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D:\Documents and Settings\Ghales\My Documents\Internet\Opp\APRIL18.WPD 1 1 2 3 4 DEPARTMENT OF JUSTICE ANTITRUST DIVISION 5 and FEDERAL TRADE COMMISSION 6 7 Hearings on: 8 9 COMPETITION AND INTELLECTUAL PROPERTY LAW 10 AND POLICY IN THE KNOWLEDGE BASED ECONOMY 11 12 Standard Setting 13 14 Thursday, April 18, 2002 15 Great Hall of the U.S. Department of Justice 16 333 Pennsylvania Avenue, N.W. 17 Washington, D.C. 18 19 20 21 22 2 1 MORNING SESSION PARTICIPATING PANELISTS: 2 3 Morning Session: Disclosure of Intellectual 4 Property in Standards Activities 5 6 Michael Antalics, Partner, O'Melvey & Myers, LLP 7 Carl Cargill, Director Corporate Standards, Sun 8 Microsystems, Inc. 9 Donald R. Deutsch, Vice President, Standards 10 Strategy and Architecture, Oracle 11 Corp. 12 Ernest Gellhorn, Professor, George Mason 13 University School of Law 14 Peter Grindley, Senior Managing Economist, LECG, 15 Ltd., London 16 Mark Lemley, Professor of Law, Boalt Hall, 17 University of California, Berkeley 18 Amy A. Marasco, Vice President and General 19 Counsel, American National Standards 20 Institute 21 Richard T. Rapp, President, National Economic 22 Research Associates 3 1 MORNING SESSION PARTICIPATING PANELISTS 2 (Continued): 3 4 David Teece, Professor, Haas School of Business, 5 University of California, Berkeley 6 Dennis A. Yao, Associate Professor of Business 7 And Public Policy and Management, 8 The Wharton School, University of 9 Pennsylvania 10 11 MORNING SESSION MODERATORS: 12 13 Robert W. Bahr, U.S. Patent and Trademark Office 14 Gail Levine, Federal Trade Commission 15 Tor Winston, Department of Justice 16 17 18 19 20 21 22 4 1 AFTERNOON SESSION PARTICIPATING PANELISTS: 2 3 Afternoon Session: Licensing Terms in Standards 4 Activities 5 6 Stanley M. Besen, Vice President, Charles River 7 Associates 8 Daniel J. Gifford, Robins, Kaplan, Miller & 9 Ciresi Professor of Law, University of 10 Minnesota School of Law 11 Richard Holleman, Industry Standards Consultant 12 Allen M. Lo, Director of Intellectual Property, 13 Juniper Networks, Inc. 14 Mark R. Patterson, Associate Professor of Law, 15 Fordham University School of Law 16 Scott K. Peterson, Corporate Counsel, 17 Hewlett-Packard Company 18 Dr. Lauren J. Stiroh, Vice President, National 19 Economics Research Associates 20 Daniel Swanson, Partner, Gibson, Dunn & 21 Crutcher, LLP 22 5 1 AFTERNOON SESSION PARTICIPATING PANELISTS 2 (Continued): 3 4 Andrew Updegrove, Partner, Lucash, Gesmer & 5 Updegrove, LLP 6 Daniel Weitzner, Director of Technology and 7 Society Activities, World Wide Web 8 Consortium 9 10 AFTERNOON SESSION MODERATORS: 11 12 Robert W. Bahr, U.S. Patent and Trademark Office 13 Carolyn Galbreath, Department of Justice 14 Gail Levine, Federal Trade Commission 15 Tor Winston, Department of Justice 16 17 18 19 20 21 22 6 1 TABLE OF CONTENTS 2 3 PANELIST PRESENTATION PAGE 4 Mark Lemley 10 5 6 Afternoon Session - Page 183 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 7 1 MORNING SESSION 2 (9:00 a.m.) 3 GAIL LEVINE: Good morning. Good 4 morning, and thank you all for coming today. 5 I just want to introduce myself. I'm Gail 6 Levine. I'm the deputy assistant general counsel 7 for policy studies at the Federal Trade 8 Commission. 9 Tor Winston sitting next to me today 10 is an economist with the Department of Justice. 11 And we also have Bob Bahr from the United States 12 Patent and Trademark Office. 13 On behalf of all three of us we really 14 want to thank you panelists for coming to join us 15 today to talk about standard setting issues in 16 the knowledge based economy. I want to introduce 17 all of our panelists briefly this morning. 18 I'm going to do so very briefly 19 because I want us to keep to schedule. But when 20 it's time for us to open our panel discussion, 21 I'm going to ask each of our panelists to say a 22 just few words about themselves and their 8 1 standard setting backgrounds so that we have a 2 context within which to place their comments. 3 This morning we have with us Professor 4 Mark Lemley, who has moved. You moved on me. 5 MARK LEMLEY: I figured I'm not 6 actually going to block the screen when I'm 7 giving the presentation. 8 GAIL LEVINE: That's fine. Professor 9 Mark Lemley is going to be giving our morning 10 PowerPoint presentation to bring all of us up 11 to speed on standard setting organization 12 developments. He's a professor of law at Boalt 13 Hall at the University of California, Berkeley. 14 We also have with us Mike Antalics, a 15 partner at O'Melveny & Myers. Carl Cargill; he's 16 the director of corporate standards at Sun 17 Microsystems. 