Synopses & Reviews
Excerpt from Intellectual Property Antitrust Protection Act of 1995: Hearing Before the Committee on the Judiciary, House of Representatives, One Hundred Fourth Congress, Second Session, on H. R. 2674 May 14, 1996
The committee met, pursuant to notice, at 9:41 a.m., in room 2141, Rayburn House Office Building, Hon. Henry J. Hyde (chairman of the committee) presiding.
Present: Representatives Henry J. Hyde, Carlos J. Moorhead, George W. Gekas, Howard Coble, Charles T. Canady, Stephen E. Buyer, Martin R. Hoke, Fred Heineman, Steve Chabot, Bob Barr, Patricia A. Schroeder, Jack Reed, and Zoe Lofgren.
Also present: Alan F. Coffey, Jr., general counsel/staff director; Joseph Gibson, counsel; Perry Apelbaum, minority counsel; and Kenny Prater, clerk.
Opening Statement of Chairman Hyde
Mr. Hyde. The committee will come to order.
This morning we consider H.R. 2674, the Intellectual Property Antitrust Protection Act of 1995. I introduced this legislation on November 20, 1995, and nine members of this committee are co-sponsors. H.R. 2674 would eliminate a court-created presumption that market power is always present for antitrust purposes when a product protected by an intellectual property right is sold, licensed, or otherwise transferred. In antitrust law, market power is the power to control prices or exclude competition.
In my view, the market power presumption for intellectual property is wrong because it is based on false assumptions. Because there are often substitutes for products covered by intellectual property rights or there is no demand for the protected product, an intellectual property right does not automatically confer the power to determine the overall market price of a product or the power to exclude competitors from the marketplace. As Justice O'Connor put it, and I quote, "A common misconception has been that a patent or copyright suffices to demonstrate market power. While a patent or copyright might help to give market power to a seller, it is also possible that a seller in that situation will have no market power: for example, a patent holder has no market power in any relevant sense if there are close substitutes for the patented product."
I've been interested in this issue for many years. I would note that our former colleague, Hamilton Fish, was the author of predecessor House bills on this subject.
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