Patenting Strategies of the EU Pharmaceutical Industry -Crossroad between Patent Law and Competition Policy. Research Papers in Law, 1/2011

From the Introduction. The pharmaceutical sector inquiry carried out by the European Commission in 2008 provides a useful framework for assessing the relationship between the patent system on the one hand and competition policy and law on the other hand. The pharmaceutical market is not only specifically regulated. It is also influenced by the special characteristics of the patent system which enables pharmaceutical companies engaged in research activities to enter into additional arrangements to cope with the competitive pressures of early patent application and the delays in drug approval. Patents appear difficult to reconcile with the need for sufficient and adequate access to medicines, which is why competition expectations imposed on the pharmaceutical sector are very high. The patent system and competition law are interacting components of the market, into which they must both be integrated. This can result in competition law taking a very strict view on the pharmaceutical industry by establishing strict functional performance standards for the reliance on intellectual property rights protection granted by patent law. This is in particular because in this sector the potential welfare losses are not likely to be of only monetary nature. In brief, the more inefficiencies the patent system produces, the greater the risk of an expansive application of competition law in this field. The aim of the present study is to offer a critical and objective view on the use or abuse of patents and defensive strategies in the pharmaceutical industry. It shall also seek to establish whether patents as presently regulated offer an appropriate degree of protection of intellectual property held by the economic operators in the pharmaceutical sector and whether there is a need or, for that matter, scope for improvement. A useful starting point for the present study is provided by the pharmaceutical sector competition inquiry (hereafter “the sector inquiry”) carried out by the European Commission during the first half of 2008. On 8 July 2008, the Commission adopted its Final Report pursuant to Article 17 of Regulation 1/2003 EC, revealing a series of “antitrust shortcomings” that would require further investigation1.

The ENP in the light of the new “neighbourhood clause” (Article 8 TEU). Research Papers in Law, 2/2011

This short contribution outlines the renewed constitutional framework in which the “European Neighbourhood Policy” (ENP) is to be integrated and further developed (1.) and briefly discusses its possible implications for the finalité of the neighbourhood relationship in general and of the ENP more specifically (2.). This constitutional perspective reveals three – already well-known – conceptual problems of the ENP (3.).

The Criminalisation of Migration in Europe: A State-of-the-Art of the Academic Literature and Research. CEPS Liberty and Security in Europe No. 61, October 2013

In the last 30 years, a clear trend has come to define modern immigration law and policy. A set of seemingly disparate developments concerning the constant reinforcement of border controls, tightening of conditions of entry, expanding capacities for detention and deportation and the proliferation of criminal sanctions for migration offences, accompanied by an anxiety on the part of the press, public and political establishment regarding migrant criminality can now be seen to form a definitive shift in the European Union towards the so-called ‘criminalisation of migration’. This paper aims to provide an overview of the ‘state-of-the-art’ in the academic literature and EU research on criminalisation of migration in Europe. It analyses three key manifestations of the so-called ‘crimmigration’ trend: discursive criminalisation; the use of criminal law for migration management; and immigrant detention, focusing both on developments in domestic legislation of EU member states but also the increasing conflation of mobility, crime and security which has accompanied EU integration. By identifying the trends, synergies and gaps in the scholarly approaches dealing with the criminalisation of migration, the paper seeks to provide a framework for on-going research under Work Package 8 of the FIDUCIA project.

EU Trade Actors after Lisbon: Enhanced Negotiations or Business as Usual? Brugges Political Research Paper No. 32, November 2013

As seen by the launching of trade negotiations with Japan and the United States, the European Union has shifted gears in order to achieve amplified benefits in bilateral trade agreements. The entry into force of the Lisbon Treaty brought the European Parliament and the European External Action Service into the picture as new actors in trade negotiations. The question arises if the new framework of trade negotiations is better off than the pre-Lisbon era. By applying Veto Players theory to the Central American Association Agreement and Principal-Agent theory to the Ukrainian Association Agreement, two results were concluded. First, the participation of the European Parliament as a veto player has decreased the effectiveness of trade negotiation. Second, the participation of the European External Action Service has shown the contrary, namely an increase of effectiveness in trade negotiations.

