Administrative Hearing in Intel Antitrust Case Set for February

(December 9, 1998)  The administrative hearing in the FTC's antitrust action against Intel is schuduled to begin on February 23, 1999, in Washington DC, and could last for six weeks.  FTC Administrative Law Judge James Timony is presiding.

See, Summary of In the Matter of Intel Corporation, FTC Docket No. 9288.

The Federal Trade Commission filed a Complaint against Intel on June 8, 1998 alleging that Intel is a monopoly that illegally refused to deal with computer makers Compaq, Intergraph, and DEC in order to coerce them into surrendering certain intellectual property rights.  The FTC seeks a "cease and desist" order.  The Complaint alleges that Intel’s conduct constitutes unlawful monopolization, unlawful attempts to monopolize, and unfair methods of competition, all in violation of Section 5 of the Federal Trade Commission Act.

Robert Pitofsky

FTC Chairman Robert Pitofsky delivered a speech on antitrust law and high tech to the Federalist Society Convention in Washington DC on November 14.  He also spoke with Tech Law Journal about that speech on November 18.  The following are excerpts from that unrevealing interview:

TLJ: You said ... "One possible position is that intellectual property is property," and "I am not entirely comfortable with that." Could you elaborate on that?

Pitofsky: I am trying to remember the context. I think what I meant by that is that some people would argue that application, regulation, specifically of antitrust, in intellectual property issues [be] done exactly the same way as application as other forms of property, and I am not comfortable with that, because I can see a difference. ...

TLJ: Does a patent holder, or a holder of another intellectual property right, have an absolute right to refuse to license or share information?

Pitofsky: You know, that is an issue in the Intel case, so I am not going to respond to that at this point.


TLJ:  Is the June 23 decision of the Court of Appeals in the Microsoft case something that is binding on the Federal Trade Commission?

Pitofsky: Well that is an interesting question. It is not, well, obviously, we would have to respect that particular decision, but that decision, that could not apply to us. It was an interpetation of a consent decree between Microsoft and the Department of Justice.  The letter of that opinion could not apply to us.

TLJ: ... is that something that you would like to see reversed by the Court of Appeals or by the Supreme Court?

Pitofsky: You know, I think, I think I don't want to comment. That is Justice's case.

(Chairman Pitofsky also declined to comment on other pending antitrust suits, including the Intergraph v. Intel suit.)

Intel's Answer asserts that "Intel has not monopolized any market, attempted to monopolize any market, or used any unfair methods of competition. Intel has not violated Section 5 of the Federal Trade Commission Act or any other antitrust law.  This is not an appropriate matter for action by the FTC. The allegations in this matter arise out of intellectual property disputes between Intel and three other major high technology companies. Two of those disputes have been settled on mutually agreeable terms among the parties. The third dispute is currently in litigation in Alabama. In each of these cases, Intel took reasonable, measured steps under the law and its contracts to protect its intellectual property and its core business. In none of these cases did Intel deny anyone a supply of microprocessors or any other product. Intel’s actions did not and could not harm competition in any relevant market."

The administrative hearing is scheduled to start on February 23, 1999, in Washington DC.  It will take place in Room 532 of the Main FTC building on Constitution Avenue.  The hearing will be open to the public, although Intel spokesman Chuck Malloy stated that "some sessions will be closed because of the administrative law judge's protective order."

The hearing could last for six weeks.  Malloy predicted "five to six weeks, but that is pure guess."  The FTC concurs.  Willard Tom stated: "typical for a case of this nature, goes on for several weeks, maybe six weeks."

Willard Tom, who is the Deputy Director of the FTC's Bureau of Competition, spoke to Tech Law Journal on December 7.  He expects Intel to file a dispositive motion: it is "fairly typical in cases of this sort."  The deadline for filing such motions is January 22, 1999.

Asked if the FTC would add any new factual allegations, Tom responded "no, except in the sense that whenever you go to trial you are fleshing out the bare bones allegations in the Complaint."  He also stated that "we would not introduce a major new theory of the case without ... (an amended complaint) or filing a new complaint."

Deputy Director Tom declined to comment on the status of settlement negotiations, or even to confirm or deny that negotiations are under way.  He also would not comment on whether the FTC would drop any of the claims in the Complaint prior to the hearing.

Joseph Kattan, an attorney with the law firm of Gibson, Dunn & Crutcher, which represents Intel in this matter, declined to discuss the case.

Related Stories

FTC Brings Administrative Action Against Intel, 6/9/98.
FTC Denies Intel Motion for More Definite Statement, 6/30/98.
Intel Answers FTC Antitrust Complaint, 7/14/98.
Pitofsky Wants to Change Antitrust Law for High Tech, 11/15/98.
On November 27 Robert Pitofsky wrote to Tech Law Journal to
complain about "misinterpretations and distortions of my views ..."
in the November 15 story.  See, full text of the letter.