Antitrust and Trade Regulation Commons^™

Reflections On Section 5 Of The Ftc Act And The Ftc's Case Against Intel, Daniel A. Crane

Articles

The Federal Trade Commission’s (“FTC’s”) unprecedented enforcement action against Intel raises profound issues concerning the scope of the FTC’s powers to give a construction to Section 5 of the FTC Act that goes beyond the substantive reach of the Sherman Act. While I have urged the FTC to assert such independence from the Sherman Act, this is the wrong case to make a break. Indeed, if anything, Intel poses a risk of seriously setting back the development of an independent Section 5 power by provoking a hostile appellate court to rebuke the FTC’s effort and cabin the FTC’s powers in …

Did We Avoid Historical Failures Of Antitrust Enforcement During The 2008-2009 Financial Crisis?, Daniel A. Crane

Articles

During both economic crises and wars, times of severe national anxiety, antitrust has taken a back seat to other political and regulatory objectives. Antitrust enforcement has often been a political luxury good, consumed only during periods of relative peace and prosperity. In 1890, the Sherman Act's adoption kicked off the era of national antitrust enforcement. Barely three years later, the panic of 1893 provided the first major test to the national appetite for antitrust enforcement. Perhaps 1893 should not be included in the story: antitrust was still young, and it was not even clear that the Sherman Act applied to …

Optimizing Private Antitrust Enforcement, Daniel A. Crane

Articles

Private litigation is the predominant means of antitrust enforcement in the United States. Other jurisdictions around the world are increasingly implementing private enforcement models. Private enforcement is usually justified on either compensation or deterrence grounds. While the choice between these two goals matters, private litigation is not very effective at advancing either one. Compensation fails because the true economic victims of most antitrust violations are usually downstream consumers who are too numerous and remote to locate and compensate. Deterrence is ineffective because the time lag between the planning of the violation and the legal judgment day is usually so long …

Does Monopoly Broth Make Bad Soup?, Daniel A. Crane

Articles

There is an oft-repeated maxim in U.S. antitrust law that a monopolist's conduct must be examined in its totality in order to determine its legality. Judges admonish that plaintiffs "should be given the full benefit of their proof without tightly compartmentalizating the various factual components and wiping the slate clean after scrutiny of each." As the U.S. Court of Appeals for the Seventh Circuit stated in much-quoted language, "It is the mix of various ingredients ... in a monopoly broth that produces the unsavory flavor."' In this article, I examine the use and misuse of monopoly broth theories. Reflecting a …

A Tale Of Two Theories Of Well-Known Marks, Leah C. Grinvald

Vanderbilt Journal of Entertainment & Technology Law

The well-known marks doctrine presents a conundrum in international trademark law. Although protecting foreign well-known trademarks has been a treaty obligation since 1925, courts around the world, and in the United States and China in particular, do not uniformly apply the doctrine. This lack of uniform protection leads to the question of whether these countries are complying with their international obligations. While brand owners and some commentators would answer this question in the negative, this Article provides a different perspective. This Article offers an alternative approach to answering the compliance question: Before considering the question, one must examine the perspective …

The Obama Administration And Section Two Of The Sherman Act, Herbert J. Hovenkamp

Faculty Scholarship at Penn Carey Law

During the administration of President George W. Bush, the Antitrust Division was not enthusiastic about use of §2 of the Sherman Act to pursue anticompetitive single-firm conduct. Indeed, its most prominent contribution on the issue was the Antitrust Division’s §2 Report, which the Obama Antitrust Division withdrew only eight months after it was issued.This withdrawal was entirely in keeping with candidate Obama’s repeated promises to reinvigorate antitrust enforcement.

This essay analyzes the current state of antitrust and makes recommendations concerning structures and practices where increased §2 enforcement is warranted and those where it is not. Wise use of enforcement dollars …

The Challenge Of Interpreting 'Wto-Plus' Provisions, Julia Ya Qin

Law Faculty Research Publications

This paper seeks to address special interpretive issues raised by the China Accession Protocol, focusing on provisions that prescribe more stringent rules for China than generally applicable WTO disciplines. These ‘WTO-plus’ provisions have already been involved in several WTO disputes. In the light of these disputes, the paper analyzes the interpretive challenge presented by the Protocol and suggests that, to meet the challenge, WTO adjudicators need to embrace a more holistic and systemic interpretive approach. The paper then proposes three working principles that may help to interpret the WTO-plus provisions of the Protocol in a coherent and systematic manner.

