Intellectual property and competition

24.4 DP 68 discussed the tension between intellectual property laws and competition law in promoting innovation. While both ultimately seek to increase competition and efficiency within markets to benefit of consumers, their modes of achieving this goal differ:

competition law strives to maintain a consistently competitive market whilst intellectual property law is content to allow mild distortions in market conditions to realise long term benefits. Thus, despite the common goal, intellectual property law’s mode of achieving market efficiencies is antithetical to competition law’s view of acceptable behaviour. It is this ideological impasse that produces tension.[5]

24.5 The Australian Competition and Consumer Commission (ACCC) suggested that the interaction between these laws raises several crucial questions, including what types of incentives are necessary to encourage innovation to the level that is best for society; and whether society benefits most if it rewards initial innovation through broad intellectual property protection, or fosters successive innovation by requiring access to such intellectual property.[6]

[5] P Tucker, ‘Refusal to Licence Intellectual Property Rights and Misuse of Market Power: Where is the Line in the Sand?’ (1999) 10 Australian Intellectual Property Journal 78, 79–80.

[6] Australian Competition and Consumer Commission, Submission P64, 12 December 2003.