Patents, Standards and Antitrust: Patent Pools · Patent Pools in the News. DUKE LAW CENTER FOR...

DUKE LAWCENTER FOR JUDICIAL STUDIES

PATENT LAW INSTITUTE

Patents, Standards and Antitrust: Patent Pools

Mark H. WebbinkSenior Lecturing Fellow

Duke University School of Law

History of Patent PoolsDOJ/FTC GuidelinesEU GuidelinesPatent Pools in the News

History of Patent Pools

1856The Sewing Machine Pool

1890Sherman Antitrust Act

1917Manufacturers Aircraft Association

1945Hartford‐Empire

1964International Manufacturing

DOJ Nine No‐No’s (1960’s)• Tying• Assignment back• Resale restrictions• Horizontal restraints• Mandatory package licenses• Royalty provisions not tied to sales• Post‐sales restrictions• Minimum resale pricing

1995DOJ/FTC Guidelines

DOJ/FTC Guidelines

Section 5.5Cross‐Licensing and Patent Pools

Pro‐Competitive Aspects of Pooling:• Integrating complementary technology• Reducing transaction costs• Clearing blocking positions• Avoiding costly litigation• Promoting the dissemination of technology

Anti‐Competitive Potential of Pooling:• Collective price restraints (per se)• Collective output restraints (per se)• Exclusion (rule of reason)• Arrangements discouraging R&D (rule of reason

1997MPEG‐LA Business Review Letter

MPEG‐LA Pool Activities:• Non‐exclusive license open to all• Solicit licensees• Enforce license agreements• Collect and distribute royalties

MPEG‐LA Pool – Positive Aspects:• Option to license directly from holder• Open membership• Non‐discriminatory licensing• Limited to essential patents• Essentiality determined independently• Reasonable grantback provision

1999Patent Pools and the Antitrust Dilemma

Steve Carlson

1998Summit Technology/VISX Pool

Summit/VISX Issues:• No independent licensing• No licenses to others• Price floor

2007DOJ/FTC Guidelines Revised

Suggested closer scrutiny of pools

Primary Concerns with Patent Pools:• Horizontal restraints• Collusion• Discourage R&D and new product development

Patent Pools – Pro‐competitive Attributes:• Only complementary patents• Limited to essential technology• Removal of invalid or unenforceable patents

• Non‐exclusive license with right to license independently

• Other non‐discriminatory attributes

EU Guidelines

Block Exemption excludes patent pools

EU Revisions:• Pools still excluded from block exemption• Essential means both in producing a product and complying with a standard

• Pool safe harbor

EU Patent Pool Safe Harbor:• Open participation in standard and pool creation process

• Only essential patent pooled• No exchange of sensitive information• Licenses to pool are non‐exclusive• FRAND terms to third‐parties• No prohibition to validity or essentiality challenges

• Allows R&D for improvements

EU vs. U.S. Guidelines:• EU – all judged under rule of reason• EU more restrictive on grantbacks• EU adopting U.S. approach to licensee estoppel

Patent Pools in the News

Defensive Patent PoolsRPX

Allied Security TrustOpen Invention Network

Pools Related to Major Portfolio Sales

Google acquisition of Motorola Mobility

Microsoft/Apple acquisition of Nortel patents

Apple/Oracle acquisition of Novell patents

Medicines Patent Pool

Biotech Patent Pools – Potential Concerns• Few industry standards• Patents tend to be both complementary and substitutional

• Need for licensing terms in advance of development/regulatory approval

Expect more patent pools, especially in biotech

‐‐‐‐‐‐‐‐Greater recognition of pro‐competitive aspects

‐‐‐‐‐‐‐‐Continued monitoring for anti‐competitive effects

Patents, Standards and Antitrust: Patent Pools · Patent Pools in the News. DUKE LAW CENTER FOR...

Documents

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