Re: Dominant Patents

[John Jacobs <JJACOBS@FTC.GOV>]

One possible antitrust issue that comes to mind is "sham litigation."  The
allegation would be monopolization (or attempt to monopolize) by raising
rivals' costs through pursuing patent prosecution.  However, under the
Noerr-Pennington doctrine, petitioning the courts (e.g.,. patent litigation) is
exempt from antitrust scrutiny unless the antitrust plaintiff can show the
defendant had engaged in a "pursuit of claims so baseless that no
reasonable litigant could realistically expect to secure favorable relief." 
Professional Real Estate Investors v. Columbia Pictures, 113 S.Ct. 1920,
1929 (1993).  If there was probable cause for the underlying patent
litigation, it cannot form the basis for an antitrust suit.  If the patent claims
are clearly baseless, the game is still not over.  The plaintiff must then
show that the antitrust defendant had intended to harm competition
"through the use [of] the governmental process -- as opposed to the
outcome of that process."  Id. at 1928 (internal citation omitted)
(emphasis added).  If the plaintiff gets this far, then the issue of immunity
is resolved and the patent litigation may be the subject of an antitrust suit.
However, the antitrust case must still be made.
--John Jacobs
Disclaimer: views are mine, not necessarily the Federal Trade
Commission's or any Commissioner's.

>>> James Love <love@cptech.org> 04/11/98 08:29am >>>
I would appreciate comments or pointers to articles about problems with
dominant patents.

A biotechnology firm markets a very profitable product protected by a
patent.  An inventor claims to have an invention (involving binding)
that may reduce by at least 50 percent the amount of the product needed
for an effective treatment.  The biotech firm, which may feel locked in
on reimbursement schedules) isn't interested in the invention, which
could dramatically reduce sales.  Third parties might be able to market
the invention, but they would need access to significant quantities of
the product to complete necessary tests for the new product design,
and
for FDA approval.  Third parties also express concern to inventor that
1st company would likely litigate, and 1st company has history of doing
this to protect product rights.  

Are there antitrust issues?

     Jamie

-- 
James Love
Consumer Project on Technology
P.O. Box 19367, Washington, DC 20036
love@cptech.org | http://www.cptech.org
202.387.8030, fax 202.234.5176