The theory of essential facilities. the principle of access to invention in case of abusive refusal to license

AuthorIrina Cucer Lisnic
PositionPhD Candidate, Faculty of Law, 'Nicolae Titulescu' University of Bucharest (e-mail:
Essential facilities designate specific inputs which are essential for the production of other
downstream goods.
Inputs are situated upstream and so are eligible for intellectual property protection. In order to
foster competition in the downstream, holders of these inputs should be forced to give access to
potential users, by offering them operating lidcenses. In other words, one must respect the exclusive
right of intellectual property holder to freely exploit his invention or must he be sacrificed in favor of
downstream competition ?
In the present analysis we intend to analyze some of either controverted or less known judicial
aspects related to the theory of essential facilities.
Keywords: compulsory licenses, essential feature, dominance, abuse, input, effective
1. Generalities *
It has been widely assumed that the
compulsory licenses for the intellectual
property rights, based on art. 102 of the
Treaty establishing the European Union,
stand as an example for the cases of
essential facilities. According to the logic
on which the theory of “essential facilities”
is based, the owner of a facility which
cannot be reproduced by way of the
ordinary process of innovation and
investment and in the abse nce of which the
competition on a market is impossible o r
restricted, must share it with a rival.
Hence, the ter m essential facility
means the entirety of material and non-
material installations owned by a dominant
and non-reproducible enterprise; as a result
the third parties` access to these
* PhD Candidate, Faculty of Law, “Nicolae Titulescu” University of Bucharest (e-mail:
Case United States v. Terminal Railroad Ass'n, 224 U.S. 383 (1912).
installations is indispensable for them to
carry out their activity on the market, and it
concerns the situation when one may obtain
a forced access to an intangible asset owned
by a dominant enterprise.
The theory has its origin in the
American competition case law from the
beginning of the last century when a conflict
of access to railroad infrastructure had to be
. In this case, St. Louis was the
only area with railroad infrastructure which
granted access to the railroad infrastructure
of other areas and the ass ociation with
Terminal Railroad Association of St. Louis
owned a fraction of the operation of the
railroad in St. Louis, as a r esult, it actuall y
controlled the entire access to such
infrastructure, which caused it to be called
to trial in order to be obligated to grant
access to other operators in exchange for
reasonable and non-discriminatory tariffs.
The USA Supre me Court compelled
Terminal Railroad Associa tion of St. Louis
to grant access in e xchange for reasonable
tariffs on the grounds that the railroad is a
public utility and the association Terminal
Railroad Association of St. Louis acted as a
cartel, with the risk of excluding other users
of the railroad. At that moment, The Court
referred to the competition aspect of the
business and did not introduced the term
essential facility, it being applied
subsequently, the t heory assigning it three
cumulative conditions in order to be
applied: the use thereof is indispensable for
an operator which provides a specific
service, it is impossible or at least difficult
to multiply the infras tructure in this case
and, finally, the functional control exercised
by way of monopo le or a group of
associates acting unitary. The subject
matter was not fighting the monopoles, but
merely the abuse of a dominant position for
vertical integration, which imposed the
intervention of the competition authorities.
In Euro pe, the theory of essential
facilities was applied for the first time in
, following a complaint of B&I (an
Irish ferry operator), when the Commission
established that Sealink (a British ferry
operator, which was also the harbour
authority in Holyhead, Wales) abused its
dominant position when it modified its
schedule in such way that this modification
affected the loading and un-loading
operations of B&I, following the reduction
of the available time. In oth er words, the
Commission held that the deed of the owner
of an essential facility to use its p ower on a
market in order to consolidate its position
on a related market is an abuse according to
art. 82 of the EEC Treaty [art. 102 of
TEEU]. This happens when such owner
Case Be-I Line v. Stena-Sealink, CJEC, 11 iun. 1992 (IP/92/478).
Marie Anne Frison Roche, gulation versus concurrence, in Au-delà des codes, Dalloz, Paris, 2011, p. 171-185.
CJEC 21 feb. 1973, case Euroemballage-Continental Can c/Comision Europenne, no. 6/72.
grants his competitors access on the relate d
market under conditions that are less
advantageous than his own services,
without any objective justification. T he
Commission ruled by way of decision that
Sealink to adopt a different schedule or
return to the initial one. The Commission
assessed that there is a risk of an
“irreparable prejudice” to be produced due
to increasing the interruptions in the loading
and un-loading procedures as well as the
effects of such on the services offered.
The term essential facility is not
directly connected with the actual
completion and efficient competition. The
actual competition is defined as the
competition exercised on the market,
whereas the efficient competition means the
best potential competition on the market. It
is possible that a non-competition situation,
meaning the absence of actual competition,
to meet the criteria of an efficient
competition. The theory showed
several markets reserve for the mselves an
efficient competition and the CJEC
explicitly says that the purpose of the
competition policies is to preserve on the
market the possibilities of an efficient or
potential competition. This means the
possibility of third enterprises to compete
with the enterprise in the dominant position,
the latter not having the right to compromise
the actual competition and thus having
particular obligations including to allow the
competitors to create an actual competition.
This is why one observed that an enterprise
in a dominant position might attempt an
assault upon the competition even in the
absence of an abusive practice considering
the obligation pointed above, to ensure an
actual competition on the market. In this
context, if the enterprise owns an essential

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