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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
`
`
`CONTINENTAL AUTOMOTIVE
`SYSTEMS, INC.,
` Plaintiff,
`v.
`
`
`AVANCI, LLC, et al.
`Defendants.
`
`
`
`No. 3:19-CV-02933-M
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`MOTION FOR LEAVE TO FILE STATEMENT OF INTEREST
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`The United States respectfully moves for leave to file the Statement of Interest attached
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`hereto as Exhibit A pursuant to 28 U.S.C. § 517, which permits the Attorney General to send
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`“any officer of the Department of Justice” to “any State or district in the United States to attend
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`to the interests of the United States in a suit pending in a court of the United States[.]”
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`The Antitrust Division of the Department of Justice enforces the federal antitrust laws
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`and has a strong interest in their correct application. The United States has an interest in this
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`pending case because of the application of Section 2 of the Sherman Act (15 U.S.C. § 2) in the
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`matter as described below. Notwithstanding the United States’ statutory authorization to file a
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`Statement of Interest, in the interest of avoiding any conflict with Local Rules, the United States
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`respectfully moves the Court for an order permitting it to file its Statement of Interest attached
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`hereto.
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`I.
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`Procedural Background
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`On July 23, 2019, Plaintiff Continental Automotive Systems, Inc. (“Continental” or
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`“Plaintiff”) brought suit in the Northern District of California against Avanci LLC and Avanci
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`Motion for Leave to File Statement of Interest – Page 1
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`Platform International Limited (collectively “Avanci”) along with other entities (collectively,
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`with Avanci, “Defendants”) based on Defendants’ patent licensing practices. With a motion to
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`dismiss pending, venue for this matter was transferred to the Northern District of Texas. On
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`January 27, 2020, this Court ordered both sides to re-brief the motion to dismiss, limited to the
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`change in Circuit law and any other change in status since the motion was originally briefed.
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`(Dkt. 264.) The United States consulted with counsel for each side and informed them that it
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`was considering filing a Statement of Interest regarding Continental’s Section 2 claims. The
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`United States further conferred with counsel for both parties on February 25-26, 2020, regarding
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`the Statement of Interest and this Motion for Leave. At this time, counsel for each of the
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`Defendants informed the United States that each consented to the filing. Counsel for Continental
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`informed the United States that it would oppose the filing. Continental will submit its opposition
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`to Defendants’ Motion to Dismiss on or before February 28, 2020.
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`II.
`
`Argument
`
`The Antitrust Division of the Department of Justice enforces the federal antitrust laws
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`and has a strong interest in their correct application. The United States has a particular interest in
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`this case because it involves the intersection of antitrust law and intellectual property rights, a
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`topic which the United States has long studied and with which it has considerable enforcement
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`experience.1 The United States seeks to ensure that the antitrust laws are correctly applied to
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`promote innovation and enhance consumer welfare, and are not misinterpreted in ways that could
`
`
`1 See U.S. Dep’t Of Justice & Fed. Trade Comm’n, Antitrust Guidelines For The Licensing Of
`Intellectual Property (2017),
`https://www.ftc.gov/system/files/documents/public_statements/1049793/ip_guidelines_2017.pdf;
`U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Enforcement and Intellectual Property
`Rights: Promoting Innovation and Competition (2007),
`https://www.justice.gov/sites/default/files/atr/legacy/2007/07/11/222655.pdf.
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`Motion for Leave to File Statement of Interest – Page 2
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`undermine these critical goals. This Statement explains that Continental’s attempts to base
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`Section 2 antitrust violations upon alleged breaches of “fair, reasonable, and nondiscriminatory”
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`(“FRAND”) licensing commitments made during standard-setting processes, including claims of
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`purported “deception” regarding FRAND rates, do not articulate cognizable antitrust claims. In
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`particular, the Statement argues that courts in the Fifth Circuit should not follow the Third
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`Circuit’s decision in Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297 (3d Cir. 2007), in the
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`standard-setting context. The United States takes no position on the merits of the remaining
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`claims or the motion to dismiss them.
