk of serious and irreparable damage to competition.
28. Competition law remedies specific to IP
Do special remedies exist under your competition laws that are specific to IP matters?
No remedies specific to IP matters exist under Romanian Competition Law.
29. Remedies and sanctions
What competition remedies or sanctions have been imposed in the IP context? (Please describe briefly any actual remedies or sanctions.)
The authorisation of a concentration through the acquisition of control over certain trademarks and assets was for example given subject to the purchaser’s commitment to give up the acquisition of specific trademarks together with the amendment of the non-competition undertaking, with a view to reserve the purchased company the right to manufacture and market, without any limitation from the purchaser’s side of the trademarks at stake.
30. Scrutiny of settlement agreements
How will a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? (For example, with respect to a patent infringement claim, could an agreement whereby one party agrees not to compete with respect to the patented product be considered to violate the competition laws? In what circumstances?)
There is no case law on how a settlement agreement terminating an IP infringement dispute be analyzed from a competition perspective. Patent settlements have been scrutinized and monitored in the EU especially in the context of delaying generic entry, but this has not yet been the case with the Competition Council. It is worth however noting that in the context of a settlement and non-assertion agreement, non-challenge clauses are generally considered to fall outside Article 101(1), being inherent in such agreements that the parties agree not to challenge ex post the intellectual property rights covered by the agreement (since the very purpose of the agreement is to settle existing disputes and/or to avoid future disputes).
ECONOMICS AND APPLICATION OF COMPETITION LAW
What role has economics played in the application of competition law to cases involving IP rights?
Economic benefit and efficiencies have always played a part in the assessment of competition cases involving IP rights, under the general criteria for the analysis of the fulfilment of the conditions in article 5(2) of the Competition Law (the equivalent of article 101(3) TFEU), given the fact that it is the economics that provides an answer to the question whether the consumers receive a fair share of the efficiency gains and whether the restrictions are indispensable to the attainment of the efficiencies..
32. Recent cases
Have there been any recent high-profile cases dealing with the intersection of competition law and IP rights?
There have not been high-profile cases dealing with the intersection of competition law and IP rights in the past year. In one of its recent cases (Decision 3/2010), the Competition Council dealt with a complaint of abuse of dominance filed against the producer of an originator drug, in relation to the prevention of entry of generic drugs on the market and excessive pricing, and held that a product covered by an IP right should not be subject to an investigation regarding excessive prices; an issue would only arise in case the IP right would not be justified from the perspective of the need to protect the investment made by the undertaking holding the IP right. Even in such case, in the Romanian Competition Council’s view, an intervention of the competition authority would not be appropriate and could only be justified in case an exclusionary abuse would be at stake.