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The Internet of Things is advancing as a new technological paradigm with enormous economic and societal implications. Network connectivity provides the basis. With this in mind, past and current conflicts surrounding the licensing and enforcement of standard essential patents (SEPs) in the information and communications technology (ICT) sector cast a shadow over IoT development. Focusing on the European approach based on competition law, this article explores the extent to which the existing legal framework, which has been mainly developed against the backdrop of problems in the mobile industry, will be capable of responding adequately to the challenges raised by the IoT.

This Position Statement presents a broad overview of issues arising at the intersection of AI and IP law based on the work of the Max Planck Institute for Innovation and Competition research group on Regulation of the Digital Economy. While the analysis is approached mainly from a perspective de lege lata, it also identifies questions which require further reflection de lege ferenda supported by in-depth interdisciplinary research. The scope is confined to substantive European IP law, in particular, as regards copyright, patents, designs, databases and trade secrets. Specific AI-related issues are mapped out around the core questions of IP law, namely, the eligibility for protection under the respective IP regimes, allocation of rights and the scope of protection. The structure of the analysis reflects three key components of AI: inputs required for the development of AI systems, AI as a process and the output of AI applications. Overall, it is emphasised that, while recent legal and policy discussions have mostly focused on AI-aided and AI-generated output, a more holistic view that accounts for the role of IP law across the AI innovation cycle is indispensable.

On the European level, promoting the free flow of data and access to data has moved to the forefront of the policy goals concerning the digital economy. A particular aspect of this economy is the advent of connected devices that are increasingly deployed and used in the context of the Internet of Things (IoT). As regards these devices, the Commission has identified the particular problem that the manufacturers may try to remain in control of the data and refuse data access to third parties, thereby impeding the development of innovative business models in secondary data-related markets. To address this issue, this paper discusses potential legislation on data access rights of the users of connected devices. The paper conceives refusals of the device manufacturers to grant access to data vis-a-vis users as a form of unfair trading practice and therefore recommends embedding data access rights of users in the context of the European law against unfair competition. Such access rights would be complementary to other access regimes, including sector-specific data access rights of competitors in secondary markets as well as access rights available under contract and competition law. Against the backdrop of ongoing debates to reform contract and competition law for the purpose of enhancing data access, the paper seeks to draw attention to a so far not explored unfair competition law approach.

The present Q&A paper aims at providing an overview of artificial intelligence with a special focus on machine learning as a currently predominant subfield thereof. Machine learning-based applications have been discussed intensely in legal scholarship, including in the field of intellectual property law, while many technical aspects remain ambiguous and often cause confusion. This text was drafted by the Research Group on the Regulation of the Digital Economy of the Max Planck Institute for Innovation and Competition in the pursuit of understanding the fundamental characteristics of artificial intelligence, and machine learning in particular, that could potentially have an impact on intellectual property law. As a background paper, it provides the technological basis for the Group’s ongoing research relating thereto. The current version summarises insights gained from background literature research, interviews with practitioners and a workshop conducted in June 2019 in which experts in the field of artificial intelligence participated.

The European Union is the home of the most experienced supranational competition law system of the world. Hence, other regional integration systems often look at the EU as a role model for designing their regional competition policies. However, this does not necessarily argue in favor of a ‘copy-and-paste’ adoption of the European framework. To learn from the EU implies taking into account both the European experience and the socio-economic and political circumstances of the relevant region for the purpose of designing a tailor-made regional competition policy. Accordingly, European experience demonstrates that certain decisions need to be made, such as on the scope of application of the regional competition law, its relationship with the national competition law systems, its institutional design and its enforcement mechanisms. ASEAN has chosen to implement a regional competition policy framework as part of its project to create an ASEAN single market and an ASEAN Economic Community. However, ASEAN’s approach to competition law is limited to convergence. Its biggest achievement consists in the adoption of competition legislation in the ASEAN countries. This article discusses whether and to what extent ASEAN should now go a step further and ‘transplant’ the EU competition law framework. The answer depends on a number of considerations such as the goals of creating a supranational competition law, the degree and potential of economic integration of the national economies, the level of economic development of these economies, the development of a competition culture in these countries, the comparative advantages of centralised and decentralised enforcement and the willingness of ASEAN countries to surrender sovereignty in the field of competition law.

The Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled is an important and meaningful WIPO treaty. It intends to mitigate the book famine for blind and visually impaired persons worldwide. This position paper of the Max Planck Institute for Innovation and Competition recommends that the EU Commission present in the foreseeable future a specific proposal for a Directive therewith mapping more concretely the specifications of Article 5(3)(b) of Directive 2001/29/EC. The aim of this position paper is to outline the basic points of such a Directive, taking into account the requirements of the WIPO Marrakesh Treaty.

In 2013, the European legislature revised the Public Sector Information (PSI) Directive of 2003. The PSI Directive strives to make information collected by public sector bodies in the framework of their public tasks available for commercial re-use by private undertakings for the provision of added-value information services. Whereas, in 2003, the European legislature aimed to set first incentives to overcome resistance of public sector bodies to make data accessible for re-use, ten years later many Member States have developed open-data policies that are designed to make PSI available to the public free of charge. The revision of 2013 takes account of this evolution by integrating the former re-use policy into a larger open-data policy. This article assesses the evolution of the European framework for the regulation of PSI from a competition-oriented perspective. Thereby, it also critically reviews the Compass judgement of 2012 in which the Court of Justice of the EU (CJEU) limited the scope of EU competition law to the re-use of PSI by adopting a narrow approach to the concept of an ‘undertaking’.

This Position Statement responds to the Communication of 10 January 2017 by which the European Commission launched a public consultation on the future legal framework for data-driven markets that emerge in the course of the current digitization of industrial production and the advent of smart products in which sensors are embedded. In particular, the Position Statement comments the Commission’s ideas on a possible future data producer’s right as a means of promoting access to data. While the Max Plank Institute agrees that there are indeed instances where there is a need to “unlock data”, it rejects a data producer’s right. Rather, the Institute recommends considering more targeted data access rights that would specifically react to situations in which a manufacturer of smart products would otherwise try to reserve related markets for itself. The Max Planck Institute thereby takes inspiration from the data portability right that has already been implemented as part of the Basic Data Protection Regulation. Moreover, general principles on the design of data access regimes are developed. In sum, the Max Planck Institute favours a sector-specific approach to the introduction of a general data access right or a generally applicable data access regime. Sector-specific rules are especially needed for answering more concrete questions such as regarding the person entitled to claim access or the one of whether a data holder should be remunerated for granting access to data.

The Max Planck Institute welcomes the initiative of the European Commission for a binding legal instrument on collective management of copyright and related rights in the EU. Numerous provisions are to be appreciated. Yet the Commission seems to fail to take account of the full legal framework and factual circumstances that have structured the current system of collective rights management. Disposing of natural monopolies in a two-sided market, collecting societies should not refuse to grant access to their services to rightholders and users. Hence, it is strongly recommended that the European legislature follows the experience of numerous Members States and proposes an obligation to contract with rightholders as well as with users. The critique on the Commission’s approach to cross-border licences for online rights on musical works as set forth in the Recommendation of 2005 has unfortunately not been duly considered and the Commission’s assessment of the practical effects of the Recommendation is mistaken. Differences of substantive copyright law among Member States still constitute an obstacle to the establishment of an internal market for works. This is why the Institute deems the Commission’s sectorial approach to the regulation of cross-border licensing to be problematic. Also such regulation would require further harmonisation of substantive copyright law. Moreover, the Proposal fails to take account of statutory remuneration rights and cases of mandatory collective management. Both pursue specific protection of original rightholders. In this regard the Proposal’s refusal to distinguish between different categories of rightholders raises concerns. Since collecting societies manage copyrights and related rights arising from national law, and considering the benefits of an authorisation system, which can be found in several Member States, the Institute advises the European legislature to clearly state that the intellectual property exception of Art. 17(11) of the Service Directive applies to collecting societies. The Proposal endangers the balance both between different categories of rightholders and between rightholders and users that the established system of collective management of copyright in Europe traditionally seeks to achieve. It thereby compromises the laudable goal to foster the establishment of an internal market for online uses of works across Europe.

