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IP/Antitrust Interface

IP/Antitrust Interface

International antitrust attention remains focused on the intersection of antitrust and intellectual property law, two areas of law that are inextricably linked. While antitrust rules aim to protect competition, IP laws grant temporary legal monopolies. There is therefore an inherent tension between these two fields of the law.

The Shearman & Sterling antitrust team has successfully handled several complex high-profile matters in this increasingly important area.

The friction between IP protection and antitrust has increased significantly in recent years. European regulators have recently focused on a number of cases in which it was alleged that companies had used their IP rights to unlawfully restrict competition. In the US, regulators have been increasingly active in the IP/antitrust interface in recent years. For example, the FTC has investigated the competitive impact of patent settlements in the pharmaceutical area and focused on the conduct of patent holders in the standard-setting context. Similarly, the DOJ has investigated the acquisitions of significant patent collections by consortia of competitors.

The risk of inconsistent outcomes under US and EU laws is also a real danger, particularly where IP is a core part of a company’s business and where the company can be alleged to be dominant in a particular product or technology market.

Businesses developing or acquiring valuable IP must consider the antitrust consequences of exploiting and enforcing their IP portfolio. Analyzing the effects of their conduct and ensuring antitrust compliance will allow companies to avoid potentially protracted and thorny litigation or regulatory intervention. However, these businesses need not adopt an excessively formalistic approach to managing antitrust exposure that risks stifling innovation. An effective antitrust compliance policy, based on a sound understanding of the antitrust rules, should always be compatible with conduct that seeks to ensure an adequate return on R&D investment by preserving the integrity of IP rights and protecting innovators from free riding.

Featured Matters

  • Nokia in the ongoing European Commission investigation following a complaint by Google alleging collusion involving Mosaid, a non-practicing entity that acquired 2000 patents from Nokia in 2011.
  • Qualcomm in the ongoing European Commission investigation following yet another abuse of dominance complaint relating to the 3G mobile broadband technology. In a similar investigation, handled by the same team, the European Commission closed the formal antitrust proceedings in 2009, marking the first time a major US high tech firm succeeded in having a dominance case against it terminated.
  • Samsung in the ongoing European Commission’s investigation of whether its applications for injunctive relief regarding its Standards Essential Patents may be considered to be abusive.
  • Sony on the US and EU antitrust aspects of its participation in the Rockstar consortium (including Microsoft, Apple, RIM and Sony) that successfully acquired several thousand Nortel patents.
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