In a major 2018 speech, Justice Department Assistant Attorney General for Antitrust Makan Delrahim enunciated a “New Madison Approach” (NMA) (a tribute to James Madison’s support for a strong patent system) designed to restore greater respect for efficiency-seeking patent transactions in antitrust enforcement. Consistent with the NMA, the Trump Administration Antitrust Division took a number of initiatives aimed at reducing perceived new antitrust risks associated with widely employed patent licensing practices (particularly those touching on standardization).
The NMA enunciates key principles dealing with the interrelationship of patent and antitrust law. It rejects recent commentaries by patent critics (including Obama Administration antitrust enforcers) that view patents as conferring excessive market power that should be curbed – either through reinterpreting antitrust law or by establishing patent policies of standard setting organizations (SSOs) that favor implementer firms that practice a patent when they build new technologies.
Notably, the NMA is skeptical of claims about the gravity of the “hold-up” problem, which arises when patentees demand excessive licensing fees for their standard essential patents (SEPs), access to which is needed by implementers that are locked into SSO standards.
The Delrahim Antitrust Division from 2017 through 2020 filed more than 40 amicus briefs or statements of interest in antitrust cases. It amassed a respectable box score: courts accepted the Department’s position in 15 cases and disagreed in two cases. But now the Biden Administration is taking steps to revise the December 2019 joint DOJ, USPTO, NIST statement and walk back the NMA.