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`III.
`
`Conclusion
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`Accordingly, the United States respectfully requests leave to file its attached Statement of
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`Interest regarding the proposed application of Section 2 of the Sherman Act (15 U.S.C. § 2).
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`Respectfully submitted,
`
`
`
`
`
`
`/s/ Andrew DeLaney
`
`
`
`
`
`ANDREW N. DeLANEY (NYBN 4713947)
`DANIEL E. HAAR
`Attorneys, Antitrust Division
`U.S. Department of Justice
`950 Pennsylvania Ave. NW
`Washington, DC 20530
`Telephone: (202) 598-2846
`Facsimile: (202) 514-0536
`E-mail: andrew.delaney@usdoj.gov
`Attorneys for the United States of America
`
`Motion for Leave to File Statement of Interest – Page 3
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`

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`
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`Certificate of Conference
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`I certify that counsel for the United States conferred with counsel for each of parties on
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`February 25-26, 2020. Counsel for each of the Defendants informed the United States that each
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`consented to the filing. Counsel for Plaintiff informed the United States that it would oppose the
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`filing.
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`
`
`/s/ Andrew DeLaney
`Andrew DeLaney
`Attorney, Antitrust Division
`U.S. Department of Justice
`
`Certificate of Service
`
`On February 27, 2020, I electronically submitted the foregoing document with the clerk
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`
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`of court for the U.S. District Court, Northern District of Texas, using the electronic case filing
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`system of the court. I hereby certify that I have served all parties electronically or by another
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`manner authorized by Federal Rule of Civil Procedure 5(b)(2).
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`
`
`/s/ Andrew DeLaney
`Andrew DeLaney
`Attorney, Antitrust Division
`U.S. Department of Justice
`
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`Motion for Leave to File Statement of Interest – Page 4
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`

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`EXHIBIT A
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`

`

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`
`
`MAKAN DELRAHIM
`Assistant Attorney General, Antitrust Division
`
`MICHAEL F. MURRAY
`Deputy Assistant Attorney General, Antitrust Division
`
`WILLIAM J. RINNER
`Senior Counsel and Chief of Staff to the Assistant Attorney General, Antitrust Division
`
`ELYSE DORSEY,
`TAYLOR M. OWINGS
`Counsel to the Assistant Attorney General, Antitrust Division
`
`DANIEL E. HAAR
`ANDREW N. DeLANEY (NYBN 4713947)
`JENNIFER DIXTON
`Attorneys, Antitrust Division
`U.S. Department of Justice
`950 Pennsylvania Ave. NW
`Washington, DC 20530
`Telephone: (202) 598-2846
`Facsimile: (202) 514-0536
`E-mail: andrew.delaney@usdoj.gov
`
`Attorneys for the United States of America
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF TEXAS
`DALLAS DIVISION
`
`
`CONTINENTAL AUTOMOTIVE
`SYSTEMS, INC.,
` Plaintiff,
`v.
`
`
`AVANCI, LLC, et al.
`Defendants.