Making Autonomies Matter: Sub-State Actor Accommodation in the Nordic Council and the Nordic Council of Ministers - An Analysis of the Institutional Framework for Accommodating the Faroe Islands, Greenland and Åland within ‘Norden’. EDAP Paper 03/2014

Sovereign powers are not absolute but exercised in varying areas and to varying degrees by sub-state, state and supra-state entities. The upward dispersion of power to international organisations carries implications for the sub-state level, while sub-state governance poses demands as to the conduct of governance at the international level. It is well recognised that sub-state entities, such as federal states and autonomies, may have the (restricted) capacity to enter into international relations. But what capacities do international organisations have to accommodate autonomies in their institutional frameworks? This paper shall present a case study of one such framework, namely Nordic co-operation and the accommodation of the Nordic autonomies, the Faroe Islands, Greenland and Åland, within its institutional framework. Within ‘Norden’, the position of autonomies has been scrutinised and adapted on several occasions, in the late 1960s, early 1980s and in the mid-2000s. The accommodation of the autonomies has been discussed in light of evident implications of statehood and international legal personality and the institutional arrangements eventually carved serve well to illustrate the challenges and opportunities international organisations face in the attempt to accommodate multi-level systems.

Shifting Between Hegemony and Dominance? A Neo-Gramscian Analysis of the EU as a Structural Foreign Policy Actor: The Singular Case of the Cariforum-EU Economic Partnership Agreement. Bruges Regional Integration & Global Governance Paper 01/2014

The groundbreaking scope of the Economic Partnership Agreement (EPA) between the European Union (EU) and Cariforum (CF) irrefutably marks a substantive shift in trade relations between the regions and also has far-reaching implications across several sectors and levels. Supplementing the framework of analysis of Structural Foreign Policy (SFP) with neo-Gramscian theory allows for a thorough investigation into the details of structural embeddedness based on the EU's historic directionality towards the Caribbean region; notably, encouraging integration into the global capitalist economy by adapting to and adopting the ideals of neoliberal economics. Whilst the Caribbean – as the first and only signatory of a ‘full’ EPA – may be considered the case par excellence of the success of the EPAs, this paper demonstrates that there is no cause-effect relationship between the singular case of the ‘full’ CF-EU EPA and the success of the EPA policy towards the ACP in general. The research detailed throughout this paper responds to two SFP-based questions: (1) To what extent is the EPA a SFP tool aimed at influencing and shaping the structures in the Caribbean? (2) To what extent is the internalisation of this process reflective of the EU as a hegemonic SFP actor vis-à-vis the Caribbean? This paper affirms both the role of the EU as a hegemonic SFP actor and the EPA as a hegemonic SFP tool. Research into the negotiation, agreement and controversy that surrounds every stage of the EPA confirmed that through modern diplomacy and an evolution in relations, consensus is at the fore of contemporary EU-Caribbean relations. Whilst at once dealing with the singular case of the Caribbean, the author offers a nuanced approach beyond 'EU navel-gazing' by incorporating an ‘outside-in’ perspective, which thereafter could be applied to EU-ACP relations and the North-South dialogue in general.

Discretion and Accountability: The ESMA Judgment and the Meroni Doctrine. Bruges European Economic Research (BEER) Papers 30/2014

