In May 2010, the Department of Justice (DOJ), the Federal Trade Commission (FTC), and the Department of Commerce’s Patent and Trademark Office (PTO) held a joint public workshop to address ways in which careful calibration and balancing of patent policy and competition policy can best promote incentives to innovate. It was the first time these three agencies jointly sponsored such an event.
David Kappos, Under Secretary of Commerce for Intellectual Property and Director of the PTO, introduced the workshop. He drew a direct connection between U.S. economic success and innovation and said that the workshop was an opportunity to “progress toward defining an interagency innovation strategy for our administration.”
Christine Varney, Assistant Attorney General in charge of the Department of Justice’s Antitrust Division, introduced the competition perspective. Assistant Attorney General Varney recognized “that patent and antitrust drive innovation in different but complementary ways” and she expressed confidence this dialogue between the competition agencies and the PTO would help ensure that the U.S. effectively uses its competition and patent policy tools.
Aneesh Chopra, the U.S. Chief Technology Officer from the Executive Office of the President, commended the workshop as consistent with the “President’s call…to inspire more collaboration within our Executive Branch…addressing issues of critical importance to the U.S. economy and the President’s Strategy for American Innovation.”
The agencies assembled panels of experts from business, academia, and government to examine three issues of significant importance to patent and competition law and policy. The first panel analyzed how challenges posed by the backlog of patent applications at the PTO affect the competitive strategies of patent applicants and innovators. The panelists explained that lengthy delays in processing patent applications create uncertainty in the commercialization of technology. They agreed that the backlog should be reduced in ways that do not adversely affect the quality of U.S. patents. Shortly after the workshop, the PTO began public review of a new, three-track system designed to address the backlog by allowing some applications to be reviewed more quickly than others.
The second panel discussed the differences in the frequency with which injunctive relief is granted in patent infringement cases brought in U.S. district courts versus cases brought before the U.S. International Trade Commission (ITC). In its 2006 eBay Inc. v. MercExchange L.L.C. decision, the U.S. Supreme Court directed U.S. courts to look to traditional equitable principles when issuing permanent injunctions in patent infringement cases. Since that decision, district courts have denied patent owners injunctive relief in more than 20 percent of cases where infringement has been found. Upon a finding of patent infringement by the ITC, by contrast, injunctive relief is the only remedy available. The panelists explored ways to limit the potential for patent owners to harm competition through inappropriate use of the ITC process.
The third and final panel looked at the competitive impact of collaboratively set standards, focusing in particular on how a patent holder may seek more lucrative licensing terms for its patented technology than would have been possible if that technology had competed with alternatives before the standard was set. Panelists discussed how standard-setting organizations could best reap and retain the benefits of ex ante competition between technologies while maximizing the incentives of patent holders to participate in standard-setting activities.
At the close of the workshop, the three agencies’ chief economists—Drs. Carl Shapiro (DOJ), Joseph Farrell (FTC), and Stuart Graham (PTO)—highlighted a number of ways in which competition and patent policies can work together to benefit consumers.
A transcript of the workshop is available on the PTO Web site.