Monday, March 14, 2016

Two New Papers by Nicolas Petit

Nicolas Petit has posted two new papers on ssrn, The Smallest Salable Patent-Practicing Unit ('SSPPU') Experiment, General Purpose Technologies and the Coase Theorem and The IEEE-SA Revised Patent Policy and Its Definition of 'Reasonable' Rates: A Transatlantic Antitrust Divide?Here is a link to the SSPPU paper, and here is the abstract:
In the last years, some Standard-Setting Organizations (“SSOs”) active in wireless communications have experimented new pricing principles for standard essential patents (“SEPs”). One of those experiments is the “SSPPU” rule. Under SSPPU, the licensing rates paid to owners of SEPs for the use of their technology shall reflect the “value that the functionality of the claimed invention or inventive feature…contributes to the value of the relevant functionality of the smallest saleable Compliant Implementation that practices the Essential Patent Claim”. This paper reviews the SSPPU experiment through the lenses of the Coase theorem. It finds that SSPPU interferes with the efficient operation of the price system, and is likely to reduce investment in socially beneficial activities, including in General Purpose Technologies (“GPTs”) which are key drivers of economic growth.
Here is a link to the IEEE-SA paper, and here is the abstract:
The IEEE-SA updated patent policy and the Business Review Letter issued by the US DoJ have caused much discussion in the US (Sidak, 2015). The purpose of this paper is to assess whether a similarly lenient antitrust approach to Standard Setting Organizations’ (“SSOs”) rate setting policies would prevail under the European Union (“EU”) competition rules. Recent EU competition case-law has promoted a very hard line in the area of coordinated conduct. Cases such as Dole Food Company, T-Mobile or Expedia have expanded the scope of the per se prohibition rule found in Article 101 TFEU to forms of horizontal coordination with less than obvious anticompetitive potential, such as "cheap-talk" pre-pricing communication (Dole Food Company), episodic collusion (T-Mobile) and horizontal agreements with limited market coverage (Expedia). Those judgments, and others, share a common rationale: that of deterring any coordinated interference with the price system. In the EU courts' view, joint interference by competitors with the price system seems to be a sin in itself, regardless of actual or potential market effects. Horizontal coordination is thus increasingly prohibited on its face, and punished as a means to set an example. From an enforcement standpoint, this trend in the case-law trend has pros (lower enforcement costs) and cons (deters pro-competitive coordination). But perhaps more importantly, it has a major normative implication, which is that it raises the antitrust risk for all forms of coordination, including arrangements of the type found in the IEEE-SA updated patent policy. This paper explains that the antitrust risk generated by SSOs rate setting policies is presumably higher in the EU than in the US, where the case-law on horizontal coordination is less stringent. From a methodological standpoint, the paper choses to discuss this issue on the sole basis of the case-law of the EU courts, instead of focusing on Commission Guidelines and other soft law instruments, whose binding value on parties other than the Commission itself has been considerably degraded in recent judgments.

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