`
`No. 3:19-CV-02933-M
`
`STATEMENT OF INTEREST OF
`THE UNITED STATES
`
`
`
`STATEMENT OF INTEREST OF THE UNITED STATES
`Case No. 3:19-CV-02933-M
`
`

`

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`
`
`TABLE OF CONTENTS
`
`I. INTRODUCTION ..................................................................................................................... 1
`
`II. BACKGROUND ...................................................................................................................... 2
`
`A. Patent Law and Antitrust Law Serve the Same Goal of Promoting Dynamic
`Competition.................................................................................................................... 2
`
`B. Standard Setting and Development Activity Creates Economic Efficiency Through the
`Selection of a Superior Technology ............................................................................... 4
`
`C. Relevant Factual Allegations ......................................................................................... 6
`
`III. ARGUMENT .......................................................................................................................... 8
`
`A. Continental’s Breach of FRAND Claims Do Not Allege that Defendants Engaged in
`Any Unlawful Exclusionary Conduct ............................................................................. 9
`
`1. A Patent Holder’s Effort to Maximize Its Licensing Rates after Agreeing to Abide
`by FRAND Terms Does Not Constitute Unlawful Exclusionary Conduct ........... 11
`
`2. A Patent Holder’s Alleged “Deception” Regarding the Rates It Intends to Charge
`After Making a FRAND Commitment Does Not Constitute Unlawful Exclusionary
`Conduct .................................................................................................................. 15
`
`3. There Is No Antitrust Duty to License on FRAND Terms .................................... 20
`
`B. Imposing Antitrust Liability for Violations of FRAND Commitments in the Standard
`Setting Context Risks Over-Deterring Conduct That Is Already Adequately Policed by
`Contract and Patent Law .............................................................................................. 20
`
`C. A Section 2 Cause of Action Premised on Alleged Violations of a FRAND
`Commitment Is Not Administrable Because It Would Require Courts to Act as
`Central Planners ......................................................................................................... 21
`
`IV. CONCLUSION..................................................................................................................... 25
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`STATEMENT OF INTEREST OF THE UNITED STATES
`Case No. 3:19-CV-02933-M i
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`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`Abraham & Veneklasen Joint Venture v. Am. Quarter Horse Ass’n,
`776 F.3d 321 (5th Cir. 2015) ....................................................................................................... 9
`
`Aerotec Int’l, Inc. v. Honeywell Int'l, Inc.,
`836 F.3d 1171 (9th Cir. 2016) ................................................................................................... 13
`
`Allied Tube & Conduit Corp. v. Indian Head, Inc.,
`486 U.S. 492 (1988) ................................................................................................................... 12
`
`Am. Soc’y of Mech. Eng’rs, Inc. v. Hydrolevel Corp.,
`456 U.S. 556 (1982) ................................................................................................................... 12
`
`Apple, Inc. v. Motorola Mobility, Inc.,
`886 F. Supp. 2d 1061 (W.D. Wis. 2012) ..................................................................................... 4
`
`Aspen Skiing v. Aspen Highlands Skiing Corp.,
`472 U.S. 585 (1985) ................................................................................................................... 14
`
`Atari Games Corp. v. Nintendo of Am., Inc.,
`897 F.2d 1572 (Fed. Cir. 1990).................................................................................................... 4
`
`Bell Atl. Corp. v. Twombly,
`550 U.S. 554 .............................................................................................................................. 16
`
`Berkey Photo, Inc. v. Eastman Kodak Co.,
`603 F.2d 263 (2d Cir. 1979)....................................................................................................... 17
`
`Broadcom Corp. v. Qualcomm Inc.,
`501 F.3d 297 (3d Cir. 2007) ............................................................................................ 8, 18, 19
`
`Brooke Group Ltd. v. Brown & Williamson Tobacco Corp.,
`509 U.S. 209 (1993) ............................................................................................................. 21, 24
`
`Concord v. Boston Edison Co.,
`915 F.2d 17 (1st Cir. 1990) ........................................................................................................ 21
`
`Ericsson, Inc. v. D-Link Sys., Inc.,
`773 F.3d 1201 (Fed. Cir. 2014).................................................................................................. 19
`
`Ex parte Michelin N. Am., Inc.,
`795 So. 2d 674 (Ala. 2001) ........................................................................................................ 16
