Page 78 - Azerbaijan State University of Economics

STUDYING OF SPECIAL PRACTICAL ISSUES OF ABUSE OF DOMINANCE

competition in the long run by providing incentives for the development and

production of new products and production processes. In most cases it is
possible to find a number of substitutes in the market also for products that

are protected by intellectual property rights [see, for example, McGrath

1984: 355-65]. As a result, the existence and exercise of such rights should
not usually be a source of concern to antitrust authorities.

Nevertheless, abuses in the acquisition and exercise of these rights can
be a legitimate concern for competition authorities in some cases. Practices

that may raise competition issues fall into three main categories: the
acquisition of patents, the transfer of technology through licensing

arrangements, and cooperative arrangements among innovating firms. These

practices raise concerns when they constitute attempts to extend market
power by excluding entry into a market, suppressing innovation. At the same

time, these practices may also serve legitimate, efficiency-related purposes

[OECD 1989].
Licensing agreements are an important means of transfer of technology

between firms, especially in the international context. Such contracts are
often complex and include an array of vertical and other restrictions on the

licensee, including technology grant-backs, tie-ins, territorial market
limitations, and field-of-use restrictions in technology licensing agreements.

Broadly speaking, the factors to be considered in distinguishing

anticompetitive from procompetitive licensing are the same as those in
relation to other anticompetitive practices.

In 1995 the U.S. antitrust authorities issued new Antitrust Guidelines for
Intellectual Property Licensing. The guidelines emphasize that the treatment of

licensing arrangements depends importantly on whether the relationships
between the firms involved are primarily horizontal or vertical. Competition is

more likely to be harmed when the firms are horizontally related (that is, they

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