18 We have Donald Deutsch, vice president 19 of standards, strategy, and architecture at 20 Oracle Corporation; Professor Gellhorn at 21 George Mason University School of Law, who 22 apologizes; because of some important charitable 9 1 work he's doing, he has to leave us early today. 2 But we're grateful for the time we have with him 3 and we're going to make the best use of it 4 we can. 5 We also have with us Peter Grindley, 6 who is the senior managing economist at LECG 7 Limited of London. We have also Amy Marasco, who 8 is the vice president and general counsel of the 9 American National Standards Institute, ANSI. 10 We have Richard Rapp, the president 11 of the National Economic Research Associates; 12 David Teece, an economist and a professor at the 13 Haas School of Business at the University of 14 California, Berkeley; and Dennis Yao, who is an 15 associate professor of business and public policy 16 and management at The Wharton School, University 17 of Pennsylvania. 18 This morning's agenda is going to go 19 like this. We're going to have Mark Lemley give 20 us a presentation of something like 20, 25 21 minutes that will bring us up-to-date on the 22 standard setting issues. 10 1 Then we're going to open up to a panel 2 discussion. And we're going to cover three 3 topics. The first and most -- and the topic 4 we'll spend the most time on is the question of 5 disclosure issues. 6 Around 11:00 we'll try and take a 7 15-minute break. Starting around 11:15 we'll 8 come back to talk about challenges to the 9 selection of a standard, challenges to exclusion 10 from the standard setting organization, then 11 break for lunch. 12 We'll come back in the afternoon, and 13 we'll be talking about -- with a different panel 14 about licensing issues in standards activities. 15 With no further ado, I'd like to introduce Mark 16 Lemley. 17 MARK LEMLEY: All right. Well, I'm 18 just going to do legal background which I hope is 19 familiar to much of you. And I'm also going to 20 say a little bit about some studies that I have 21 done of different standard setting organizations. 22 You can learn everything you need 11 1 to know about the antitrust rules related to 2 standard setting organizations when you realize 3 that we don't actually know what to call them. 4 Sometimes they are standard setting 5 organizations. Sometimes they are standards 6 development organizations. Sometimes they are 7 collective technical organizations. Sometimes 8 they are consortia. 9 And it's kind of ironic it seems to me 10 that we can't standardize the definition or even 11 the terminology for standard setting which 12 suggests maybe we're in trouble elsewhere. 13 All right. So some brief background 14 on antitrust issues that relate to standard 15 setting organizations but aren't specifically 16 intellectual property issues, and I will run 17 through these with some haste. 18 If you asked an antitrust lawyer from 19 40, 50 years ago or certainly from 80 or 90 years 20 ago, can I get together in a room with my 21 competitors and exchange information about what 22 products I'm going to make in the future, they'd 12 1 go apoplectic, right? 2 The fundamental basis of antitrust law 3 is hostile to the idea of competitors getting 4 together to share information. And a bunch of 5 early trade association cases took that hostility 6 quite seriously, suggesting that trade 7 associations themselves might be illegal 8 because they facilitate cartels. 9 Now, it's true that standard setting 10 organizations can on occasion be a front for a 11 cartel. They can facilitate collusion on price, 12 collusion on innovation in technical areas. 13 But in fact of course they serve all sorts of 14 procompetitive purposes. On the vast majority 15 of occasions they are not fronts for cartels. 16 Nonetheless, there are some modern 17 cases, notably the Addamax case from the District 18 of Massachusetts, that exhibit a hostility to 19 standard setting organizations themselves so that 20 the very idea of getting together can in some 21 circumstances be problematic. 22 Even in that case ultimately the First 13 1 Circuit does not find an antitrust violation. 2 And it seems to me quite properly that antitrust 3 has largely moved beyond the idea that standard 4 setting organizations themselves are problematic 5 except in the most extreme of cases. 6 A second set of issues has to do with 7 the standard that is set and its availability to 8 competitors in the marketplace.
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