Court Won't Rehear Pay-For-Delay Patent Lawsuit; We Pay, They Delay

from the this-is-progress? dept

Among the many, many nasty things done in the name of patent law is the rather disgusting practices of "pay-for-delay", where a big pharma firm sues a generic pharma maker for patent infringement, with no legal basis, and part of the "settlement" that is then worked out is that the big pharma will pay off the generic pharma not to enter the market with a generic for a certain period of time. Basically, it's a (by definition and government support) monopoly player in the market paying off competitors to keep the market exclusive. It's difficult to see how that's not a blatant violation of anti-trust law. But, alas, apparently the Second Circuit doesn't see it that way. In April it tossed out a lawsuit over this issue, because the pharma companies involved put in a few worthless other things into the deal that acted as "cover" for the real anti-competitive move -- and, since the "monopoly" was from a patent, the court didn't see it as an anti-trust issue.

So, basically, even beyond the basics of patent law, non-infringing generics are being kept out of the market through what certainly seems like it should be blatant anti-trust practices. The generic pharma asked the entire Second Circuit to rehear the case, especially since the original three-judge panel had expressed some concerns over its own ruling, and even thought that the case might benefit from a full panel review. And yet... that's not going to happen. Joe Mullin points us to the news that the court has rejected the request for an en banc (full panel) rehearing of the case.

It did this despite the fact that the Justice Department, the American Medical Association and 34 state attorneys general all filed briefs in support of an en banc rehearing. And, then there's the FTC which is against these kinds of deals as well, and claims that they've cost consumers over $3.5 billion per year, and that number is rapidly growing each year. Of course, with all that firepower against such blatantly anti-competitive deals that make it more expensive to get important drugs, you'd think that perhaps a law change would be in order. No such luck. While the big health care reform bill that was passed earlier this year at one time had a provision outlawing such pay-for-delay scams, it got dropped from the bill along the way.

Filed Under: antitrust, patents, pay for delay, pharmaceuticals

Texas Attorney General 'Investigating' Google, With Little Basis In Reality

from the not-this-again dept

I'm beginning to think we need a series of posts on "State Attorneys General Gone Wild." We've discussed the insider's view from Topix' Chris Tolles about how state attorneys general grandstand against tech sites, despite having absolutely no legal basis. We've seen it happen over and over and over and over and over again (most recently with Craigslist -- a favorite target).

Late Friday, the news broke that Texas' AG was "investigating" Google for antitrust violations, using the trio of companies that have been mentioned for a while now -- Foundem, MyTriggers and TradeComet -- who have all been making a stink about how Google is somehow violating antitrust laws because those three sites don't like their rankings in Google. All three claim that they're competitors to Google, and Google is somehow trying to hold them down. This is, frankly, ridiculous. As has been explained over and over again, rankings are an opinion, protected by free speech rights. And, furthermore, if Google was really trying to keep competitors down, wouldn't it actually focus on players that actually matter in the space? Besides, if you look on Google, you can easily find highly ranked links to all sorts of Google competitors. It's also worth mentioning, of course, that all three of these companies have some sort of connection to Microsoft.

So, once again, we have some silly grandstanding, and it's not at all clear what Texas has to do with any of this. None of the companies are based in Texas, and Google's not breaking any laws here. It seems like just more grandstanding by a state AG against Google. It'll be interesting to see what happens, because unlike sites like Topix and Craigslist, Google might actually have enough clout to not just give in and settle.

Meanwhile, Danny Sullivan does a nice job summarizing the ridiculousness of this (that's the link above):

My view is the arguments are generally absurd. None of these companies are large enough to pose any threat to Google, to the degree it would be compelled to take such stupid action. Moreover, if Google's going to act to block a competitor, I'd expect it to pick bigger targets -- say like Microsoft.

And for the legal view, we turn to Eric Goldman who sums it up with the title "Are You Kidding Me???":

I'm always amazed by people who forget that Google's organic search and ad ordering are editorial processes fully protected by the First Amendment. Part of this myopia is Google's own fault. It has so successfully sold itself as a technology platform that we forget about the editorial processes embedded in its core business. As a result of those judgments, any legal challenges to Google's search practices runs squarely into serious First Amendment considerations.

