Weiteres Forschungsprojekt
Immaterialgüter- und Wettbewerbsrecht

Competition in Innovation: Strategies in the Creation and Exploitation of Innovations in the Light of Competition Law

Competition Law has been built so far by considering mainly market competition, and especially considering price competition. The main goal of the project is to develop an analysis on the way Competition Law should be implemented when companies compete in the creation of innovations and not in the offering of their products in the market.

Last Update: 15.12.15

Modern Competition Law has constructed its structures on the basis of the paradigm of price competition in the market. This approach has largely neglected the important role that competition plays in the creation of innovation, even when the proper Article 101 (1) b) TFEU particularly prohibits as incompatible with the internal market those agreements and abusive practices that limit or control technical development. Thus one of the main goals of this project is to analyse anticompetitive practices that may have an impact on the launch of innovations.

This reasoning acquires special relevance considering the special characteristics of the main innovation markets nowadays (bio- and nano-engineering, ICT, pharmaceutics…) in which economic success has more to do with research and development and the ownership of IP rights than with the offering of products at the lowest price. The dynamic character of these businesses makes it also necessary to rethink the relationship between Competition and IP regulations. In these markets, beside price competition, innovation is a very important competition parameter. They are based in a first-winner model. Those competitors who achieve first the innovation, are granted the IP rights that confer them the exclusive legal position in the market of this brand new product, removing –at least temporally- competition from other undertakings. These “winners” may achieve a market dominance on the base of the IP granted and the specific market conditions. In this landscape, undertakings –and mainly these in a dominant position- may engage in anticompetitive behaviour or celebrate agreements, creating barriers to entry and eliminating actual or potential competition in that market.  

IP rights are not ends in themselves, but instruments to enhance innovation. By allowing their holders to get a reward for their investment in R&D, patents do serve as an incentive to competition based on innovation. Yet, an IP system granting broad exclusive exploitation rights and that is devoid of any kind of competitive modulation may generate important social costs that cannot be easily subsumed. An over-protectionist IPRs system leads to several risks and social costs, and it confers the IP owners an important legal monopoly on the inventions that can be used to build up important barriers to enter in a determinate sector of innovation, discouraging R&D and innovation in that field. IP exclusive exploitation rights are justified by the need of granting a return of the investment made for the creation of the innovation.

In this context, the project focuses on the analysis of three general environments:

1.   1. Competition prior to the innovation or competition in the creation of innovations

2.   2. Competition post innovation. Strategies once the innovation is created to hinder the innovative efforts of competitors

3.   3. Antibodies to enhance competition in innovation


Project Manager

Prof. Dr. Eugenio Olmedo Peralta

Main Areas of Research