Antitrust & Competition Policy Blog

FTC Announces First in Series of Hearings on Evolving Intellectual Property Marketplace

Posted by D. Daniel Sokol

An important hearing is the FTC's recently announced hearing on the Evolving Intellectual Property Marketplace.  According to the Notice in the Federal Register:

The December 5 hearing will include three th panels addressing a range of topics related to the valuation of patents and the operation of the market for intellectual property. A primary goal of this first hearing is to identify those issues that require more in-depth study in subsequent hearings. In the first panel, participants will discuss the operation and impact of emerging business models, aspects of the patent system that support those models, and industry responses. The second panel will explore remedies law and the need for economic analysis in this area. In the third panel, participants will examine legal doctrines that affect the value and licensing of patents, such as the recent Supreme Court cases on obviousness, declaratory judgment and exhaustion, and doctrines that make the scope and enforcement of patents unpredictable. The panel will consider whether the notice function of patents operates to support an efficient marketplace. The Commission invites public comments discussing the current marketplace for intellectual property, in particular its impact on innovation incentives and competition concerns and the role of economic analysis in this assessment. The Commission will accept comments, as described above, until February 5, 2009. Comments addressing any of the following questions would be particularly helpful.

1. How has the IP marketplace changed in the past five to ten years? What changes are expected in the future? What aspects of the patent system drive those changes? What is the impact of those changes on innovation?

2. What are the new business models involving intellectual property? What has motivated the development of these business models? What is their impact on innovation?

3. What economic evidence is relevant when analyzing whether to grant a permanent injunction following a finding of infringement? What proof have courts required? How should the analysis take into account the incentives to innovate provided by the patent system and the benefits of competition? What is the appropriate remedy when the court has denied a permanent injunction after a finding of infringement?

4. Do the legal rules governing patent damages result in awards that appropriately compensate patentees? Are there circumstances in which they result in overcompensation or undercompensation of patentees? What evidence is there of the extent of these problems? What information would be helpful to better assess whether damage awards appropriately compensate patentees? Are courts and juries able to make damages determinations with sufficient accuracy? To the extent that there are problems resulting from the determination of damages for patent infringement, how should they be addressed?

5. How have changes in willfulness doctrine changed the behavior of patentees and potential infringers? Do recent changes in the law adequately address the concerns with willfulness doctrine identified in the October 2003 FTC IP Report?

6. How will changes in patent law rendered by Supreme Court and Federal Circuit decisions of the past five years affect the value of patents? How will these changes affect the operation of the IP marketplace? How will they affect innovation and competition?

7. How does uncertainty regarding the validity and scope of patents affect the operation of the IP marketplace? Does the current system adequately fulfill the notice function of patents? How does uncertainty influence the operation of the IP marketplace? What are the sources of uncertainty that affect the value of patents and the operation of the IP marketplace? What could be done to address them?

8. How transparent is the current IP marketplace? Can it be made more transparent? Is that desirable?

9. During the past five years, what new learning has furthered the understanding of the patent system and the IP marketplace?

DATES: The first hearing will be held December 5, 2008, in the Conference Center of the FTC office building at 601 New Jersey Avenue, N.W., Washington, D.C. All interested parties are welcome to attend. An agenda for that hearing will be posted on the FTC’s website, www.ftc.gov. The Commission may hold subsequent hearings in Washington, D.C. and other locations. Prior to each hearing, the Commission will publish an agenda on its website.

ADDRESSES: Any interested person may submit written comments responsive to any of the topics identified in this Federal Register notice or in any subsequent announcement related to hearings on the Evolving IP Marketplace. Respondents are encouraged to provide comments as soon as possible, but no later than February 5, 2009. The FTC will only accept comments submitted by weblink or in hard copy format. Information about how to submit comments will be posted on the website for the hearings, accessible at http://www.ftc.gov/ftc/workshops.shtm

Economics, Law and Institutions: The Shaping of Chinese Competition Law

Posted by D. Daniel Sokol

David Gerber of Chicago Kent Law has posted a wonderful new piece, Economics, Law and Institutions: The Shaping of Chinese Competition Law.