In 1994, by concluding the TRIPS Agreement as part of the new WTO system, states recognized the “trade-relatedness” of IPRs. Yet scholars have so far given very little attention to this concept. This chapter identifies three aspects of this idea, namely (1) as a legal concept, (2) as an economic justification for more advanced international IP standards, and (3) as a political strategy. During the last decade, this concept also migrated to many bilateral trade agreements in which “TRIPS-plus” standards were included. This development not only confirmed and strengthened the trade-relatedness of IPRs, it also requires a reassessment of the concept in order to judge the appropriateness of IP bilateralism. Indeed, the main research question of this chapter relates to the soundness of combining IP rules with trade rules. Whether this combination makes economic sense can be critically reviewed in the light of several considerations of economic theory. This economic analysis shows how the international IP system, starting with TRIPS and continuing with bilateral trade agreements, had to develop towards an inefficient expansion of IP protection. From the perspective of 2014, the conclusion is that the strategy to use trade concessions as a bargaining chip for higher IP standards for the purpose of promoting the competitiveness of technologically more advanced countries has not produced the expected results. The chapter strongly argues for reconsidering the current trade policy of technologically more advanced countries to push through ever-higher levels of protection in various forms of trade agreements.

As part of the project to establish a Digital Single Market the European Commission has launched a ‘Free Flow of Data’ initiative. This initiative is meant to enhance the growth potential of the emerging data economy, which is characterised by the digitisation of production (smart factories) and the advent of digitised products such as smart — driverless — cars or smart wearables that will be able to communicate with each other and the environment through the Internet of Things. Furthermore, the enormous amount of data generated and controlled by the industry could serve as a most valuable input for other new data-driven services and for applications in the public interest such as the operation of smart cities, smart and resource-efficient farming or measures to prevent the spread of infectious diseases. Obviously, this new data economy has to rely on the commercialisation of data. But what kind of regulation is needed in order to make the data economy work? Do we need new ownership rights in data? Or should regulation focus on access in order to make data as widely available as possible? The European Commission is currently working on a Communication to provide answers to these questions by January 2017. This article tries to assist the Commission by working on a pro-competitive framework for issues of both ownership and access. In so doing, this article undertakes two things: first, it analyses to what extent intellectual property laws already provide control over data and then discusses the need and justification for introducing new rules on data ownership. Second, it analyses whether EU competition law already provides remedies to promote access to data and furthermore explores whether and under which conditions introduction of new access regimes would be advisable.This article is to be considered as on-going research. It is only made available online. A later publication will take into account the Commission Communication expected for January 2017.

This position statement of the Max Planck Institute for Innovation and Competition has been released against the background of the European Free Flow of Data Initiative of the European Commission and the on-going political, economic and academic debate on the related issues. The Institute takes a stance as regards the introduction of exclusive rights in data, special legal protection of algorithms used in data analysis, as well as the questions on the applicability of the current EU legal framework for the sui-generis database rights and trade secrets to individual data and data-sets. The Institute sees no economic justification for the introduction of new exclusive rights in data, which could even hamper the functioning of the data-driven economy. In contrast, the statement emphasizes the importance of access to data in order to ensure the proper functioning of data-driven markets. It identifies the need for further research in this regard and recommends the general approach and principles to be considered if the special regulation of access to data is necessary.

On 18 November 2014, Advocate General Bot delivered his opinion on the Spanish action against Regulation No. 1257/2012 on Unitary Patent Protection. Among other things, Spain claims that the Regulation is not capable of guaranteeing unitary patent protection as required by Article 118(1) TFEU since, pursuant to the conflict-of-law rule contained in Article 5(3), it leaves this question to the national law of the participating Member States. AG Bot rejected this claim by arguing that, under the EU principle of sincere cooperation, the participating Member States are under an obligation to ratify the Unified Patent Court (UPC) Agreement, which contains uniform rules on the scope of such patents. The legislative history shows that most of the substantive patent law provisions that were included in the Commission Proposal for the UPP Regulation were ultimately transferred to the UPC Agreement as part of a political compromise that attempts to exclude the jurisdiction of the Court of Justice of the EU (CJEU) for these rules. Hence, following the reasoning of AG Bot, the conflict-of-law rule of Article 5(3) is not designed to solve a conflict of laws, but only aims to insulate the UPC Agreement against claims that its uniform substantive patent law provisions are nevertheless part of EU law and, therefore, ought to be interpreted by the CJEU. This, however, gives rise to three constitutional concerns that are not addressed by AG Bot, namely, (1) a conflict with the principle of democracy as a fundamental value of the Union, (2) a circumvention of the fundamental rights of the European Union, which would otherwise guide the interpretation of the substantive patent law provisions, and (3) a curtailment of effective judicial control as an expression of the rule of law. In sum, the opinion of AG Bot comes as a clear disappointment and should not be followed by the CJEU.

