Collaborations Relating to Intellectual Property

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CHAPTER VIII

COLLABORATIONS RELATING TO

INTELLECTUAL PROPERTY

Collaboration among intellectual property rights holders is a

common and often beneficial way to make full use of intellectual

property. For example, joint ventures can be used to integrate parties’

complementary technologies, reducing costs and encouraging innovation

and the introduction of new products. As products and services relying

on intellectual property continue to become even more central to the

economy, understanding how the antitrust laws apply to collaborations

relating to intellectual property will become increasingly important. At

the same time, under certain circumstances, competitor collaborations

may have the effect of reducing competition among alternative products

or technologies or may be used as a means to exclude the intellectual

property of others that could have provided equal or more benefits to

consumers. This chapter considers the intersection between

collaborations involving intellectual property rights and the antitrust

laws, including an overview of the applicable agency guidelines and

potential theories of competitive effects.

A. Types of Intellectual Property Collaborations

1. Patent Pools

Patent pools are a common form of collaboration in which owners of

distinct patents jointly license to third parties the right to use their

respective patents.1 Patent pools can have several procompetitive

benefits. They can reduce or eliminate the need for litigation because

disputes over patent rights can be avoided. Patent pools also reduce

transaction costs as licensees only need to enter into a single licensing

agreement for technologies that are jointly owned by many firms. By

creating patent pools and assembling complementary patents, the

1. See, e.g., Standard Oil Co. v. United States, 283 U.S. 163, 169, 51 S. Ct.

421, 423 (1931); Princo Corp. v. ITC, 616 F.3d 1318 (Fed. Cir. 2010);

Carpet Seaming Tape Licensing Corp. v. Best Seam Inc., 694 F.2d 570,

579 (9th Cir. 1982), cert. denied, 464 U.S. 818 (1983).

Joint Ventures

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efficient production of goods and services can be facilitated and the

required inputs may be put in the hands of the most efficient and

qualified producers.2 For example, two or more parties may own certain

patents that are not sufficient individually to manufacture a product. The

parties may hold blocking positions whereby one party’s technology is

necessary to use the other. Combining the necessary patents into a single

license can reduce transaction costs for implementers and reduce

concerns over patent hold-up or royalty stacking. Clearing blocking

patents may lead to the faster development of a given technology, and

patent pools provide a way to allow complementary assets to be

organized under a single contract to be licensed to interested parties.

Pooling of intellectual property rights may, however, raise antitrust

concerns. Patent pools can be used to suppress competition among actual

and potential competitors, thereby harming consumers by facilitating

price fixing, allocating markets, and excluding rivals.3 For instance,

patent pools that consist of substitute technologies may harm competition

if it is likely that competition between two substitute patents will be

eliminated if pooled. The Department of Justice (DOJ) and Federal Trade

Commission (FTC) have warned that exclusion from patent pools may

harm competition 4

2. U.S. Dep’t of Justice & U.S. Patent and trademark office, Policy

Statement for Standards-Essential patents Subject to Voluntary F/RAND

Commitments (2013), available at www.justice.gov/atr/public/

guidelines/290994.pdf.

3. For further discussion of the antitrust implications of patent pools, see

ABA SECTION OF ANTITRUST LAW, INTELLECTUAL PROPERTY AND

ANTITRUST HANDBOOK (2d ed. 2015).

4. U.S. Dep’t of Justic & Fed. Trade Comm’n, Antitrust Guidelin es for the

Licensing of Intellectual Property (January 12, 2017), available at

https://www.justic.gov/atr/IPguidelines/download; U.S. Dep’t of Justice

& Fed. Trade Comm’n, Antitrust Enforcement and Intellectual Property

Rights: Promoting Innovation and Competition (2007), available at

www.justice.gov/atr/public/hearings/ip/222655.pdf. The European Union

approach to patent pools is broadly in line with the United States

approach. However, the European Commission is said to take a stricter

approach, analyzing pools under the principles set out in the Technology

Transfer Guidelines. See European Comm’n, Guidelines on the

Application of Article 101 of the Treaty on the Functioning of the

European Union to Technology Transfer Agreements, 2014 OJ (C89) 3

(March 28, 2014) available at http://ec.europa.eu/competition/antitrust/

legislation/transfer.html).