This paper assesses the effectiveness of the Meroni doctrine in the light of the recent judgment in the ESMA case. The first part explains in detail the problem of delegation of powers in the EU from the perspective of the principal-agent theory and complements it with the analysis of the trade-off between different levels of independence and accountability of agencies. A simple economic model is developed to illustrated the relationship between the independence and accountability of an agency. It shows that it is the accountability mechanism that induces the agent to act, rather than the extent of his independence. The paper also explains the inter-temporal interactions between the principal and the agent on the basis of the incentives in place for the different players. The second part is devoted to analysis of the functioning of ESMA in the context of its delegated powers. After the presentation of main aspects of the regulatory framework establishing ESMA, the paper continuous with an analysis and interpretation of the discretionary powers of ESMA. The rather rigid position of the Court of Justice in relation to the Meroni doctrine seems to be unsuitable to delegation of complex regulatory tasks. This is particularly evident in the case of financial markets. Finally, the judgment does not examine in any detail whether and how the principals - i.e. the EU and Member States - are best able to evaluate the quality of ESMA decisions and regulations and whether there are different but more effective accountability mechanisms.

Die Europäische Union und das Rahmenübereinkommen zum Schutz nationaler Minderheiten: ignorieren, parallell “umsetzen“ oder gar beitreten? = The European Union and the Framework Convention for the Protection of National Minorities: ignore, "implement" or even join? EDAP Paper 04/2014

This paper looks at the Council of Europe Framework Convention for the Protection of National Minorities (FCNM) through the lense of European Union law. It does so by posing four major questions: does the fact that 24 of 28 Member States of the EU ratified the FCNM have any legal implications for the European Union itself? Secondly, turning to the national level, does it make a difference for the implementation of the FCNM whether or not a state that has ratified the FCNM is also a member to the European Union? Thirdly, returning to the European Union itself, can and should the EU accede to the FCNM? Or are there, finally, any means beside ratification that would allow the European Union to implement the objectives and obligations as enshrined in the FCNM? These four questions are analysed in detail before the paper concludes on the potential role of the European Union in managing diversity and protecting (persons belonging to) minorities.

Informational Barriers to Energy Efficiency - Theory and European Policies. Bruges European Economic Research (BEER) Papers 15/2009

This BEER addresses informational barriers to energy efficiency. It is a widely acknowledged result that an energy efficiency gap exists implying that the level of energy efficiency is at an inefficiently low level. Several barriers to energy efficiency create this gap and the presence of asymmetric information is likely to be one such barrier. In this article a theoretical framework is presented addressing the issues of moral hazard and adverse selection related to energy efficiency. Based on the theoretical framework, European policies on energy efficiency are evaluated. The article is divided into two main parts. The first part presents the theory on information asymmetries and its consequences on energy efficiency focusing on the problems of moral hazard and adverse selection. Having established a theoretical framework to understand the agency barriers to energy efficiency, the second part evaluates the policies of the European Union on energy efficiency. The BEER finds that problems of moral hazard and adverse selection indeed can help explain the seemingly low levels of energy. In both presented models the cost to the principal from implementing high energy efficiency outcome is increased with the informational asymmetries. The theory reveals two implications to policies on energy efficiency. First, the development of measures to enable contractual parties to base remuneration on energy performance must be enhanced, and second, the information on technologies and the education of consumers and installers on energy efficiency must be increased. This could be complemented with certification of installers and energy efficiency advisors to enable consumers to select good agents. Finally, it is found that the preferred EU policy instrument on energy efficiency, so far, seems to be the use of minimum requirements. Less used in EU legislation is the use of measuring and verification as well as the use of certifications. Therefore, it is concluded that the EU should consider an increased use of these instruments, and in particular focus on a further development of standards on measurability and verification as well as an increased focus on education of consumers as well as installers and advisors on energy efficiency.

EU Policies and Cluster Developments of Hydrogen Communities. Bruges European Economic Research (BEER) Papers 14/December 2008

