Joff Wild

The Wall Street Journal is reporting that the US Justice Department and the Federal Trade Commission are inviting a group of companies and NPEs to an informal hearing in Washington DC next month as part of their ongoing efforts to get a better understanding of whether “specialized patent-holding firms” are having an impact on competition in high-tech markets. The WSJ quotes Joseph Wayland, who until last week was the acting head of the DoJ’s anti-trust department, as saying: “There's a possibility of competitive harm here." And the report continues: “Mr. Wayland said officials are devoting "huge energy, particularly at a senior level" to this and other antitrust issues surrounding patents.”

Among those invited to the US capital for the discussions are Cisco, Intellectual Ventures and Nokia. That’s a good sign because those three are, respectively: a company that has been a consistent and outspoken critic of NPE business models (most recently launching legal action against two NPEs, accusing them of racketeering); probably the world’s biggest NPE in terms of portfolio and income, and one whose shareholders include a number of operating companies; and an operating company that over recent times has developed partnerships with NPEs. That those three have been asked along shows that the officials concerned are at least beginning to understand what it is they are looking at and just how complicated it can get.

Readers of this blog will not be surprised at this latest development. We have been looking at growing interest from the antitrust and competition authorities in the patent market generally and NPEs specifically for quite a while. Back in March we reported on the words of another former DoJ head of antitrust, Christine Varney, who told the Financial Times: “Intellectual property and the aggregation of patented technology will be among the biggest issues to emerge in the next few years, both in terms of reviews of transactions and industry conduct … We’re only in the early stages of understanding how the acquisition of patents might deter innovation.” Then last month we said that Rockstar and other NPEs might want to think about preparing themselves for investigations following comments made by Jeffrey Wilder, of the Economics Analysis Group at the DoJ’s Antitrust Division, during a webinar that had been organised by the ABA.

Of course, looking at and even formally investigating are not the same thing as coming to any definitive conclusions, but from the tone of what senior past and present employees of the DoJ are saying there does seem to be something of a consensus inside that organisation at least that there are issues which need to be addressed. And if they are thinking that in the US, you can put your life savings on the fact that they are having similar thoughts in Europe. After all, it’s not as if the Commission needs much excuse to come down like a ton of bricks on patent owners. The complaint that Google lodged with DG Competition earlier this year about the Nokia and Microsoft hook-up with MOSAID is increasingly looking like a very prescient move.