Monday, April 20, 2009

The CAFC considers patent pools in Princo case

In Princo v. ITC, the CAFC discussed patent pools:

Jefferson Parish Hosp. Dist. No. 2 v. Hyde, 466 U.S. 2, 40-44 (1984) (O’Connor, J., concurring in judgment)
(“Tie-ins may entail economic benefits as well as economic harms, and . . . these
benefits should enter the rule-of-reason balance.”); see also Herbert Hovenkamp, Mark.
D. Janis & Mark A. Lemley, IP and Antitrust § 34.4, at 34-20.1 (2009) (“Typical
procompetitive benefits [of patent pools] include the clearing of blocking positions, the
advantages flowing from integration of complementary technologies, and the cost
savings from avoiding litigation.”).


Philips I recognized that patent pools could generate procompetitive efficiencies
in the form of reduced transaction costs, reduced litigation expenses, and most
importantly the overall “procompetitive effect of reducing the degree of uncertainty
associated with investment decisions.” Philips I, 424 F.3d at 1192-93. These
efficiencies are not limited to situations in which a potential pool patent is, in fact, a
blocking patent. As we noted in Philips I, one of the major potential efficiencies of
package licensing in the context of innovative technology is the avoidance of
“uncertainty that could only be resolved through expensive litigation.” Id. at 1198; see
also id. at 1192


In short, because standardization of technology and the development of patent pools are
likely to occur
early in the development of a given technology market, requiring stringent proof of the
destruction of future competition, with its accompanying imponderables, would
effectively immunize from misuse manufacturers who agree to suppress competition
from alternative technologies.

**In passing-->

Randy Picker on the Google Book Settlement


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