This study takes on the issue of political and socio-economic conditions for the hydrogen economy as part of a future low carbon society in Europe. It is subdivided into two parts. A first part reviews the current EU policy framework in view of its impact on hydrogen and fuel cell development. In the second part an analysis of the regional dynamics and possible hydrogen and fuel cell clusters is carried out. The current EU policy framework does not hinder hydrogen development. Yet it does not constitute a strong push factor either. EU energy policies have the strongest impact on hydrogen and fuel cell development even though their potential is still underexploited. Regulatory policies have a weak but positive impact on hydrogen. EU spending policies show some inconsistencies. Regions with a high activity level in HFC also are generally innovative regions. Moreover, the article points out certain industrial clusters that favours some regions' conditions for taking part in the HFC development. However, existing hydrogen infrastructure seems to play a minor role for region's engagement. An overall well-functioning regional innovation system is important in the formative phase of an HFC innovation system, but that further research is needed before qualified policy implications can be drawn. Looking ahead the current policy framework at EU level does not set clear long term signals and lacks incentives that are strong enough to facilitate high investment in and deployment of sustainable energy technologies. The likely overall effect thus seems to be too weak to enable the EU hydrogen and fuel cell deployment strategy. According to our analysis an enhanced EU policy framework pushing for sustainability in general and the development of hydrogen and fuel cells in particular requires the following: 1) A strong EU energy policy with credible long term targets; 2) better coordination of EU policies: Europe needs a common understanding of key taxation concepts (green taxation, internalisation of externalities) and a common approach for the market introduction of new energy technologies; 3) an EU cluster policy as an attempt to better coordinate and support of European regions in their efforts to further develop HFC and to set up the respective infrastructure.

Interconnector Investment for a Well-Functioning Internal Market: What EU regime of regulatory incentives? Bruges European Economic Research (BEER) Papers 18/October 2010

Sufficient cross‐border electricity transmission infrastructure is a pre‐requisite for a functioning European internal market for electricity. Also, the achievement of the EU’s energy policy objectives – sustainability, competitiveness and security of supply – critically depends on adequate investment in physical interconnections between the member states. Mainly focusing on the “regulatory path”, this paper assesses different ways to achieve a sufficient level of interconnector investment. In a first step, economic analysis identifies numerous impediments to interconnector investment adding up to an “interconnector investment failure”. Reflecting on the proper regulatory design of an EU framework able to overcome the interconnector investment failure, a number of recommendations are put forward:  All congestion rents should be channeled into interconnector building. Unused rents should be transferred to a European interconnector fund supervised by an EU agency.  Even though inherently sub‐optimal, merchant transmission investment can be used as a means to put pressure on regulated transmission system operators (TSO) that do not deliver. An EU agency should have exclusive competence on merchant interconnector exemptions.  A European TSO organization should be entrusted with supra‐national network planning, supervised by an EU agency.  The agency should decide on investment cost reallocation for interconnector projects that yield strong externalities. Payments could be settled via a European interconnector fund.  In case of non‐compliance with the supra‐national network plan, the EU agency should have the right to organize a tender – financed by the European interconnector fund – in order to get the “missing link” built. Assessing the existing EU regulatory framework, the efforts of the 2009 “third energy package” to fill the “regulatory gap” with new EU bodies – ACER and ENTSO‐E – are acknowledged. However, striking holes in regulatory framework are spotted, notably with regard to the use of congestion rents, interconnector cost allocation, and the distribution of decision making powers on new infrastructure exemptions A discussion of the TEN‐E interconnector funding scheme shows that massive funding can be an interim solution to the problem of insufficient interconnection capacities while overcoming the political deadlock on sensible regulatory topics such as interconnector cost allocation. The paper ends with policy recommendations.

Mutual Recognition: economic and regulatory logic in goods and services. Bruges European Economic Research (BEER) Papers 24/June 2012

Mutual recognition is one of the most appreciated innovations of the EU. The idea is that one can pursue market integration, indeed "deep' market integration, while respecting 'diversity' amongst the participating countries. Put differently, in pursuing 'free movement' for goods, mutual recognition facilitates free movement by disciplining the nature and scope of 'regulatory barriers', whilst allowing some degree of regulatory discretion for EU Member States. This BEER paper attempts to explain the rationale and logic of mutual recognition in the EU internal goods market, its working in actual practice for about three decades now, culminating in a qualitative cost/benefit analysis and its recent improvement in terms of 'governance' in the so-called New Legislative Framework (first denoted as the 2008 Goods package) thereby ameliorating the benefits/costs ratio. For new (in contrast to existing) national regulation, the intrusive EU procedure to impose mutual recognition is presented as well, with basic data so as to show its critical importance to keep the internal goods market free. All this is complemented by a short summary of the scant economic literature on mutual recognition. Subsequently, the analysis is extended to the internal market for services. This is done in two steps, first by reminding the debate on the origin principle (which goes further than mutual recognition EU-style) and how mutual recognition works under the horizontal services directive. This is followed by a short section on how mutual recognition works in vertical (i.e. sectoral) services markets.

