Posts Tagged: "monopoly"

On Tuesday, January 11, the United States District Court for the District of Columbia denied Facebook’s motion to dismiss a complaint brought against it by the U.S.  Federal Trade Commission (FTC), holding that the FTC had stated a plausible claim for relief under Section 2 of the Sherman Act. The FTC filed a complaint on December 9, 2020, asserting one count of monopoly maintenance under Section 2 of the Sherman Act. Facebook moved to dismiss both this case, and a related state case. The district court dismissed the Commission’s complaint but granted the FTC the opportunity to amend. Following a leadership change from when the complaint was initially filed, the FTC filed an amended complaint in August of 2021. L

Last week, the attorneys general of 36 U.S. states and the District of Columbia filed a lawsuit in the Northern District of California against internet services and mobile operating system (OS) provider Google. The complaint lists various causes of action under the Sherman Antitrust Act and a number of state antitrust laws that have allegedly been violated by Google’s practices in leveraging its monopoly power in the mobile OS sector to maximize its revenues on app purchases through the Google Play Store through suppression of competing app platforms and charging exorbitant fees from app developers.

Toy maker Hasbro has been rebuked by the EU General Court, after it was found to have applied to register an EU trademark (EUTM) for MONOPOLY in bad faith. The company has owned the MONOPOLY brand since acquiring Parker Bros in 1991. It filed the EUTM application, for various goods and services in classes 9, 16, 28 and 41, in April 2010 and the mark was registered in 2011. Hasbro owned three earlier EU word marks for MONOPOLY, which were registered in 1998, 2009 and 2010 and are still live. These covered some of the same goods and services as those specified in the 2010 application. After the latest application was registered, it was attacked by a Croatian company called Kreativni Doga?aji, which argued that the application was a “repeat filing” of the earlier marks and “was aimed at circumventing the obligation to prove genuine use of those marks.”

The U.S. Department of Justice and Attorneys General from 11 U.S. states filed a complaint on Tuesday in the United States District Court for the District of Columbia against Google, alleging the company is “unlawfully maintaining monopolies in the markets for general search services, search advertising, and general search text advertising in the United States through anticompetitive and exclusionary practices.” The complaint maintains that Google has for years entered into exclusionary agreements and used anticompetitive practices to “lock up distribution channels and block rivals,” and comes after more than a year of investigation.

Yesterday, we published a response from Daniel Takash, the Regulatory Policy Fellow at the Niskanen Center’s Captured Economy Project, asking for a more civil IP debate. The response was itself responding to Lydia Malone’s critical view of the R Street panel on Capitol Hill that she attended, and which she felt took the position that patents are too strong. I, too, wrote an article in advance of the R Street presentation where I was highly critical of the motivations of R Street. Mr. Takash suggests “[w]e should all do our best to live by Antonin Scalia’s maxim to ‘attack arguments, not people.’” That is perfectly reasonable. It is, however, also perfectly reasonable to question the motivations of those who are making claims that are unquestionably false. To be quite direct about it, the R Street supposition that patents are too strong is pure fantasy of the first order. Anyone with even fleeting familiarity with the subject matter who has at all been paying attention to the demise of the U.S. patent system over the last 12+ years knows that U.S. patents are not too strong. U.S. patents are too weak. So weak that for the first time in a decade the number of U.S. patent applications has decreased while patent applications worldwide surged forward by more than 5% during 2018. Moreover, U.S. applicants are not foregoing patent protection, they just aren’t filing as much in the United States. Indeed, U.S. applicants continue to be the hungriest for patents worldwide.

Patents are often referred to as monopolies. But that is a fundamental misunderstanding of how patents work to enhance competition. The truth is that a patent is a natural anti-monopoly. In a functioning patent system, inventions become investible assets when they are patented, and the value of the invention increases as market demand increases. Because of the direct relationship between market demand and patent value, a patented invention can attract enough investment to compete with entrenched incumbents in the market for the invention. This effect introduces new competitors into the market who are protected against incumbents for a long enough period that they can survive after the patent expires. Thus, patents act to increase competition by introducing new competitors into the market and thereby create competitive markets. But perhaps even more important, some inventions deliver a strong dose of creative destruction to monopolistic incumbents who did not innovate fast enough, causing those companies to fail and clearing the market of dead weight, thus opening the market to innovative new companies. Patents are the ultimate anti-monopoly in a free market. But for this to work, the market must function undisturbed by crony laws and regulations. A patent must be a presumed valid “exclusive Right.”

