for work around innovators), we must also protect the incentives of parties to compete with the original innovator.[1]
Moreover, from a doctrinal standpoint, I’m not sure the rule of reason is all it’s cracked up to be. Professor Hovenkamp (one of the principal champions of a full-blown rule of reason) may know how to “weigh” anticompetitive effects and procompetitive effects, but I sure don’t. The Supreme Court rarely applies the rule of reason and provides no guidance on how to weigh rule of reason considerations more generally—a fact that is underscored by the appellate courts’ own disarray. Indeed, even the D.C. Circuit’s decision in Microsoft[2]—arguably the most sophisticated Section 2 decision on the books – didn’t explain very well how to weigh anticompetitive effects against procompetitive effects or how to decide which prevails. So, to put it bluntly, I’m not persuaded that applying the rule of reason to all conduct by innovators—simply because they are innovators—would result in anything more than additional discord (as opposed to certitude) for the business community.
A fifth challenge I have heard concerns innovation more generally. In the 30 years since the consent in Xerox,[3] the agencies have never litigated to conclusion a
- ↑ Brief of Amicus Curiae Federal Trade Commission on Rehearing En Banc Supporting Neither Party, TiVo, Inc. v. EchoStar Corp., No. 2009-1374 (Fed. Cir. Aug. 2, 2010) (argued Nov. 9, 2010), available at http://www.ftc.gov/os/2010/08/100802tivoechostarbrief.pdf.
- ↑ See, e.g., United States v. Microsoft Corp., 253 F.3d 34 (D.C. Cir. 2001).
- ↑ See Complaint at ¶¶14 (a)-(c), 15, Xerox Corp., Docket No. 8909 (Jan. 16, 1973), reprinted in In re Xerox Corp., 86 F.T.C. 364 (Jul. 29, 1975). The Xerox case is discussed in detail in Willard K. Tom, The 1975 Xerox Consent Decree: Ancient Artifacts and Current Tensions, 68 ANTITRUST L.J. 967 (2000-01). In Xerox, the Commission alleged that Xerox violated Section 5 of the FTC Act by creating and preserving a noncompetitive market structure in the market for plain paper copiers by, among other things, developing an extensive patent portfolio through acquisition of control over Rank Xerox, a joint venture in which Xerox had previously held a non-majority stake. Because Xerox had acquired patents to all of the technologies needed to engage in xerography, the Commission alleged that Xerox was eliminating the competition in the development and creation of office copiers. The Commission settled the Xerox suit in 1975 with a consent decree that required Xerox to permit the use of any three of its dry paper copier patents on a royalty-free basis and to desist in pursuing certain of its infringement suits.
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