Posts in Antitrust

The U.S. Senate gets busy today with hearings on the tech world’s impacts on America’s youth as well as NASA’s plans for manned missions on the 50th anniversary of Apollo 11. On Wednesday, Senator Coons and Representative Stivers will reintroduce the STRONGER Patents Act, which is aimed at strengthening the patent system and promoting innovation. NASA’s plans to commercialize low Earth orbit will also be discussed in the House of Representatives, along with biometric technologies employed by the Department for Homeland Security and cybersecurity threats to the U.S. energy grid. Around the U.S. capital, both the Brookings Institution and the Information Technology and Innovation Foundation will look at tech issues involved in the current trade war between the U.S. and China. ITIF will also explore the potential use of antitrust law to break up American tech giants on Thursday.

In a recent letter, Senator Richard Blumenthal (D-Conn.) urged the Federal Trade Commission (FTC) to take action against makers of “detox teas” for engaging in “predatory” and misleading marketing tactics on social media platforms, targeting primarily young adults (and young women in particular). Taking aim at the Instagram idol Kim Kardashian, Senator Blumenthal pointed out that influencers earn up to “six figure sums” for a single social media post promoting detox tea products without any expectation that the endorsers personally use the products and expose themselves to the alleged health risks associated with the teas.    

This week in Other Barks & Bites: The Supreme Court today agreed to hear two trademark cases next term; Senators Thom Tillis and Chris Coons issue a statement regarding the recent round of patent eligibility hearings by the Senate Intellectual Property Subcommittee; four bills that would impact pharmaceutical patents and practices have passed out of the Senate Judiciary Committee; Huawei publicly calls out negative impact of Senator Marco Rubio’s legislative amendment preventing it from seeking U.S. patent infringement damages, one day after losing its trade secret case against CNEX Labs; Spotify settles a pair of major copyright suits targeting its music streaming service; Intel will reportedly auction thousands of IP assets related to wireless device technology; and revised data shows that U.S. GDP grew 3.1% during the first three months of 2019.

On May 2, the Antitrust Division of the U.S. Department of Justice (DOJ) took the unusual step of submitting a Statement of Interest in the Federal Trade Commission’s (FTC’s) case against Qualcomm to take a position contrary to the FTC. The DOJ argued that “[b]ecause an overly broad remedy could result in reduced innovation, with the potential to harm American consumers, this Court should hold a hearing and order additional briefing to determine a proper remedy that protects competition while working minimal harm to public and private interests.” In response, the FTC informed the court that it “did not participate in or request” the DOJ’s filing, that it “disagree[d] with a number of contentions” made by the DOJ, and that the DOJ “misconstrues applicable law and the record.” In the end, the court agreed with the FTC and issued injunctive relief against Qualcomm without conducting the further remedy proceedings the DOJ advocated. The public feuding between the two federal antitrust enforcement agencies about how to resolve a case litigated by one them was a remarkable spectacle. It also brought into focus a broader divide between the FTC and DOJ on the role of antitrust law in addressing patents that are essential to industry standards (SEPs) and subject to commitments to license on fair, reasonable, and non-discriminatory (FRAND) terms.

This week in Other Barks & Bites: Senators Tillis and Coons ask federal agencies to step up enforcement against IP theft; Senator Stabenow and Congressman Cummings ask GAO to review government’s drug patent authority; USPTO Director Iancu says that Congress will have to fix patent eligibility problems; China releases a new national IP strategy after the U.S. halts IP theft proceedings at the WTO; Adidas loses European trademark for three-stripe logo; VidAngel ordered to pay more than $60 million over copyright infringement; music lyric site Genius accuses Google of ripping content for its own platform; and Apple asks the United States Trade Representative to rescind tariffs that would affect consumer tech goods.

IPWatchdog will host its first Annual Meeting and Conference from March 15-18, 2020. The event will take place at the Renaissance Dallas Richardson in Dallas, Texas. Registration will begin on Sunday, March 15, followed by an opening General Session, and then an Opening Reception. We will begin Monday, March 16 and Tuesday, March 17 with breakfast. Each morning will feature two General Sessions, followed by lunch, and then a series of breakout panels in the afternoon. A Networking Cocktail Reception will be held both Monday night and Tuesday night. We hope everyone will stay and celebrate St. Patrick’s Day with us on Tuesday evening, March 17. We will conclude with an ethics breakfast on Wednesday, March 18, which will provide two hours of ethics credit for those attorneys in attendance.

This week on Capitol Hill, the Senate IP Subcommittee will hold its third and final hearing on patent eligibility issues that currently exist in the U.S. patent system. Elsewhere in the Senate, hearings will focus on privacy issues posed by data brokers as well as Federal Communications Commission oversight. Hearings over at the House of Representatives will discuss topics including NASA’s science mission, sexual harassment issues within the scientific professions, and research leading towards increased use of renewable energy sources. The Information Technology and Innovation Foundation will also host an event to explore new tax models affecting U.S.-based Internet services companies.

In a June 4 op-ed to IPWatchDog, James Edwards launched a scathing attack against Judge Koh and her 233-page ruling, which found Qualcomm to have engaged in anticompetitive behavior against competitors within the cellular chipset market. However, just as Mr. Edwards claims Judge Koh failed in her undertaking, so too has Mr. Edwards by ignoring the context and facts of the case. His argument against Judge Koh, deliberately or otherwise, does not mention the fact that this case involved the licensing of standard essential patents (SEPs) subject to the FRAND commitment, a contract between the patent holder and the standard setting organization to license the relevant patents on “fair, reasonable, and non-discriminatory” terms. Indeed, Mr. Edwards makes no mention of standard essential patents in a deliberate attempt to obfuscate the facts and fit a narrative that intellectual property rights writ large are under attack by this decision.

