Posts Tagged: "Antitrust"

The U.S. Federal Trade Commission (FTC) will not be radically changing the analysis used to address antitrust issues presented by patent law issues. The news stems from comments made by FTC acting chairman Maureen K. Ohlhausen at the 32nd Annual Intellectual Property Law Conference sponsored by the American Bar Association (ABA). Ohlhausen would go on to explain that the recent updates to the IP Licensing Guidelines, which occurred in January 2017, were “modest”, provided the FTC with flexibility, and continue to recognize that “IP law grants enforceable rights.”

This different approach—a commercialization approach—has been embraced across the American political spectrum, including both the Carter administration and the Reagan administration,[4] as well as by celebrated jurists of the last century coming from diverse philosophical perspectives, including Circuit Judges Learned Hand, Jerome Frank, and Giles Rich,[5] who saw it as important to helping the economy and society.[6] The roots of a commercialization approach to patents, in particular, reach back even further into American history, including Abraham Lincoln’s view that the patent system “added the fuel of interest to the fire of genius, in the discovery and production of new and useful things.”[7] Its study has also long extended far beyond our nation… A commercialization approach to IP views IP more in the tradition of private law, rather than public law. It does so by placing greater emphasis on viewing IP as property rights, which in turn is accomplished by greater reliance on interactions among private parties over or around those property rights, including via contracts.

These government agencies target successful, inventive U.S. firms. They politicize their processes and disregard the exclusivity that rightfully belongs to patent owners. They take away private property from the creators and give it to favored domestic companies like Samsung and Huawei, which apparently lack the smarts to win fair and square in market-based competition or by ingenuity. It’s time that America put an end to these threats, foreign and domestic. Either you believe in property rights and free enterprise or you don’t… In essence, Chinese, South Korean and FTC officials demand the benefits produced by free markets and property rights for free from American innovators in mobile technology, who took all the risk and made investments in research and development.

Last month, after a multi-year antitrust investigation, the United States Federal Trade Commission filed a complaint in federal district court charging Qualcomm with using anticompetitive business practices in violation of Section 5 of the Federal Trade Commission Act. The FTC’s decision to charge Qualcomm with violating Section 5 of the FTC Act, in lieu of alleging that Qualcomm’s conduct violated the Sherman Act appears to be the tactical equivalent of the government’s 1930’s decision to pursue Capone for tax evasion… Section 5 should not be used as a fallback device to challenge conduct actionable under the Sherman Act, but where the enforcement agency is unable or unwilling to meet the evidentiary rigor required by case law under the Sherman Act.

On January 23rd, the Federal Trade Commission (FTC) announced that it had taken steps to resolve antitrust charges involving business activities employed by Irish/U.S. drugmaker Endo International (NASDAQ:ENDP) designed to delay the entry of generic pain medications into the U.S. to preserve monopoly profits. The FTC filed a complaint for injunctive relief and a motion for entry of stipulated order for permanent injunction against Endo and others in the U.S. District Court for the Northern District of California (N.D. Cal.). These actions revive charges from a lawsuit filed by the FTC last March against Endo involving pay-for-delay patent settlements.

In 2016, the ITC had its busiest year since 2011–which was the peak of the “smartphone wars”–in terms of new investigations instituted. In 2016, 55 complaints were filed, notably, 16 of these complaints were filed by foreign companies. The ITC had an above average settlement rate of 60%; normally the settlement rate is approximately 50%. Last year also had a slight growth in nonpatent investigations which includes antitrust, trade secret, copyright and Lanham Act violations. Despite the increased workload, the average target date was 15.8 months from institution date to final Commission opinion.

On the menu this week for Other Barks & Bites, the Supreme Court hears oral arguments in a case challenging the Lanham Act’s disparagement provision, a six-figure damages verdict goes in favor of former USPTO Deputy Director Russell Slifer, a TTAB petition is filed to challenge the trademark application for an NFL franchise currently in the relocation process, an announcement by a Japanese academic-industry research project that claims to have doubled the effectiveness of solar cell panel conversion rates, the FTC takes action against a pharmaceutical company and much more.

