Posts in Antitrust

This week on Capitol Hill, both houses of Congress are abuzz with a full schedule of hearings related to science, technology and innovation topics. In the House of Representatives, various committees explore a proposed net neutrality bill, innovation in the aviation industry, and ways to improve competition in the pharmaceutical industry—a hot topic of debate in recent weeks. Both the House and the Senate will hold hearings on the future of America’s space program. The Senate will also consider consumer data privacy regulations, rural broadband investments, and military applications of artificial intelligence. On Tuesday, a pair of events at the Brookings Institution will look at the impact of technological advances on public policy, as well as the artificial intelligence race between the U.S. and China.

This week on Capitol Hill and in the Washington D.C. area, the Supreme Court grants cert in Iancu v. NantKwest; the U.S. House of Representatives will hold several hearings on important topics in technology, including electronic health records modernization for veterans, cybersecurity measures for voting systems and research on the nexus between energy and water. House committees will also explore ways to improve broadband access for small businesses and promote generic competition to reduce branded pharmaceutical prices. Drug pricing, which often involves a focus on patents, is the subject of a two-part hearing series in the U.S. Senate. Other Senate hearings this week will look at data breaches in the private sector and IP issues related to Chinese trade. The week is book-ended by a pair of events hosted by the Information Technology & Innovation Foundation, including a Thursday event that looks at the impact of the Bayh-Dole Act of 1980 and controversial calls to enforce certain provisions of the law to reduce drug prices.

This week on Capitol Hill, the newly revived Senate Subcommittee on Intellectual Property meets for the first time this term to discuss the 2019 “Annual Intellectual Property Report to Congress”; other Senate committee hearings will look at concerns related to drug pricing, the effects of the Made in China 2025 initiative on American industry and proposed legislation to support innovation in carbon capture technologies; U.S. House of Representatives committees hold hearings focusing on issues from cybersecurity in the nation’s surface transportation and defense agency to energy research funding programs and trade tensions between the U.S. and China; and elsewhere in the nation’s capital, the Heritage Foundation looks at issues related to the modernization of the United States’ nuclear submarine fleet and the Cato Institute holds a day-long event on Friday to examine the topic of regulating the activities of American tech giants like Facebook and Amazon.

This week in Other Barks & Bites: the Chinese and U.S. governments hash out intellectual property issues; a prominent New York City politician joins the effort to break the patent on Gilead’s Truvada; Qualcomm tells the ITC that Apple’s design around undermines the agency’s finding that an exclusion order shouldn’t be entered against infringing iPhones; the Fortnite copyright cases take a new turn; Babybel loses the trademark on its red wax cheese coating in the UK; Fisker & Paykel and ResMed settle their worldwide patent dispute; Facebook could face major FTC fines for payments from children playing video games on the platform; and reports indicate that Pinterest is pursuing an initial public offering.

This week in Other Barks & Bites: the USPTO appoints a new Chief Information Officer; Apple uses Qualcomm chips in Germany while American professors urge the ITC to deny exclusion of iPhones found to infringe Qualcomm patent claims; two important IP cases will be heard by the U.S. Supreme Court next week; the EU approves copyright reforms, including the hotly-debated Article 13; Fresh Prince of Bel-Air star Alfonso Ribeiro runs into issues at U.S. Copyright Office; Facebook could owe billions in fines for consumer data practices; a jury verdict dings Walmart for nearly $100 million in trademark infringement case; and Google announces multi-billion dollar plan to expand offices and data centers across the United States.

This week on Capitol Hill, the Democrat-controlled House of Representatives has planned a number of hearings on climate change and antitrust matters, especially where the T-Mobile/Sprint merger is concerned. In the Senate, cybersecurity takes center stage at the Senate Homeland Security and Energy Committees. Elsewhere in Washington, D.C., the Brookings Institution got the week started early with a look at the impacts of artificial intelligence on urban life; Inventing America hosts a half-day event looking at current issues in the U.S. patent system; and the Information Technology & Innovation Foundation examines the future of autonomous vehicles in the freight industry.

This week in Other Barks & Bites: the Federal Circuit affirms a Section 101 invalidation of patent claims in favor of Mayo Collaborative Services; Apple wins an order to limit damages in Qualcomm patent case; Google frets over proposed European Union copyright rules; India proposes jail time for film piracy; patent validity challenges drag down the stock of a major pharmaceutical firm; and a snag in the U.S.-China trade talks throws Wall Street for a loop.

On Thursday, August 9th, San Diego, CA-based semiconductor developer Qualcomm Inc. announced that it reached a mutually agreed settlement with the Taiwan Fair Trade Commission (TFTC) which greatly reduces the financial penalty assessed to Qualcomm by the TFTC for antitrust issues. Although the TFTC will retain about $93 million USD in fines which have been paid by Qualcomm through July, the settlement eliminates the remainder of the original fine valued at $773 million USD and issued by Taiwan’s fair trade regulator last October.

