Analysis of the EU and US Legal Frameworks of Anti-Competitive
Practices in Merger and Acquisitions Where Patents Remain Unutilized
Authors: Pathak Maitrayee 
Published: May 2022

The legal fields of Mergers and Acquisitions, Competition Law, and
Intellectual Property are all well-researched areas with a long history of
case law as well. However, at the intersection of these legal fields, there
are some important areas that are studied less extensively, although they
impose a significant practical effect on the economical and scientific
progress of society. One such area lies at an intersection of Mergers and
Acquisitions, Antitrust Laws on anti-competitive practices, and Patents,
specifically the case when important patents remain unutilized by the
companies after the merger or acquisition happens. This scenario may occur
for many reasons, from negligence or inability to thoroughly consider the
potential of each item in the patent portfolio of all companies involved in
the merger and acquisition, all the way to deliberate action taken to
acquire companies solely for their patent portfolios, because they are
perceived to pose a future risk to the acquiring company’s current business
lines. In this dissertation, I will attempt to prove that even though the
scenarios where patents remain unutilized after the merger or acquisition
happens are not desirable for the economy and society, as many national and
international legal frameworks on anti-competitive behavior clearly state,
the current national and international organizations do not currently have
effective operative measures in place to prevent such scenarios, identify
the companies involved and hold them accountable. I will first examine the
three different legal fields, their definitions, the objectives of the
legislator, some of their most important practical implications in the
fields where they intersect from the perspective of our study: Mergers and
Acquisitions, Antitrust Laws and Patents. I will pay attention that I
describe not only the theory but the practice of these legal fields as well,
by investigating the current laws, treaties and case law. Understanding that
these legal fields each present a wide topic, I will focus my investigation
on the European Union and United States laws and practices, with
occasionally some other international examples as well. In the following
chapters, I will investigate the practical implications of the scenario
where patents remain unutilized after certain mergers and acquisitions, to
be able to show the magnitude of the issue by interpolating the relatively
scarce economic data available on this subject. The scarcity of data is
understandable if we think about the fact that it will not be in the
interest of the companies involved to publish such data, and since the
problem has not yet been recognized as a major study subject, there are not
enough secondary sources where this data could be gathered either. However,
for the purposes of my argument, it is enough to prove the existence of the
problem, prove that it is not covered by effective measures of the EU and US
institutions to prevent these scenarios, identify the companies involved and
hold them accountable. This will already show that the objectives of the
legislator are not met in the scenarios when patents remain unutilized after
certain mergers and acquisitions. My attempts to illustrate the magnitude of
the problem will only serve as an emphasizing factor that it needs urgent
and operative action from national and international policymakers. In order
to make my dissertation as practical as possible, I have decided to include
a detailed case study from the European merger control case law where a
patent with great importance was left unutilized after a merger. The patent
in question was about Gallium Nitride RF Power Transistors, and - as we will
discuss - it was fundamental in the development of today’s 4G and 5G telecom
network infrastructure. In fact, in this case, the competition authority’s
sole focus on market concentration may have been the cause of the acquiring
company’s decision to leave the patent unutilized. The fact that development
in this area hasn’t stalled was entirely due to other companies taking over
and developing their own patents, own technology, and own production
facilities. I will also establish an operational framework for a new office
of national or international competition authorities, which I am calling the
Innovation Protection Office. The proposed operational framework is intended
to establish some practical solutions to protect customer access to the
officially recognized innovative advantage of patents and ensuring their
utilization. I will review the current legal framework for applicable laws
and procedures by which this goal can be achieved. There could be many other
operational guidelines, processes, or organizational structures that would
achieve the same result. Therefore, my main goal in establishing and
describing this operational framework is to offer future legislators
interested in the problem and the solution some useful tools to govern
public policy.