June 8, 2005
Billboards on the Virtual Highway?
David Giacolone passed on this disturbing piece of news: The Kentucky Attorney General has taken the position that a blog is an advertisement, requiring an attorney blogger to pay a mandatory $ 50 fee for each post. More on this at David's blog where you can also find strategies to put a stop to this dangerous bit of legal prestidigitation.
June 7, 2005
Antitrust and IP: A View From The DOJ
Hewitt Pate, the current head of the antitrust division in the Department of Justice, spoke on antitrust and intellectual property last week at the 2005 EU Competition Workshop in Florence, Italy. His talk was subtitled Licensing Freedom and the Limits of Antitrust. Here's a sample:
"Sound antitrust enforcement condemns anticompetitive conduct. It does not attempt to regulate the amount of competition in a general sense or address vague questions of fairness. It does not attempt to create an affirmative incentive for procompetitive conduct, by promising any specific reward or legal recognition for competitors who play by the rules. It focuses on specific anticompetitive actions, as judged by their effects on markets and consumer welfare. Although this narrow focus is a limitation, at the same time it is a great strength--it makes possible objectivity, predictability, and transparency.
"Intellectual property laws, by contrast, provide a complex system of affirmative rewards for an important type of procompetitive behavior--innovation. They take consumer welfare into account, but in different ways than does antitrust. First, they reward innovators with exclusive rights that serve as an incentive to bring new and improved goods and services to market. The hope is that such innovations will lead to increased competition and increased consumer welfare in the long term. Second, they strike a balance between these rights and certain types of public access, such as fair use under copyright law or the disclosure requirement and the limited term of patents. They also include a fail-safe procedure under which a rival or a customer can sue to declare an intellectual property right noninfringed or unenforceable for a number of reasons. So the legislature, via the IP laws, has struck a balance between the rights of IP owners, the rights of consumers, and concerns for a competitive marketplace. This may or may not be the correct balance; nevertheless, it is the one the legislature has chosen.
"It is important to understand precisely what reward is offered by the IP laws. Each type of IP right provides "exclusivity" for its owner. What does this exclusivity mean? It does not mean a right to commercialize any invention or creation. The owner of an improvement patent, for example, may find itself blocked from practicing its own patent if it cannot secure permission from the original patentee. Instead, what IP rights provide is the right to exclude others. The right to exclude is not simply one of the rights provided by intellectual property, it is the fundamental right, the foundation upon which the entire IP system is built. "
Coming Soon to the Supreme Court: A Robinson-Patman Case
The Supreme Court granted review of a case raising issues of competition and dealer foreclosure under the Robinson-Patman Act. The case will be heard during the 2005-2006 term. In Volvo v. Reeder, the Court will decide whether Volvo's practice of receiving competitive bids from potential truck retailers in exchange for price concessions constitutes price discrimination prohibited under the Robinson-Patman Act. The trial court and the US Court of Appeals for the 8th Circuit have found against Volvo, with the appellate court concluding that Reeder's fall in profits after being discontinued as a Volvo dealer was a result of Volvo's disfavoring Reeder in comparison to other retailers. The dissenting judge in the 8th Circuit questioned whether Robinson-Patman was applicable since Volvo granted concessions to retailers who were not in direct competition with Reeder.
Commerce, Cannabis, and Competition
As perhaps you have heard by now, the Supreme Court upheld Congress' power to regulate medicinal marijuana under the Commerce Clause in Gonzales v. Raich, decided yesterday. The decision was correct as far as federalism is concerned but bad policy from the perspective of drug regulation. It is unlikely that Congress will backtrack on the war on drugs, but perhaps sometime in the next ten years (as the wind on the Hill starts blowing in a different direction), there will be a federal exception for medicinal uses. Most likely what will happen before then is a policy of, to coin a phrase, "don't tell, don't prosecute." At least, I hope federal agents don't start going after the infirm and the weak even if they have the power to do so.
Jose Melendez, founder of the Concerned Citizens Coalition to Criminalize Prohibition in Florida, offers a novel theory: the war on drugs is anticompetitive policy and has been influenced by members of industry that want to monopolize and raise the price of legal intoxicants and pharmaceuticals. Mr. Melendez offers a colorful and interesting perspective which probably meshes with some of the realities of the history of marijuana regulation in the United States, even if the theories are a bit too conspiratorial.