The Federalist Society

Intellectual Property and “Cheap Exclusion”

May 1, 2005

John T. Delacourt

The transition in the Federal Trade Commission’s leadership from Chairman Timothy Muris to Chairman Deborah Platt Majoras has, naturally, raised questions within the Bar regarding the agency’s enforcement priorities. One intriguing answer to such questions was recently unveiled at the FTC’s 90th Anniversary Symposium. During that program, the Director of the Bureau of Competition – the agency’s antitrust enforcement arm – indicated that Commission staff would be taking a harder look at commercial and regulatory environments that may lend themselves to “cheap exclusion” strategies. In other words, rather than applying an identical level of scrutiny to all potential competitive threats, the agency would devote more of its investigatory resources to those situations in which anticompetitive conduct is most likely to occur. Such “cheap exclusion” scenarios tend to arise in environments in which firms can effectively exclude rivals at low cost often, though not always, through manipulation of governmental processes. This development is likely to be of particular interest to intellectual property practitioners as, to date, many of the Commission’s most high profile “cheap exclusion” cases have focused on anticompetitive efforts to extend the scope or duration of intellectual property rights....

Intellectual Property and "Cheap Exclusion"  

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