There is inherently a tension between IP law and competition law. At their simplest levels, IP protection creates monopolies and competition law limits them.
An inventor or developer of new products or technology will often want to license their invention for wider exploitation, known as technology transfer. However, some agreements for such technology transfer will conflict with competition law, particularly – at a European Union (EU) level – Article 81(1), which prohibits agreements between undertakings that may affect trade between EU member states and have as their object or effect the prevention, restriction or distortion of competition, and the equivalent prohibition in the UK under the Competition Act 1998. Therefore, a balance is needed to encourage innovation.
