Abstract
In this Article, we show that, in contrast to the Commission's balancing approach in Microsoft, the ECJ's narrow construction of the obligation to license IP under Article 82 of the EC Treaty is based on sound economics and constitutes appropriate public policy. The set of “exceptional circumstances” listed in Magill and IMS Health constitutes a reasonable implementation of the optimal legal standard for the assessment of refusals to licence IP: modified per se legality. In the IP context, an obligation to make property available is a requirement for compulsory licensing. The ECJ test limits compulsory licensing to those situations in which the prospective social benefits of licensing are large, while the negative effects of reducing the incentives to innovate are small. The ECJ test ensures that intervention is restricted to cases where the intervention is still likely to increase social welfare. The Commission's test in Microsoft, being a balancing test, does not. As noted by Professor Gerardin, “balancing ex ante vs. ex post efficiencies is obviously a very difficult process, which even the most sophisticated economists may find daunting. The risk of mistaken decisions is therefore high.”
Recommended Citation
Christian Ahlborn, David S. Evans, and A. Jorge Padilla,
The Logic & Limits of the "Exceptional Circumstances Test" in Magill and IMS Health,
28 Fordham Int'l L.J. 1109
(2004).
Available at: https://ir.lawnet.fordham.edu/ilj/vol28/iss4/9