`
`STATEMENT OF INTEREST OF THE UNITED STATES
`Case No. 3:19-CV-02933-M ii
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`

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`
`
`Georgia–Pacific Corp. v. United States Plywood Corp.,
`318 F. Supp. 1116 (S.D.N.Y. 1970)........................................................................................... 19
`
`Harrison Aire, Inc. v. Aerostar Int’l, Inc.,
`423 F.3d 374 (3d Cir. 2005)......................................................................................................... 3
`
`HTC Corp. v. Telefonaktiebolaget LM Ericsson,
`407 F. Supp. 3d 631 (E.D. Tex. 2019) ....................................................................................... 17
`
`In re Adderall XR Antitrust Lit.,
`754 F.3d 128 (2d Cir. 2014)....................................................................................................... 13
`
`LaScola v. U.S. Sprint Communications,
`946 F.2d 559 (7th Cir. 1991) ..................................................................................................... 17
`
`Lum v. Bank of Am.,
`361 F.3d 217 (3d Cir. 2004)....................................................................................................... 16
`
`Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
`475 U.S. 574 (1986) ................................................................................................................... 22
`
`McHugh v. Westpac Banking Corp.,
`Civ No. 93-3058, 1995 WL 476590 (N.D. Ill. Aug. 8, 1995) ............................................. 16, 17
`
`Microsoft Corp. v. Motorola, Inc.,
`696 F.3d 872 (9th Cir. 2012) ....................................................................................................... 4
`
`Microsoft Corp. v. Motorola, Inc.,
`795 F.3d 1024 (9th Cir. 2015) ............................................................................................... 9, 22
`
`Nat’l Soc’y of Prof’l Eng’rs v. United States,
`435 U.S. 679 (1978) ................................................................................................................... 11
`
`Novell, Inc. v. Microsoft Corp.,
`731 F.3d 1064 (10th Cir. 2013) ..................................................................................... 13, 14, 25
`
`N. Pac. Ry. Co. v. United States,
`356 U.S. 1 (1958) ......................................................................................................................... 3
`
`Nw. Power Prods., Inc. v. Omark Indus., Inc.,
`576 F.2d 83 (5th Cir. 1978) ....................................................................................................... 10
`
`NYNEX v. Discon, Inc.,
`525 U.S. 128 ....................................................................................................................... passim
`
`Pac. Bell Tel. Co. v. linkLine Commc’ns, Inc.,
`555 U.S. 438 ....................................................................................................................... passim
`
`STATEMENT OF INTEREST OF THE UNITED STATES
`Case No. 3:19-CV-02933-M iii
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`
`
`Rambus Inc. v. FTC,
`522 F.3d 456 (D.C. Cir. 2008) ............................................................................................ passim
`
`Research in Motion Ltd. v. Motorola, Inc.,
`644 F. Supp. 2d 788 (N.D. Tex. 2008) ........................................................................................ 8
`
`Retractable Techs., Inc. v. Becton Dickinson & Co.,
`842 F.3d 883 (5th Cir. 2016) ................................................................................................. 9, 16
`
`Surgical Care Ctr. of Hammond, L.C. v. Hosp. Serv. Dist. No. 1,
`309 F.3d 836 (5th Cir. 2002) ....................................................................................................... 9
`
`United States v. Aluminum Co. of Am.,
`148 F.2d 416 (2d Cir. 1945)....................................................................................................... 11
`
`United States v. Grinnell Corp.,
`384 U.S. 563 (1966) ..................................................................................................................... 9
`
`United States v. Microsoft Corp.,
`253 F.3d 34 (D.C. Cir. 2001) .............................................................................................. passim
`
`United States v. Trenton Potteries Co.,
`273 U.S. 392 (1927) ................................................................................................................... 21
`
`USM Corp. v. SPS Techs., Inc.,
`694 F.2d 505 (7th Cir. 1982) ..................................................................................................... 21
`
`Verizon Comm’ns Inc. v. Law Offices of Curtis V. Trinko, LLP,
`540 U.S. 398 (2004) ............................................................................................................ passim
`
`Statutes
`
`28 U.S.C. § 517 ............................................................................................................................... 1
`U.S. Const. art. I §8....................................................................................................................... 24
`
`Other Authorities
`
`Alden Abbott, Standard Setting, Patents, and Competition Law Enforcement—The Need for U.S.
