Dear Readers,
This Chronicle addresses the issues raised during the 2022 edition of the annual LeadershIP conference, held this April in Washington, D.C. As ever, LeadershIP invites scholars, policymakers, industry experts and other key stakeholders to discuss cutting-edge policy issues at the intersection of innovation, intellectual property, and competition.
The selection of articles in this Chronicle addresses these issues, drawing on the authors’ unique expertise and insights.
Jonathan M. Barnett opens by providing a unique insight that runs counter to traditional assumptions as regards the relationship between patents and antitrust law. The standard assumption, is that incumbents generally favor patents and, in particular, policy actions that strengthen and extend patent protection. As the author discusses, in the real world, markets often fail to conform to this expectation. Historical and contemporary evidence shows that larger firms in a variety of industries tend to favor policy positions that seek to weaken patents or, in some cases, reject them entirely.
Erik Hovenkamp turns to the hot topic of antitrust reform in so-called “big tech” markets. Recent calls for reform are fueled mainly by concerns surrounding major “platforms” like Google, Facebook, and Amazon. Critics believe, in short, that these platforms have become too large and powerful. In the U.S., some of the most aggressive proposed reforms have recently been codified in two bills, which focus largely on “self-preferencing” by online platforms and various restrictions imposed by mobile operating systems. The article evaluates these proposed reforms, based on learnings from the last fifty years. In some situations, the reforms could help to curb genuinely anticompetitive unilateral conduct. The article concludes, however, that the proposals are ill-conceived. They are insufficiently limited in the conduct they target. It concludes that the self-preferencing proposals offer no sure-fire way to avoid scrutiny other than for platforms to stop introducing new products. This could have significant adverse effects on competition.
On a similar note, the article by Kristen Osenga notes how recent reforms could undermine U.S. standard-setting policy, and indeed national security. Although the U.S. has long been a leader in innovation and standards development, recent developments might discourage American companies from engaging in these activities. These developments include difficulties in obtaining patent protection, government overrides of patent rights, and effectively prohibiting injunctive relief for patents covering inventions incorporated in technology standards. In the author’s view, because national security is intimately tied to innovation and competition, these developments could harm not just innovation, but also America’s ability to defend itself.
Using a metaphor derived from optics, David J. Teece argues that U.S. antitrust law and policy (particularly as they relate to IP) needs to use a wider-aperture lens to consider the effect of growing pressure from China. China’s policies have transformed the global economy such that the global economy is increasingly bifurcated between a China-centered authoritarian system and a market-oriented democratic systems. This generates previously unknown complications and perils. Scholars and policymakers need to adopt a wider-aperture, systems-theoretic view that will lead to cross-fertilization of ideas and collaboration with others. Only by doing so can competition policy remain relevant.
Jorge L. Contreras turns to the ever-present difficulty derived from competing FRAND jurisprudence in cross-border matters. The willingness of national courts to set global FRAND royalty rates has led to jurisdictional conflicts, competing anti-suit injunctions and a global “race to the courthouse.” The author supports the adoption of legislation that rejects global FRAND rates set unilaterally by courts in other countries. Instead, the article supports the adjudication of FRAND royalty rates for national patents through multi-party proceedings. Hopefully, such a system would lead to a consolidated, international mechanism for the determination of global FRAND rates.
Finally, Dina Kallay addresses the February 2022 judgment of the Court of Appeals for the Fifth Circuit in Continental v. Avanci. Vacating a previous judgment, the Court decided that Continental had standing to bring an antitrust claim against an SEP licensing program characterized by a field of use licensing feature. Importantly, the judgment touched on the scope of compulsory license-to-all (“CLTA”) arguments. This paper reviews the history of such (repeatedly-rejected) CLTA arguments and the ramifications of the Continental judgment for their future deployment.
In sum, the articles above provide a fascinating insight into the state of the art of antitrust law as it applies to IP-related issues in today’s breakneck environment.
As always, many thanks to our great panel of authors.
Sincerely,
CPI Team[1]
Click here for the full Antitrust Chronicle®.
[1] CPI thanks Qualcomm Inc. for their sponsorship of this issue of the Antitrust Chronicle®. Sponsoring an issue of the Chronicle entails the suggestion of a specific topic or theme for discussion in a given publication. CPI determines whether the suggestion merits a dedicated conversation, as is the case with the current issue of the Chronicle, and takes steps to ensure that the viewpoints relevant to a balanced debate are invited to participate.