Pharmaceutical Patent Litigation Settlements: Implications For Competition And Innovation, John R. Thomas

Georgetown Law Faculty Publications and Other Works

Although brand-name pharmaceutical companies routinely procure patents on their innovative medications, such rights are not self-enforcing. Brand-name firms that wish to enforce their patents against generic competitors must commence litigation in the federal courts. Such litigation ordinarily terminates in either a judgment of infringement, which typically blocks generic competition until such time as the patent expires, or a judgment that the patent is invalid or not infringed, which typically opens the market to generic entry.

As with other sorts of commercial litigation, however, the parties to pharmaceutical patent litigation may choose to settle their case. Certain of these settlements have …

A Decision-Theoretic Rule Of Reason For Minimum Resale Price Maintenance, Thom Lambert

Faculty Publications

This article evaluates these approaches from the perspective of decision theory and, finding each lacking, proposes an alternative approach to structuring the rule of reason governing RPM. Part II sets forth the decision-theoretic perspective, which seeks to maximize the net benefits of liability rules by minimizing the sum of decision and error costs. Part III then evaluates, from the standpoint of decision theory, the proposed approaches to evaluating instances of RPM. Part IV proposes an alternative evaluative approach that is more consistent with decision theory’s insights.

The Law And Economics Of Monopolization Standards, Keith N. Hylton

Faculty Scholarship

Monopolization, the restriction of competition by a dominant firm, is regulated in roughly half of the world’s nations. The two most famous laws regulating monopolization are Section 2 of the Sherman Act, in the United States, and Article 82 of the European Community Treaty. Both laws have been understood as prohibiting ‘abuses’ of monopoly power.

Optimal Antitrust Enforcement, Dynamic Competition, And Changing Economic Conditions, Keith N. Hylton

Faculty Scholarship

The recent financial crisis and recession provide an opportunity to reexamine the dynamic versus static efficiency tradeoff in antitrust enforcement policy. We examine implications of the optimal antitrust enforcement model when dynamic efficiency is incorporated. The “dynamic enforcement model” examined here provides a positive theory of Section 2 doctrine, some suggestions for modifying enforcement in light of its dynamic costs, and implies antitrust enforcers should put a greater weight on dynamic efficiency during recessions.

Intel And The Death Of U.S. Antitrust Law, Keith N. Hylton

Faculty Scholarship

The Federal Trade Commission’s (“FTC’s”) new legal attack on Intel threatens to leave the company a shell of its former self. The Commission claims that Intel violated Section 5 of the FTC Act by giving discounts and rebates to customers in a manner that harmed its main rival AMD, by designing its products in a way that disadvantages rivals, and acting too aggressively in protecting its intellectual property. The remedies the FTC is seeking would impose broad restrictions on pricing, product design, and protection of intellectual property.

The FTC’s claims are not well founded in U.S. antitrust law, though they …

The Evolution Of Trade Secret Law And Why Courts Commit Error When They Do Not Follow The Uniform Trade Secrets Act, Sharon Sandeen

Faculty Scholarship

In the spring of 2010, the Hamline Law Review hosted a symposium to mark the thirtieth anniversary of the adoption of the Uniform Trade Secrets Act. This article was written for the symposium and provides an exhaustive and detailed account of the historical context and drafting history of the Uniform Trade Secrets Act (the UTSA).

