Willard K. Tom ABA Section of International Law Spring Meeting April 17, 2009 Compulsory Licensing: An Antitrust Lawyer’s Perspective

cv 1995 DOJ/FTC Guidelines  “The intellectual property laws and the antitrust laws share the common purpose of promoting innovation and enhancing consumer welfare.... Rapid imitation would reduce the commercial value of innovation and erode incentives to invest, ultimately to the detriment of consumers.” ( § 1.0)  “ An intellectual property owner's rights to exclude are similar to the rights enjoyed by owners of other forms of private property. ( § 2.1)

cv 1995 DOJ/FTC Guidelines, cont’d  “While intellectual property licensing arrangements are typically welfare-enhancing and procompetitive, antitrust concerns may nonetheless arise.” ( § 3.1)  “[A] ntitrust concerns may arise when a licensing arrangement harms competition among entities that would have been actual or likely potential competitors in a relevant market in the absence of the license.” (Id.)  Examples of conduct that raise such concerns:  Market division, price-fixing  Merger  Foreclosure  Abuse of standard-setting processes

cv Price-fixing POOL Summitpatents VISXpatents license to Summit VISX $250 per procedure procedure

cv Foreclosure MicrosoftNetscape CompaqDellGatewayAOLApple

cv Compulsory Licensing as a Remedy  Lots of merger consent orders  Relief in consummated merger cases  Relief in conduct cases (e.g., Summit-VISX)  Note that no compulsory license would have been necessary if the transaction had been stopped before implementation — issue here was sunk costs  Remedy in monopolization/foreclosure cases poses an interesting challenge, and compulsory licensing often will not be the answer.

cv International Implications  Other countries may not see the issues the same way as the U.S. agencies.  But there is a dialogue, and some convergence, going on.