Contents: Preface PART 1 STATE-OWNED ENTERPRISES 1. Competitive Neutrality: Addressing Government Advantage in Australian Markets Deborah Healey 2. Petrobras: State Monopoly and Competition Policy Gilberto Bercovici 3. The Principle of Subsidiarity as the Essential Restriction on Peruvian State Business Activity under Pro-Competitive Conditions Tania Zuniga Fernandez 4. The Competition Dimension of the European Regulation of Public Sector Information and the Concept of an Undertaking Josef Drexl PART 2 PRO-COMPETITIVE REGULATION 5. Deepening the Freedom of Services Through Pro-Competitive Regulation: The Case of the EU Services Directive Maria Manuel Leitao Marques and Leonor Bettencourt Nunes 6 . Abuse of Administrative Monopoly in China Thomas K. Cheng 7. The Competition Policy Dimension of Water and Sanitation Services in Brazil Gesner Oliveira 8. Pro-Competitive Regulation of Personal Data Protection in the EU Simonetta Vezzoso PART 3 ANTI-COMPETITIVE MARKET INTERVENTION AND REGULATION 9. The Suppression of the Competition Policy Agenda in the Context of an Over-Regulated Economy: The Case of Venezuela Claudia Curiel Leidenz 10. Competition and the Imposition of Investment Targets in the Brazilian Pay-TV Market Arthur Barrionuevo and Pedro Dutra 11. An Essay on Intellectual Property Rights: From State-Initiated Restraints of Competition to State-Initiated Competition Rudolph J.R. Peritz PART 4 PUBLIC PROCUREMENT AND STATE SUBSIDIES 12. Benefits of Competition Policy in Public Procurement with Special Reference to India S. Chakravarthy 13. Distinguishing State and Private Subsidies: A Closer,Look at the State Character Test Thomas Jaeger INDEX

Beyond regulating markets, competition law also has a political dimension. This is especially the case in media markets, where competition policy may produce particular trade-offs for the development of democracy. Yet it is a different question whether competition law enforcement should take democracy into account as a goal and, even more so, whether this goal should influence the analytical framework for applying competition law. By putting a focus on emerging and developing economies, this article answers this question in the affirmative. It thereby builds on a recent study conducted for the World Intellectual Property Organization (WIPO) on the application of competition laws around the world to copyright-related markets. Whereas, in the past, the interface of competition law and democracy was mostly discussed with regard to media mergers, an analysis of some unilateral conduct cases shows that the ‘democratic goal’ can argue either for or against intervention. Yet promoting the goal of democracy will not conflict with an economics-based analysis of competition law if, following an evolutionary concept of competition, enforcers promote diversity of content and ideas in copyright-related media markets. In addition, the article highlights the need of independent agencies to guarantee credibility of competition law enforcement in media markets.

