US Decision on Anti-Competitiveness of Patent Settlements

This is an interesting case on the issue of the anti-competitiveness of patent settlements. Click on the link below to the Antitrust Law Blog:

http://www.antitrustlawblog.com/article-reverse-payment-patent-settlements-the-second-circuit-speaks-out.html

Antitrust Limits to Patent Settlements

The Ministry of Information and Communications should consider the work of Carl Shapiro on patent settlements in moving ahead with horizontal cooperation in the five target industries where patent disputes are (apparently) blocking innovation.

In his article published in the RAND Journal of Economics in Summer 2003, Shapiro argues that patents settlements can stifle competition and harm consumers. Shapiro proposes a specific antitrust rule limiting such settlements - a settlement must leave consumers at least as well off as they would have been from ongoing patent litigation.

In other words, the Ministry of Information and Communications should give the foremost consideration to consumer welfare if it decides to intervene in patent settlements in the five target industries. In this regard, I suggest that it has the obligation to consult with the KFTC lest the Ministry becomes involved in anti-competitive patent settlements that harm Korean consumers.

Great! Government Intervention!

{this is a draft version of this blog}
Collaboration in terms of patent pools and cross-licensing is generally pro-competitive.

The direct involvement of the Ministry of Information and Communications in high-tech patent disputes (covering five areas of patents - GSM mobiles, DMB, RFID/USN, intellegent robots, WiBro), however, is not exactly encouraging for competition given the past role of government agencies in (knowingly or unknowingly) implementing policies that have facilitated cartels.

http://epic.kdi.re.kr/epic_attach/2006/R0612101.pdf

While the proposal requires further consideration, there may be antitrust concerns with patent settlements and government intervention is unlikely to be appropriate, at first glance anyway.

Why is the KFTC not on the committee?

Also, the transfer (or sale) - the language used is non-specific - of patents to SMEs gives one the distinct impression of stronger government involvement than would meet the eye.

Who knows, "free" licenses of government patents may just start falling from the sky in Korea...