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Competition, Innovation and Intellectual Property

April 26, 2012

The following post appears courtesy of the Antitrust Division. Today the Department of Justice’s Antitrust Division is recognizing the 12th annual World Intellectual Property Day. The Antitrust Division recognizes the vital role innovation and intellectual property play in our economy. Innovation drives economic growth, creates jobs, and enhances American competitiveness in a global economy. Innovation benefits American consumers because it leads to new and enhanced products and services. The successful promotion of innovation and creativity requires a both competitive markets and strong intellectual property rights. To reward those that make investments and take risks to innovate, strong intellectual property rights protect their inventions and ideas from unauthorized infringement. Antitrust enforcement, however, remains critical to ensure that intellectual property rights are not abused to limit competition. Competitive pressures force companies to continue innovating and creating additional intellectual property. During a speech earlier this week at the Brookings Institution, Acting Assistant Attorney General Sharis A. Pozen spoke about a recent set of patent acquisitions that highlight the important intersection between intellectual property rights and competition law:

“These issues were central to our investigations of Google’s acquisition of Motorola Mobility; Apple’s, Microsoft’s and Research in Motion’s acquisition of certain Nortel Network patents; and the acquisition by Apple of certain Novell patents. In each of these investigations, the division took a hard look at the potential ability and incentives of the acquiring companies to use the patents they were seeking to illegally foreclose competition. We especially were concerned about certain ‘standard essential patents’ (SEPs) that Motorola and Nortel had pledged to license to industry participants as part of their participation in standard setting organizations. We analyzed whether the purchasing companies could use these SEPs to raise rivals’ costs or otherwise foreclose competition. During our investigation, a number of the companies involved—including Apple, Google and Microsoft—made commitments regarding their proposed SEP licensing policies. The division ultimately concluded that none of the transactions was likely to substantially lessen competition in any relevant market and it announced its closure of these investigations in February 2012.”

Our efforts to protect competition and ensure innovators obtain intellectual property protections are ongoing. We continue to review mergers and monitor the use of intellectual property rights in industries that effect consumers to ensure that the right balance is achieved between competition law and intellectual property law.

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