Pooling arrangements generally need not be open to all who would like to join. However, exclusion from cross-licensing and pooling arrangements among parties that collectively possess market power may, under some circumstances, harm competition.[1] In general, exclusion from a pooling or cross-licensing arrangement among competing technologies is unlikely to have anticompetitive effects unless (1) excluded firms cannot effectively compete in the relevant market for the good incorporating the licensed technologies and (2) the pool participants collectively possess market power in the relevant market. If these circumstances exist, the Agencies will evaluate whether the arrangement’s limitations on participation are reasonably related to the efficient development and exploitation of the pooled technologies and will assess the net effect of those limitations in the relevant market.[2]
Another possible anticompetitive effect of pooling arrangements may occur if the arrangement deters or discourages participants from engaging in research and development, thus retarding innovation. For example, a pooling arrangement that requires members to grant licenses to each other for current and future technology at minimal cost may reduce the incentives of its members to engage in research and development because members of the pool have to share their successful research and development and each of the members can free ride on the accomplishments of other pool members.[3] However, such an arrangement can have procompetitive benefits, for example, by exploiting economies of scale and integrating complementary capabilities of the pool members, (including the clearing of blocking positions), and is likely to cause competitive problems only when the arrangement includes a large fraction of the potential research and development in a research and development market.[4]
- ↑ Cf. Nw. Wholesale Stationers, Inc. v. Pac. Stationery & Printing Co., 472 U.S. 284 (1985) (holding that exclusion of a competitor from a purchasing cooperative not per se unlawful absent a showing of market power).
- ↑ See section 4.2.
- ↑ See generally United States v. Mfrs. Aircraft Ass’n, 1976-1 Trade Cas. (CCH) ¶ 60,810 (S.D.N.Y. 1975); United States v. Auto. Mfrs. Ass’n, 307 F. Supp. 617 (C.D. Cal. 1969), appeal dismissed sub nom. City of New York v. United States, 397 U.S. 248 (1970), modified sub nom. United States v. Motor Vehicle Mfrs. Ass’n, 1982-83 Trade Cas. (CCH) ¶ 65,088 (C.D. Cal. 1982).
- ↑ See section 3.2.3 and Example 3. See also 2007 Antitrust-IP Report, supra note 13, at 62-63; Summit Tech., Inc., 127 F.T.C. 208, 209-10 (1999) (FTC challenge to patent pool that included competing technologies from only two firms with FDA approval for a certain form of laser eye surgery and established a set licensing fee for use of either pool member’s equipment). DOJ has reviewed favorably several patent pools with safeguards in place to mitigate potential anticompetitive harms. See generally Letter from Thomas O. Barnett, Assistant Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to William F. Dolan, Partner, Jones Day (Oct. 21, 2008), https://www.justice.gov/sites/default/files/atr/legacy/2008/10/21/238429.pdf; Letter from Joel I. Klein, Assistant Att’y Gen., Antitrust Div., U.S. Dep’t of Justice, to Carey R. Ramos, Partner, Paul, Weiss, Rifkind, Wharton &
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