Dedicated to upholding US antitrust laws, the FTC will use the hearing to bring the US innovation community up to date on all recent legislation, with the aim of ensuring that the laws are properly understood. The hearing marks the FTC's first major advocacy work in the field for five years, and is set to kick start a series of IP hearings that will roll out over 2009.
In the first of three panels staged throughout the hearing, the FTC will touch on industrial changes created by the patent system. This panel will look at business models that have emerged from patent valuation and licensing; how they are functioning within industry as a whole, and what effects they are having on the patent system itself. The second panel will address laws on damages and injunctions, asking how they have affected innovators and consumers. The third will take the hearing full-circle: returning to themes of valuation and licensing, but in the context of US Supreme Court rulings on obviousness and patent exhaustion. Quanta v LG Electronics, decided by the Supreme Court in June, is likely to be a touchstone for this panel's discussions.
In an announcement, the FTC said: 'Changes and proposed changes in the law, together with evolving business models for buying, selling and licensing IP, could significantly influence a patent's economic value and the operation of the IP marketplace. The hearings will consider the impact of these changes on innovation, competition and consumer welfare.' It added: 'The commission seeks the views of the legal, academic and business communities on the issues to be explored at the hearings.'
Published in 2003, the FTC's last piece of public IP work – To Promote Innovation – was a significant report on the growing fiscal importance of patents. Commenting on the paper five years on, the FTC indicated that it has provided a backdrop for the upcoming hearings. '[The report] found that both competition and patents influence innovation, which drives economic growth and increases standards of living,' it said. 'Patent rights make it easier for inventors to attract funding and enter the licensing and joint venture arrangements needed to commercialise an invention.'
Set up in 1914 to promote competition as a free market driver, the FTC devotes its energies to ruling for fair conduct in corporate deals, such as mergers and agreements, safeguarding consumers along the way. In the global economy, it also has the power to ensure that foreign organisations trading with US businesses are following its rules and abiding by Federal laws. For example, on 12 November it launched proceedings against several UK-based payday loans websites, claiming they had failed to comply with Federal requirements to disclose key loan terms to US customers. The FTC's advocacy work abroad is carried out by its Office of International Affairs, which has formed links with a range of similar interest groups such as the International Competition Network (ICN).