Contents:PART I FOUNDATIONS OF THE COMPLEX RELATIONSHIP OF COMPETITION LAW AND REGULATION 1. The Regulatory Breakthrough of Competition Law: Definitions and WorriesMariateresa Maggiolino2. Anti-Anti Regulation: The Supplanting of Industry Regulators with Competition Agencies and how Antitrust Suffers as a ResultAdi Ayal3. (Re-)Joining The Regulatory Fold? Problem-Solving Innovations in Competition EnforcementYane SvetievPART II NEW FORMS OF ADVOCY POWERS OF COMPETITION AGENCIES4. New Powers - New Vulnerabilities? A Critical Analysis of Market Inquiries Performed by Competition AuthoritiesTamar Indig and Michal S. Gal5. New Frontiers for Competition Advocacy and the Potential Role of Competition Impact AssessmentNicoletta RangonePART III COMPETITION LAW ENFORCEMENT IN REGULATED INDUSTRIES IN GENERAL 6. A Reassessment of the Relationship Between Competition Law and Sector-Specific RegulationMario Siragusa and Fausto Caronna7. Regulatory Approach to Competition Law in the Practice of the Polish Competition Authority - A Critical AssessmentKrystyna Kowalik-Banczyk8. Enforcement of Competition Rules in Regulated Industries: Abuse-of-dominance Practices in the New EU Member States, Candidate Countries and Potential CandidatesAlexandr Svetlicinii And Marco BottaPART IV INFORMATION AND TELECOMMUNICATION MARKETS9. From Competition Law to Sector-Specific Regulation in Internet Markets? A Critical Assessment of a Possible Structural ChangeRolf H. Weber10. The Regulatory Approach in Competition Law Enforcement for Innovation-Intensive Industries: The Case of Broadband Access Regulation in JapanToshiaki Takigawa11. Abuses of Information and Informational Remedies: Rethinking Exchange of Information under Competition LawFabiana Di Porto PART V COMPETITION LAW AS REGULATION IN IP-RELATED MARKETS12. Competition Law as an Instrument of IP Regulation? The Case of Strategic Patent FilingsEmanuela Arezzo13. Competition Law as the Limit to Standard-SettingBjorn LundqvistIndex

Is there still a chance for Europe’s initiative on a WTO Multilateral Framework Agreement on competition policy after the failure of the 2003 Ministerial Conference of Cancún? Do developing countries that reject the initiative act against their own interests? Do we really need such an agreement in the light of alternative approaches to international competition law? This article tries to answer these questions and supports principles of a possible WTO competition law considerably different from those proposed by the European Community. These principles reject a concept of an international competition law as a market-access guaranteeing instrument of trade policy and would implement the protection of international competition in trans-border markets as the objective of WTO competition law. This kind of law reacts to today’s situation in which trade liberalisation and international protection of intellectual property rights enable undertakings to abuse their freedoms and their property rights in larger markets emerging as a consequence of WTO law after the Uruguay Round. In this sense the proposals of this article contribute to the solution of problems of globalisation.

Beyond regulating markets, competition law also has a political dimension. This is especially the case in media markets, where competition policy may produce particular trade-offs for the development of democracy. Yet it is a different question whether competition law enforcement should take democracy into account as a goal and, even more so, whether this goal should influence the analytical framework for applying competition law. By putting a focus on emerging and developing economies, this article answers this question in the affirmative. It thereby builds on a recent study conducted for the World Intellectual Property Organization (WIPO) on the application of competition laws around the world to copyright-related markets. Whereas, in the past, the interface of competition law and democracy was mostly discussed with regard to media mergers, an analysis of some unilateral conduct cases shows that the ‘democratic goal’ can argue either for or against intervention. Yet promoting the goal of democracy will not conflict with an economics-based analysis of competition law if, based on an evolutionary concept of competition, enforcers promote diversity of content and ideas in copyright-related media markets. In addition, the article highlights the need of independent agencies to guarantee credibility of competition law enforcement in media markets.

On 20 February 2014, the Council of the European Union adopted the new Directive on Collective Rights Management. In its Proposal for this Directive, the Commission argued that cross-border collective rights management services are liberalised pursuant to Article 16 of the Services Directive of 2006. Yet, only one week after the adoption of the new Directive, the Commission’s view was rejected by the Court of Justice of the EU in the OSA judgment. This chapter analyses the relationship between the principle of free movement of services and national sector-specific regulation of CMOs in more detail in order to explore to which extent the principle of free movement of services and the need for specific rules for collective management of copyrights could be better coordinated in the future.

The European Union (EU) has concluded—and still is in the process of negotiating—a number of bilateral trade agreements with extensive provisions on intellectual property rights that partially go beyond what is required by the WTO/TRIPS Agreement (so-called “TRIPS-plus standards”). These agreements include the Economic Partnership Agreement (EPA) with the CARIFORUM States, the Free Trade Agreement with South Korea, the Association Agreement with Central America and the Trade Agreement with Columbia and Peru. There is a general assumption that these agreements only oblige the other contracting parties to change their intellectual property laws, whilst there is no need for the EU to take any implementation measures. This chapter questions this latter assumption by analysing, in particular, the rules of these agreements on criminal sanctions, genetic resources, transfer of technology and competition law and the general principles on the enhancement of sustainable development.