`Policy Reform, CPI Antitrust Chron. (Mar. 2015) ........................................................ 19, 20 , 23
`
`Anup Malani & Jonathan S. Masur, Raising the Stakes in Patent Cases,
` 101 Geo. L.J. 637, 638 (2013) .................................................................................................. 21
`
`Benjamin Klein, Market Power in Antitrust: Economic Analysis After Kodak,
`3 Sup. Ct. Econ. Rev. 43 (1993) ................................................................................................ 22
`
`STATEMENT OF INTEREST OF THE UNITED STATES
`Case No. 3:19-CV-02933-M iv
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`
`
`Bernhard Ganglmair, Luke M. Froeb & Gregory J. Werden, Patent Hold-Up and Antitrust: How
`a Well-Intentioned Rule of Reason Could Retard Innovation, 60 J. Indus. Econ. 249 (2012) .. 23
`
`Bruce H. Kobayashi & Joshua D. Wright, Federalism, Substantive Preemption, and Limits on
`Antitrust: An Application to Patent Holdup, 5 J. Comp. L. & Econ. 469 (2009) ...................... 22
`
`Ian Ayres & Gregory Klass, Promissory Fraud, 78 N.Y. St. B.A. J. 26, 30 (2006) .................... 16
`
`Jorge Padilla, Douglas H. Ginsburg & Koren W. Wong-Ervin, Antitrust Analysis Involving
`Intellectual Property and Standards: Implications from Economics,
`forthcoming Harv. J.L. & Tech. (2019) ....................................................................................... 3
`
`Joshua D. Wright & Douglas H. Ginsburg, Whither Symmetry? Antitrust Analysis of Intellectual
`Property Rights at the FTC and DOJ, 9(2) Comp. Policy Int’l, 41 (2013) ................................. 3
`
`Douglas H. Ginsburg, Koren W. Wong-Ervin & Joshua D. Wright, The Troubling Use of
`Antitrust to Regulate FRAND Licensing, Comp. Policy Int’l (Oct. 2015) ................................ 22
`
`Kristen Osenga, Ignorance Over Innovation: Why Misunderstanding Standard Setting
`Operations Will Hinder Technological Progress,
`56 U. Louisville L. Rev. 159 (2018) ...................................................................................... 5, 23
`
`Mark A. Lemley, Intellectual Property Rights and Standard-Setting Organizations,
`90 Cal. L. Rev. 1889 (2002) .................................................................................................... 3, 4
`
`Hon. Maureen K. Ohlhausen, The Elusive Role of Competition in the Standard-Setting Antitrust
`Debate, 20 Stan. Tech. L. Rev. 93 (2017) ................................................................................. 24
`
`3A Phillip E. Areeda & Herbert Hovenkamp, Antitrust Law (4th ed. 2016) ................................ 21
`
`Richard A. Posner, Economic Analysis of Law (9th ed. 2014) ..................................................... 23
`
`Richard J. Gilbert & Hillary Greene, Merging Innovation into Antitrust Agency Enforcement of
`the Clayton Act, 83 Geo. Wash. L. Rev. 1919 (2015) ................................................................ 3
`
`Thomas O. Barnett, Maximizing Welfare Through Technological Innovation,
`15 Geo. Mason L. Rev. 1191 (2008) ....................................................................................... 2, 3
`
`U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrust Enforcement and Intellectual Property
`Rights: Promoting Innovation and Competition (2007), ............................................... 1, 4, 6, 12
`
`U.S. Dep’t Of Justice & Fed. Trade Comm’n, Antitrust Guidelines For The Licensing Of
`Intellectual Property (2017) ............................................................................................... 1, 4, 14
`
`
`
`
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`STATEMENT OF INTEREST OF THE UNITED STATES
`Case No. 3:19-CV-02933-M v
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`I. INTRODUCTION
`The United States respectfully submits this statement pursuant to 28 U.S.C. § 517, which
`permits the Attorney General to direct any officer of the Department of Justice to attend to the
`interests of the United States in any case pending in a federal court. The Antitrust Division of
`the Department of Justice enforces the federal antitrust laws and has a strong interest in their
`correct application. The United States has a particular interest in this case because it involves the
`intersection of antitrust law and intellectual property rights, a topic which the United States has
`long studied and with which it has considerable enforcement experience.1 The United States
`seeks to ensure that the antitrust laws are correctly applied to promote innovation and enhance
`consumer welfare, and are not misinterpreted in ways that could undermine these critical goals.