The Economics of State Aid for the Rescue and Restructuring of Firms in Difficulty: Theoretical Considerations, Empirical Analysis and Proposals for Reform. Bruges European Economic Research (BEER) Papers 27/September 2013

State aid for rescue and restructuring (R&R) of companies in difficulty causes a significant distortion of competition. It prevents the market from eliminating inefficient companies. Because of this, the European Commission has to be specially strict when it assesses rescue or restructuring aid. This paper examines recent cases of corporate restructuring partly funded with public money. It explains the main aspects of the current guidelines which are applicable to R&R State Aid and establishes a theoretical framework for the economic assessment of R&R aid. It then analyses decisions adopted by the European Commission concerning R&R state aid during the period 2000-2013. It finds that there is little economic rationale in the granting of R&R aid. The paper concludes by applying the lessons drawn from the empirical analysis to the anticipated revision of the R&R guidelines in the context of the State Aid Modernisation process.

Bringing South Caucasus Closer to Europe: Achievements and Challenges in ENP Implantation. Natolin Research Paper 03/March 2011

While the initial Commission Communication on Wider Europe (March 2003) did not include Armenia, Georgia and Azerbaijan in the forthcoming policy for the EU’s new neighbourhood, the Southern Caucasus region has now gained considerable attention in the framework of the ENP and beyond, not least because of security considerations. The ENP undoubtedly represents a step forward in the EU’s policy towards Armenia, Azerbaijan and Georgia, yet its implementation highlights major differences between the three countries and important weaknesses in all three of them. The Eastern Partnership addresses some of these weaknesses and it also significantly strengthens the EU’s offer to South Caucasus countries, which is now fully in line with the perspectives proposed to the Western NIS. The paper highlights five main conclusions and recommendations: • Political, economic, social and diplomatic developments in the South Caucasus in the 2000's highlight both diverging trends and the persistence of tensions between the three countries. They also have different aspirations vis-à-vis the EU and different records in ENP implementation. The EU should therefore mainly rely upon an individual approach towards each country. • While bilateral relations should form the basis of the EU's approach, most of the challenges faced by Georgia, Armenia and Azerbaijan are not confined to national borders and require regional solutions. This applies primarily, but not exclusively, to the unresolved conflicts. The EU should promote targeted regional cooperation including, inter alia, confidence-building measures to address indirectly the protracted conflicts and measures supporting drivers of change, which play a critical role in the confidence-building process; • Under the ENP, especially since the opening of negotiations for association agreements and with the perspective of DCFTA, trade-related issues, market and regulatory reform have become prominent in the EU's relations with all three Caucasus countries. At the same time, the priorities identified when the ENP was launched, i.e. good governance and the rule of law, still correspond to major challenges in the South Caucasus. The EU should more clearly prioritise good governance and the rule of law as the basis of both the ENP and successful reforms; • In all partner countries (but even more so in the South Caucasus), ENP implementation has been adversely affected by poor administrative capacities and weak institutional coordination. The EU should increasingly focus on institutional reform/capacity building in its support to partner countries and ensure that the link between the ENP and domestic reform processes is strengthened; • In the South Caucasus the EU has recently concentrated on a few assistance tools such as budget support, Twinning and TAIEX. While these instruments undoubtedly bring an added value, they should be better combined with tools allowing for greater flexibility and targeting non-governmental actors, e.g. EIDHR/NSA.