Patent pool and antitrust

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PATENT POOL AND ANTITRUST

SUCHITRA BAIPATENT DEPARTMENT



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MEANING OF PATENT

A patent is a legal document, granted for any novel, non-obvious and utility product or process, by a state to an inventor for a statutorily specified period of time upon the disclosure of his invention in a document known as the patent specification. The patent confers the owner/inventor with an exclusive monopoly rights over his invention, preventing others from exploiting his invention to which the patent has been issued.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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MEANING OF PATENT POOL

A patent pool is an agreement between two or more patent owners to license one or more of their patents to one another or third parties.

A patent pool may also be defined as “the aggregation of intellectual property rights which are the subject of cross-licensing, whether they are transferred directly by patentee to licensee or through some medium, such as a joint venture, set up specifically to administer the patent pool.”



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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PATENT POOL PROCESS

PATENT



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Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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PATENT POOL PROCESS

A patent pool is a simple system where patent-owners voluntarily give their patents to a central organization that then licenses them to other companies and researchers. Companies that make unbranded drugs and researchers that want to use the patents to develop new versions of the drugs can access the patents in the Pool in exchange for paying a fair royalty to the patent owners. The Pool acts as a ‘one-stop-shop’ for managing the negotiations and receiving and paying the royalties.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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BENEFITS

Patent pools provide many benefits for licensees including: Offers practical way to overcome patent barriers, which

encourages competition and leads to lower prices. Avoiding protracted negotiations on licensing terms and

conditions with each patent owner through a single point of contact « one stop shop »

Clearing of blocking positions. Gaining competitive advantage by getting products to

market more quickly. Making the technology accessible to all users on fair,

reasonable, and non-discriminatory terms and conditions.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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• Antitrust laws are referred to as "competition laws" - are statutes developed by the U.S. Government to protect consumers from predatory business practices by ensuring that fair competition exists in an open-market economy.

DEFINITION OF ANTITRUST



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Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



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[CONTD…

• Antitrust laws are applied to a wide range of questionable business activities, including but not limited to:Market Allocation:

• Suppose my company operates in the Northeast and your company does business in the Southwest. If you agree to stay out of my territory, I won't enter yours, and because the costs of doing business are so high that startups have no chance of competing, we both have a de facto monopoly.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


CONTD…

• Bid Rigging: There are three companies in an industry, and

all three decide to quietly operate as a cartel. Company 1 will win the current auction, so long as it allows Company 2 to win the next and Company 3 to win thereafter. Each company plays this game so that all retain current market share and price, thereby preventing competition.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

[email protected]


CONTD…

• Price Fixing: My company and your company are the

only two companies in our industry, and our products are so similar that the consumer is indifferent between the two except for price. In order to avoid a price war, we sell our products at the same price to maintain margin, resulting in higher costs than the consumer would otherwise pay.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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OBJECTIVE OF ANTITRUST LAW

• The antitrust laws prescribe unlawful mergers and business practices in general terms, leaving courts to decide which ones are illegal based on the facts of each case. Courts have applied the antitrust laws to changing markets, from a time of horse and buggies to the present digital age. Yet for over 100 years, the antitrust laws have had the same basic objective:

• to protect the process of competition for the benefit of consumers,

• making sure there are strong incentives for businesses to operate efficiently, keep prices down, and

• keep quality up.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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CASE LAWS

• In the first case, United States v. Trans-Missouri Freight Association, the Supreme Court found that railroad companies had acted unlawfully by setting up an organisation to fix transport prices. The railroads had protested that their intention was to keep prices low, not high. The court found that this was not true, but stated that not every "restraint of trade" in a literal sense could be unlawful. Just as under the common law, the restraint of trade had to be "unreasonable".



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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CHICAGO BOARD OF TRADE V. UNITED STATES

• The Supreme Court found a "good" restraint of trade. The Chicago Board of Trade had a rule that commodities traders were not allowed to privately agree to sell or buy after the market's closing time (and then finalise the deals when it opened the next day). The reason for the Board of Trade having this rule was to ensure that all traders had an equal chance to trade at a transparent market price. It plainly restricted trading, but the Chicago Board of Trade argued this was beneficial. Brandeis J., giving judgment for a unanimous Supreme Court, held the rule to be pro-competitive, and comply with the rule of reason. It did not violate the Sherman Act.



Chennai - 600 004.Tel: +91 - 44 - 2498 4821



Bangalore - 560 001.Tel: +91 - 80 - 6546 2400



Tel: +91 - 422 – 6552921

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THANK YOU

Patent pool and antitrust

Law