Antitrust and Consumer Protection

Competition: 2016, Vol 25, No. 2

EXCEPTIONS TO THE RULE: CONSIDERING THE IMPACT OF NON-PRACTICING ENTITIES AND COOPERATIVE REGULATORY PROCESSES IN THE UPDATE TO THE ANTITRUST GUIDELINES FOR THE LICENSING OF INTELLECTUAL PROPERTY

By Robin Feldman1

The Department of Justice (DOJ) and Federal Trade Commission (FTC) released a proposed update to the 1995 Antitrust Guidelines for the Licensing of Intellectual Property on August 12, 2016.2 The following comments were submitted to the DOJ and FTC in response to the proposed update.

My primary comments pertain to the basic principle underlying the Guidelines and Update, that intellectual property licensing "is generally procompetitive.”3 While this premise is sound when analyzing traditional intellectual property markets, there is now a large secondary market for patents, populated by non-practicing entities (NPEs), for which the intensity of that statement no longer holds true and which requires a more nuanced approach. In that context, a stark statement of general procompetitiveness, without qualification, can hamper efforts by states and market actors to grapple with modern manifestations of anticompetitive behavior.

As explained in greater depth below, I recommend the following amplifications to the language in Sections 2.0 and 3.2 of the Update to take into account a secondary market in which intellectual property licenses may not serve procompetitive ends. The suggested language is italicized below:

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