Joff Wild

Ralph Eckardt, managing director of 3LP Partners and co-author (with colleague Mark Blaxill of the excellent The Invisible Edge: Taking Your Strategy to the Next Level Using Intellectual Property) , was another who attended the FTC/DoJ workshop on patent assertions entities (PAEs) last Monday. Those of a nervous disposition may want to look away now. He writes:

I found the FTC/DOJ Workshop on “Patent Assertion Entity Activities” absolutely terrifying.  If you were attending to get some guidance about what kind of activities might be considered ‘suspect’ from a competition authority perspective, you would have left the conference more concerned and confused than at the start of the day.  From chairman Jon Leibowitz’s opening remarks to the final panel of antitrust academics, there were numerous statements about the “obvious concerns” raised by Patent Assertion Entities, but absolutely no consensus about what actions might be considered ‘safe’, and which might raise FTC/DOJ ‘concerns’.  There were panelists who expressed antitrust concerns about the most basic patent sales transactions and others who found little or no need for competition authority intervention whatsoever.

The risk of harm from competition authority intervention in the patent system is extremely concerning.  It is unclear to me why any of the issues discussed at the workshop should be addressed by the FTC or DOJ, and can’t be adequately addressed by the PTO, the courts, Congress and the marketplace.

There is a history here that we would do well to remember.

During the late 1950s through the early 1970s, the US competition authorities intervened in the patent system by issuing more than 100 consent decrees effectively stripping the country’s largest technology companies of their patent rights and forcing them to license to all comers either for free or at well below market prices.  These were not fringe companies or technologies.  They included IBM’s patents on semiconductors and computers, AT&T’s patents on telecommunications and computers, Dupont’s patents on nylon, and Xerox’s patents on xerography, to name just a few.  In all, they ‘donated to the public’ more than 50,000 patents from US corporations.  They did immeasurable harm to these companies by stripping them of a major source of competitive advantage and opening up the US market to foreign (mostly Japanese) competitors.

 Let’s hope that this time around the competition authorities will take it slow and make sure they fully understand the issues before they decide to intervene.