Among other stories that it tells, the article explains that the UTSA was prompted by the “Erie/Sears/Compco squeeze.” Because of the Supreme Court’s famous decision in Erie R.R. Co. v. Tompkins in 1938, it was understood by business interests and their attorneys that the common …

Pharmaceutical Reverse Payment Settlements: Presumptions, Procedural Burdens, And Covenants Not To Sue Generic Drug Manufacturers, Catherine J. K. Sandoval

Faculty Publications

This Article analyzes recent developments in antitrust law, focusing on agreements between pharmaceutical patent holders and generic drug manufacturers that require a generic manufacturer to delay its market entry in exchange for a payment or other consideration from the patent holder. A predictable consequence of settlements that delay the marketing of a generic drug is that prices for the patented drug will remain higher than if the generic competitor had prevailed in its challenge to the patent's validity or the patent holder had failed to show that the generic infringed on its patent. Analysis of the legality of these settlements …

Back To The Future: Rediscovering Equitable Discretion In Trademark Cases, Mark P. Mckenna

Journal Articles

Courts in recent years have increasingly made blunt use of their equitable powers in trademark cases. Rather than limiting the scope of injunctive relief so as to protect the interests of a mark owner while respecting the legitimate interests of third parties and of consumers, courts in most cases have viewed injunctive relief in binary terms. This is unfortunate, because greater willingness to tailor injunctive relief could go a long way to mitigating some of the most pernicious effects of trademark law’s modern expansion. This Essay urges courts to reverse this trend towards crude injunctive relief, and to re-embrace their …

Patent Pools, Rand Commitments, And The Problematics Of Price Discrimination, Daniel A. Crane

Book Chapters

The social welfare problematics of patent pooling by competitors are well known. Competitor patent pooling has the potential to create powerful efficiencies by eliminating holdout problems and blocking positions and reducing transactions costs from licensing negotiations. At the same time, competitors can use patent pools to cartelize in a variety of ways, for example by fixing prices, entrenching patents of dubious validity, and discouraging rivalry for innovation. Determining legal norms capable of capturing the efficiencies without enabling cartels has not proven easy.

Perhaps because of the practical difficulty of separating pro-competitive from anticompetitive pools, antitrust scrutiny has swung from extreme …

Unilateral, Anticompetitive Acquisitions Of Dominance Or Monopoly Power, Avishalom Tor

Journal Articles

The prohibition of certain types of anticompetitive unilateral conduct by firms possessing a substantial degree of market power is a cornerstone of competition law regimes worldwide. Yet notwithstanding the social costs of monopoly modern legal regimes refrain from prohibiting it outright. Instead, competition laws prohibit monopolies or dominant firms from engaging in those types of anticompetitive conduct that amount to monopolizing or an abuse of dominant position. Importantly, anticompetitive conduct can take place both on the road to monopoly and, later on, once substantial market power has been achieved. Legal regimes nevertheless tend either to ignore or pay only limited …

Intellectual Property And Antitrust Limits On Contract: Comment, Matthew J. Holian, Neil Nguyen

Faculty Publications

In their chapter in Dynamic Competition and Public Policy (2001, Cambridge University Press), Burtis and Kobayashi never defined their model's discount rate, making replicating their simulation results difficult. Through our own simulations, we were able to verify their results when using a discount rate of 0.10. We also identified two new types of equilibria that the authors overlooked, doubling the number of distinct equilibria in the model.

Governing Gambling In The United States, Maria E. Garcia

CMC Senior Theses

The role risk taking has played in American history has helped shape current legislation concerning gambling. This thesis attempts to explain the discrepancies in legislation regarding distinct forms of gambling. While casinos are heavily regulated by state and federal laws, most statutes dealing with lotteries strive to regulate the activities of other parties instead of those of the lottery institutions. Incidentally, lotteries are the only form of gambling completely managed by the government. It can be inferred that the United States government is more concerned with people exploiting gambling than with the actual practice of wagering.

In an effort to …

Designing Antitrust Agencies For More Effective Outcomes: What Antitrust Can Learn From Restaurant Guides, D. Daniel Sokol

UF Law Faculty Publications

Antitrust policy should be concerned with the quality and effectiveness of the antitrust system. Some efforts at agency effectiveness include self-study of antitrust agencies to determine the factors that lead to improving agency quality. Such studies, however, often focus only on enforcement decisions and other agency initiatives such as competition advocacy. They do not reflect at least one other part of the equation: what do non-government users of the antitrust system think about the quality of antitrust agencies? This Symposium Essay advocates the use of a ratings guide by antitrust practitioners for antitrust agencies to add to the tools in …