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November 19, 2012

Patent-holding firms under US antitrust authorities’ scrutiny

A meeting will be held next month in Washington by the Justice Department and the Federal Trade Commission to discuss about the matter

By CBR Staff Writer

US antitrust authorities are examining whether specialised patent-holding firms are acting to disrupt competition in high-tech markets, according to the Wall Street Journal.

Joseph Wayland, who served as the Justice Department’s acting antitrust chief until last week was quoted by the Wall Street Journal as saying that "There’s a possibility of competitive harm here."

Wayland said officials are spending lot of time "at a senior level" to this and other antitrust issues surrounding patents.

The Justice Department and its antitrust enforcer, the Federal Trade Commission (FTC), are inviting involved parties for an informal hearings in December this year in Washington, US.

Tech firms are anticipated to press for tougher scrutiny of the patent issues what they describe as a threat to innovation.

However, those patent firms who horde patents to sell them later to extract fee but not to build new devices could be defensive in this matter.

FTC chairman Jon Leibowitz told the Wall Street Journal, "There has been a great deal of controversy and disagreement about whether they stifle innovation and whether they are an anticompetitive problem,"

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"What we want to do is understand the industry better," Leibowitz said.

Companies which will participation in the next month’s session include Cisco Systems, Nokia and Intellectual Ventures Management, a patent-holding firm co-founded by former Microsoft technology chief Nathan Myhrvold.

People familiar with the agencies’ plans told the news agency that a second session also is in the works.

In October this year, Cisco had filed worded racketeering allegations in federal court against two patent firms, alleging in one instance that the company’s tactics effectively amounted to an extortion scheme.

In 2006, Research In Motion paid a Virginia patent-holding firm $612.5m to settle patent-infringement claims that almost stopped its BlackBerry service.

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