I'm also intrigued by the potential role of 47 USC 230(c)(2), a federal law which basically insulates websites' filtering decisions from any state law causes of action (except state wiretapping laws and possibly state IP claims). The interplay between 230(c)(2) and antitrust claims is hardly clear, but it's possible that the Texas AG's efforts are completely preempted by the federal statute.

Goldman also wonders what the actual result would be if Texas AG Greg Abbott "succeeds" in forcing Google to change its ranking process: "Let's assume Texas can actually establish a case against Google's algorithms. Then what? Will Greg Abbott start telling Google how it should run its search engine? It's hard to imagine that the cure will be better than the disease."

Finally, and in a way that no one else can, the folks over at Groklaw has an astoundingly detailed look at how ridiculous this claim is.

Filed Under: antitrust, greg abbott, texas
Companies: foundem, google, microsoft, mytriggers, tradecomet

Can Antitrust Law Stop Abuses Of Intellectual Property And Free Access To Knowledge?

from the it-would-be-a-start... dept

A year ago, at the Congressional Internet Caucus' State of the Net West event, I was pleasantly surprised to hear Rep. Zoe Lofgren make the suggestion that an area that antitrust regulators should really be looking at is how copyright law is abused for anti-competitive reasons. Now, Glyn Moody points us to a new paper from Sean Flynn (who's been active in trying to get ACTA negotiators to answer questions) about how antitrust laws could be useful in stopping abuses of intellectual property law and improving access to knowledge. I'm not convinced this will actually work, but it's an interesting area that seems worth exploring.

Filed Under: antitrust, intellectual property

Is Microsoft Behind Antitrust Claims Against Pretty Much Everyone Else Now?

from the it's-all-politics dept

While some feel that the long antitrust fight against Microsoft ended up having little impact, there does appear to be some evidence that Microsoft recognizes what a pain dealing with antitrust accusations are. That seems to be the most reasonable explanation for why Microsoft seems to be showing up behind the scenes in recent antitrust activity against both Google and IBM. With Google, a few small companies with highly dubious claims have stepped up with antitrust claims against Google, but of course, there's a secret Microsoft connection in that these tiny companies with monetary disputes that are a pittance, seem to have secured the help of some super high-powered lawyers who have a long history of working with Microsoft. Hmm...

And then, last week, the news came out that the EU was investigating IBM for supposed antitrust violations -- and, IBM is now claiming that the small companies involved in the complaints are "proxies of Microsoft." Yes, it looks like rather than actually being about protecting consumers, antitrust activity has now become about saddling competitors with a huge distracting fight.

Of course, IBM's activity is a bit shady here as well. Part of the issue was that they were trying to block these companies that make software emulators of IBM hardware. IBM claims that such emulators "pirate IBM's intellectual property." That seems pretty silly. An emulator shouldn't be seen as infringing. Of course, if IBM is found to be violating antitrust behavior, then it may be its own fault here as well: intellectual property is, inherently, about using monopoly power. But, if you rely on one form of monopoly power, you shouldn't be surprised when another form comes back to bite you.

Filed Under: antitrust, competition, politics
Companies: google, ibm, microsoft

Texas AG Looks Into Price Fixing Antitrust Questions Surrounding Ebooks

from the had-to-happen dept

As many of you surely know, earlier this year, there was a bit of a fight between publishers and Amazon over ebook pricing, which resulted in Amazon backing down from its "all ebooks at $9.99" policy, and publishers getting the ability to raise the price on ebooks. The whole thing seemed a bit odd, and smacked of price fixing and antitrust (potentially collusion). Apparently I wasn't the only one who thought so. Nastybutler77 points us to the news that the Attorney General in Texas is now investigating the issue. The theory is that it's an investigation into Apple's practices -- which could fit with the Justice Department's own investigation into potentially anti-competitive practices by Apple. But, I'm wondering why the focus isn't more on the book publishers. It used to be that retailers got to set their own pricing, and vendors requiring retailers to set a certain price violated price fixing laws. Recent case law has backed away from that concept, though I'm still not sure I understand why.

