Granting the agency’s motion for summary judgment, a federal court in the District of Columbia has upheld the U.S. Federal Trade Commission’s (FTC’s) authority to adopt an industry-specific rule under the Hart-Scott- Rodino [HSR] Antitrust Improvements Act and thus left in place a rule that would require pharmaceutical companies to report certain grants of an exclusive right to commercially use a patent or part of a patent as a “potentially reportable asset acquisition under the [HSR] Act.” Pharm. Research & Mfrs. of Am. v. FTC, No. 13-1974 (U.S. Dist. Ct., D.D.C., decided May 30, 2014).
So ruling, the court rejected the challenger’s arguments that FTC could not issue an industry-specific rule under the law and that the agency failed to establish a rational basis for the rule and to comply with legally required procedures. Additional details about the proposal, which was adopted without change, appear in Issue 40 of this Bulletin. Regulated under the rule are two categories of patent rights transfers, “where the licensor retains only manufacturing rights or co-rights.” FTC found that such transfers “‘carr[y] the same potential anticompetitive effects’ as buying a patent outright,” and that they are particularly prevalent in this industry.