`This Statement explains that Continental’s attempts to base Section 2 antitrust violations
`upon alleged breaches of “fair, reasonable, and nondiscriminatory” (“FRAND”) commitments
`made during standard-setting processes, including claims of purported “deception” regarding
`FRAND rates, do not articulate cognizable antitrust claims.2 Breaches of FRAND
`commitments—that is, breaches of contractual obligations—are quintessential contract law
`problems. The Supreme Court has made clear that not all contract disputes are antitrust disputes,
`even when a monopolist is involved. The allegations in the complaint fail to state a harm to the
`
`
`1 See U.S. Dep’t Of Justice & Fed. Trade Comm’n, Antitrust Guidelines For The
`Licensing Of Intellectual Property (2017),
`https://www.ftc.gov/system/files/documents/public_statements/1049793/ip_guidelines_2
`017.pdf [hereinafter IP Guidelines]; U.S. Dep’t of Justice & Fed. Trade Comm’n,
`Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and
`Competition (2007),
`https://www.justice.gov/sites/default/files/atr/legacy/2007/07/11/222655.pdf [hereinafter
`2007 Antitrust-IP Report].
`2 The United States takes no position on the merits of the remaining claims or the motion
`to dismiss them. Deception, of course, can ground a valid Section 2 claim in certain
`circumstances. See, e.g., United States v. Microsoft Corp., 253 F.3d 34, 76-77 (D.C. Cir.
`2001) (en banc) (per curiam) (premising Section 2 liability in part on Microsoft’s
`intentionally false statements to developers that applications they developed to run on
`Microsoft systems would be compatible with non-Microsoft operating systems). In this
`Statement of Interest, the United States focuses solely on the availability of antitrust
`claims for a particular type of purported deception in the standard-setting context.
`STATEMENT OF INTEREST OF THE UNITED STATES
`Case No. 3:19-CV-02933-M
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`competitive process, which is fatal to purported antitrust claims. Recognizing a Section 2 cause
`of action premised on alleged violations of commitments to offer patent licenses at rates that are
`FRAND would (1) run contrary to the policies underlying the antitrust laws that encourage
`market-based pricing; (2) risk distorting licensing negotiations for standard-essential patents
`(“SEPs”); and (3) threaten to deter procompetitive or competitively neutral conduct.
`Accordingly, the United States respectfully submits that the Court should dismiss the Section 2
`antitrust claims based upon breaches of FRAND commitments in the standard-setting process,
`including claims that a licensor purportedly engaged in “deception” regarding the rates it
`intended to offer to licensees.
`
`II. BACKGROUND
`A. Patent Law and Antitrust Law Serve the Same Goal of Promoting Dynamic
`Competition
`The patent laws are rooted in Article I, Section 8 of the Constitution, which establishes a
`patent framework bestowing inventors with “exclusive Right[s]” over their “Writings and
`Discoveries,” in order “[t]o promote the Progress of Science and useful Arts.” U.S. Const. art. I,
`§ 8. Exercising its constitutional authority, Congress created a patent regime that allows
`markets, not regulators, to determine how best to reward inventors for their technological
`advances. Protected by the constitutional guarantee of “exclusiv[ity],” inventors may reap the
`benefits of their investments in research and development by marketing and selling their new
`technologies, or by licensing their patent rights to implementers who can more efficiently deliver
`those technologies to end users. The guarantee of market-driven financial rewards for invention
`serves as a powerful incentive for the development of new inventions that can render old
`technologies obsolete.