Filed Under: antitrust, ebooks, price fixing, pricing, texas
Companies: amazon, apple

Justice Department Asking Questions About Apple Trying To Block Labels From Offering Deals To Amazon

from the restraint-of-trade... dept

Back in March, we wrote about reports that Apple had gone around and pressured various record labels to stop working with Amazon on its "MP3 Daily Deal" promotion. The reports suggested that Apple had told the labels that it would not promote any releases that were featured as Amazon's Daily Deal. As we noted at the time, this sounded like a classic "restraint of trade" situation that the government tends to frown upon, especially when performed by what might be considered the dominant player in the market. I'm not sure I believe it should be an antitrust issue, but it certainly is the kind of thing that the government gets upset about.

So it should come as little surprise at all to find out, indeed, that the Justice Department is now looking into this. Of course, it's early, and nothing may come of it, but you would still think that Apple would be a bit more careful than blatantly telling partners not to work with a competitor. Or does Steve Jobs hope that his powers of persuasion will wow over the Feds as well?

Filed Under: antitrust, music, promotions
Companies: amazon, apple, justice department

Supreme Court Says Antitrust Law Applies To The NFL; No Exclusive Licensing Allowed

from the good-move dept

Earlier this year, we mentioned the Supreme Court was reviewing a lawsuit over whether or not the NFL had the right to have an exclusive license for its apparel. A company, American Needle, who had supplied apparel to various NFL teams, sued the NFL after it had entered into a long-term exclusive contract with Reebok to handle all team apparel. American Needle claimed that this was a clear anti-trust violation, as all of the teams had colluded to exclude everyone else from the market. The NFL argued, instead, that the entire league should be viewed as a single company. Today, the Supreme Court ruled against the NFL, saying that each team should be viewed as a separate company. The case then gets sent back down to be reconsidered: The details of this particular case are somewhat unique, in that it really only applies to situations where there are sports leagues (Major League Baseball is the only sports league that has an official exemption from Congress for antitrust issues -- though it's not clear why the different treatment). However, the decision by retiring Justice John Paul Stevens highlights the importance of competition, and the problems of letting organizations team up, just because teaming up makes better financial sense for all of those organizations:

Directly relevant to this case, the teams compete in the market for intellectual property. To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks. When each NFL team licenses its intellectual property, it is not pursuing the "common interests of the whole" league but is instead pursuing interests of each "corporation itself," Copperweld, 467 U. S., at 770; teams are acting as "separate economic actors pursuing separate economic interests," and each team therefore is a potential "independent cente[r] of decisionmaking," id., at 769. Decisions by NFL teams to license their separately owned trademarks collectively and to only one vendor are decisions that "depriv[e] the marketplace of independent centers of decisionmaking," ibid., and therefore of actual or potential competition.

This makes a lot of sense. Otherwise, you could argue that any particular industry could set up an organization of which all the companies in that industry are a "member" and allow that single organization to negotiate exclusive deals, with the argument that it's "for the common interests of the whole." But, that's obviously collusion, with the intent to harm consumers. Thankfully, the Supreme Court saw through the flimsy claim that such a structure makes companies immune to antitrust law.

Filed Under: antitrust, supreme court, trademark
Companies: american needle, nfl, reebok

Company Sues MPEG-LA, Claiming Antitrust Violations Over Patents

from the this-could-be-interesting... dept

It's no secret (though certain copyright and patent system defenders insist otherwise) that copyrights and patents are monopoly privileges, granted by the government. In fact, some of our elected officials have made the argument that antitrust law should be used against the worst abuses of intellectual property law. While it's unclear how successfully that will play in courts, we may soon have a bit of a test case. Slashdot points us to the news that German company Nero AG is suing MPEG-LA, claiming abuse of monopoly power with its patent pools for licensing digital video codecs.

As you may recall, MPEG-LA acts as a patent pool for many important patents related to digital video -- to the point that the organization appears to believe it is not possible to do digital video without infringing on those patents. Recently, the company has been getting more aggressive, first starting up a separate patent trolling subsidiary, and also threatening Google and others for trying to set up a new open video standard.

