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77 Bipartisan former antitrust enforcers, academics critique Delrahim on patent holdup

 |  May 17, 2018

On May 17, 2018, an open letter was addressed to Assistant Attorney General Makan Delrahim by 77 former government enforcement officials and academics, who do not believe his recent speeches on patents and patent holdup “are consistent with the broad bipartisan legal and economic consensus that has existed for over a decade regarding standard setting.”

The letter (which can be downloaded in its entirety here) raises eight specific issues:

  1. “The anticompetitive harms from patent holdup have been consistently acknowledged by officials in Republican and Democratic administrations.”

  2. “The holdup problem has been recognized by courts and standard setting organizations themselves.”

  3. “[They] agree that the “holdup and holdout problems are not symmetric”, [but] … believe that it is holdup that presents the more serious antitrust concern.”

  4. “Patentees that obtain or maintain monopoly power as a result of breaching a FRAND commitment present a standard monopolization case.”

  5. “While [they] agree that patents are important for innovation and that injunctive relief often is appropriate, [they] do not agree that patents provide an unqualified “property right to exclude” that is accompanied by an injunction and a conclusion that “unilateral patent holdup” is “per se legal”.”

  6. “The position that patent infringement necessarily results in injunction is, for good reason, no longer law.”

  7. “Pointing to exclusive rights granted to patentees as a type of natural property right ignores the uncontroversial utilitarian framework for the patent grant.”

  8. “[They] do not believe that holding patentees to their promise of licensing on FRAND terms “amount[s] to a troubling de facto compulsory licensing scheme”.”

Signatories of the letter include Michael Carrier (Rutgers), Timothy Muris (Stanford, former FTC Chairman and Acting AAG), Richard Gilbert (Berkeley, former DAAG), Fiona Scott Morton (Yale, former DAAG), Janusz Ordover (NYU, former DAAG), Daniel Rubinfeld (NYU, former DAAG), Jonathan Baker (AUWCL, former Director of the FTC’s Bureau of Economics), and David Balto (former Policy Director of the FTC’s Bureau of Competition).