[Ecommerce] Justice Department, FTC Seek Balance Between IP, Antitrust

[James Love]

*       The report concluded that a unilateral refusal to license
digital  content is not intrinsically an antitrust violation, that the
terms of intellectual property licensing can threaten competition, and
that international bodies need to accelerate their coordination of
intellectual property issues.

*       "At its most basic level, an intellectual property right is a
specialized restraint of trade," added *John Delacourt*, chief antitrust
counsel for the FTC's office of policy planning. "It will confer a
significant competitive advantage" on the patent holder.


*Antitrust*
*Justice Department, FTC Seek Balance Between IP, Antitrust*
by Drew Clark <mailto:dclark@nationaljournal.com>

      Antitrust officials at the Justice Department
<http://www.usdoj.gov/> and the FTC <http://www.ftc.gov/> said on Friday
that their agencies are continuing efforts to advise technology
companies about the appropriate balance between intellectual property
and competition law.
      Citing an October report of Justice's intellectual property task
force, Deputy Assistant Attorney General *Thomas Barnett* said that
despite the report's focus on copyright piracy, it included several
antitrust recommendations currently being implemented by the department.
      The report concluded that a unilateral refusal to license digital
content is not intrinsically an antitrust violation, that the terms of
intellectual property licensing can threaten competition, and that
international bodies need to accelerate their coordination of
intellectual property issues.
      "There can be threats to competition [through licensing], but we
want to guide" the process through recommendations from Justice, Barnett
said during a panel discussion on the subject at the Federal Society. He
said no major changes to the 1995 industry guidelines are under way.
      Those 1995 guidelines are widely seen among members of the
intellectual property bar as having reversed the location of the
pendulum that periodically swings between valuing antitrust law or
trumped copyrights and patents more. But Justice and the FTC continue to
investigate other ways that intellectual property rights may stifle
competition, and the U.S. approach on licensing guidelines is become
globally recognized, Barnett said.
      In April 2004, for example, the European Union adopted a rule along
the lines of U.S. guidelines on transferring government-backed
technology research to the private sector. "The former EU proposal was
rule-based," Barnett said. "Now it is effects-based and more focused on
economic principles."
      "At its most basic level, an intellectual property right is a
specialized restraint of trade," added *John Delacourt*, chief antitrust
counsel for the FTC's office of policy planning. "It will confer a
significant competitive advantage" on the patent holder.
      Delacourt elaborated on cases where intellectual property holders
exert what he said were undue advantages over rivals through industry
standards and referred to the agency's November 2003 report on antitrust
and patent law. He said Justice would collaborate with FTC on the next
section of the report, which also will deal with copyrights.
      But Jones, Day attorney *Joe Sims* said the FTC was misguided in
its approach to intellectual property. Referring to former agency
Chairman *Timothy Muris*, Sims said, "One of Tim Muris' main policy
objectives was trying to draw attention to this issue and to try to move
that pendulum back, from his perspective, to the middle."
      The thrust of the October report by Justice recommended creating
five additional prosecutorial units that specialize in intellectual
property and computer-hacking crimes. It also called for improving
coordination of anti-counterfeiting and intellectual property
enforcement, and changing some legal standards for wiretapping in
criminal investigations.