Since America’s earliest days, a lot of creative and innovative toys have come through the consumer marketplace. Many becoming so iconic they have become household names and synonymous with a moment in time for America’s youth. Some of the most popular of these toys that continue to show up year after year under Christmas trees were patented… It wouldn’t be a traditional Christmas at IPWatchdog unless we spent some time profiling some cool innovations that relate to the holiday season. So today, I return to one of our all time favorite articles. Five years ago we published The Top 10 Most Iconic (and Patented) Toys and last year we published The Most Iconic (and Patented) Games. With Christmas firmly in mind, it is time to revisit and expand these lists. When initially published some truly iconic classic toys and games were inexplicably left missing. So, with the hours winding down before Santa Claus makes his way down chimneys across the world, join us as we look back at some of the most popular toys and games of all time, as well as the patents behind them.

Darrow became the first millionaire game inventor, thanks to royalty payments. The irony, however, is that Darrow may not have invented the game at all, but rather he may have taken a locally popular game and made only a few changes. By the time Parker Brothers realized that Darrow may not have been the true inventor the game was already a huge success. In order to protect the game and its investment the decision was made to buy up all patents and copyrights on any related game, thereby ensuring the monopoly on Monopoly®. Thus, the story of Monopoly® provides inspiration to inventors who at first are told no, and for companies who acquire intellectual property rights.

Is the Supreme Court anti-patent? it has been suggested to me that such rhetoric, whether true or not, is unhelpful and puts those urging pro-patent views on the defensive. If that is correct then it should be banned from our lexicon. But I still wonder how one can or should refer to Justices who repeatedly vote against the patent owner? Certainly, the Supreme Court is not pro-patent, and they are certainly showing no signs of being self-aware when it comes to the path of destruction they have cut through critical sectors of the American high-tech economy. But I guess that doesn’t make them anti-patent, or at least you can’t call them anti-patent because that is rude, or off putting, or offensive to those who hold the Court in high esteem. 

Although it’s not illegal to earn a profit, unfair business practices in the pursuit of holding a monopoly over an entire industry led to the breakup of Standard Oil, especially the rebates from railroad companies for oil shipments which substantially lowered Standard Oil’s transportation costs relative to its much smaller competitors. Recent academic research has suggested that, while the U.S. government acted appropriately to stop the cartelization of an industry, Standard Oil was engaging in typical capitalist activity in securing better deals which optimized oil shipments. This would seem somewhat less nefarious than an outright copying technologies from smaller competitors in an effort to stave off competition.

Between 1882 and 1906, this market dominance reportedly brought Standard Oil a total of $838,783,800 in net income. On an annual basis, that would mean that Standard Oil earned nearly $35 million in net income each year, which equals approximately $969 million in 2017 dollars when adjusted for inflation… To some of the tech super giants of today, $1 billion in profits is nothing more than pocket change… If Standard Oil remains the benchmark for what it means to be a monopoly, which many believe it does, it is difficult to understand why U.S. Antitrust regulators are not at least asking very serious questions about the market dominance of the tech super giants and the associated suppression of smaller, truly innovative enterprises.

In the first sentence of the entire article, the author falls prey to a misconception often parroted by those with anti-patent viewpoints, namely that patent protection is a “government-granted monopoly.” Yes, the patent is granted by the government, and yes, it offers an inventor the right to exclude others from the market, but a patent provides no promise of a monopoly or any market success whatsoever. More than 90 percent of patents cover technologies that will not be commercialized. If there’s no market, there’s no monopoly. Instead, patents help to create markets by creating an enforceable property right capable of attracting investment and warding off free-riders if in fact a market does ultimately exist… But the Mises Institute’s author even notes that Curtiss continued to design aircraft control methods that wouldn’t infringe on the Wright Brothers’ patent, an unwitting recognition of the fact that patent protection encourages innovators to find ways to invent without infringing on a patent.

Several years ago we profiled the Top 10 Iconic (and Patented) Toys in our Christmas Eve edition. This year we decided to profile the most iconic and patented games, many of which are still likely to be found waiting for good little girls and boys under the Christmas tree. Profiled are Monopoly®, Rubik’s Cube, Battleship, and Rock’em Sock’em Robots, Twister and Simon.

These government agencies target successful, inventive U.S. firms. They politicize their processes and disregard the exclusivity that rightfully belongs to patent owners. They take away private property from the creators and give it to favored domestic companies like Samsung and Huawei, which apparently lack the smarts to win fair and square in market-based competition or by ingenuity. It’s time that America put an end to these threats, foreign and domestic. Either you believe in property rights and free enterprise or you don’t… In essence, Chinese, South Korean and FTC officials demand the benefits produced by free markets and property rights for free from American innovators in mobile technology, who took all the risk and made investments in research and development.