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University of Florida
Levin College of Law

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Thursday, November 6, 2008

FTC Announces First in Series of Hearings on Evolving Intellectual Property Marketplace

Posted by D. Daniel Sokol

An important hearing is the FTC's recently announced hearing on the Evolving Intellectual Property Marketplace.  According to the Notice in the Federal Register:

The December 5 hearing will include three th panels addressing a range of topics related to the valuation of patents and the operation of the market for intellectual property. A primary goal of this first hearing is to identify those issues that require more in-depth study in subsequent hearings. In the first panel, participants will discuss the operation and impact of emerging business models, aspects of the patent system that support those models, and industry responses. The second panel will explore remedies law and the need for economic analysis in this area. In the third panel, participants will examine legal doctrines that affect the value and licensing of patents, such as the recent Supreme Court cases on obviousness, declaratory judgment and exhaustion, and doctrines that make the scope and enforcement of patents unpredictable. The panel will consider whether the notice function of patents operates to support an efficient marketplace. The Commission invites public comments discussing the current marketplace for intellectual property, in particular its impact on innovation incentives and competition concerns and the role of economic analysis in this assessment. The Commission will accept comments, as described above, until February 5, 2009. Comments addressing any of the following questions would be particularly helpful.

1. How has the IP marketplace changed in the past five to ten years? What changes are expected in the future? What aspects of the patent system drive those changes? What is the impact of those changes on innovation?

2. What are the new business models involving intellectual property? What has motivated the development of these business models? What is their impact on innovation?

3. What economic evidence is relevant when analyzing whether to grant a permanent injunction following a finding of infringement? What proof have courts required? How should the analysis take into account the incentives to innovate provided by the patent system and the benefits of competition? What is the appropriate remedy when the court has denied a permanent injunction after a finding of infringement?

4. Do the legal rules governing patent damages result in awards that appropriately compensate patentees? Are there circumstances in which they result in overcompensation or undercompensation of patentees? What evidence is there of the extent of these problems? What information would be helpful to better assess whether damage awards appropriately compensate patentees? Are courts and juries able to make damages determinations with sufficient accuracy? To the extent that there are problems resulting from the determination of damages for patent infringement, how should they be addressed?

5. How have changes in willfulness doctrine changed the behavior of patentees and potential infringers? Do recent changes in the law adequately address the concerns with willfulness doctrine identified in the October 2003 FTC IP Report?

6. How will changes in patent law rendered by Supreme Court and Federal Circuit decisions of the past five years affect the value of patents? How will these changes affect the operation of the IP marketplace? How will they affect innovation and competition?

7. How does uncertainty regarding the validity and scope of patents affect the operation of the IP marketplace? Does the current system adequately fulfill the notice function of patents? How does uncertainty influence the operation of the IP marketplace? What are the sources of uncertainty that affect the value of patents and the operation of the IP marketplace? What could be done to address them?

8. How transparent is the current IP marketplace? Can it be made more transparent? Is that desirable?

9. During the past five years, what new learning has furthered the understanding of the patent system and the IP marketplace?

DATES: The first hearing will be held December 5, 2008, in the Conference Center of the FTC office building at 601 New Jersey Avenue, N.W., Washington, D.C. All interested parties are welcome to attend. An agenda for that hearing will be posted on the FTC’s website, www.ftc.gov. The Commission may hold subsequent hearings in Washington, D.C. and other locations. Prior to each hearing, the Commission will publish an agenda on its website.

ADDRESSES: Any interested person may submit written comments responsive to any of the topics identified in this Federal Register notice or in any subsequent announcement related to hearings on the Evolving IP Marketplace. Respondents are encouraged to provide comments as soon as possible, but no later than February 5, 2009. The FTC will only accept comments submitted by weblink or in hard copy format. Information about how to submit comments will be posted on the website for the hearings, accessible at http://www.ftc.gov/ftc/workshops.shtm

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