Princo Corp. v. International Trade Commission

Brief of the Federal Trade Commission as amicus curiae, before the en banc United States Court of Appeals for the Federal Circuit, in a case concerning an appeal of an International Trade Commission order banning the import of certain compact discs on the grounds that the importer, Princo Corp., infringed patents held by Philips Corporation. A divided Federal Circuit panel had held that the patents were unenforceable because Philips committed “patent misuse” by conspiring with another company to impose licensing restrictions that had the effect of blocking the development of alternative technologies and stifling potential competition. The FTC’s brief supports neither of the parties, but urges the en banc Federal Circuit, to the extent it draws on antitrust law to address the “patent misuse” claim, to recognize that pro-competitive efficiencies may justify some competitive restraints, but only if they are reasonably necessary to enable the companies to engage in productive collaboration, such as a joint venture to develop new technologies. The brief also emphasizes that, under the flexible “rule of reason” analysis used in antitrust cases, some “inherently suspect” business practices may be deemed anticompetitive without any elaborate analysis of market power or proof of actual harm to competition.