Antitrust and Consumer Protection

Competition: 2016, Vol 25, No. 2

DISPATCHES FROM THE WEST COAST: FEDERALISM, COMPETITION, AND COMMENTS ON THE UNITED STATES’ PROPOSED UPDATE TO THE ANTITRUST GUIDELINES FOR LICENSING INTELLECTUAL PROPERTY1

By Emilio Varanini2 and Cheryl Johnson3

I. INTRODUCTION

The United States Department of Justice and the Federal Trade Commission (the "Agencies") issued in August of this year the Proposed Update to the Antitrust Guidelines for Licensing Intellectual Property (the "Proposed Update") and sought comments from the public.4 Though the official comment period closed on September 26, 2016, it is anticipated that the finalization of the Proposed Update will take some time.

States like California are on the front lines in finding the appropriate mix between intellectual property ("IP") and antitrust so as to continue the unprecedented growth of industries in their states, such as the high-technology industry, the biotech industry, and the creation of new content and services.5 It is therefore important for states that the balance be struck true in rewarding innovation through the grant of IP rights without allowing the anticompetitive leveraging of those rights to create entrenched monopolies and cartels that hinder competition.6 States like California have brought important cases in the areas of pharmaceuticals and high-technology involving the intersection of IP and antitrust.7 And as guardians of federalism and the resulting split of sovereignty in the U.S. Constitution,8 states like California have a strong interest in reconciling and harmonizing the workings of IP laws with other laws and doctrines, including state and federal antitrust law.9 As antitrust enforcers for the State of California with a substantial background in IP, we set out our own personal views on this Proposed Update against this backdrop.

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