World Competition Day 2016 – Linkages between Competition and Intellectual Property

The Competition Authority of Botswana (CA) on December 5^th joined other competition agencies in observing World Competition Day. A panel discussion on the ‘Linkages between Competition and Intellectual Property” which is the theme for this year, was held to celebrate this day. Panelists included Mr. Duncan Morotsi from the Competition Authority, Mr. Timothy Moalosi from the Companies and Intellectual Property Authority (CIPA) and Mr. Letlhogonolo Makwinja from the Copyright Society of Botswana (COSBOTS).

The speakers identified innovation and benefit for consumers as the common thread linking competition and intellectual property. Mr. Moalosi noted that intellectual property (IP) rights and the benefits accrued thereof is an incentive for research and development. “In competitive markets entrepreneurs are forced to innovate and constantly seek ways to come up with new products which benefit the consumer” he said. Moalosi reiterated that there are safeguards to ensure that IP rights do not become a hindrance to competition, hence there are public interest provisions in the Industrial Property Act of 2010 which guard against monopolising markets and other abuses by a patent owner.

Section 31 of the Act provides for the use of compulsory licensing for competition. The Minister may without the consent of the patent owner after hearing the patentee or any other interested person, authorise a government agency, other person or body to exploit the patented invention on the payment of adequate remuneration to the patentee.

“This happens where a court or administrative body has determined that the manner of exploitation of the invention by the patentee is anti-competitive or constitutes an abuse of the patent,” Moalosi said. The Minister may revoke the decision if satisfied that the conditions or circumstances that led to the decision have ceased to exist and are likely not to recur.

Section 33 of the Act provides for a compulsory license for failure to exploit a patent on the grounds that the market for the patent is not being supplied or is not supplied on reasonable terms in Botswana. Section 34 provides for licensing in respect of dependent patents, and this happens where the exploitation of a subsequent patent is dependent upon obtaining a license under an earlier patent.

The CA’s Mr. Morotsi said intellectual property holders cannot innovate if they are not exposed to competition. To that end, Competition Law appreciates the costs involved in generating ideas and producing a product, and thereby appreciates IP rights.  “Completion law respects IP holders in the knowledge based economy and it cannot be used to constrain people from doing things that benefit consumers,” he said.

Morotsi noted that the Competition Act does not apply to any agreement to the extent that it relates to the protection, exercise, licensing or assignment of rights under any law governing intellectual property rights. However he was quick to point out that this is not a blanket exclusion of intellectual property from competition law. He noted that section 25 of the Competition act which prohibits abuse of dominance, equally applies to intellectual property abuses.

“Patent holders are protected but in the exercise of their patent rights they must not harm competition. If you refuse to license a third party to exploit your patent, it is abuse of dominance” he said. Morotsi said it is good that the Industrial Property Act has competition provisions and checks and balances against anti-competitive practices such as abuse of dominance and refusal to deal.

Mr. Makwinja for his part said COSBOTS encourages competition and takes steps to identify the rightful owners of works and reward them for their intellectual property in the form of royalties. This encourages innovation in the areas such as music, literature and poetry.

Every year on December 5th civil society organisations, consumer and competition agencies celebrate World Competition Day under a chosen theme. On 5^th December 1980, the United Nations General Assembly adopted Resolution 35/63 on the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices. The objective was to ensure that restrictive business practices do not impede or affect trade and development in developing countries.