Challenges of the new economy: Issues at the intersection of antitrust and intellectual property

Antitrust Law Journal

Volumn 68, Issue 3, 2001, Pages 913-923

  Pitofsky, Robert ^a  

^a NONE

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EID: 0035581440     PISSN: 00036056     EISSN: None     Source Type: Journal    
DOI: None     Document Type: Conference Paper

References (39)

1. The Remedy for Microsoft, N.Y. TIMES, Apr. 28, 2000, at A22.
2. In emphasizing avoidance of cartels and containment of illegal monopoly power -concepts derived from economic literature - I do not mean to suggest that the reasons for hostility to cartels and illegal monopolies are exclusively economic, or that the antitrust laws be interpreted solely with economic goals in mind. On the contrary, concentrated market power can impair individual and business freedom and, depending on the sector of the economy in which it occurs, can on occasion threaten democratic values that require dispersion of economic power. See Robert Pitofsky, The Political Content of Antitrust, 127 U. PA. L. REV. 1051 (1979).
3. U.S. Department of Justice and Federal Trade Commission Horizontal Merger Guidelines § 0.1 (1992, revised 1997), reprinted in 4 Trade Reg. Rep. (CCH) ¶ 13,104.
4. Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985); Spectrum Sports, Inc. v. McQuillan, 506 U.S. 447 (1993).
5. Northwest Wholesale Stationers, Inc. v. Pacific Stationery & Printing Co., 472 U.S. 284 (1985).
6. Continental T.V., Inc. v. GTE Sylvania Inc., 433 U.S. 36, 51 n.18 (1977).
7. See United States v. Aluminum Co. of Am., 148 F.2d 416 (2d Cir. 1945) acknowledging a superior skill foresight and industry defense to a charge of monopolization.
8. See Broadcast Music, Inc. v. CBS, Inc., 441 U.S. 1 (1979) (including analysis of efficiencies in deciding between per se or rule of reason treatment of cartel behavior).
9. Revision to the U.S. Department of Justice and FTC Joint Horizontal Merger Guidelines (1997), supra note 3.
10. Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 12 (1984); Northern Pac. Ry. v. United States, 356 U.S. 1, 6 (1958).
11. FTC v. Indiana Fed'n of Dentists, 476 U.S. 447 (1986); Klor's Inc. v. Broadway-Hale Stores, 359 U.S. 207 (1959).
12. Frank H. Easterbrook, The Limits of Antitrust, 63 TEX. L. REV. 1, 15 (1984) ("[T]he economic system corrects monopoly more readily than it corrects judicial errors. There is no automatic way to expunge mistaken decisions of the Supreme Court. A practice once condemned is likely to stay condemned, no matter its benefits.")
13. Automobile Mfrs. Ass'n v. United States, 307 F. Supp. 617 (C.D. Cal. 1969), aff'd sub. nom. City of New York v. United States, 397 U.S. 248 (1970).
14. See Standard Oil Co. (Indiana) v. United States, 283 U.S. 163 (1931).
15. See Baker-Cammack Hosiery Mills v. Davis Co., 181 F.2d 550, 569-71 (4th Cir. 1950).
16. Berkey Photo, Inc. v. Eastman Kodak Co., 603 F. 2d 263, 281 (2d Cir. 1979) ("If a firm that has engaged in the risks and expenses of research and development were required in all circumstances to share with its rivals the benefits of those endeavors, this incentive [to innovate] would very likely be vitiated. Withholding from others advance knowledge of one's new products, therefore, ordinarily constitutes valid competitive conduct.").
17. Federal Trade Commission and U.S. Department of Justice Antitrust Guidelines for Collaborations Among Competitors § 3.31 (a) (2000), available at http://www.ftc.gov/os/2000/04/ftcdojguidelines.pdf.
18. For a description of the "Nine No-No's," see Willard K. Tom & Joshua A. Newberg, Antitrust and Intellectual Property: From Separate Spheres to Unified Field, 66 ANTITRUST L.J. 167, 178-84 (1998).