ABSTRACT: China has been considering enactment of an anti-monopoly (antitrust) law since 1993, and it has now enacted such a law. Given the potential importance of this legislation, there is much uncertainty about what the enactment means and what roles it is likely to play in influencing the development of the Chinese economy. This article applies a neo-institutionalist analysis in examining some of the factors that have influenced the shaping of the legislation and that are likely to influence the operation of competition law and its organizations. The main argument is that the central dynamic in both the creation of the statute and its structuring has been the interaction of Chinese economic policy institutions with foreign pressures (institutional mechanisms intended to "push" the Chinese decision makers in certain directions) and foreign cognitive influence (cognitive factors that accord influence to foreign organizations, experience, and laws). These interactions also provide insights into how the law is likely to be applied. The paper also explores these two concepts - foreign pressure and foreign cognitive influence - in relation to the theory of institutional change.

Cartel Overcharges and Optimal Cartel Fines

Posted by D. Daniel Sokol

Robert H. Lande of the University of Baltimore Law School and John Connor of Purdue University Applied and Agricultural Economics have a wonderful new work on Cartel Overcharges and Optimal Cartel Fines.

ABSTRACT: This chapter examines how high cartels raise prices on average and what this should mean for the current criminal fine levels in the U.S. Sentencing Guidelines. We utilize two distinct data sets (economic and other studies, and verdicts in final cartel cases) and find that cartels have caused average overcharges in the range of 31 to 49 percent and median overcharges in the range of 22 to 25 percent of affected commerce. We conclude that the current Sentencing Commission presumption that cartels overcharge on average by 10 percent is much too low, and the current levels of cartel penalties should be increased significantly.

Future of Private Antitrust Enforcement Invitational Symposium

Posted b y D. Daniel Sokol

The American Antitrust Institute presents

Future of Private Antitrust Enforcement Invitational Symposium
December 11, 2008 - December 11, 2008

On Thursday, December 11, 2008, the American Antitrust Institute will host its second annual Invitational Symposium on the Future of Private Antitrust Enforcement.  The event will take place in the Holeman Lounge of the National Press Club in Washington D.C. Several prominent antitrust lawyers and academics will discuss and debate a variety of topical issues and judicial developments pertaining to private enforcement. A complete agenda follows, or download the agenda here.

 

There is no cost for the program, but it is an invitational event with limited seating. If you have received an email invitation and wish to register, please complete the registration form at www.antitrustinstitute.org before Monday, November 24, 2008. If you would like to request an invitation, please email aai@antitrustinstitute.org.

 

Information about the speakers for this event is available here.

AGENDA:

9:00 a.m. – Welcome

Bert Foer, President, American Antitrust Institute

9:30 a.m. - New Information on the Deterrent Effects of Private Enforcement

An update on the AAI's 2007 Report on the benefits of private enforcement.

Robert Lande, Venable Professor of Law, University of Baltimore; AAI Director

9:45 a.m. – Restoring the Legitimacy of Private Enforcement: A Discussion of the AAI’s Transition Report

A discussion of the major recommendations of the Private Enforcement chapter from The Next Antitrust Agenda: The American Antitrust Institute’s Transition Report on Competition Policy to the 44th President of the United States. The chapter and recommendations are now available here.

Moderator:

Richard Brunell, AAI Director of Legal Advocacy; Adjunct Professor of Law, Boston College Law School

Panelists:

Jonathan Cuneo, Partner, Cuneo Gilbert & LaDuca

Einer R. Elhauge, Petrie Professor of Law, Harvard Law School

The Hon. J. Thomas Rosch, Commissioner, Federal Trade Commission

10:45-11:00 BREAK

11:00 a.m. – Action on the Class Action Front: A Potpourri

Harvard Law School’s David Rosenberg, author of "Mandatory-Litigation Class Action: The Only Option for Mass Tort Cases,” will provide an overview of recent challenges to class certification. The panel discussion will also consider a variety of topics relating to class actions

