Muris Announces Plans for Intellectual Property Hearings

Federal Trade Commission Chairman Timothy J. Muris today announced that the Commission and the Department of Justice will host public hearings to develop a better understanding of how to manage the issues that arise at the intersection of antitrust and intellectual property law and policy.  Speaking at the American Bar Association Antitrust Section's Fall Forum, Muris observed that, in the 1970s, antitrust law and policy lacked a "sufficient appreciation of the incentives for innovation that intellectual property and intellectual property licensing can provide." Now, Muris noted, some observers say that "perhaps it is intellectual property doctrine that is not showing a proper appreciation for the innovation that competition may spur." "Because this is a pressing public policy issue, we will hold extensive hearings, starting this winter, to address issues that involve both competition and intellectual property policies. We are delighted that the Antitrust Division will join us in hosting these hearings."

During his speech, Muris noted that the "tensions between the doctrines tend to obscure the fact that, properly understood, IP law and antitrust law both seek to promote innovation and enhance consumer welfare. . . . IP law, properly applied, preserves the incentives for . . . innovation. Innovation benefits consumers through the development of new and improved goods and services, and spurs economic growth. Similarly, antitrust law, properly applied, promotes innovation and economic growth by combating restraints on vigorous competitive activity. By deterring anticompetitive arrangements and monopolization, antitrust law also ensures that consumers have access to a wide variety of goods and services at competitive prices."

The FTC Chairman said that certain notable developments "in the antitrust and IP systems may have had significant implications for competition and innovation in the American economy." He cited: 

The increasing number of patents issued annually, jumping from 66,000 in 1980 to 175,000 in 2000. "We need to understand the recent trend in patent proliferation," Muris said.   The changing scope of patents. The FTC Chairman noted that "Some allege that . . . important patents . . . are overbroad, and that overbroad patents can inhibit follow-on innovation. . . . Others contend that broad patents are essential to encourage high-risk research in entirely new fields."   The role of the Federal Circuit. "Because patent and competition issues frequently arise in the same cases, the Federal Circuit can play an increasingly important role in the development of competition law. We will consider the Federal Circuit's substantive impact on competition law," Muris said.   Refusals to deal. Muris observed that "tensions can also arise between antitrust and IP doctrines when a patent or copyright holder unilaterally refuses to license its intellectual property."

"Many of these and other issues cannot be addressed solely by enforcing the antitrust laws but can be addressed in our hearings, where we anticipate that we will receive valuable input from business, consumer, and government representatives; the antitrust and intellectual property bars; economists; and academics." Muris noted that, historically, the FTC has used workshops and hearings to improve its understanding of issues that lie at the core of competition policy.

"The hearings will consider the implications of competition and intellectual property law and policy for innovation and other aspects of consumer welfare," Muris said. "We will explore primarily the interrelationships between competition and patent policy, with some attention to other intellectual property issues as they arise in particular contexts. Standard-setting, cross-licensing and patent pools, unilateral refusals to deal, other business practices, the proliferation of patents, the changing scope of patents, and the role of the Federal Circuit will be among the topics on the agenda," he said.

Chairman Muris' remarks represent his own views and not necessarily the views of the Commission or other Commissioners.

Copies of the Chairman's remarks and the Federal Register Notice announcing the hearings will be available shortly from the FTC's web site at http://www.ftc.gov and also from the FTC's Consumer Response Center, Room 130, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580. The FTC's Bureau of Competition seeks to prevent business practices that restrain competition. The Bureau carries out its mission by investigating alleged law violations and, when appropriate, recommending that the Commission take formal enforcement action. To notify the Bureau concerning particular business practices, call or write the Office of Policy and Evaluation, Room 394, Bureau of Competition, Federal Trade Commission, 600 Pennsylvania Avenue, N.W., Washington, D.C. 20580, Electronic Mail: antitrust@ftc.gov; Telephone: (202) 326-3300. For more information on the laws that the Bureau enforces, the Commission has published "Promoting Competition, Protecting Consumers: A Plain English Guide to Antitrust Laws," which can be accessed at http://www.ftc.gov/bc/compguide/index.htm.