19. United States v. Aluminum Co. of Am., 148 F.2d 416, 427 (2d Cir. 1945) ("Many people believe that possession of unchallenged economic power deadens initiative and depresses energy; that immunity from competition is a narcotic, and rivalry is a stimulant, to industrial progress; that the spurs of constant stress is necessary to counteract an inevitable disposition to let well enough alone.").
20. 203 F.3d 1322 (Fed. Cir. 2000).
21. Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451 (1992).
22. On remand, the ISOs dropped their tying claims against Kodak, contending that Kodak's unilateral refusal to sell replacement parts violated Section 2 of the Sherman Act. See Image Technical Servs., Inc. v. Eastman Kodak Co., 125 F.3d 1195, 1201 (9th Cir. 1997).
23. 203 F.3d at 1327-28.
24. For cases discussing the balance, see SCM Corp. v. Xerox Corp., 645 F.2d 1195 (2d Cir. 1981); United States v. Studiengesellschaft Kohle, m.b.h., 670 F.2d 1122 (D.C. Cir. 1981) See also Tom & Newberg, supra note 18, at 173-75 (describing evolution of balance between antitrust and intellectual property); Louis Kaplow, The Patent Antitrust Intersection: A Reappraisal, 97 HARV. L. REV. 1815 (1984).
25. Professional Real Estate Investors, Inc. v. Columbia Pictures Indus., 508 U.S. 49 (1993).
26. Plaintiffs also challenged Xerox's policy of refusing to sell copyrighted manuals. The Federal Circuit treated the policy as a unilateral refusal to sell intellectual property, and reached much the same conclusions as those relating to patent issues. The copyright portion of the opinion raises policy issues that are similar to the patent issues and, at least in the context of this article, does not require separate discussion.
27. For example, if the plaintiff proved that the defendant had attempted to enforce an invalid patent, as part of a Walker Process or sham litigation claim, then the defendant would have no lawful patent to license and permissible limits of its refusal to do so would be irrevelant.
28. Walker Process Equip. Inc. v. Food Mach. and Chem. Corp., 382 U.S. 172 (1965).
29. See Nobelpharma AB v. Implant Innovations, Inc., 141 F. 3d 1059, 1070-71 (Fed. Cir. 1998); see also James B. Kobak, Intellectual Property, Competition Law and Hidden Choices Between Original and Sequential Innovation, 3 VA. J.L. & TECH. 6 (1998).
30. See Professional Real Estate Investors, 508 U.S. at 60.
31. See, e.g., International Salt Co. v. United States, 332 U. S. 392 (1947).
32. See, e.g., SCM Corp. v. Xerox Corp., 645 F.2d 1195, 1206 (2d Cir. 1981) ("Where a patent has been lawfully acquired, subsequent conduct permissible under the patent laws cannot trigger liability under the antitrust laws.").
33. Lorain Journal Co. v. United States, 342 U.S. 143, 155 (1951) (holding that a local newspaper attempted to monopolize the market for local advertising by refusing to deal with advertisers who dealt with a new local radio station).
34. Cf., e.g., Mannington Mills, Inc. v. Congoleum Indus. Inc., 610 F.2d 1059, 1073 (3d Cir. 1979) (noting that "the patent system has no interest in permitting the patentee's monopoly to be used as a screen for the maintenance of a horizontal cartel at the licensee level"); International Wood Processors v. Powder Dry Inc., 792 F.2d 416 (4th Cir. 1986).
35. See, e.g., United States v. Krasnov, 143 F. Supp. 184, 201-02 (E.D. Pa. 1956), aff'd per curiam, 355 U.S. 5 (1957); United States v. Besser Mfg. Co., 96 F. Supp. 304, 311 (E.D. Mich. 1951), aff'd, 343 U.S. 444 (1952).
36. These issues arose in a recent enforcement action against Dell Computer. See Dell Computer Corp., C-3658 (FTC May 20, 1996) (consent order).
37. 2000 U.S. Dist. LEXIS 5070 (N.D. Cal. Mar. 28, 2000).
38. *26.
39. *23 ("Given that a patent holder is permitted under the antitrust laws to completely exclude others from practicing his or her technology," 3 Corn's proposed licensing terms were not antitrust violations.).