Richard Lloyd

Much of the analysis of Makan Delrahim’s appointment to head the Department of Justice’s antitrust division has, not surprisingly, focused on what it might mean for merger control. That’s partly because a number of mega-mergers in the US, such as AT&T’s bid for Time Warner, remain in various states of limbo as the parties wait to see how policy pans out under the new administration. 

But, if confirmed, Delrahim would arguably have the most IP experience of anyone who has ever led the DOJ’s antitrust unit. Over a career that has seen him make the typical switch between public service and private practice, Delrahim has worked on IP issues at the domestic and international trade levels, building a track record that earns him broad bipartisan respect. During the George W. Bush administration, he was a member of the Antitrust Modernization Commission which made a number of recommendations around the overlap of patents and antitrust; while before joining the Trump transition team, Delrahim worked as a lobbyist in private practice at Brownstein Hyatt Farber Schreck where his clients included Qualcomm. Early in his career, he also worked at the National Institutes of Health (NIH) where he was detailed to work as the deputy director for IP rights at the Office of the US Trade Representative.

His appointment, which is due to be formally announced on Monday, has generally been greeted warmly in antitrust and IP circles. “This is like choosing “Mad Dog” Mattis for defence,” claimed former senior FTC official David Balto, referring to the popular US defence secretary. “Makan is a strong enforcer who has a keen sense of the importance of antiturst enforcement in high-tech markets.  Antitrust is a bipartisan issue and it’s critical to have a leader who can work with both Democratic and Republican Congressman and Makan is clearly the best person for the job.”

IP lobbyist and founder of the Farrington Group, Peter Harter, pointed to Delrahim’s well-rounded credentials as another cause for optimism. “What’s most interesting about Makan is that he addresses issues with the background of a scientist as well as a lawyer and public servant,” he said.

It might still be a little too early to make bold predictions about just how significant this appointment is for the intersection of IP and antitrust. As one observer pointed out, Delrahim, like most antitrust officials, is likely to take a dim view where IP is being used in a monopolistic fashion. But, more broadly, there is certainly some hope that his appointment indicates that the Trump White House is going to take a far less expansive view of antitrust and how it relates to IP rights than the previous administration.

The intersection of antitrust and IP was one of the topics under discussion earlier this week at the LeadershIP event in Washington DC. One of the keynote speakers was Joshua Wright, a former commissioner at the Federal Trade Commission (FTC), who is now a law professor at George Mason University. Wright left the FTC in 2015 and, as he admitted, during his time at the commission he often found himself at odds with the Obama administration over the IP/antitrust nexus. In his speech, he made it very clear just how vital subject he considers it to be:

It is my view that there is no more important area with respect to competition policy for the incoming administration than the intersection of IP and antitrust. None that requires more attention and intellectual energy, none that requires more thoughtful strategy, none that requires more investment in the agencies and their own human capital to improve their performance and none in terms of areas of policy that are as important in a bang for your buck rate of return basis. In my view current antitrust IP policy at the DOJ and FTC is off the tracks.

As Wright and others at the event made clear this is important because as in so many other fields, what the authorities in the US say and do resonates around the world. It is no coincidence that as a school of thought developed in the US around how antitrust might be used to more aggressively police the assertion of IP rights, so other, overseas regulators have used it as an instrument to clamp down on the licensing practices of foreign, often American companies. Qualcomm’s recent travails in China and South Korea are perhaps the most obvious examples.

In the dying days of the Obama administration the chipmaker’s licensing practices were also thrust into the spotlight by a case filed by the FTC against the company in Northern California. That lawsuit was brought despite the strong objections of one commissioner, Maureen Ohlhausen, who is now the acting chair of the FTC. As the new administration slowly fills its key positions, early indications are that it might take a different tack on IP and antitrust which could have significant repercussions for the licensing market.