Clearing the Air

It's a long-standing legal conflict that in recent years has gotten much worse.

On one side is patent law, which provides limited, government-sanctioned monopolies on inventions. On the other is antitrust law, which seeks to stamp out monopolies and other anticompetitive practices. Stuck in the middle are patent owners. They're uncertain how much they can use their patents to ward off competitors and gain market share without violating antitrust law.

Breaking the Law

For instance, the report adopts a new position on refusals to license. Both the Federal and 9th Circuits have ruled that a company can violate antitrust law simply by refusing to license its patents to competitors. However, these courts have set very different standards for determining when a violation exists, so the legal situation is quite muddled.

The report, of course, cannot rewrite antitrust law. It merely provides the FTC's and DOJ's interpretation of existing law. Still, businesses that comply with these new guidelines can feel confident the main antitrust enforcers, the FTC and DOJ, will not take action against them.

Moreover, the guidelines offer ammunition to patentees that want to overturn more stringent judicial antitrust standards. "The report provides a basis for challenging the older law, saying it is not economically viable," Cohen says.


Steven Seidenberg

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