Antitrust Law Daily Wrap Up, ANTITRUST NEWS: FTC, Antitrust Division seek comments on updated IP Licensing Guidelines, (Aug 12, 2016)

By Greg Hammond, J.D.

The FTC and Department of Justice Antitrust Division are asking for the public’s feedback on proposed updates to the Antitrust Guidelines for the Licensing of Intellectual Property or "IP Licensing Guidelines." The guidelines set forth the two agencies’ antitrust enforcement policy concerning the licensing of IP protected by copyright, patent, and trade secret law.

Both agencies continue to believe that the IP Licensing Guidelines "remain soundly grounded" with regard to three basic principles: (1) the agencies apply the same antitrust analysis to conduct involving IP as to conduct involving other forms of property, taking into account the specific characteristics of a particular property right; (2) the agencies do not presume that IP creates market power; and (3) the agencies recognize that IP licensing allows firms to combine complementary factors of production and is generally procompetitive.

Some changes, however, are needed because the IP Licensing Guidelines "should accurately reflect intervening changes in statutory and case law," the agencies announced. In particular, the updated guidelines should account for the recently enacted Defend Trade Secrets Act; the longer copyright terms that went into effect after the guidelines were issued; and case law developments like the Supreme Court’s decision in Illinois Tool Works, Inc. v. Independent Ink, Inc., in which the High Court agreed that a patent does not necessarily confer market power on the patentee.

"The IP Licensing Guidelines have been invaluable to the department’s investigative and enforcement efforts since they were issued in 1995," stated Acting Assistant Attorney General Renata Hesse, in charge of the Antitrust Division. "They have also guided business planning, and they have been cited by courts, in numerous government briefs, business review letters and policy documents. Although the guidelines are sound, it is time to modernize them to reflect changes in the law since they were issued."

"Licensing is a cornerstone of a strong system of IP rights because it offers one way that firms can maximize the value of their IP and realize an appropriate return on their investment," commented FTC Chairwoman Edith Ramirez. "These updated guidelines reaffirm our view that U.S. antitrust law leaves licensing decisions to IP owners, licensees, private negotiations and market forces unless there is evidence that the arrangement likely harms competition."

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