This week in Other Barks & Bites: the Wisconsin Alumni Research Foundation’s petition to the Supreme Court in a case against Apple; AAG Makan Delrahim’s remarks about misuse of antitrust law by U.S. courts; Eli Lilly’s petition to the Supreme Court regarding functional claiming rule; cert granted in Allen v. Cooper to determine state sovereign immunity against copyright claims; the list of top universities receiving U.S. utility patents; Google Buys Looker For $2.6 Billion; and the ongoing Senate debate on patent eligibility.

If a judge ever botched an antitrust case involving patents, the prize may go to federal district Judge Lucy Koh for her ruling in favor of the Federal Trade Commission (FTC) in its antitrust action against Qualcomm. The intersection of intellectual property and antitrust is riddled with land mines and booby traps. The danger of getting an IP issue in this vicinity wrong becomes all the more likely after the Koh ruling and, thus, all the more dangerous and far-reaching. Judge Koh managed to step on several trip wires in her decision for the FTC in a case that should never have been brought, never tried, and should have been withdrawn or dropped. The damage from this ruling will reverberate far beyond the global leader in wireless connectivity technology the FTC unfairly hammered in this case. “Patents are a form of property,” Assistant Attorney General for Antitrust Makan Delrahim has said, “and the right to exclude is one of the most fundamental bargaining rights a property owner possesses. Rules that deprive a patent holder from exercising this right . . . undermine the incentive to innovate.” Basic principles like property rights, exclusivity, dynamic competition and the incentive to innovate escaped Judge Koh’s grasp.

This week in Other Barks & Bites: Chinese state media pushes back on the United States’ claims of intellectual property theft; a bipartisan coalition from both houses of Congress releases a draft proposal of Section 101 patent law reform; Senator Coons seeks more information on Amazon’s privacy practices for Alexa devices; the city of Baltimore files a lawsuit over a scheme to delay market entry of a generic to the Zytiga prostate cancer treatment; the USITC institutes a patent infringement investigation of Comcast after several complaints from Rovi; USPTO Deputy Director Peters files a petition brief in a Supreme Court case over USPTO personnel expenses incurred during litigation instigated by patent applicants; and Qualcomm plans to appeal adverse ruling in Northern California antitrust case brought by the FTC.

In a 233-page Order issued yesterday, Judge Lucy Koh of the United States Federal District Court for the Northern District of California handed Qualcomm a stinging defeat in the case brought by the Federal Trade Commission (FTC) alleging that Qualcomm engaged in unlawful licensing practices. It was just three weeks ago that Apple and Qualcomm entered into a peace treaty. The revelations about Apple’s coordinated efforts to manipulate the licensing market by shrewdly challenging inferior patents to beat down prices should have led to the FTC dropping its pursuit of Qualcomm. It is no secret that Apple has urged regulators all over the world to chase Qualcomm for alleged anticompetitive licensing practices, but it has now come out in federal court proceedings that Apple just didn’t like the rate it agreed to pay Qualcomm and decided to manipulate the marketplace and then use that manipulation to pull the wool over the eyes of regulators, including the FTC, in an attempt to leverage a better deal with Qualcomm.Apple succeeded in achieving peace with Qualcomm, although the company has been badly beaten by Apple in near collusion with regulators all over the world. So why would the FTC continue to persecute Qualcomm given the revelations in the Apple/Qualcomm litigation that demonstrate that Qualcomm did not seek an unreasonably high licensing rate?

Most Congressional hearings are morality plays designed to reach a predetermined outcome. It wasn’t hard to predict how the second hearing on drug pricing by the House Committee on Oversight and Reform was supposed to go. If the title, “HIV Prevention Drug: Billions in Corporate Profits after Millions in Taxpayer Investments” wasn’t enough of a clue,  when Chairman  Elijah Cummings (D-MD) said it was because of the “phenomenal leadership” of freshman Rep. Alexandria Ocasio-Cortez (D-NY)  that the hearing was being held, any doubts evaporated. In an extraordinary gesture of deference for a new Member of Congress, Rep. Ocasio-Cortez was recognized for an opening statement before senior members of the committee. However, because of two differences in this hearing from its predecessor things didn’t quite go as planned. This time, the Committee invited both sides to appear, not just the critics; and one member dared to challenge its underlying premise, leading to an electrifying exchange with the Chairman. We’ll examine that shortly.

On Thursday, May 9, the Affordable Prescriptions for Patients (APP) Act was introduced into the U.S. Senate by Senators John Cornyn (R-TX) and Richard Blumenthal (D-CT). If passed by Congress and signed into law, the bill would modify the Federal Trade Commission (FTC) Act to give the FTC additional antitrust authority to challenge the anticompetitive nature of certain actions by pharmaceutical patent owners in the service of providing more consumer access to generic and biosimilar drugs.

I am Emil Malak, CEO of VoIP-Pal.com Inc., and a named inventor on two U.S. patents–Mobile Gateway: US 8,630,234 & Electrostatic Desalinization and Water Purification: US 8,016,993. To date, our company owns 22 issued and or allowed patents, which we developed over the past 15 years. Against all odds, we have been 100% successful in defending eight Inter Partes Reviews (IPRs): four from Apple, three from AT&T, and one from Unified Patents. We are presently in litigation against Apple, Verizon, AT&T, Twitter and Amazon. My experience with Voip-Pal has made it painfully clear that the deck has been stacked against companies who own IP being used without license by large tech companies. The America Invents Act (AIA), orchestrated by Silicon Valley, was designed to destroy the very ladder they climbed to ascend to their lofty perch, and make certain that they could not be challenged.