DO FIRST AMENDMENT PRINCIPLES LIMIT THE ANTITRUST AGENCIES’ ABILITY TO PROHIBIT ENFORCEMENT OF STANDARDS-ESSENTIAL PATENTS?

By David L. Meyer¹ and Fabien Thayamballi²

Recent antitrust enforcement actions have called attention to the potential that application of the antitrust laws, like all governmental action, is limited by the constraints of the First Amendment. This is not a new development. The half-century old Noerr-Pennington doctrine reflects, at least in part, limitations placed on the reach of the antitrust laws by the First Amendment right of petition. Recent developments at the interface between antitrust and patent enforcement have brought renewed attention to the potential for antitrust enforcement to run afoul of constitutional limits.

The issue is starkly illustrated by dueling comments issued by commissioners of the Federal Trade Commission ("FTC") addressing recent agency settlements that limited the defendants’ ability to enforce their standards-essential patents in the courts by seeking injunctive relief. The commissioners disagreed on the proper application of Noerr-Pennington immunity, which shields genuine attempts to influence governmental action from antitrust liability irrespective of their effects on competition. In each case, the FTC opined that the owner of patents essential to the practice of industry standards could be subjected to liability for seeking injunctions against parties that were prepared to enter patent licenses, contrary to the owners’ prior commitments to license those patents on Fair, Reasonable, and Non-Discriminatory ("FRAND") terms. Commissioner Maureen Ohlhausen dissented in both cases, arguing that "the Noerr-Pennington doctrine precludes Section 5 liability for conduct grounded in the legitimate pursuit of an injunction or any threats incidental to it."³ The FTC majority’s response to that objection was that enforcing Section 5 does not offend the First Amendment when it merely "requires those making promises to keep them."⁴

Antitrust law is often invoked to regulate activities that could be regarded as within a class protected by the First Amendment. At least in some sense price fixing and other agreements in restraint of trade entail both "association" and "speech." However, since early in the last century, antitrust jurisprudence has paid little attention to First Amendment limitations, with the exception of Noerr-Pennington immunity and the occasional limits on the remedial powers of courts to regulate ongoing behavior by entities, like newspapers, for which expression is their stock in trade. If expressive conduct causes competitive harm that brings it into conflict with the antitrust laws, the conduct generally has not been treated as protected by the First Amendment. No court has suggested that the Constitution gives cartelists the privilege to utter "I agree" without consequence.