Overview:

David Rosenberg, Lee S. Kreindler Professor of Law, Harvard Law School

Panelists:

Joseph Bruckner, Partner, Lockridge Grindal Nauen PLLP

Vince Esades, Partner, Heins Mills & Olson PLC

Daniel A. Small, Partner, Cohen, Milstein, Hausfeld & Toll PLLC

12:15 p.m. – Luncheon Address: The Future of Antitrust Enforcement: Public and Private

An analysis of how the 2008 Presidential election results could affect antitrust policy.

Introduction:

Katherine Kinsella, President, Kinsella/Novak Communications, LLC

Address:

Einer R. Elhauge, Petrie Professor of Law, Harvard Law School

1:45 p.m. - Associated General Contractors: Implications for States and Private Actions

A discussion of challenges relating to standing in indirect purchaser class actions.

Kathleen E. Foote, Senior Assistant Attorney General, Chief, Antitrust Section, California Department of Justice

Daniel E. Gustafson, Partner, Gustafson Gluek PLLC

 

2:30 p.m. – How Private Enforcement in Europe Will Change the Antitrust World

With European nations beginning to introduce private remedies, how will this change the role of U.S. firms and the development of antitrust law?

Michael Hausfeld, Partner, Cohen Milstein Hausfeld & Toll PLLC

3:00 p.m. - Judicial Resolution of Contested Facts in Antitrust Cases

An examination into the possibility of a disturbing new trend in jury-avoidance.

Joshua P. Davis, Professor and Director, Center for Law and Ethics, University of San Francisco School of Law

Eric L. Cramer, Shareholder, Berger & Montague, P.C.

3:30 p.m. - Has Daubert Become an Unfair Method of Competition?

An economist and legal practitioners discuss the implications of Daubert relating to the standards for the admissibility of expert testimony and economic evidence in antitrust cases.

Moderator:

James Langenfeld, Director, LECG

Panelists:

Peter B. Nordberg, Shareholder, Berger & Montague, P.C

Joseph R. Saveri, Partner, Lieff Cabraser Heimann & Bernstein

4:15 p.m. – Closing

Bert Foer, President, American Antitrust Institute

 

WHEN:

Thursday, December 11, 2008. 9:00 am – 4:30 pm. Continental breakfast and lunch (Sponsored by Rust Consulting) will be served.

WHERE:

National Press Club, Holeman Lounge

529 14th St. NW, 13th Floor - Washington, DC 20045

RSVP:

There is no cost for the program, but seating is limited and we are requiring registration in advance. Please complete the registration form before Monday, November 24, 2008.

 

This is an invitational symposium. To request additional invitations, or to transfer your invitation, please contact AAI at aai@antitrustinstitute.org.

 

Dynamic Competition' Does Not Excuse Monopolization

Posted by D. Daniel Sokol

Jon Baker of American University's Washington College of Law has a great short new piece, Dynamic Competition' Does Not Excuse Monopolization, that argues against the position taken by Evans and Hylton in their work The Lawful Acquisition and Exercise of Monopoly Power and its Implications for the Objectives of Antitrust.

ABSTRACT: This comment on a forthcoming article by Keith Hylton and David Evans explains why considerations of "dynamic competition" do not argue against antitrust enforcement. While the prospect of achieving monopoly may foster innovation, that observation misleads as to appropriate antitrust policy unless qualified by the observation that the push of competition generally spurs innovation more than the pull of monopoly. Moreover, the longstanding doctrinal rule that mere monopoly pricing is not illegal should not be read as demonstrating that antitrust law values monopolies for their role in promoting innovation.

Google/Yahoo Agreement is Over

Posted by D. Daniel Sokol

The official Goggle Blog has announced that the advertising agreement will not be pursued any further.

Competition Day Program in Chile

Posted by D. Daniel Sokol

Competition Day is an annual tradition in many countries.  The program for Chile's Competition Day is available here and will be held on November 13, 2008.

