Posts in Antitrust

Historically an esoteric area of law, in recent years, antitrust policy is drawing broader attention as a tool to curb the exercise of monopolistic market power, especially by big tech behemoths. Congressional reports on both Democratic and Republican sides of the aisle, multiple legislative initiatives to reform U.S. antitrust law, and a recent book by Senator Amy Klobuchar (D-MN), Chair of the Senate Judiciary Subcommittee on Competition Policy, Antitrust, and Consumer Rights, are some indicators of this trend. Along these lines, broad outcry broke out against rumored Department of Justice (DOJ) Antitrust Division leadership appointments of candidates representing big tech interests, such as Karen Dunn (Apple, Amazon), Renata Hesse (Google, Amazon), Susan Davies (Facebook), and against Deputy Attorney General Lisa Monaco’s (Apple, Google) involvement in deliberations over the nomination of a DOJ Assistant Attorney General (AAG) for Antitrust.

Yesterday, Representatives Carolyn Maloney (D-NY), Jerrold Nadler (D-NY) and David Cicilline (D-RI) asked Federal Trade Commission (FTC) Acting Chair Rebecca Kelly Slaughter to open a formal inquiry into pharmaceutical company AbbVie’s practices, which the representatives said have worked “to delay U.S. biosimilar entry for [AbbVie’s] blockbuster drug Humira.” The request was prompted by documents uncovered as part of an investigation being conducted by the House Committee on Oversight and Reform into the company. “Based on our review, these documents indicate that AbbVie delayed biosimilar competition for far longer than warranted by its own internal evaluations of the strength of its patent portfolio, which anticipated biosimilar entry no later than 2017,” said the letter.

The Federal Trade Commission’s (FTC’s) March 26 deadline for filing a petition for writ of certiorari at the U.S. Supreme Court has come and gone, officially ending the FTC’s opportunity to appeal its loss at the Ninth Circuit in its antitrust enforcement action against semiconductor developer Qualcomm. As federal regulators move on from this final vestige of Obama-era antitrust enforcement activity against patent-related business activities, much of the intellectual property world continues to await key appointments under President Joe Biden that will reveal the tenor of the policy debate in patents and antitrust during the current administration.

In a major 2018 speech, Justice Department Assistant Attorney General for Antitrust Makan Delrahim enunciated a “New Madison Approach” (NMA) (a tribute to James Madison’s support for a strong patent system) designed to restore greater respect for efficiency-seeking patent transactions in antitrust enforcement (a 2020 law journal commentary discusses the NMA and the reactions it has elicited, both positive and negative). Consistent with the NMA, the Trump Administration Antitrust Division took a number of initiatives aimed at reducing perceived new antitrust risks associated with widely employed patent licensing practices (particularly those touching on standardization). Those new risks stemmed from Obama Administration pronouncements that seemed to denigrate patent rights, in the eyes of patent system proponents (see here, for example). Given this history, the fate (at least in the short term) of the NMA appears at best uncertain, as the new Biden Administration reevaluates the merits of specific Trump policies. Thus, a review of the NMA and the specific U.S. policy changes it engendered is especially timely. Those changes, seen broadly, began a process that accorded greater freedom to patent holders to obtain appropriate returns to their innovations through efficient licensing practices – practices that tend to promote the dissemination of new and improved technologies throughout the economy and concomitant economic welfare enhancement.   

To those of us who breathe intellectual property and innovation, it sounds so obvious to say that consumers benefit greatly from the dynamic competition inventions and IP bring forth:  new products, technologies and industrial sectors. However, many who breathe antitrust hold a different perspective — it presumes a patent confers market power, that commercialization amounts to anticompetitive conduct and that the right to exclude is equivalent to monopolization by incumbent players in a static market. Assistant Attorney General for Antitrust Makan Delrahim, who left the U.S. Department of Justice (DOJ) with the changeover of administrations, bridged this gulf. Delrahim achieved this due to his background as both patent attorney and antitrust lawyer. Delrahim offered a framework he calls the New Madison Approach. The New Madison Approach advanced through the division’s amicus program.

Yesterday, Rep. Beth Van Duyne (R-TX-24) sent a letter to President Joe Biden explaining her concerns over recent reports that the leading candidate for the top antitrust post at the Department of Justice (DOJ) is likely to go to long time Democrat antitrust official Renata Hesse, who served in the DOJ Antitrust Division during the Obama Administration as a Deputy Assistant Attorney General and as Acting Assistant Attorney General. Hesse, who has gone in and out of government, has represented both Google and Amazon, companies that are facing antitrust scrutiny from the DOJ, European Union and dozens of state Attorneys General.

The Court of Justice of the European Union (CJEU) last week ruled against Qualcomm in an antitrust case over UMTS-compliant baseband chipsets. The case dates back to April 2010, when UK company Icera Inc. filed a complaint accusing Qualcomm of predatory pricing by supplying three chipsets to its customers Huawei and ZTE at below cost price…. The judgment gives the Commission the green light to seek a broad range of information in antitrust investigations, which may have implications for actions against other tech companies.

