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Patent Attorney Axel H Horns' Blog on Intellectual Property Law.

 

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Sunday, February 15, 2004

 

CEC Report on Competition in Professional Services has been published.

The Secretary-General of the European Commission has published with EXTERNAL LINKDocument 6237/04 a paper issued by the Commission of the European Communities "COM(2004) 83 final - Report on competition in professional services" which surely is also relevant with regard to the regulated professions of Patent Attorneys, Patent Agents, Trade Mark Agents and the like. Some quotations from the Executive Summary:
[...] The Lisbon European Council in March 2000 adopted an economic reform programme with the aim of making the EU the most competitive and dynamic knowledge-based economy in the world by 2010. Professional services have an important role to play to improve the competitiveness of the European economy, as they are inputs for the economy and business, so their quality and competitiveness have important spill over effects. Professional services are also important because of their direct import for consumers.

The five main categories of potentially restrictive regulation in the EU professions are: (i) price fixing, (ii) recommended prices, (iii) advertising regulations, (iv) entry requirements and reserved rights, and (v) regulations governing business structure and multi-disciplinary practices.

On the one hand, a significant body of empirical research shows, the negative effects that excessive or outdated restrictive regulations may have for consumers. Such regulations may eliminate or limit competition between service providers and thus reduce the incentives for professionals to work cost-efficiently, to lower prices, to increase quality or to offer innovative services.

On the other hand, there are essentially three reasons why some regulation of professional services can be necessary: asymmetry of information between customers and service providers, as a defining feature of professional services is that they require practitioners to display a high level of technical knowledge which consumers may not have; externalities, as these services might have an impact on third parties; and certain professional services are deemed to produce ‘public goods’ that are of value for society in general. Proponents of restrictive regulations argue therefore that such regulations are designed to maintain the quality of professional services and to protect consumers from malpractice. While the Commission acknowledges that some regulation in this sector is justified, it believes that in some cases more pro competitive mechanisms can and should be used instead of certain traditional restrictive rules. [...]

In particular, the paper again quotes that the Commission also earlier had examined the code of conduct of the Institute of Professional Representatives before the European Patent Office. It had found that a number of restraints were purely deontological rules and as such outside the scope of Article 81 but that the restriction on comparative advertising could only be temporarily maintained after exemption under Article 81(3).

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