`Innovation is vital to a vibrant free market. The strong intellectual property rights
`envisioned by the Founders help level the competitive playing field for small innovative
`companies. Without the benefit of strong IP protection, a larger firm is generally better able to
`appropriate the benefits of innovation. First, “if the benefit from an innovation is proportional to
`the scale of operations that employ the innovation,” a larger firm benefits from greater
`STATEMENT OF INTEREST OF THE UNITED STATES
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`appropriation due to the larger size of the operations that profit from the innovation. Richard J.
`Gilbert & Hillary Greene, Merging Innovation into Antitrust Agency Enforcement of the Clayton
`Act, 83 Geo. Wash. L. Rev. 1919, 1925 (2015). Second, with a greater market share, a larger
`firm “can increase appropriation by reducing the share of the market that may imitate the
`innovation without compensating the innovator.” Id. at 1925-26. As a result, strong IP
`protection reduces the influence of market size and market share on incentives to innovate.
`The antitrust laws seek to achieve the same goal of protecting and promoting the
`reinforcing cycle of competition and innovation, which generates dynamic competition in the
`marketplace and ultimately allows consumers to reap the rewards of new products.3 Like the
`patent laws, antitrust laws rely on free markets as the best means of allocating resources and
`determining prices. As the Supreme Court famously explained, “[t]he Sherman Act was
`designed to be a comprehensive charter of economic liberty aimed at preserving free and
`unfettered competition as the rule of trade. It rests on the premise that the unrestrained
`interaction of competitive forces will yield the best allocation of our economic resources, the
`lowest prices, the highest quality, and the greatest material progress . . . .” N. Pac. Ry. Co. v.
`United States, 356 U.S. 1, 4 (1958).
`Antitrust law thus does not function merely as a means for ensuring low prices. High
`demand for a creative new product may drive up its price, but that price may simply reflect
`consumer preferences for a superior product relative to alternatives. See Harrison Aire, Inc. v.
`Aerostar Int’l, Inc., 423 F.3d 374, 381 (3d Cir. 2005) (“Competitive markets are characterized by
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`3 See generally Jorge Padilla, Douglas H. Ginsburg & Koren W. Wong-Ervin, Antitrust
`Analysis Involving Intellectual Property and Standards: Implications from Economics,
`forthcoming Harv. J.L. & Tech. (2019); Joshua D. Wright & Douglas H. Ginsburg,
`Whither Symmetry? Antitrust Analysis of Intellectual Property Rights at the FTC and
`DOJ, 9(2) Comp. Policy Int’l, 41 (2013) (“The proposition that antitrust enforcement and
`[intellectual property rights] conflict has been overtaken by the realization that each
`regime spurs dynamic competition.”); Thomas O. Barnett, Maximizing Welfare Through
`Technological Innovation, 15 Geo. Mason L. Rev. 1191, 1200 (2008) (“[W]hen
`innovation leads to dynamic efficiency improvements . . . it is a particular type of
`competition, and one that we should be careful not to mistake for a violation of the
`antitrust laws.”).
`STATEMENT OF INTEREST OF THE UNITED STATES
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`both price and quality competition, and a firm’s comparatively high price may simply reflect a
`superior product.”). Antitrust law protects this behavior rather than punishes it, so that others
`will have incentives to innovate and compete themselves—all for the benefit of consumers. See
`IP Guidelines § 1.0; Wright & Ginsburg, Whither Symmetry, supra. Rather than focusing on
`prices in isolation, antitrust law instead protects consumers from practices that harm
`competition—that is, they harm some “competitive process” in a manner can harm consumers in
`the form of above-competitive prices, lower output, reduced innovation, or a deprivation of
`consumer choice. See United States v. Microsoft, Corp., 253 F.3d 34, 58 (D.C. Cir. 2001) (en
`banc) (per curiam).
`In this regard, the policies of the patent laws and antitrust