Antitrust Enforcement and Intellectual Property Rights: FTC/DOJ Joint Report

The FTC and DOJ have jointly issued a monumental report on the relationship between patent rights and antitrust policy.  Gems from the report:

  • Refusal to license patents to competitors – without more – will not raise antitrust concerns.
  • Conditional refusals, on the other hand, are subject to antitrust scrutiny.
  • Standard setting negotiations, cross-licensing, & patent pools are not per se violations, but are reviewed under the rule of reason framework.
  • The starting point for evaluating practices that extend beyond a patent’s expiration is an analysis of whether the patent in question confers market power. If so, these practices will be evaluated under the agencies’ traditional rule of reason framework, unless the agencies find a particular practice to be a sham cover for naked price fixing or market allocation.
  • Collecting royalties beyond a patent’s statutory term can be efficient.

Notably absent from the report are issues involving pharmaceutical reverse-payments where the two departments have recently knocked-heads.

Read the report here.

[Via Professor Sokol at the Antitrust Blog]

3 thoughts on “Antitrust Enforcement and Intellectual Property Rights: FTC/DOJ Joint Report

  1. 3

    The position with respect to collecting royalties beyond the statutory term is not in conflict with SCOTUS precedent. The SCOTUS, in Brulotte v. Thys Co., has deemed the practice to be per se patent misuse – a different doctrine from antitrust. Although Posner believes this application of misuse doctrine to be economically unsound, and wrote a strong opinion arguing for overruling Brulotte, the SCOTUS denied cert.

    A party can still succeed on a theory of patent misuse – the FTC/DOJ joint report simply states that the practice is not considered a violation of antitrust law.

  2. 2

    Re: “Collecting royalties beyond a patent’s statutory term can be efficient.”

    How do they propose effectively ignoring the Sup. Ct. decision that says you can’t?

  3. 1

    “The report follows a series of hearings jointly conducted by the agencies in 2002”

    LOL – it took them 5 years to issue their report??? At 217 pages, it will take awhile to read – and even longer to digest given the issues and the fact that it is coming from the DOJ and FTC. But, a very brief perusal suggests that it may simply be a longer version of their 1995 report on antitrust issues in IP licensing (or, perhaps not). I also noted that MedImmune was relegated to a footnote. In part I am sure that this is simply a result of the recency of the case.

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