Extraterritorial reach of competition remedies – JURATA– December 2017 OECD discussion
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This presentation by Jay Jurata, Partner at Orrick, US, was made during the discussion “Extraterritorial reach of competition remedies” held at the 126th meeting of the OECD Working Party No. 3 on Co-operation and Enforcement on 5 December 2017. More papers and presentations on the topic can be found out at oe.cd/ercr.
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Extraterritorial reach of competition remedies – JURATA– December 2017 OECD discussion
- 1. Extraterritorial Reach of Competition Law Remedies in IP Rights Disputes OECD Working Group Roundtable (Dec. 5, 2017) John (“Jay”) Jurata, Jr.
- 2. – Practical Concerns – Case Studies – Recommendations Overview Views are personal and should not be attributed to the firm or particular clients
- 4. Navigating Extraterritorial Remedies Different substantive laws by jurisdiction Minimal “nexus” with jurisdiction imposing remedy Comity (including “negative comity”) Sovereignty
- 5. • IPRs granted by statute – Enforceable only in granting jurisdiction – No legal effect outside granting jurisdiction • But increasingly regulated by non-issuing jurisdiction competition authorities Negating IP Rights Granted by Other Governments
- 6. IPR Example: Legal Effect of U.S. Patents Type of Commerce Involve U.S. Patents? U.S. to U.S. Yes U.S. imports Yes U.S. exports Maybe Non-U.S. to Non-U.S. No
- 7. Case Studies
- 8. Dispute Reviewing Agency Scope of Remedy Domestic Worldwide Google/MMI U.S. FTC (2013) X* EU (2014) X Samsung EU (2014) X Microsoft-Nokia MOFCOM (2014) X KFTC (2015) X Qualcomm NDRC (2014) X* KFTC (2016) X SEPs: One World; Overlapping Remedies
- 9. Weakens global patent system Discourages “design around” innovation Encourages trade wars to protect “national champions” Increases IP transaction costs Effect of Extraterritorial Remedies in IPR Disputes
- 10. Recommendations
- 11. Revisiting “Domestic Effects” Test Domestic Manufacturers Product Exports Product Imports Domestic Consumers
- 12. • Defer to jurisdiction with closest “nexus” to challenged conduct • Seek formal input from other jurisdictions affected by proposed remedy – Per ICN Recommended Practice for Merger Notification and Review Procedures (p.34) • Limit geographic scope of remedy to scope of jurisdiction of reviewing courts Other Possible Approaches
- 13. Questions?
- 14. John (“Jay”) Jurata, Jr. Practice Group Leader: Antitrust & Competition Washington, D.C. tel: +1.202.339.8504 email: jjurata@orrick.com Contact Information
- 15. Backup Slides
- 16. “. . . Samsung has for a period of five years committed not to seek any injunctions in the European Economic Area (EEA) on the basis of any of its SEPs, present and future, that relate to technologies implemented in smartphones . . .” Samsung (DG Comp 2014)
- 17. Google-MMI (FTC 2013) “Patent Claim” means one or more claims in issued patents or pending patent applications issued or pending in the United States or anywhere else in the world.” “Nothing in this Order shall prohibit Respondents from seeking Covered Injunctive Relief for alleged Infringement of a FRAND Patent against a Potential Licensee who . . . is outside the jurisdiction of the United States District Courts.”
- 18. • Cleared unconditionally in 13 jurisdictions – Including U.S. (Microsoft HQ) and E.U. (Nokia HQ) • No “direct, substantial or reasonably foreseeable effect” on domestic China/Korea phone sales – De minimus Windows phone sales in China/Korea – No allegations of enforcement of China/Korea patents – Overwhelming majority of MSFT’s patent portfolio were non- Chinese/Korean Microsoft-Nokia (MOFCOM 2014 & KFTC 2015) Consent decrees covered non-domestic phone sales by China/Korea manufacturers
- 19. NDRC KFTC Alleged conduct Patent licensing practices Patent licensing practices Portfolio makeup Mostly non-Chinese Mostly non-Korean Agency finding Abuse of dominance Abuse of dominance Scope of remedy Limited to China (and unpatented jurisdictions) Worldwide Qualcomm (NDRC 2014 & KFTC 2016)