Posts Tagged: "Antitrust"

One of the most complex issues in antitrust and patent law today involves agreements by which brand-name drug companies pay generics to delay entering the market. In the past decade, with the Supreme Court showing no interest in wading into the area, the Federal, Second, and Eleventh Circuits have upheld these agreements. And, with each court relying on its sister court, a momentum had developed that made it nearly impossible to discern a role for antitrust scrutiny. The Third Circuit just found that a reverse payment was “prima facie evidence of an unreasonable restraint of trade.”

Commenting on the Yahoo! Inc. patent infringement lawsuit filed against Facebook in March of 2012, Mr. Cuban concludes his post by stating: “I hope Yahoo[!] is awarded $50 billion dollars. It is the only way that consumers will realize what is at stake with patent law as is. Then maybe we can get it right and further innovation and competition in this country.” These statements are from a very influential technology entrepreneur, investor and generally-recognized American business guru. Thus, it would seem that the continuous negative headlines from the smart phone patent wars are definitely giving patents a bad rap!

So what did Apple and the other publishers do that put them on Uncle Sam’s Radar? Allegedly, they agreed among themselves to sell their e-books at the same price. This is also known as “Price Fixing” and it’s a big no-no. When companies who sell the same product agree among themselves to set the same price for that product, they could (not necessarily will) set that price as high as they wish, because there will be no place cheaper to get it. The type of price fixing alleged here – ‘horizontal’ price fixing – is considered violative of the Sherman Act regardless of the effect on the market. This means that even if the agreement didn’t actually harm the market whatsoever, it would still be considered anti-competitive.

The term “patent misuse” refers to specific types of prohibited behavior engaged in by the owner of the patent rights. Patent misuse is an affirmative defense that recognizes that it is possible for a patent owner to abuse the exclusive right enjoyed as a result of the issuance of a patent. As an affirmative defense, patent misuse cannot be used as a sword, but can only be used by an alleged infringer if and when the patent owner seeks to enforce the exclusive right of the patent in a patent infringement suit. Once a patent infringement suit is initiated, the alleged infringer, in order to successfully rely upon the patent misuse defense, must “show that the patentee has impermissibly broadened the ‘physical or temporal scope’ of the patent grant with anticompetitive effect.” If the alleged infringer can demonstrate that the patent owner did engaged in prohibited behavior, the patent will be unenforceable despite the fact that it is valid. In this respect, patent misuse is similar to the doctrine of inequitable conduct, which also works to make an entire patent unenforceable.

We conclude that the FTC has not identified sufficient evidence to raise serious doubt about the current efficiencies of the IP marketplace. Indeed, the available empirical evidence suggests that these existing rules and practices work well. The interests of consumers are well represented by standard setting organizations and competition among technology implementers who at the end of the day must make goods and services that people wish to purchase.

Earlier this month Dechert LLP, representing an undisclosed number of companies (“stakeholders”), sent a letter to IMG College (“IMG”) and its licensing division, the Collegiate Licensing Company (“CLC”), and demanded that IMG and CLC cease and desist any efforts to restrict the number of licensees permitted to supply merchandise bearing the brands of various NCAA colleges and universities. It looks likes trademark and antitrust issues are back on the menu in sports, which makes intellectual property nerds like me very happy. We all knew American Needle Inc. v. National Football League (“Needle”) would embolden private antitrust suits; it was just a question of when. But a pivotal question is should Needle be extended to permit private antitrust suits in collegiate athletics?

I don’t doubt that the Google Legal Team is an excellent department, and undoubtedly praiseworthy. It is also correct to say that they are dealing on nearly a daily basis with cutting edge issues that relate to the use of intellectual property in a still young medium — the Internet. It is also true to observe that they have had to deal with antitrust matters, patent litigations, copyright and trademark matters, not to mention the undoubtedly countless private matters that we haven’t yet learned about and many we won’t ever learn about. Nevertheless, I wonder whether there is a premature victory lap or recognition that is just slightly ahead of accomplishment. Certainly if Google scores a final victory in the Rosetta Stone appeal on trademarks (more below) and can resurrect the book settlement (more below) that would go a long way to justifying this award, I just wonder whether it might be a year ahead of schedule and a bit akin to President Obama winning the Nobel Peace Prize after only a few months in Office.

