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Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy

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Federal Trade Commission.


Notice of public hearings and opportunity for comment.


The Federal Trade Commission (“FTC” or “Commission”) announces public hearings beginning in January 2002 on “Competition and Intellectual Property Law and Policy in the Knowledge-Based Economy.” The hearings will focus primarily on the implications of antitrust and patent law and policy for innovation and other aspects of consumer welfare. Copyright and trademark issues as they arise in particular high-tech contexts also may be considered. The hearings will be held at and administered by the FTC and co-hosted with the Antitrust Division of the Department of Justice.

The knowledge-based economy has grown in economic significance over the past few decades. It is increasingly important that competition and intellectual property law and policy work in tandem to support and encourage ongoing innovation underlying that economy. Policies for both competition and intellectual property raise legal and economic questions that are substantially interlinked.

Through public hearings, we seek to gather facts about, and to enhance the understanding of, how doctrines, practices, and policies of each discipline affect both initial and sequential innovation, and related functions, in today's economy. The goal is to promote dialogue, learning, and consensus building among business, consumer, government, legal, and academic communities on these topics. In addition to officials from the FTC and the Antitrust Division, business, consumer, judicial, Congressional, and other government representatives will be invited, as will representatives from the antitrust and intellectual property bars, economists, and academics.

The hearings will be transcribed and placed on the public record. Any written comments received also will be placed on the public record. A public report that incorporates the results of the hearings, as well as other research, will be prepared after the hearings.


The hearings will begin in January 2002 and will conclude later in the spring. Specific dates and more specific topic listings will be provided in a later notice and in press releases. Any interested person may submit written comments responsive to any of the topics to be addressed; such comments should be submitted no later than the last session of the hearings.


When in session, the hearings will be held in Room 432 at the FTC headquarters, 600 Pennsylvania Avenue, NW., Washington, DC. All interested parties are welcome to attend. Written comments should be submitted in both hard copy and electronic form. Six hard copies of each submission should be addressed to Donald S. Clark, Office of the Secretary, Federal Trade Commission, 600 Pennsylvania Avenue, NW., Washington, DC 20580. Submissions should be captioned “Comments regarding Competition & Intellectual Property.” Electronic submissions may be sent by electronic mail to “competitionand intellectual property@ Start Printed Page” Alternatively, electronic submissions may be filed on a 3-1/2 inch computer disk with a label on the disk stating the name of the submitter and the name and version of the word processing program used to create the document.

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Matthew Bye, Office of General Counsel, Policy Studies, 600 Pennsylvania Avenue, NW., Room 505, Washington, DC 20580; telephone (202) 326-3522; e-mail: Detailed agendas for the hearings will be available on the FTC Home Page ( and through Angela Wilson, Staff Assistant, at (202) 326-3190.

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The issues that juxtapose competition and intellectual property policy are ones that have potentially broad implications for the development of the U.S. economy and consumer welfare. Courts have recognized that “[although] the aims and objectives of patent and antitrust laws may seem, at first glance, wholly at odds[, . . .] the two bodies of law are actually complementary, as both are aimed at encouraging innovation, industry, and competition.” [1]

Yet the question of how to balance intellectual property and competition policy in particular circumstances has generated significant debate and discussion over the decades. During the 1970's, federal antitrust enforcement received justified criticism for certain policies—since revised [2] —overly hostile to the appropriate use of patents. More recently, some have questioned whether certain intellectual property policies, practices, and doctrines incorporate a proper appreciation of competitive issues, including ways in which intellectual property protection may impede—rather than encourage—innovation. Others have raised questions on whether certain antitrust approaches are properly appreciative of the need to promote innovation. The intersection of antitrust and intellectual property law continues to present difficult questions, and the debate may have intensified as the knowledge economy has increased in its importance to consumer welfare.

Thus, a series of hearings to explore the issues raised in this ongoing debate is timely. We approach these issues with open minds and in a spirit of learning. The hearings that are announced in this notice will, it is hoped, further fact gathering, learning, dialogue, and discussion among the affected parties, and will result in a greater understanding of and consensus about the approaches to policy in these areas that are most likely to benefit U.S. consumers.

The hearings will include consideration of the following general issues. This list is not exhaustive, and parties submitting written comments do not have to address each issue.

General Issues for Consideration

What roles do competition and intellectual property law and policy play in fostering initial and follow-on innovation? From a practical business perspective, how does each contribute to or impede ongoing innovation? What do empirical studies show?

What is the frequency of cross-licensing, patent pooling, and other arrangements for the transfer or joint use of intellectual property? Does their use or usefulness vary across industries? What business reasons most typically underlie their creation? What intellectual property and competition issues do they typically raise? Have the guideposts for antitrust analysis established by the DOJ/FTC Antitrust Guidelines for the Licensing of Intellectual Property proved useful?

To what extent does commercialization of new technology require multiple licenses from multiple patentees—that is, to what extent do “patent thickets” exist? How do they affect both practices with respect to intellectual property and competition among innovator companies? How should policymakers take this into account?

What competition issues arise in the settlement of patent disputes and in the context of other agreements, such as standard setting, that involve patent rights? What should be the standards for assessing the antitrust significance of a unilateral refusal to deal, an issue recently addressed by the Federal Circuit's decision in CSU v. Xerox?[3] To what extent has the Federal Circuit become an increasingly important source of antitrust doctrine?

To what extent do questions about the scope and types of patents (e.g., business methods patents), and the procedures and criteria under which they are issued, raise competition issues? To what extent do substantive and procedural rules, both at agency and judicial levels, have implications for initial and sequential innovation, competition, and appropriability? What are the facts in this area?

To what extent is the assessment of these and other intellectual property-related questions different for new technologies? How does the globalization of the economy affect the assessment of these and related issues? What further insights can be offered to both intellectual property and antitrust doctrine from economics and other disciplines?

To what extent should, and if so, how might, fact gathering and other learning from the hearings be incorporated into competition and intellectual property practices, doctrine, and procedures?

The hearings will be transcribed and placed on the public record. Any comments received also will be placed on the public record. A public report that incorporates the results of the hearings, as well as other research, will be prepared after the hearings.

By direction of the Commission.

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Donald S. Clark,


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1.  Atari Games Corp. v. Nintendo of Am., Inc., 897 F. 2d 1572, 1576 (Fed. Cir. 1990).

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2.  See generally, U.S. Department of Justice and Federal Trade Commission, Antitrust Guidelines for the Licensing of Intellectual Property (1995).

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3.  In re Independent Service Organizations Antitrust Litigation, 203 F. 3d 1322, 1327 (Fed. Cir. 2000), cert. denied, CSU, L.L.C. v. Xerox Corp., 121 S.Ct. 1077 (2001).

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[FR Doc. 01-28943 Filed 11-19-01; 8:45 am]