The Evolving IP Marketplace: Aligning Patent Notice and Remedies ...

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THE EVOLVING IP MARKETPLACE:ALIGNING PATENT NOTICE AND REMEDIESWITH COMPETITIONA REPORT OF THEFEDERAL TRADE COMMISSIONJON LEIBOWITZChairmanWILLIAM E. KOVACICCommissionerJ. THOMAS ROSCH CommissionerEDITH RAMIREZCommissionerJULIE BRILLCommissionerJoni LupovitzEileen HarringtonRichard FeinsteinDavid VladeckJoseph FarrellWillard K. TomRandolph W. TritellJeanne BumpusSusan S. DeSantiCecelia PrewettDonald S. ClarkChief of StaffExecutive DirectorDirector, Bureau of CompetitionDirector, Bureau of Consumer ProtectionDirector, Bureau of EconomicsGeneral CounselDirector, Office of International AffairsDirector, Office of Congressional RelationsDirector, Office of Policy PlanningDirector, Office of Public AffairsSecretary of the CommissionReport Drafters and ContributorsSuzanne Michel, Deputy Director, Office of Policy PlanningWilliam Cohen, Deputy General Counsel for Policy StudiesWilliam Adkinson, Office of the General CounselErika Meyers, Bureau of CompetitionSuzanne Drennon Munck, Office of Policy PlanningJoel Schrag, Bureau of EconomicsKaren Goldman, Office of General CounselChristopher Bryan, Office of the General CounselChristopher Falcone, Office of the General CounselInquiries concerning this report should be directed to:Suzanne Michel (202) 326-3094 or smichel@ftc.gov
Page 5: THE EVOLVING IP MARKETPLACE:ALIGNIN
Page 8 and 9: Two areas of patent law beyond pate
Page 10 and 11: those risks or take a license due t
Page 13 and 14: EXECUTIVE SUMMARYCHAPTER 1EVOLVING
Page 15 and 16: Some argue that PAEs encourage inno
Page 17 and 18: his invention.” Otherwise, the cl
Page 19 and 20: However, the factors traditionally
Page 21: ecommendation is consistent with th
Page 24 and 25: market reward for the invention, me
Page 26 and 27: licensor and willing licensee would
Page 28 and 29: easonable royalty damages. Recent c
Page 30 and 31: Recommendation. Consistent with FRE
Page 32 and 33: How Permanent Injunctions Affect In
Page 34 and 35: Recommendation. Courts should consi
Page 36 and 37: exclusion order, which is sometimes
Page 38 and 39: CHAPTER 1EVOLVING PATHWAYS OF INNOV
Page 40 and 41: II.THE INCREASING IMPORTANCE OF OPE
Page 42 and 43: 18from a design house that develops
Page 44 and 45: 29universities, leading to over 700
Page 46 and 47: 41products of the collaboration wil
Page 48 and 49: 54 55industries, and the IT sector
Page 50 and 51: merit and promise, or as a defensiv
Page 52 and 53:
IV.AREAS OF PATENT POLICY THAT AFFE
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alancing these concerns and recomme
Page 56 and 57:
I. INTRODUCTIONCHAPTER 2THE EVOLVIN
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A. Beneficial EffectsThe ability of
Page 60 and 61:
Ex post patent transactions can als
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industries where innovation is gene
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can also encourage ex post transact
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copied the patented technology, as
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the patent marketplace are not avai
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One panelist described his firm, Ac
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80to bring litigation. And at the e
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should respond. The effect of these
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technology from start-ups often pre
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transactions that harm innovation f
Page 80 and 81:
I. INTRODUCTIONCHAPTER 3PATENT NOTI
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10Such uncertainty can greatly inhi
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and telecommunications, patent noti
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35not to acquire and commercialize
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47Most of it, however, addressed th
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63“‘through,’ . . . ‘to’,
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Institutional concerns/deferred res
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95been made. Third parties can trac
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C. Difficulties in Sifting Through
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pharmaceuticals, there is a very lo
Page 100 and 101:
A. Improving the Ability to Underst
Page 102 and 103:
Several of the panelists suggested
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- the applicant had not disclosed s
Page 106 and 107:
indefiniteness invalidates the pate
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circumstances in which a patent’s
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description requirement; the second
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205ambiguous. Enablement provides l
Page 114 and 115:
216regarding applicable skill level
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225dictionary or accept the use of
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specific technology at hand. (2) De
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247clarity. With its just-issued Su
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258considered part of the prosecuti
Page 124 and 125:
Noting the “benefits of publicati
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going to be difficult to have the p
Page 128 and 129:
happens, enforcement of such claims
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prolonged continuation practice - c
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D. Improving the Ability to Sift Th
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314them in reverse chronological or
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equire such recordation, although a
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or the allocation of burdens for su
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354proposed broadening the existing
Page 142 and 143:
136
Page 144 and 145:
CHAPTER 4THE ECONOMIC AND LEGAL FOU
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Consumers benefit from the competit
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Patent damage awards should reflect
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The threat of an injunction also cr
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29innovation. When infringers are a
Page 154 and 155:
IV.CONCLUSIONPatent damages that ei
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CHAPTER 5LOST PROFITS DAMAGESI. INT
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assumed that the remainder of the i
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prices for it. In the world without
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ule makes the determination of dama
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patentees. Patentees that have prov
Page 166 and 167:
CHAPTER 6THE HYPOTHETICAL NEGOTIATI
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7of patent disputes. (Appendix A re
Page 170 and 171:
Panelists opposed to changes in dam
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Courts invoke the hypothetical nego
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37want to license the patent at the
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not justify inflating the reasonabl
Page 178 and 179:
Concerns about compensating unprove
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67 68non-infringers might have paid
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determining the bargain the parties
Page 184 and 185:
