Originally published in IP and Competition Law 360
Applying Basic Antitrust Principles To SEPs
By Yee Wah Chin
IP AND COMPETITION LAW 360 -- The United States antitrust approach to intellectual
property has evolved over time. The IP laws and the antitrust laws are now commonly
viewed as complementary. Both value innovation, competition and consumer welfare,
while IP rights are considered to be a form of personal property rights[1] that confer only
the right to exclude others from the areas covered by the IP.[2] The same antitrust
analysis applies to conduct involving IP as to conduct involving other forms of property,
taking into account the specific characteristics of the particular property right.
There is no presumption that IP creates market power. The Patent Act makes that clear
in the context of patent law.[3] The U.S. Supreme Court’s decision in Illinois Tool Works
Inc. v. Independent Ink Inc.[4] extended that principle to the antitrust context.
However, there have been significant calls recently for findings that infringement suits
and licensing conduct by patent assertion entities labeled “patent trolls” and holders of
standard-essential patents generally are monopolization or attempts to monopolize that
violate Sherman Act §2, 15 U.S.C. §2. This article argues that the basic principles of
keeping in mind history and context, and general antitrust principles, apply equally to
SEPs and PAEs as to other economic phenomena.
History and Context
The context of the state of a country’s economy affects its law, including competition
law. Many of the early, key U.S. Supreme Court decisions interpreting the Sherman Act
and laying the foundations of U.S. antitrust law involved huge cartels that affected
substantial portions of the U.S. economy, such as the Standard Oil trust,[5] the railroad
trust[6] and the meat packing cartel.[7] These are cases that may be unlikely to occur
today in the U.S., substantially precisely because of this early law enforcement and
because of changes in the U.S. economy in the last 120-plus years.[8]
Some of the evolution in the U.S. of the balance between fostering innovation and
ensuring public access to innovation, and of the approach of antitrust law to IP,
occurred perhaps as a result of the shift of the U.S. from being primarily an IP-taker in
the 18th and 19th centuries, to significantly an IP-giver today. Some of this evolution
can also be seen in other jurisdictions, perhaps including China.[9] These may be
situations of where one stands depending on where one sits.
Antitrust Principles