Complete Genomics, Inc., BGI Americas Corp., and MGI America’s Inc. (Complete Genomics) have filed suit against Illumina, Inc. alleging violation of federal antitrust statutes and California unfair competition laws in the U.S. District Court for the Northern District of California, San Francisco Division. The January 11 complaint contends that Illumina obtained at least three of the patents Illumina has asserted against Complete Genomics in an unlawful, anticompetitive manner. The complaint argues that two of the patents asserted by Illumina are invalid based on fraud on the United States Patent and Trademark Office (USPTO) and that there was no basis for asserting infringement with respect to the third patent.

This is the fourth in a series of articles analyzing statements made by various entities in the cellular industry regarding licensing Standard Essential Patents (SEPs) on a Fair, Reasonable and Non-Discriminatory (FRAND) basis. The third article considered the royalty base to which FRAND rates apply. This article focuses on statements made regarding the obligations of SEP owners in the process of FRAND licensing.

How many people or organizations could undergo an exhaustive investigation into everything they’ve done over the past 30 years and emerge unscathed? That’s what just happened to the technology transfer operations at the Department of Health and Human Services (HHS), with the spotlight primarily focused on the National Institutes of Health (NIH). Of course, an exercise like this has to find something, so the report that resulted from this exercise is titled “NIH Should Publicly Report More Information about the Licensing of Its Intellectual Property”. After extensive digging, all it uncovered are some pretty small potatoes.

This week in Washington IP news, Senate committees will convene a series of business meetings, including one by the Senate Judiciary Committee to look at a proposed bill that would create an alternative dispute resolution (ADR) pathway for resolving copyright small claims. The Senate Environment Committee will also discuss a proposed legislative draft designed to restore American dominance in nuclear energy in part by supporting the licensing of advanced nuclear energy technologies. Elsewhere, the Brookings Institution will host a pair of events exploring the impacts of smart machines on the American labor force as well as the future of antitrust policy in the tech sector during the Biden Administration.

Makan Delrahim, the Assistant Attorney General for the Department of Justice’s (DOJ’s) Antitrust Division, has received much-deserved acclaim from fellow intellectual property hawks for his commitment to re-framing the Antitrust Division’s relationship with intellectual property law through a “New Madison” lens. Madison, the founder of the Constitution’s Patent and Copyright Clause, understood the nuanced relationship between the two. Over the last few years, Delrahim has gone to great lengths to restore his vision. It would be a shame if one significant oversight over music industry policy in the coming weeks incites a blemish on his otherwise impeccable three-year track record.

It is difficult to talk about political issues in the current environment in the United States but looming for the patent and innovation community is a potential disaster. While it will undoubtedly upset many, the truth is that there is currently no official President-Elect and there won’t be until the Electoral College votes in the middle of December. In no fewer than six swing states, the vote was so close that President Trump and his lawyers have launched a series of lawsuits that have already made their way to the United States Supreme Court. Much more litigation relating to the election can be expected and proof will be necessary to back up the allegations of the Trump campaign if anything major news outlets are reporting will be changed. In the meantime, it should be fairly uncontroversial to say that President Trump has an uphill battle. It is also absolutely factual to say that Vice President Biden is proceeding as if he is President-Elect.

The European Commission has formed a preliminary view that Amazon has breached Article 102 of the Treaty on the Functioning of the European Union by distorting competition in online retail markets. It announced on November 10 that it had sent a Statement of Objections to the e-commerce company. Article 102 (formerly Article 82 TEC) prohibits “any abuse by one or more undertakings of a dominant position within the internal market or in a substantial part of it.” Amazon is said to be dominant in France and Germany, its biggest markets in the EU. The Commission said that Amazon systematically relies on non-public business data of independent sellers on its marketplace to the benefit of its own competing retail business. This data includes the number of units of products ordered and shipped, sales revenues, and the number of online visits made to offers.

On day one of IPWatchdog’s SEP2020, keynote speaker David Kappos told IPWatchdog President and CEO Gene Quinn that the IP community should not panic about what a Biden administration might mean for standard essential patents (SEPs), or IP more broadly. “I have reason to believe we could see a positive continuation of what we’ve seen in recent years,” Kappos said. “President-Elect Biden comes from a background where he under[stands] IP. I worked with him on IP issues under the first Obama administration and he demonstrated an appreciation for the balance that involves intellectual property. He comes from a state – Delaware – that means business about IP, with a strong specialty chemicals industry in that state, and a strong patent jurisprudence.” Additionally, Biden would have people like Senator Chris Coons (D-DE), who has been “an extremely strong advocate for strong intellectual property,” around him. “I have a tremendous faith in [Coons] as a force for making sure we continue going in the right direction,” Kappos added.