Patent News

Dec. 7, 2018

U.S. Department of Justice: Assistant Attorney General Makan Delrahim Delivers Remarks at the 19th Annual Berkeley-Stanford Advanced Patent Law Institute

“Telegraph Road”: 
Incentivizing Innovation at the Intersection of Patent and Antitrust Law

Thank you Jim for that introduction, and for inviting me today to participate in the Advanced Patent Law Institute.

As the Assistant Attorney General of the Antitrust Division, I spend most of my time with antitrust lawyers and economists.  Being among this talented group of patent lawyers today brings me back to my earlier career, when I worked on patent transactions and the enforceability of intellectual property rights for the National Institutes of Health and, later, the U.S. Trade Representative.  So thank you for letting me reminisce a little and for the honor of being with you.

The title of my remarks today is “Telegraph Road: Incentivizing Innovation at the Intersection of Patent and Antitrust Law.”  As you may know, Telegraph Road is a song by Dire Straits that came out in 1982.

It is about a pioneer who makes a home in the wilderness.  His entrepreneurship and hard work attract other people and he soon finds himself in the midst of a bustling town building up around him.  The lyrics describe the on-slaught of infrastructure:

Then came the churches, then came the schools
Then came the lawyers, then came the rules
Then came the trains and the trucks with their load
And the dirty old track was the Telegraph Road.

This transformation is an apt metaphor for the history of our envied innovation economy here in the United States—especially the part about lawyers and rules.

Ingenuity and entrepreneurship are fundamental to our free-market economy.  Like the entrepreneur in Telegraph Road, countless American inventors have done the hard work of creating something from nothing: from electronics, to biotech, to microchips and software.

Over the years, an infrastructure has built up around those inventors to capitalize on their ingenuity.  The American inventor is no longer alone in the wilderness.  He is surrounded by business people and lawyers, with their strategies and their rules.

With all these interests pulling the inventor in different directions, the question is whether we are doing everything we can to preserve the fundamentals that encouraged innovation in the first place.  I fear that at the intersection of patent and antitrust law, some have lost sight of that goal.

Today, I will discuss how standard-setting organizations have formed around innovators.  When they work well, they translate ingenuity into usable, commercialized technologies.  When they don’t, they can run the risk of stifling innovation.

First, I will address the reasons to protect the patent holder’s right to seek an injunction against infringing uses of its technology, even when the patent is essential to the practice of a technological standard.

Second, I will discuss my concerns that standard-setting organizations have been given too little scrutiny when they have acted as a forum to slow down, rather than to facilitate, the adoption of disruptive innovations.

Third, I will discuss how standard-setting organizations can affect incentives to innovate when they set patent policies that govern participation in the forum.

I will start where lawyers often do: with the text of the U.S. Constitution.  As I have observed before, there is only one place in that founding document where the word “right” is used, and that is in Article 1, Section 8, Clause 8, otherwise known as the Copyright and Patent clause.

It provides that “[t]he Congress shall have the Power…to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries…”  And it bears emphasis that the authors of the Constitution not only used the word “right,” but they also preceded it with the equally important word “exclusive.”

Our forefathers thought that patent rights—including the ability to exclude competitors—are critical to promoting innovation in our country.

So where do we, at the Antitrust Division, fit in?  Our job is to protect free-market competition from abuses including the unwarranted exclusion of competitors.  We enforce the antitrust laws for the benefit of consumers, who win when companies have to out-perform one another in order to earn the business of those individual consumers.