“Installing Ms. Ohlhausen as the permanent chairman of the FTC would go a long way toward righting a badly tilting vessel.”
One of the most straightforward steps President Trump can take to steer the ship of state on its new course is to put good people in place throughout the government.
This is particularly true if achieving one of his administration’s stated goals — making America economically and creatively great again — truly is a high priority. And few appointments are as critical in that vein as those agencies with authority for intellectual property.
The low-hanging fruit here is Patent and Trademark Office and Federal Trade Commission leadership.
I have already argued for firing PTO Director Michelle Lee. Let me add here, and send her packing out of the U.S. government in any role. Michelle Lee has no business being part of the Trump administration. I understand she is smart and a nice person. But Ms. Lee is far too steeped in the antipatent, anti-inventor perspective that drove IP policy in the previous administration and that she imbibed from the Google kool-aid.
At the FTC, President Trump has already made the salutary move of naming Commissioner Maureen Ohlhausen the agency’s Acting Chairman. This early move was a great first step. The even more significant step would be to name Ms. Ohlhausen the permanent chairman of the FTC and to do so quickly.
This should be an easy call. By resumé alone, she brings the experience and legal acumen to lead the agency where she has invested much of her career. Ms. Ohlhausen has shown the wisdom, good judgment and backbone to recover this competition agency from its drift into distortion and thuggish heavy-handedness. She has already begun the FTC’s course correction, seen here and here.
When the traditionally measured agency engaged in politically motivated — as opposed to evidence-based — enforcement actions in January, Ms. Ohlhausen penned a remarkable and rare dissent, which begins:
My practice is not to write dissenting statements when the Commission, against my vote, authorizes litigation. That policy reflects several principles. It preserves the integrity of the agency’s mission, recognizes that reasonable minds can differ, and supports the FTC’s staff, who litigate demanding cases for consumers’ benefit. On the rare occasion when I do write, it has been to avoid implying that I disagree with the complaint’s theory of liability.
I do not depart from that policy lightly. Yet, in the Commission’s 2-1 decision to sue Qualcomm, I face an extraordinary situation: an enforcement action based on a flawed legal theory (including a standalone Section 5 count) that lacks economic and evidentiary support, that was brought on the eve of a new presidential administration, and that, by its mere issuance, will undermine U.S. intellectual property rights in Asia and worldwide. These extreme circumstances compel me to voice my objections.
This principled, reasoned statement provides insight into Ms. Ohlhausen’s scrupulous approach to exercising the FTC’s powers. Importantly, this and other of her writings make clear that she holds a firm grasp on the difference between exercising the property right to exclusivity of one’s patented invention during the limited time of that exclusivity and the anticompetitive conduct of a monopolist in the antitrust sense.
Lest this sound too glowing on my part, I will add that I don’t agree with Ms. Ohlhausen on everything. For example, I differ with her about patent settlements, otherwise know as pay for delay, where innovator pharmaceutical companies reach out-of-court settlements, under the framework of the Hatch-Waxman Act, with patent-infringing generic medicine companies. I view this as a desirable and appropriate way to balance the brand drug’s exclusive property rights, an appropriate option for two parties to reduce court costs, and provide generic alternatives, often available earlier than the patent expiration date.
Nevertheless, the encroachment of antitrust application on IP exclusivity threatens American invention. Invention and discovery, along with the ability to protect them with a patent (or deed to a new property), is a vital element for achieving the kind of economic progress the President is aiming for.
Installing Ms. Ohlhausen as the permanent chairman of the FTC would go a long way toward righting a badly tilting vessel. And filling out the FTC roster with commissioners who share Ms. Ohlhausen’s clarity about the critical importance of intellectual property as a private property right, and her willingness to stand up to infringing bullies and foreign IP thieves on behalf of those inventive American companies’ intellectual property rights, would restore robust wealth creation and market competition with bright lines between intellectual property and antitrust.