First, I continue to wish for patent eligibility reform in Congress that would overrule Mayo, Myriad and Alice, although I am mindful of both how naive that sounds and dangerous it could become given competing interests at play. Of course, there is also a very real possibility any statutory reform would simply be ignored by the Supreme Court anyway, as they cling to the judicially created exceptions to patent eligibility that find no support anywhere in the statute or Constitution. Second, I am again also going to wish for meaningful copyright reforms and/or real Internet industry cooperation that recognizes the important rights of content creators, both large and small. It is too easy to steal original content with impunity and that threatens content creators large and small. Finally, while I would like to wish for an end to post grant procedures, I’ll remain content to more modestly wish for a new PTO Director unafraid to reform the post grant process in ways that remove the systemic biases that make the proceedings hopelessly one-sided against patent owners.

The IP Licensing Guidelines, which state the agencies’ antitrust enforcement policy with respect to the licensing of intellectual property protected by patent, copyright, and trade secret law and of know-how, were issued in 1995 and are now being updated. In the agencies’ view, the IP Licensing Guidelines remain soundly grounded, as a matter of antitrust law and economics. Nevertheless, the agencies have determined that some revisions are in order because the IP Licensing Guidelines should accurately reflect intervening changes in statutory and case law.

One reason the PTAB is convenient for reaching reverse payment deals is that there is no direct antitrust oversight, since its judges are administrators with very narrow legal authority. Further, while there is a statute requiring agreements between Hatch-Waxman firms to be submitted to the Federal Trade Commission (FTC) for antitrust review, the parties may attempt to evade it. The statute requires submission of agreements that relate to the manufacture or sale of either firm’s drug. The parties might therefore feel justified (rightly or wrongly) in not submitting a consent decree stating that the patent is valid and would be infringed by the proposed generic, since this does not expressly address manufacture or sales. Alternatively, it could be that the parties submit a district court consent decree (which includes no reverse payment), but not the PTAB settlement (which could include a reverse payment). After all, a PTAB settlement simply says that the parties agree to terminate the IPR – it need not declare the patent valid – and this arguably does not relate to manufacture or sales.

Google, the Internet software and services arm of Alphabet Inc. (NASDAG:GOOGL), offers a tremendously valuable portal to the wider Internet through its flagship search engine service. One of the more popular aspects of Google’s search engine is the image search features; as of July 2010, Google’s image search was delivering one billion pageviews per day to the company and 10…

The FTC’s complaint alleges that Endo paid the first generic companies that filed for FDA approval – Impax Laboratories, Inc. and Watson Laboratories, Inc. – to eliminate the risk of competition for Opana ER and Lidoderm, in violation of the Federal Trade Commission Act. The FTC is asking the district court to declare that the defendants’ conduct violates the antitrust laws, and further seeking an order that the companies disgorge their ill-gotten gains. Of course, the FTC asks for a permanent bar to prevent the companies from engaging in similar anticompetitive behavior in the future.

When patents were brought up in the hearing, however, it seemed to focus mainly on their effects in the pharmaceutical world. Ramirez’s prepared remarks for the hearing touched on pay for delay in pharmaceutical patent infringement settlements, and she noted that the U.S. Supreme Court’s June 2013 decision in Federal Trade Commission v. Actavis has given the FTC a greater capacity to challenge pay for delay schemes in court. Ramirez also stated that a report on the FTC investigation into patent assertion entities (PAEs) will be made available sometime this spring.

Pharmaceuticals is the industry sector where a strong patent system, promising substantial returns to successful innovation, is of paramount importance. Regrettably, the weakening of pharmaceutical patent rights through legislative means and antitrust lawsuits is symptomatic of a broader and more general policy attack that antitrust enforcers have directed against patents in recent years. Antitrust enforcers and legislators clearly need a few remedial lessons in the economics of innovation before their myopic meddling cripples the (up-to-now) highly successful American pharmaceutical sector and other key U.S. industries, which have stood as a testament to the value of strong patent rights.

The number of these potentially anticompetitive deals has fallen significantly following the Supreme Court’s landmark antitrust decision in FTC v. Actavis in 2013. The total number of such deals filed with the FTC has dropped to 21 in FY 2014 from 29 in FY 2013, and 40 in FY 2012 prior to the Actavis ruling. The FTC staff report for FY 2014 represents the first annual snapshot of such deals following the Actavis decision.