Commentary: Bright Lines and Cautionary Notes

• Author: Timothy J. Brennan
• Pages: 226-245

226

Commentary: Bright Lines and

Cautionary Notes

Timothy J. Brennan2

A. INTRODUCTION

Edward Iacobucci and Ralph Winter’s contribution to the symposium

is a thorough and excellent summary of the economics of tying as

they are and should be applied in Ca nadian law. It should be required

reading for al l in the competition bar and enforcement community.

In many respects, its value to t hat audience is that it does not rest rict

 anks go to the Bu reau for inviting me to participate i n the symposium, to

Ralph Winter and Ed Iacobucci for a n excellent paper and presentation, and to

Gill Allen, R ichard Corley, Abraham Hollander, Ariel Katz , Bill Kovacic, David

Vaver, and other conference participants for t heir provocative questions and

comments. Specia l thanks go to Alan Gunders on for organizing the sympo-

sium and for many thought ful and useful d iscussions on intellect ual property

and competition law whi le I was at the Bureau.

 Professor, Public Policy and Economic s, University of Maryland, B altimore

County, and Senior Fellow, Resources for t he Future, Washington, DC. Emai l:

brennan@umbc.e du. During , the author held the T.D. MacDonald Ch air

in Industria l Economics at the Competition Bureau. e opin ions expressed

here are his alone and do not ref‌lec t the views of the Bureau, the commi ssioner,

or her staf‌f.

 See E. Iacobucci and R . Winter, “Tying and Intellec tual Property,” chapter  in

this book.

:      227

its analysis to intellec tual property (IP); rather, it uses IP to illustrate

general principles for the analysis of tying.

at approach has considerable merit, in that to an increasing ex-

tent competition authorities are viewing IP as just another form of

property. e Competition Bureau of Canada’s Intellectual Property

Enforcement Guidelines (IPEGs) set out the pri nciple that IP law is

designed to extend to creative works and innovative product protec-

tions akin to those af‌forded by conventional property, in particular,

the right to exclude. Along with t hat right, IP is not that dif‌ferent

from conventional property rights, which may also entail certain time

limits and use rest rictions roughly akin, if dista ntly so, to restrictions

placed on copyrights or patents.

So, to a f‌irst approximation and maybe more, one should look at

potentially anti-competitive practices involving IP as we would with

conventional property. Collusion is inherently no better or worse if it

involves sellers with competing IP as it is with sellers with competing

factories or stores. Mergers involving IP raise the same questions as

mergers do generally — whether the par ties are in the same relevant

market, who else is in the market, and what would be the unilateral or

coordinated ef‌fects. Even w ith abuse of dominance, while t he exclu-

sive rights in IP may convey market power, the Bureau’s approach, as

stated in its IPEGs, is to investigate in particular contexts whether IP

f‌its a general framework for assessing potential practices.

However, the IPEGs themselves and t he symposium indicate a

need to appreciate that a long some dimensions, IP is not the same as

conventional property. Accordingly, I begin by reviewing some of the

 For a US example, see Illinois Tool Works, Inc. v. Independ ent Ink, Inc.,  U.S.

 ().

 Competition Bureau Ca nada, Intellectual Proper ty Enforcement Guidelines

(), online: http://strategis.ic.gc.ca /pics/ct/ipege.pdf, especia lly section .

[IPEGs].

 T. Brennan, “Copyright, Proper ty, and the Right to Deny” ()  Chicago-

Kent L. Rev. .

 Competition Bureau Ca nada, Merger Enforcement Guidelines (Sept.  ),

online: ww w.competitionbureau.gc.ca/PDFs/MEGs.Final .pdf. Section

. includes a f‌irm’s IP as one of a number of factors i nf‌luencing the amount of

competition that mig ht be lost if that f‌irm is acquire d by a competitor.

 IPEGs, above note  at ..