Patent Law

Watchdog

By Gary Odom and Jordan Kuhn

The FTC, this nation's competition watchdog, is anti-patent. Commissioner J. Thomas Rosch considers patents inherently anti-competitive. But mergers to create an illegal market-dominant company, well, that's a different topic, a matter of discretion. So the FTC okayed a merger between Flow and Omax, both Washington state companies, despite acknowledging that they "are each other's closest competitor in the highly concentrated U.S. market for water-jet-cutting systems."

The FTC:

Waterjet cutting systems are used by a wide variety of industrial machine tool customers... Flow is the largest manufacturer of waterjet cutting systems in the United States. Omax is the second largest... Flow and OMAX are each other's closest competitors because they are the only two competitors that manufacture comparably priced waterjet cutting systems with the most advanced and efficient controllers... The relevant market would be highly concentrated as a result of the acquisition. Post-acquisition, [the combined company] would account for more than 55 percent of waterjet cutting system sales in the United States.

Oh, but if Omax is willing to license its two patents, 5,508,596 and 5,892,345, royalty-free, no problemo. Merge away. The consent order, "to an acquisition by Flow of Omax in violation of Section 7 of the Clayton Act," was unanimously approved.

To allow any whiners to let off steam, the consent order is open to public comment until August 8.

Full post as published by The Patent Prospector on July 13, 2008 (boomark / email).