Interplay of IP Laws and Antitrust Regulations, Slides of Competition Law and Policy

Download Interplay of IP Laws and Antitrust Regulations and more Slides Competition Law and Policy in PDF only on Docsity! Intellectual Property and Antitrust Docsity.com Disclaimer • The views expressed here are mine alone and do not necessarily reflect the views of the Federal Trade Commission, any Commissioner, or other FTC staff. Docsity.com Types of Intellectual Property • Patent: exclusive right to make, use, or sell a product or service embodying the invention • Copyright: exclusive right to reproduce, prepare derivative works, and distribute copyrighted material • Trademark: exclusive right to use mark in commerce Docsity.com Applicable Antitrust Laws • Section 1: coordinated conduct – Licensing agreements – Patent pools • Section 2: unilateral conduct – Refusals to license – Bad faith enforcement • Section 7: acquisitions – Patent accumulation Docsity.com Basic Assumptions • Historical Views • Current US View • International Views Docsity.com Early View: Antitrust Must Limit IP • Focus was on scope of IP grant Conduct inside scope was immune Conduct outside scope was unlawful Docsity.com Current US View: 1995 IP Guidelines • IP law and antitrust share common purpose: promoting innovation and enhancing consumer welfare • Antitrust analysis of IP like other property • IP does not necessarily confer market power • Licensing is generally procompetitive Docsity.com International Views: Countries with Competition Laws: 1980 Source: ICN: Assessing Technical Assistance (2005) Docsity.com International Convergence: CCS Guidelines (2005) • IP and competition laws both “promot[e] economic efficiency and innovation” • IP “essentially comparable” to “other property” • IP “does not necessarily create market power” • Licensing generally procompetitive Docsity.com Analytical Framework * Key Questions ¢ Applications Docsity.com Analytical Framework: What are the key questions? • What is the competitive relationship between the parties? • Do the parties have market power? • What is the mechanism of potential harm? • What are the procompetitive benefits? Docsity.com Market Power: in what relevant market? • Goods market – Market for goods made using the IP and subs • Technology market – Technologies and goods that are close economic substitutes • Innovation market – R&D to particular new goods or processes, and close substitutes for that R&D Docsity.com What is the mechanism of potential harm? • Limiting competition between parties – market division – price fixing • Limiting competition from others – exclusive dealing – tying – package licensing/ patent pools Docsity.com What are the procompetitive benefits? • Exclusive dealing – encourage investments and promotion • Patent pools – integrating complementary technologies – reducing transaction costs – clearing blocking positions – avoiding costly infringement litigation Docsity.com Application: Exclusive Dealing Docsity.com Exclusive Dealing • Competitive relationship? – vertical or horizontal? • Market power? • Mechanism of potential harm? – foreclosure of competitors – foreclose licensee internal development • What are the procompetitive benefits? – encourage investment or promotion Docsity.com Open Issues • Refusals to license • Proving market power • “Reverse Payment” Settlements of IP Litigation Docsity.com Open Issues: Proving Market Power or How do we know a patent is blocking? • “[O]nly the legal force of the [patents] themselves … can exclude competitors, and patent claim interpretation is… to be decided by the courts” Minebea v. Papst, _ F. Supp. 2d _, 2006 WL 2374458 (D.D.C. Aug. 17, 2006) • In re Union Oil Co. of Cal., 2004 FTC Lexis 115, 127 (2004) (market power could be established through evidence of business conduct and responses to threats and suits). Docsity.com Market Power Issue: Cross-license with Territorial Market Division Docsity.com Open Issue: “Reverse Payment” Settlements of IP Litigation • Judicial treatment • Open analytical issues Docsity.com “Reverse Payment” Cases in the Courts of Appeal • Second Circuit: Generally followed logic of Eleventh Circuit. • In re Tamoxifen, _ F.3d _ (2d Cir. 2006) – Settlement after patentee loss at district court not suspect – Reverse payment not suspicious so long as litigation not a sham – Restrictions within exclusionary scope – Agreement did not cause bottleneck Docsity.com “Reverse Payment” Cases: District Court • Kaiser Found. Health Plan v. Abbott Labs., CV 02-2443-JFW (C.D. Cal.) – Hytrin opt out – agreement deemed per se illegal – causation tried to jury • would generic enter “but for” agreement – Jury verdict for defendants Docsity.com “Reverse Payment” Cases: View of Patent Rights • Probabalistic patent rights • Commission’s Cert. Petition, FTC v. Schering-Plough: – “the ‘probabilistic’ nature of patents” – “As both economists and legal scholars have remarked, ‘a patent is not a right to exclude, but rather a right to try to exclude.’” Docsity.com