(Note: In December 2012, the Department of Justice and the Federal Trade Commission held a Hearing on the impact of patent assertion entities (PAEs) on innovation and competition and the implications for antitrust enforcement policy. The Agencies then issued a Request for Public Comments on the topic of the Hearing. In response, on April 5th, Richard Wolfram submitted the following comment to the DOJ and FTC, adapted and shortened here for Antitrust Connect. The full Public Comment – one of almost 70 public comments submitted to the Agencies — is available at http://www.ftc.gov/os/comments/pae/pae-0066.pdf or from the author.)
This comment is submitted in my personal capacity and d [...]
Commissioner Edith Ramirez became the new Chairwoman of the Federal Trade Commission on March 4. The White House announced the selection on February 28th.
Chairwoman Ramirez is an excellent choice for antitrust enforcement generally, but is truly an ideal Chair for the FTC as it prepares to face the next generation of anti-competitive practices stemming from patent misuse. She uniquely combines an IP litigation background with a commitment to aggressively enforce the spirit and the letter of the antitrust laws, and may prove a valuable friend in the movement for patent litigation reform.
Prior to joining the FTC, Chairwoman Ramirez was a partner with top intellectual property litigation fi [...]
My U.S. colleagues Lee van Voorhis and Brian Rafkin wrote an excellent client alert on the Bosch case and I asked them to prepare the following short summary for the Kluwer readership:
On November 26, 2012, the FTC and Robert Bosch GmbH entered into a Consent Agreement that resolved the FTC’s inquiry into Bosch’s $1 billion acquisition of SPX Services. As part of the Consent Agreement the FTC required that Bosch agree to license on FRAND terms certain SPX patents. This is the first case where the FTC alleged an antitrust violation where a patent owner sought injunctions against willing licensees of FRAND-encumbered standard-essential patents. Moreover, the FTC obtained a consent agreemen [...]
One of the critical obstacles to our innovation economy are patent trolls or Patent Assertion Entities (“PAE”) which acquire patents simply to bring patent litigation and effectively tax innovation. PAEs exploit numerous problems in our legal system including the expense and uncertainty of patent litigation, the excessive granting of patents in the high-tech space, the ambiguity of abstraction surrounding the claims of many high-tech patents, and the anticompetitive pricing power that comes from aggregating patents in an industry where market definition is especially difficult. PAEs are costing the economy over $29 billion annually and creating barriers to the innovation that is critical [...]
Since the advent of antitrust enforcement in the United States through the Sherman Act in 1890, antitrust law and patent law have endured an uneasy relationship. Initial cases treated patents as superior to competition. Patentees once were “the owner of a monopoly recognized by the Constitution and by the statutes of Congress.” Gradually throughout the years our understanding of the intersection of intellectual property law and antitrust has evolved. We evolved to recognize that the scope of the patentee’s power is limited, and “as long as the inventors kept within their statutory exclusive rights” they could placate the Sherman Act. Regulatory agencies now recognize pate [...]
One of the most complex and daunting challenges facing competition regulators is the evolving intersection of antitrust and intellectual property law. Given that both antitrust law and patent law seek to enhance consumer welfare and promote innovation, but do so through very different mechanisms, it is natural for regulators to struggle when harmonizing monopoly-granting patent law with competition-enforcing antitrust law.
Notwithstanding these hurdles, representatives from the Department of Justice Antitrust Division, the Federal Trade Commission, and the European Commission made it clear in a recent series of speeches that they intend to broaden their patent and competition focus to go bey [...]
Over the last decade, the patent landscape has been dramatically altered by the rise of entities whose business model is to acquire significant patent portfolios and aggressively pursue license fees from businesses selling products that may infringe on some of those patents. Such companies are known as “non-practicing entities” (NPEs) or “patent assertion entities” (or, in some circles, “patent trolls”) because they do not manufacture or sell any products to consumers. The U.S. antitrust agencies are considering how the antitrust laws should apply to NPEs, and one news organization has reported that the agencies intend to hold a workshop later this year to address the issue.
On 16 July 2012, a U.S. appeals court issued a decision holding that pharmaceutical patent settlements that restrict generic entry and contain a payment to the generic company are presumptively unlawful under the U.S. antitrust laws. The decision is a major victory for the U.S. Federal Trade Commission’s view of pharmaceutical patent settlements with so-called “reverse payments,” and dramatically alters the U.S. legal landscape in the U.S. with respect to such settlements. Additionally, by holding that a patent settlement can violate the antitrust laws without proof that it affected competition outside the scope of a valid patent, the decision creates a direct conflict with the ho [...]
The patent wars have become a real drag on the economy. A recent study estimated that the direct cost of patent trolls, firms that use patents solely as a source of securing revenue from litigation, exceeded $29 billion. The real costs in litigation: delayed innovation and loss of consumer choice are even greater. Now, the U.S. Congress is taking notice. Just last week, the Senate Judiciary Committee held a hearing to examine the use of standard essential patents (SEPs) in claims before the International Trade Commission (ITC) and now the House Judiciary Committee is holding a hearing on July 18.
After the Supreme Court put the brakes on some abuses of patent law in its 2006 eBay v. MercExch [...]
When competitors form a truce, consumers need to worry because often they find ways to make consumers pay more by cutting off competition. Nowhere is that a more big-ticket concern than an alliance between Nokia and Microsoft, waging a potential patent war on their smart phone rivals and potentially costing consumers millions of dollars in higher smart phone prices. Both companies recognize they have been losing the battle for smart phone dominance, as products like Apple’s iPhone and open source operating systems like Google’s Android continue to prevail.
With the knowledge they cannot succeed based on fair competition, Microsoft and Nokia have turned to patent enforcement as a means of dri [...]