- An antitrust "safety zone" in which the Department will not challenge most restraints in licensing arrangements where the licensor and its licensees account for no more than 20% of each relevant market affected by the restraints. The Department has indicated that this safety zone seeks to address concerns that small businesses and innovators are hampered by antitrust uncertainty.
- Methods by which the Department, under certain circumstances, will evaluate the impact of a licensing arrangement or acquisition on research and development.
- For the purpose of antitrust analysis, the Department regards intellectual property as comparable to any other form of property.
- The Department does not presume that intellectual property creates market power in the antitrust context; and
- The Department recognizes that intellectual property licensing is generally procompetitive.
"While intellectual property licensing arrangements are typically welfare-enhancing and procompetitive, antitrust concerns may arise when licensing arrangements impede competition that likely would have taken place in the absence of the license."The Department will examine a licensing arrangement either under the strict test of per se illegality or under the more flexible rule of reason--that is whether the procompetitive benefits outweigh any anticompetitive effects. The Guidelines explain that the mode of antitrust analysis will turn on more than whether the relationship of the parties to the licensing arrangement is primarily horizontal (e.g. both vendors) or vertical (e.g. vendor and supplier). To determine whether a particular restraint in a licensing arrangement is given per se or rule of reason treatment, the Department will first determine whether the restraint in question can be expected to contribute to an efficiency-producing integration of economic activity by, for example, facilitating the combination of the licensor's intellectual property with complementary intellectual property or other production capabilities of the licensee.The fourth section of the Intellectual Property Guidelines contains general principles concerning the Department's evaluation of a licensing arrangement under the rule of reason. This is the section where the Department defines the antitrust safety zone, "where the licensor and its licensees collectively account for no more than 20% of each relevant market affected by the restraint." This section also contains a useful analysis of anticompetitive effects. The factors identified are market structure, coordination and foreclosure; whether the licensing arrangement involves exclusivity; whether there are benefits from reduction of competition; and other factors such as the pace of innovation and history of rivalry in the marketplace.With respect to exclusivity, the licensing arrangement may involve exclusivity in two distinct respects. Generally, an exclusive license which restricts the right of a licensor to license to others is less problematic than "exclusive dealing" which arises when a license prevents or restricts the licensee from using competing technologies.Section 4 also deals with efficiencies and justifications. If the Department finds that a restraint in a licensing arrangement has an anticompetitive effect, the Department will consider whether the restraint produces offsetting procompetitive benefits, such as by facilitating the efficient development and exploitation of intellectual property. The evaluation of procompetitive efficiencies, of the reasonable necessity of a restraint to achieve them and of the duration of the restraint may depend on the market context.The final section of the Guidelines illustrates the application of the principles articulated throughout the Guidelines to particular licensing restraints and to arrangements that involve cross licensing, pooling or acquisition of intellectual property. This section includes a discussion of licensing arrangements among horizontal competitors, resale price maintenance (where a licensor of an intellectual property right in a product fixes the licensee's resale price of that product), tying arrangements (conditioning the ability of a customer to license one or more items of intellectual property on the customer's purchase of another item or service), exclusive dealing (when a license prevents the licensee from licensing, selling, distributing or using a competing technology), cross licensing or pooling arrangements (where two or more owners of different items of intellectual property agree to license one another or third parties), grant backs (arrangements under which a licensee agrees to extend to the licensor of intellectual property the right to use the licensee's improvement to the licensed technology) and acquisition of intellectual property rights. With respect to this last item, the Department will analyze such a transaction as an acquisition of assets just as it does any other asset acquisition and will apply the analysis contained in the 1992 Merger Guidelines.Finally, the Department announces in these Guidelines that it may challenge the enforcement of invalid intellectual property rights as an antitrust violation. Case law supports the Department's position that an objectively baseless infringement action, brought in bad faith, when the complainant knows the intellectual property right to be invalid, may violate Section 2 of the Sherman Act.Health Care GuidelinesOn September 27, 1994, the Department of Justice and the Federal Trade Commission released Nine Statements of Enforcement Policy and Analytical Principles Relating to Health Care and Antitrust. These supersede and expand the six Statements of Enforcement Policy issued in September 1993.The 1994 Health Care Guidelines retain the basic philosophy and approach of the 1993 Guidelines. They expand and define new "safety zones" of conduct in which efficiency-producing joint ventures may proceed without significant risk of challenge from federal enforcement agencies. With respect to conduct falling outside of the safety zones, the new Guidelines set forth the approach of the antitrust enforcement agencies in analyzing such conduct and articulate the principles that will guide an agency inquiry. The 1994 Health Care Guidelines also set forth the procedure for business reviews and advisory opinions by the agencies and commit to prompt responses.The nine areas covered are as follows:
- Statement 1 - Mergers Among Hospitals
- Statement 2 - Hospital Joint Ventures Involving High Technology Or Other Expensive Health Care Equipment
- Statement 3 - Hospital Joint Ventures Involving Specialized Clinical Or Other Expensive Health Care Services
- Statement 4 - Providers' Collective Provision Of Non-Fee-Related Information To Purchasers Of Health Care Services
- Statement 5 - Providers' Collective Provision Of Fee-Related Information to Purchasers Of Health Care Services
- Statement 6 - Provider Participation In Exchanges Of Price and Cost Information
- Statement 7 - Joint Purchasing Arrangements Among Health Care Providers
- Statement 8 - Physician Network Joint Ventures
- Statement 9 - Analytical Principles Relating To Multiprovider Networks
- the relative significance to the alleged violation of conduct within the United States, as compared to conduct abroad;
- the nationality of the persons involved in or affected by the conduct;
- the presence or absence of a purpose to affect United States consumers, markets or exporters;
- the relative significance and foreseeability of the effects of the conduct on the United States as compared to the effects abroad;
- the existence of reasonable expectations that would be furthered or defeated by the action;
- the degree of conflict with foreign law or articulated foreign economic policy;
- the effect on foreign enforcement; and
- the effectiveness of foreign enforcement.
- waived its immunity explicitly or by implication;
- engaged in commercial activity;
- expropriated property in violation of international law;
- acquired rights to United States property;
- committed certain torts within the United States or agreed to arbitration of a dispute.
The final section of the International Guidelines contains a discussion of personal jurisdiction and procedural rules. This section of the Guidelines recognizes that, in all cases, the exercise of personal jurisdiction must satisfy constitutional requirements of minimum contacts with the United States, such that the proceeding comports with "fair play and substantial justice."