atent pools — bundles of patents intended to facilitate cross-licensing and steer technology into the marketplace — have been touted as a way to cut litigation and transaction costs for businesses. A study released by a former Federal Trade Commission official challenges that assumption.
“While patent pools may generate some efficiencies and benefits, they may also cause anticompetitive effects like price fixing, collusion, and thwarting innovation,” the official, David Balto, said in releasing his findings on Thursday.
Balto, policy director for the Bureau of Competition from 1998 to 2001, now operates from the Washington-based Law Offices of David A. Balto. He released ” Barriers to Competition on the Innovation Superhighway: How the Lack of Antitrust Scrutiny of Patent Pools Deters Competition.”
The document was based on his examination of FTC and the Justice Department’s antitrust division’s enforcement actions and guidelines, plus a 2011 DOJ investigation into the Moving Pictures Experts Group pool involving web video encoding technology.