Antitrust Regulation and the Patent Law Jungle

When it comes to the legal treatment of patents and patent owners, it is easy at times to think that litigation in the Patent Office or the federal courts is the only game in town. But patent ownership directly affects competition, as anyone who has sued or been sued by a competitor for patent infringement can attest. And it is easy to see businesses claiming monopoly power over patented inventions to try to over–extend that claim to assert monopoly power over the market for an entire product that may use some of that patented technology. Smartphone wars, anyone?

So anti–competitive behavior can raise antitrust questions. As reported in the Huffington Post, representatives from the Department of Justice, Federal Trade Commission, and European Commission gathered recently to discuss this very issue, highlighting five areas of increasing interest and concern for those charged with enforcing antitrust laws:

1. Unilateral aggregation of patents by individual competitors in an industry;
2. Collaborative aggregation of patents by multiple competitors;
3. Non–practicing entities (a/k/a patent trolls or patent assertion entities);
4. Transfer of patent rights from non–practicing entities to operating companies and the relationship between such NPEs and operating companies after such a transfer; and
5. Business practices of unwilling licensees in the context of standards–essential patents.

With patent litigation on the rise—especially patent litigation by non–practicing entities—it is essential that the agencies that enforce antitrust laws monitor and act on the anti–competitive ripple effects. As Judge Richard Posner of the Seventh Circuit Court of Appeals said of the aggressive use of patent litigation in the tech industry in a recent interview, “As in any jungle, the animals will use all the means at their disposal, all their teeth and claws that are permitted in the ecosystem.” It is up to agencies like the DOJ and FTC to do their part to maintain the law of that jungle.