Speaker(s):   Gavin Clarkson (HBS/Harvard Law School)
Title:                 Sharper Machetes for the Patent Thicket: Objective Criteria for Antitrust Evaluations of Patent Pools


Abstract

While antitrust and intellectual property seemed to be in tension for most of the 20th century, with patent pooling often facing the brunt of antitrust enforcement, recent developments indicate that these two areas of law can be aligned so as to foster innovation rather than stifle it.  The 1995 Guidelines for the Licensing of Intellectual Property, jointly issued by the U.S. Department of Justice and the Federal Trade Commission, formally established the possibility that collective ownership structures for intellectual assets, including patent pools, could be pro-competitive in certain circumstances.  The 1995 Guidelines provide a clear and objective indication of what an appropriate licensing structure for a patent pool would be.

Much of the evaluation of patent pool membership is quite subjective, however, which still leaves a high level of uncertainty for potential pool participants.  Given the high cost of defending an antitrust enforcement action and the extremely harsh penalties for losing at trial, patent pool formation is likely to be less frequent than the optimal level needed for the maximization of innovative activity in a number of industries. This paper proposes a theoretical set of objective criteria for the evaluation of patent pools, based on a combination of network analytic measures and statistical natural language processing techniques, and suggests that such criteria might be incorporated into antitrust analysis so as to create a rebuttable presumption of validity for certain types of patent pools.  With objectively determinable criteria for patent pool formation, those firms attempting to hack their way through the patent thicket can proceed in clearing blocking patent positions by forming collective ownership structures without worrying excessively about the ambiguities of antitrust enforcement.