A Price-Fixer's Memoir — Exculpation and Revenge While Confronting the Antitrust Abyss: An Essay on Threshold Resistance by Alfred Taubman

Posted by D. Daniel Sokol

Arthur Austin (Case Western Law) has a wonderful new piece in the latest issue of the Antitrust Source on A Price-Fixer's Memoir — Exculpation and Revenge While Confronting the Antitrust Abyss: An Essay on Threshold Resistance by Alfred Taubman.

ABSTRACT: United States v. Taubman was a class-driven trial with a Henry James-Norman Mailer template: high art descends to the shopping mall. A Wall Street Journal article on the case was even entitled, To Sotheby’s Boss, Selling Art Is Much Like Selling Root Beer, a reference to the source of Sotheby’s chairman Alfred Taubman’s considerable wealth, shopping malls. Instead of testimony from accountants and economists duking it out over bookkeeping ploys and arcane marketing strategy, the public got haughty exchanges from specialists in wheeling and dealing Monets, Renoirs, and Warhols, while discussing price strategy. In 2005 I published an essay discussing Sotheby’s implications for the price-fixing narrative. Using Adam Smith’s commentary as the anchor, I focused on conspiracy—the most troublesome issue in the pricing conundrum. Two years later Taubman has published a candid account of his experiences, Threshold Resistance— a raw glimpse into his reactions to a conviction as one of the alleged instigators of the most pernicious form of commercial deviancy. This Essay seeks to fathom the psychology and tactics of the hunted as he responds to the accusations of a trusted colleague while coping with what Justice Holmes called a “foolish law.

Antitrust Under an Obama Administration

Posted by D. Daniel Sokol

This was an electoral landslide.  What the election means for antitrust remains to be seen depending on who runs DOJ and FTC.  The Daily Deal suggests that the next head of DOJ Antitrust will be Bill Kolasky of Wilmer and the next FTC Chairman will be current FTC Commissioner Jon Leibowitz.

Some initial thoughts on what will be different:

1. increased challenges of mergers and monopolization cases, especially at DOJ

2. more consumer protection work at the FTC with a push to more expansive consumer rights

3. less language by US enforcers internationally about "convergence" and more on "harmonization"

4. a move away from cartels as the supreme evil of antitrust to more holistic approach that elevates unilateral conduct (if I am right, Josh Wright must be beside himself in terms of what this means under an error/cost framework)

The Democracy of Competition - EC (Competition) Law and the Fine Line between Markets, Public Interests and (Self-)Regulation

Posted by D. Daniel Sokol

Hans Vedder of University of Groningen discusses The Democracy of Competition - EC (Competition) Law and the Fine Line between Markets, Public Interests and (Self-)Regulation in his latest working paper.

ABSTRACT: The EC and it's Member States struggle to draw the line between markets and public interests. Traditionally, these two are contrasted, most prominently by the continental Member States and followed by a conclusion that public interests require public governance. Some of this public governance takes the form of a public law framework within which self-regulation by the members of a profession occurs. We also see a more subtle version of self-regulation, whereby regulators are so dependent on specific information from the professions concerned, that they effectively become captive regulators. In those circumstances, the degree to which the public interest, rather than the interest of the professions concerned, is actually served may be doubted.

This holds true even more where legislators, both at the EC and the Member State level, are moving the line between markets and public interests towards the market side. It is uniformly recognised that public governance is not the blanket solution for market failures and the introduction of market mechanisms may actually increase consumer welfare. The contrast between public interests and markets may therefore also be rephrased into a citizens versus consumers antithesis. EC (competition) law plays a prominent role in this debate in that it requires member state regulators to rethink how and to what extent their actions serve the public interest. This role of EC (competition) law requires a fundamental rethinking of the market (consumer) and public interest (citizen) antithesis. The hypothesis central to this paper is that EC (competition) law can serve as a democratic instrument to increase legitimacy whilst refining the line between markets and public interests.