In this particular case, the details are important. OS News notes that MPEG-LA had approached the Justice Department back in the 90s to get an "all clear" against any antitrust problems, which the DoJ gave with some conditions. Nero suggests those conditions have not been met:

First, the MPEG-LA would engage with independent experts to ensure only essential patents would be placed in the MPEG-2 pool. They told the DOJ that the MPEG-2 pool constituted of 53 essential patents. Second, independent experts would "weed out nonessential patents" from the pool. Third, licensing terms would be "fair, reasonable, and nondiscriminatory".

Nero claims none of these safeguards were honoured, and here's where it gets juicy; "absolute power has corrupted the MPEG-LA absolutely", according to Nero. First of all, the so-called independent expert was anything but independent. The expert helped form the MPEG-LA, helped in drafting the first MPEG-LA licensing agreements, answers questions from licensees on behalf of the MPEG-LA, has attended business settlement meetings on behalf of the MPEG-LA, and has testified before US congress on behalf of the MPEG-LA. Heck, he is listed on the MPEG-LA website as "MPEG-LA's US patent counsel".

Nero also claims that the MPEG-LA has unlawfully extended its patent pools by adding non-essential patents to the MPEG-2 patent pool. Even though the MPEG-LA told the DOJ there were only 53 essential MPEG-2 patents, the non-independent expert added round and about 800 more patents to the pool, extending the duration of the patent pool, since the old, 53 essential patents expired....

Nero further claims that the MPEG-LA has "formulated and imposed licensing terms that are unfair, unreasonable, and discriminatory", by charging different royalty rates from licensees for the same MPEG-2 license and by not making any downward adjustment in line with the "rapid and dramatic" decrease in costs of implementing the MPEG-2 standard. In addition, the MPEG-LA collects royalties for the same device multiple times (internal hardware, software, monitor, etc.), and the licensing body has failed to "communicate its policies equally to all licensees".

MPEG-LA has responded to the lawsuit by basically accusing Nero of being an infringer with sour grapes. Now let's see what the courts think...

Filed Under: antitrust, patents, video
Companies: mpeg-la, nero

Ohio Attorney General Says Google Not Protected By Section 230 In Antitrust Lawsuit

from the ah,-local-laws dept

Back in February, we highlighted a rather odd antitrust lawsuit brought against Google by a small company. Google had originally brought a lawsuit against the company in the Ohio state court system for failure to pay its advertising bills, and the company suddenly came back with a group of big name (expensive) lawyers (who just happen to have a connection with Microsoft), claiming antitrust violations against Google. Google filed to dismiss the lawsuit, claiming that its protected in its actions under Section 230 -- and that this trumps any state laws. It appears that Ohio's Attorney General is siding with the local company. Eric Goldman points us to the news that the Attorney General is arguing that Section 230 does not apply here, saying that state laws trump Section 230 and that Google's reasoning for why Section 230 apply are flawed: The reasoning is a bit of inside baseball, but it's interesting to note that even Ohio's Attorney General is now getting involved in this case, which started as a small time attempt to collect some unpaid bills... and has now turned into something much, much bigger.

Filed Under: antitrust, section 230
Companies: google

Apple To Face Antitrust Investigation Over Its iPhone Development Policies?

from the better-things-to-do dept

The FTC and the DOJ are reportedly holding talks over which group will launch an antitrust inquiry into Apple's policies regarding app development for the iPhone and iPad. Apple recently made a change to the terms of its iPhone SDK, barring developers from using third-party development tools. Apple claims it did this to ensure that iPhone apps are of the highest quality, but the real reason appears to be to push developers to only develop for the iPhone, and not other rival platforms. The behavior may be as annoying as it is unsurprising, but it's hard to see how this warrants antitrust action and government intervention. Apple isn't restricting access to that market completely, they're just forcing developers to use certain tools in order to participate in it. While Apple is trying to throw its weight around for its own benefit, what its doing may not necessarily be illegal -- but that doesn't mean it's a good idea either. This policy seems likely to fail in the marketplace more quickly than any resolution through government intervention could take effect.

Filed Under: antitrust, development, iphone
Companies: apple