Remedies

Remedies for violations of competition law involving IP

What sanctions or remedies can the competition authorities or courts impose for violations of competition law involving IP?

In cases of violation of competition law involving IP, the JFTC may issue a cease-and-desist order to take any measures necessary to eliminate such violation. However, while the term ‘necessary measures’ suggests that such drastic measures as compulsory licensing or divestiture of IP rights are possible, whether or not the JFTC is of the view that such aggressive enforcement policy is needed is unclear; to date, the JFTC has not ordered compulsory licensing or divestiture of IP rights. If the violation is private monopolisation whereby a violator controls other enterprises’ business activities, subject to some additional requirements, the JFTC should impose a surcharge (a type of administrative fine) on the violators. In addition, if the violation is private monopolisation whereby a violator excludes other enterprises’ business activities or certain types of unfair trade practices, the JFTC will impose a surcharge on the violators. Private parties who have been harmed by such acts of violation may seek an injunction, compensation for damages or report the alleged violation to the JFTC, or any combination of the foregoing, subject to certain other requirements.

Competition law remedies specific to IP

Do special remedies exist under your competition laws that are specific to IP matters?

Article 100 of the AMA lays down special sanctions that are specific to IP matters. That is, when the court pronounces a criminal sentence on people who have committed private monopolisation or unreasonable restraint of trade, it may order that the patents exercised for the relevant offence be revoked. However, this sanction has never previously been declared.

Scrutiny of settlement agreements

How would a settlement agreement terminating an IP infringement dispute be scrutinised from a competition perspective? What are the key factors informing such an analysis?

Even a settlement agreement terminating IP infringement litigation will be scrutinised in the same manner as any other agreement. For example, an agreement whereby a defendant agrees not to compete in respect of the patented product of a plaintiff may violate the AMA, especially if the plaintiff is ‘influential’ in the relevant market (namely, with a market share exceeding 20 per cent). See also question 24.