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2016 World Competition Day on Linkages between Competition and Intellectual Property.

The Competition and Consumer Protection Commission (the Commission) joins the rest of the world in commemorating the World Competition Day which falls on 5th December of every year. World Competition Day has been commemorated every year by various competition authorities since 1980 when the United Nations adopted the Set of Multilaterally Agreed Equitable Principles and Rules for the Control of Restrictive Business Practices, and Anti-Competitive Practices (UN Set).

 

 

 The UN Set recognizes the development dimension of competition law and policy and provides a framework for international cooperation and exchange of best practices. This framework also provides vital technical assistance and capacity-building for interested member States so that they are better equipped to use competition law and policy for development. 5th December, 2016, marks the thirty-sixth (36th) anniversary of the adoption of the UN Set by the General Assembly.

 

The Commission is inspired to raise awareness on the benefits of competitive markets and the harm of anti-competitive trade practices. This not only spreads the message for the benefit of industry and trade but consumer welfare as well. The Commission is of the strong view that, effective implementation of Competition Law in Zambia requires all stakeholders to participate and play their role in upholding the tenets of fair Competition and fair trade. This is when the full benefits of competition will be felt and enjoyed by both Businesses, and consumers. The Commission therefore has forums for reporting which enables the elimination of anti-competitive practices which are a threat to competitive markets. It is against this background that the Commission joins the rest of the world in commemorating this year’s World Competition Day.

 

The World Competition Day theme for 2016 is ‘Linkages between Competition and Intellectual Property’.

 

Intellectual property refers to creations of the mind: inventions; literary and artistic works; and symbols, names and images which are used in commerce and trade. The types of Intellectual property is further divided into two categories, these being Industrial property which includes patents for inventions, trademarks, industrial designs and geographical indications. The other category of intellectual property is Copyright which covers literary works such as novels, poems and plays, films music artistic works and architectural designs. Copyright protection applies to original works of authorship embodied in a tangible medium of expression (WTO; 2016).

 

Competition on the other hand is a process of economic rivalry between market players striving to attract consumers and enlarge market shares in order to gain sales and make profits.

 

The link between Intellectual Property Rights (IPRs) and Competition Law and policy can be intricate and requires careful balancing. IPR is a tool if harnessed well has a potential to promote economic growth and enhance consumer welfare. The IPR rights confer on the holders of these rights the same rights enjoyed by any other person owning property. As a result, new innovations are encouraged both at micro and macro level spurring health competition in the process. Without IPR, innovators would not have incentives to come up with new products and services as they would be subject to unlawful exploitation by imitators. In the process, the development and graduation of enterprises would be stunted, competition would be diminished and consumers would suffer. Therefore, competition law and policy should be applied complimentary with IPRs to ensure that all stakeholders including innovators, consumers and the economy at large remain protected from undue exploitation.

 

It should be noted that IPRs confers the exclusive use of rights to their holders but that does not mean such rights are not absolute. IPR are subject to competition law principles because the monopoly status they confer to their holders is the very reason why competition law prohibits its abuse. Competition law thus operates to contain the abusive exercise of the conferred exclusive rights. It is only when allowed bounds and limits of competition are exceeded in the exercise of intellectual property rights that competition law seeks to correct for the benefit of consumer and the economy in general. This helps markets to remain open and effective by preserving the primary source of competitive pressure.

 

The enforcement of competition law therefore does not always assume IPR to be restrictive but begins with the recognition that IPR confers property rights. Such rights do not always translate to market power which is a concern of competition law but instead forms the basis for entry into markets as innovators rush in to seek rent and in turn competition ensues for the benefit of consumers and the economy in general. The goal of IPRs is to protect and promote inventions while competition law on the other hand provides the mechanism of removing market distortion, prevent anti-competitive behaviour and prohibits the abuse of monopoly power. However, over extension of IPRs such as the granting of exclusivity over non-differentiated features e.g. trademarks for common non-distinctive words and many other such extensions become inherently in themselves anti-competitive and against the spirit of competition law and policy. Equally, inadequate protection of rights is a receipt for less innovation as imitations and abuse of rights by non-holders become the order of the day to the detriment of economic growth and consumers.  Too little Intellectual Property means genuinely differentiating features cannot be protected.

 

Therefore, as the Commission advocates for more competition, it is very important to protect intellectual property rights as imitators could more rapidly exploit the efforts of innovators and investors without compensation. Rapid imitation would reduce the commercial value of innovation and erode incentives to invest, ultimately to the detriment of consumers. The Competition laws promote innovation and consumer welfare by prohibiting certain actions that may harm competition with respect to either existing or new ways of serving consumers.

 

It is noteworthy to know that Zambia has various legislation that protect intellectual property these include the Competition and Consumer Protection Act Number 24 of 2010. The Act under Section 3 protects intellectual property rights, however, although this Section protects Intellectual Property Rights, the Act still provides under Section 8, 9 and 10, that if Intellectual Property owner contravenes the law with regard to the mentioned section above, the Commission has powers to commence investigations against the Intellectual Property owner. The Act further has provisions that prevent the abuse of dominance or monopoly power through Section 16 of the Act. These sections protect the owners of the intellectual property by enabling them to compete favorably or enable them to enter the market and compete effectively with existing competitors.

 

In conclusion, it is can be stated that the ultimate link between intellectual property and competition law is the protection of consumer welfare, innovation and growth as consumers are subjected to a variety of superior and quality products due to innovation. Further with the protection of competition, market players are compelled to offer these products at relatively cheap prices to the consumers.

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About CCPC

The Competition and Consumer Protection Commission (CCPC) is a statutory body established with a unique dual mandate to protect the competition process in the Zambian Economy and also to protect consumers.

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Competition & Consumer Protection Commission
4th Floor Main Post Office Building
P.O Box 34919
Lusaka
+260 211 232657/222787

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zcomp@ccpc.org.zm

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