Note: Combating Joint Ventures in Suppression: Taking Inventory of the Legal Arsenal

By Daniel J. Iden. Full text here.

Companies may decide to leave patented technologies unused for numerous reasons, a great many of them legal. The patent laws confirm a company’s right to let a patent languish, unpracticed by anyone. But companies with patents on alternative technologies may agree to enter into a joint venture: promoting and licensing one alternative while suppressing the other. These arrangements have an anticompetitive flavor, particularly where there is substantial consideration flowing to the owner of the unused alternative technology. Because the public may ultimately benefit from promoting innovation over suppression, the Note asserts the law should deter these anticompetitive joint ventures. The Note looks at three currently available legal avenues: using antitrust law as it currently stands, expanding the doctrine of patent misuse, and eliminating incentives to form suppressive joint ventures by applying patent remedies differently. Ultimately, the Note argues that courts should make these arrangements unattractive to companies by awarding only discounted damages to aggrieved suppressors. This approach, where the damages are based on what is paid to the company for its unused technology, reduces the appeal of the most anticompetitive arrangements while still adequately compensating the patentee for its right to exclude.