Some of the questions the FTC is interested in investigating and discussing during this inquiry include whether changes in the economy and evolving businesses have created competition and consumer protection issues in communication and information technology networks, market power and entry barriers in markets featuring “platform” businesses, the role of intellectual property in competition, and a variety of issues surrounding the security and use of big data… With networks, market power, platforms, intellectual property and big data being the focal point of the FTC inquiry, there is little doubt that the big tech giants of Silicon Valley are the targets of this FTC competition review. For those in innovator community the feeling will no doubt be that such a government inquiry is long overdue.

On Friday, June 15th, the Court of Appeals for the Federal Circuit denied a petition for panel rehearing and rehearing en banc in Xitronix Corporation v. KLA-Tencor Corporation. The petition for rehearing was filed by KLA-Tencor after the Federal Circuit first decided Xitronix back in February of this year, where the appellate court held that it didn’t have jurisdiction to hear an appeal in a patent case which only involved claims of monopolization under U.S. Supreme Court standards set in 1965’s Walker Process Equipment v. Food Machinery & Chemical Corp.

It has been five years since FTC v. Actavis. In that landmark ruling, the Supreme Court held that settlements by which brand-name drug companies pay generics to settle patent litigation and delay entering the market could have “significant anticompetitive effects” and violate the antitrust laws. What has happened in these five years? For starters, the number of “pay for delay” settlements (involving payment and delayed entry) has declined.

Although it’s not illegal to earn a profit, unfair business practices in the pursuit of holding a monopoly over an entire industry led to the breakup of Standard Oil, especially the rebates from railroad companies for oil shipments which substantially lowered Standard Oil’s transportation costs relative to its much smaller competitors. Recent academic research has suggested that, while the U.S. government acted appropriately to stop the cartelization of an industry, Standard Oil was engaging in typical capitalist activity in securing better deals which optimized oil shipments. This would seem somewhat less nefarious than an outright copying technologies from smaller competitors in an effort to stave off competition.

Antitrust agency communications, such as the EU Commission’s Horizontal Guidelines and the FTC/DOJ Licensing Guidelines underline that market power does not necessarily result from patent ownership as such. They contain, however, no specific language on standard-essential patents which are – if they are valid and truly standard-essential – different from other patents in that they must, by definition, be used in order to operate on the respective standard-based market. In Europe at least, it seems to be increasingly accepted that SEPs can convey market power but that they do not necessarily always do so. Advocate General Wathelet’s proposition (para. 57 et seq. of his opinion in the Huawei/ZTE case) to establish a rebuttable presumption that SEP ownership generates market power has not been taken up by the CJEU’s Huawei/ZTE-decision, probably because the parties already agreed that Huawei held a dominant position (para. 43). But court decisions from the UK (for instance Unwired Planet/Huawei, a summary of the case is provided here) and Germany (for instance LG Düsseldorf, 26.3.2015, 4b O 140/13) have taken a case-sensitive approach, looking not only at the leverage generated by a SEP but also at circumstances which may limit its holder’s power.

On November 10, 2017, the Department of Justice’s (DOJ’s) new top antitrust enforcer, Assistant Attorney General (AAG) Makan Delrahim, delivered a powerful speech on antitrust law and policy enforcement towards intellectual property rights (IPRs). Former USPTO Director David Kappos described it as “the most important DOJ antitrust speech on IP during my decades practicing law”. … The speech clarifies that the new AAG views “any policy proposals with one-sided focus on hold-up with great skepticism because they pose a serious threat on the innovating process,” and submits that antitrust law should not be misused to police the private commitments such as FRAND that IP holders make to SSOs. In this, the speech agrees with the view shared by several scholars that FRAND commitments are contracts and a potential breach of those commitments may not be best suited under the purview of antitrust law and that “there are perfectly adequate and more appropriate common law and statutory remedies available to the SSO or its members”.

Even at ground level, where American courts in San Diego and San Jose are now being called on to apply the law laid out in prior court decisions to the particular facts of the smartphone chip market, the multipronged attack on Qualcomm’s patent licensing practices offers an unusually rich platter of meaty issues to feast upon for those who advise patent licensors and licensees. Leaving aside the implications for the smartphone industry and the market for cellular baseband processors that Qualcomm now dominates, the new precedents that will be set in court—if the parties don’t settle or a Republican-controlled FTC doesn’t withdraw its case—will have broad and deep implications for patent owners and users—much as the US v. Microsoft case has had since it was decided almost two decades ago.