On Friday, May 13, 2011, the Federal Circuit issued the latest decision in a long line of Rambus decisions stemming out of conduct of Rambus as it participated in the JEDEC standard-setting body, as well as litigation events that followed. A five judge panel of the Federal Circuit (per Judge Linn) affirmed the district court’s determination that Rambus destroyed documents during its second shred day in contravention of a duty to preserve them and, thus, engaging in spoliation.

About 10 years ago, the NFLP decided that they wanted Reebok (and only Reebok) to make hats with the teams’ logos on them. American Needle, Inc., a competitor of Reebok, had been making these types of hats for the NFL for a really long time, and as a result of the NFLP’s deal with Reebok, it lost its contract with NFLP to make said hats. American Needle, Inc. did not have much of a sense of humor about this and sued the NFL under Antitrust principles. Enter American Needle v. National Football League et al. Needle is a big case because if the NFL had gotten what it asked for, the player’s union wouldn’t have been able to decertify and the players wouldn’t have been able to bring an antitrust suit.

One of the most debated issues in patent and antitrust law today involves pharmaceutical patent settlements. Brand-name drug manufacturers pay generic firms to settle patent litigation and delay entering the market. How should the antitrust laws respond? The Cipro case presents an ideal vehicle for Supreme Court review. It involves a simple, undisputed payment from brand to generic to delay entering the market.

The Federal Trade Commission and Department of Justice on Friday, August 19, 2010, issued revised Horizontal Merger Guidelines that outline how the federal antitrust agencies evaluate the likely competitive impact of mergers and whether those mergers comply with U.S. antitrust law. These changes to the Guidelines mark the first major revision of the merger guidelines in 18 years, and is…

The Federal Trade Commission approved a settlement with Intel Corp. that resolves charges the company illegally stifled competition in the market for computer chips. Intel has agreed to provisions that will open the door to renewed competition and prevent Intel from suppressing competition in the future. Under this agreement Intel must modify its intellectual property agreements with AMD, Nvidia, and Via so that those companies have more freedom to consider mergers or joint ventures with other companies, without the threat of being sued by Intel for patent infringement.

86 law, economics, public policy and business professors filed an amici curiae brief with the United States Court of Appeals for the Second Circuit seeking the en banc review of the panel decision in In re Ciprofloxacin Hydrochloride Antitrust Litigation, which issued on April 29, 2010. Mark A. Lemley, William H. Neukom Professor, Stanford Law School and partner in the San Francisco law firm Durie Tangri LLP, is representing the 86 professors pursuing this matter pro bono as a concerned law professor and not on behalf of any client. When asked for comment he offered that he thinks “the Cipro case may well be the turning point in legal treatment of reverse settlements.”

The plaintiffs had argued that defendants had in fact violated Section 1 of the Sherman Act when they settled their dispute concerning the validity of Bayer’s Cipro patent by agreeing to a reverse exclusionary payment settlement. Bayer agreed to pay the generic challengers, and in exchange the generic firms conceded the validity of the Cipro patent. The Second Circuit panel affirmed the granting of summary judgment, finding themselves confined by the previous Second Circuit ruling in Tamoxifen. The panel did, however, make the extraordinary invitation to petition the Second Circuit for rehearing in banc, citing the exceptional importance of the antitrust implications, the fact that the primary authors of the Hatch-Waxman Act have stated reverse payments were never intended under the legislation and the fact that the Second Circuit in Tamoxifen simply got it wrong when they said that subsequent generic entrants could potentially obtain a 180 exclusive period even after the first would-be generic entrant had settled.

European Union regulators on Wednesday dropped an antitrust investigation into Rambus Inc. after the company agreed to cap royalty fees for memory chip patents. In an agreement reached between EU regulators and Rambus, Rambus will not charge any royalties for SDR and DDR chip standards and to bring fees for newer versions of DDR down from 3.5 percent to 1.5…