1 1 2 DEPARTMENT of JUSTICE ANTITRUST DIVISION 3 And
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1 1 2 DEPARTMENT OF JUSTICE ANTITRUST DIVISION 3 and FEDERAL TRADE COMMISSION 4 5 Hearing on: 6 7 COMPETITION AND INTELLECTUAL PROPERTY LAW 8 AND POLICY IN THE KNOWLEDGE BASED ECONOMY 9 10 Session 1: Refusals to License and Compulsory 11 Licensing in the European Union, 12 Canada, and Australia 13 14 Session 2: Licensing in the European Union: 15 The Technology Transfer Block Exemption and 16 Agreements that Fall Outside its Scope 17 18 19 Wednesday, May 22, 2002 20 Great Hall of the U.S. Department of Justice 21 333 Pennsylvania Avenue, N.W. 22 Washington, D.C. 2 1 MORNING SESSION PARTICIPATING PANELISTS: 2 3 Morning Session: Refusals to License and 4 Compulsory Licensing 5 6 Gwillym Allen, Senior Economist and Strategic 7 Policy Advisor, Competition Policy 8 Branch, Canadian Competition Bureau 9 Henry Ergas, Managing Director, Network Economics 10 Consulting Group, Australia 11 Ian Forrester, Executive Partner, White & Case 12 LLP, Brussels 13 David W. Hull, Partner, Covington & Burling, 14 Brussels 15 John Temple Lang, Counsel, Cleary, Gottlieb, 16 Steen & Hamilton, Brussels 17 Patrick Rey, Professor of Economics, University 18 of Toulouse, France, and Research 19 Director, Institut d'Economie 20 Industrielle 21 James S. Venit, Partner, Skadden, Arps, Slate, 22 Meagher & Flom, Brussels 3 1 AFTERNOON SESSION PARTICIPATING PANELISTS: 2 3 Afternoon Session: Licensing in the European 4 Union: The Technology Transfer Block 5 Exemption and Agreements that Fall 6 Outside its Scope 7 8 Peter Alexiadis, Partner, Squire, Sanders & 9 Dempsey, Brussels 10 Fiona Carlin, Local Partner, European Law Center, 11 Baker & McKenzie, Brussels 12 Yee Wah Chin, Senior Counsel, Mintz, Levin, Cohn, 13 Ferris, Glovsky & Popeo, P.C. 14 Maurits Dolmans, Partner, Cleary, Gottlieb, 15 Steen & Hamilton, Brussels 16 Mark D. Janis, Professor of Law, University of 17 Iowa College of Law 18 James Leavy, Partner, Serra, Leavy & Cazals, 19 Paris, France 20 Kirtikumar Mehta, Director, DG Competition, 21 European Commission 22 Willard K. Tom, Partner, Morgan, Lewis & Bockius 4 1 HEARING MODERATORS: 2 3 William J. Kolasky, Deputy Assistant Attorney 4 General, Antitrust Division, 5 Department of Justice 6 William E. Kovacic, General Counsel, Federal 7 Trade Commission 8 Mary Critharis, U.S. Patent & Trademark Office 9 10 11 12 13 14 15 16 17 18 19 20 21 22 5 1 TABLE OF CONTENTS 2 REMARKS BY PAGE 3 William Kolasky (Opening Remarks) 6 4 William Kolasky (Afternoon Resume) 144 5 Afternoon Session - Page 144 6 7 PANELIST PRESENTATIONS PAGE 8 James Venit 15 9 Patrick Rey 27 10 Gwillym Allen 56 11 Henry Ergas 69 12 John Temple Lang 94 13 Ian Forrester 106 14 David Hull 120 15 Kirtikumar Mehta 152 16 Fiona Carlin 164 17 Yee Wah Chin 183 18 James Leavy 199 19 Peter Alexiadis 215 20 Willard Tom 235 21 Maurits Dolmans 249 22 Mark Janis 268 6 1 MORNING SESSION 2 (9:30 a.m.) 3 WILLIAM KOLASKY: Good morning, and 4 welcome to everyone. We are delighted that you 5 have joined us for another session of our joint 6 hearings of the Department of Justice and the 7 Federal Trade Commission on competition and IP 8 law and policy in the knowledge based economy. 9 My name is Bill Kolasky, and I'm one 10 of the Deputy Assistant Attorney Generals. I'm 11 responsible for international and policy matters. 12 I'm most pleased to be joined today by Bill 13 Kovacic, who is the General Counsel of the 14 Federal Trade Commission. 15 Together we will moderate three 16 comparative law sessions, two here today in the 17 Great Hall, and one tomorrow on Asian licensing 18 issues at the FTC building just one block down 19 Pennsylvania Avenue. 20 This morning our panelists will 21 be talking about how refusals to license 22 intellectual property and compulsory licensing 7 1 are treated in the European Union, Canada, and 2 Australia in comparison to how those issues are 3 approached in the United States, a topic that we 4 examined at some of our earlier sessions. 5 We will examine the circumstances 6 under which compulsory licensing of intellectual 7 property has been required as a remedy for 8 anticompetitive practices. 9 One question that arises is how to 10 set prices for such licensing. Whether courts or 11 agencies should be involved in determining a fair 12 royalty rate was a hotly debated topic at our 13 earlier sessions on U.S. law in this area. 14 In discussing these issues today, we 15 will explore the essential facilities doctrine, 16 which is an important element of recent legal 17 doctrine in Europe and is present in Canadian and 18 Australian law as well. 19 By contrast those of you familiar with 20 U.S. law know that the essential facilities 21 doctrine is in some disfavor here in the 22 United States. 