V. CHOOSING THE ROYALTY BASE.......
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3. The nature and scope of the lice
Page 188 and 189:
8as an important benefit. The condi
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22exhaustive list of categories of
Page 192 and 193:
30was excessive. When substitute te
Page 194 and 195:
43wings.’” Some district courts
Page 196 and 197:
53products. As these switching cost
Page 198 and 199:
Before the standard is chosen, tech
Page 200 and 201:
Clarification of reasonable royalty
Page 202 and 203:
court may conclude that “there is
Page 204 and 205:
93$200 million. Microsoft challenge
Page 206 and 207:
ules of thumb or benchmarks, instea
Page 208 and 209:
patents or portfolios that cover wh
Page 210 and 211:
As recently as 2010, the Federal Ci
Page 212 and 213:
The recent district court decision,
Page 214 and 215:
entire market value of the product
Page 216 and 217:
presents a practical problem for ac
Page 218 and 219:
Recommendation. Courts should ident
Page 220 and 221:
VII. REMEDIES IN THE INTERNATIONAL
Page 222 and 223:
II.CASE LAW ANALYZING PERMANENT INJ
Page 224 and 225:
suggests that the patent owner is o
Page 226 and 227:
B. Firms that Primarily License Out
Page 228 and 229:
31license technology that is essent
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aise costs and deter innovation. Th
Page 232 and 233:
51from the non-infringing ones” a
Page 234 and 235:
exclusive control over an invention
Page 236 and 237:
This is not to say, however, that c
Page 238 and 239:
771986 Federal Circuit case that pr
Page 240 and 241:
87decisions, comparing the benefits
Page 242 and 243:
which is licensed . . . By contrast
Page 244 and 245:
106leverage in post-verdict licensi
Page 246 and 247:
(exclusion orders) and district cou
Page 248 and 249:
The FTC suggests that the ITC consi
Page 250 and 251:
VIII.CONCLUSIONThe eBay injunction
Page 252 and 253:
6Chart 1Patent holder median damage
Page 254 and 255:
The PricewaterhouseCoopers study fu
Page 256 and 257:
Chart 5 20C OIYIPO' ition of darnag
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29adjusted for decisions on post tr
Page 260 and 261:
not practice its inventions, had li
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eBay decision in May 2006. Since th
Page 264 and 265:
28thus the opinion must have discus
Page 266 and 267:
III.Analysis of the Four Factors in
Page 268 and 269:
“sticky” customers has been one
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50compensated by money damages wher
Page 272 and 273:
63 64Voda and Telcordia , the paten
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that the patentee would suffer in t
Page 276 and 277:
In some cases, courts have found th
Page 278 and 279:
102patent rights. In z4, defendant
Page 280 and 281:
Sundance Inc. v. DeMonte Fabricatin
Page 282 and 283:
I-Flow Corp. v. Apex Medical Techno
Page 284 and 285:
Wald v. Mudhopper Oilfield Servs.,
Page 286 and 287:
APPENDIX CHEARING PARTICIPANTSParti
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ParticipantPeter N. DetkinFounder &
Page 290 and 291:
ParticipantJoe E. KianiChief Execut
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ParticipantJohn T. McNelisPartner a
Page 294 and 295:
ParticipantThe Honorable Sue L. Rob
Page 296 and 297:
ParticipantTracey R. ThomasChief IP
Page 298 and 299:
Alice A. KipelPartner, Steptoe & Jo
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NameComment DateJones, Nathan Novem
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Panelist Presentations at the Heari
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APPENDIX EANNOUNCED AGENDA TOPICS F
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INDUSTRY ROUNDTABLES(March 18, 2009
Page 308:
THE NOTICE FUNCTION OF PATENTS AND
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