8 1 There seems to be significant 2 agreement in the U.S. that it is difficult to 3 justify mandating access to well defined 4 intellectual property rights as an essential 5 facility. 6 As part of this discussion we will 7 also explore whether intellectual property is 8 fundamentally different from other types of 9 property and therefore in need of special legal 10 doctrines for resolving antitrust issues. 11 We may also explore whether there are 12 concerns not present in the United States such 13 as EU integration concerns that affect how 14 intellectual property rights are treated in other 15 jurisdictions. 16 With this brief introduction let me 17 begin by introducing our panelists. Joining us 18 in representing the agencies at this morning's 19 session is Mary Critharis, an assistant solicitor 20 at the U.S. Patent and Trademark Office. 21 Time constraints require that our 22 introductions of the members of our distinguished 9 1 panel be brief. More complete versions of their 2 biographies are available in the prepared 3 materials. 4 Gwillym Allen is the senior economist 5 and strategic policy advisor in economic policy 6 and enforcement in the competition policy branch 7 at the Canadian Competition Bureau. He has 8 drafted a number of Competition Bureau guidelines 9 including the intellectual property enforcement 10 guidelines. 11 Henry Ergas is the managing director 12 of the Network Economics Consulting Group in 13 Australia. He recently chaired the Australian 14 intellectual property and competition review 15 committee set up by the federal government in 16 1999 to review Australia's intellectual property 17 laws as they relate to competition policy. 18 Ian Forrester is an executive partner 19 at White & Case LLP in Brussels where he 20 practices European law. He represents the 21 European Commission before the European courts in 22 the well known Magill case about refusal to deal. 10 1 David Hull at the end of the table is 2 a partner in the Brussels office of Covington & 3 Burling. His practice concentrates on EU 4 competition law, representing clients before the 5 European Commission, and advising them on all 6 aspects of competition law. 7 John Temple Lang is with the Brussels 8 office of Cleary Gottlieb. Prior to that he 9 spent 26 years at the European Commission serving 10 most recently as the director responsible for 11 telecommunications and media in DG Comp. 12 Dr. Patrick Rey is a Professor of 13 economics at the University of Toulouse as well 14 as research director of the Institut d'Economie 15 Industrielle. 16 He has researched many aspects of 17 competition policy including the social benefits 18 and private incentives for exclusive dealing, 19 vertical integration, and refusals to deal. 20 Jim Venit is currently a partner in 21 the Brussels office of Skadden Arps. He 22 concentrates on European competition law 11 1 including representing multinational companies 2 before the European Commission and proceedings 3 under the merger regulation and Articles 81 4 and 82. 5 We regret that Professor Steve 6 Anderman of Essex University in the U.K. was 7 unable to join us today as planned because of 8 family health problems. 9 Before we begin we have a few 10 administrative details I've been asked to cover. 11 As you know, we are located in the Great Hall of 12 the main Justice building. And this creates 13 certain security concerns. 14 If you are not a DOJ employee, you 15 must be escorted around the building. Antitrust 16 Division paralegals who are wearing name tags 17 highlighted in green escorted you into the 18 Great Hall. 19 They were available at the back of the 20 room to escort you out of the building should you 21 need to leave the session, to the restroom or 22 upstairs to the seventh floor should you need to 12 1 make a phone call. Think of them as hall 2 monitors. 3 Cell phones do not work very well 4 in this part of the building again because of 5 security concerns. Because leaving the building 6 is difficult, refreshments are available in the 7 back of the room. 8 This morning's session will be a 9 combination of presentations and discussions. 10 Around 11:00 we will take a fifteen-minute break 11 and then come back for another hour, finishing up 12 around 12:30. 13 The hearings will resume at 2:00 this 14 afternoon for a three-hour discussion focusing on 15 the EU's technology transfer block exemption 16 regulation as well as agreements that fall 17 outside the scope.