The Federal Trade Commission sued Intel today, accusing the company of using its dominant market position to stifle competition. The agency’s complaint alleges that Intel used a variety of anticompetitive tactics “to put the brakes on superior competitive products that threatened its monopoly….”

Specifically, the Commission claims that Intel used threats to coerce computer manufacturers into buying Intel chips instead of those of rival manufacturers, and to block the marketing of machines that contained non-Intel chips.

What has been the impact of Intel’s behavior? According to the Commission, the company’s actions over the last decade have damaged “competition, innovation, and, ultimately, the American consumer.”

Intel, of course, has been a vocal leader in the patent reform debate over recent years. The company is a member of the computer/software industry’s Coalition for Patent Fairness and has publicly called  for changes that would curb litigation it views as “abusive.” A Promote the Progress reader has even speculated that Intel was the invisible hand behind several letters offering support for the failed rules package that would have placed arbitrary limits on an applicant’s ability to file continuation applications.

The company’s policy blog assures us that its efforts to change the patent laws are aimed at encouraging innovation and helping consumers:

…we believe that good faith manufacturers should be able to innovate and develop new products for consumers without having to worry whether they are going to lose the “patent lottery”, where speculative companies that do not produce or sell anything are able to reap large rewards in court for small sums invested in buying up patents and suing on them.

Today’s lawsuit reveals an interesting dichotomy. On one hand, the company appears willing to use its own monopoly power to block competition and protect its position. On the other hand, as its patent reform efforts show us, the company objects when others assert against it the monopoly power provided by patents.

The first half of that dichotomy is illegal, which explains the Commission’s lawsuit against the company. The second half, however, is not. A patent owner, whether she be the original inventor, a speculator, or even the fabled patent troll, has an exclusive right to practice the claimed invention. And, yes, she can sue a company, even a “good faith manufacturer,” that she believes is infringing her patent. Perhaps this explains the company’s efforts to change the patent laws.

That dichotomy also leaves Intel in a difficult position. The company must now reconcile its assurances that it seeks patent reform in order to foster innovation and to protect consumers with its alleged anti-competitive tactics, which the FTC claims has had precisely the opposite effect.

Color me skeptical.

The “Dear Senator” letters and memoranda on patent reform have been flying fast and furious over the last several weeks.  The rhetoric of late is at an all time high and seems to reflect the “false choice” on innovation described by PTO Director Jon Dudas in his explanation of the Bush administration’s letter of opposition to the Senate bill (S.1145, The Patent Reform Act of 2007) – some describe the bill as an innovation killer while others paint it as necessary for the survival of some of our most innovative industries.

The letters are, for the most part, non-revealing because we’ve known where the lines have been drawn in this battle for so long.  Most contain the same recycled language and few present any new or interesting information, causing many of us that follow the issue to glaze over them quickly.

At least one should have raised our eyebrows, though.  According to this article from Inside Higher Ed, the Coalition for Patent Fairness, which counts Google, Microsoft, Intel, Micron and other computer/software companies as members, circulated a memorandum last week that claimed that the concerns raised by various educational institutions and related associations had been “addressed” by the bill and the committee review process.

Universities have strongly opposed several provisions of the various vintages of the Patent Reform Act…so an impression that their concerns had been “addressed” could cause one to believe that the legislation was a step or two closer to significant movement.

Not so fast, though.  Turns out the CPF memorandum was not, um, blessed by any single university or association.

A call-to-action alert from the National Association of State Universities and Land-Grant Colleges aimed to set the record straight:

“The briefing paper implies that all of the university community’s concerns with S. 1145, the Patent Reform Act of 2007, have been addressed.  CPF’s assertion is factually incorrect and misrepresents the position of the university community and individual institutions on patent reform legislation.”

Looks like there’s no harm from the gaffe, though…CPF claims it didn’t intend to suggest that the heavy lifting was done, and the Association of American Universities acknowledged that several important changes that address university concerns have been made to the bill.

If you don’t yet believe that the fight to make fundamental change to our patent system is moving beyond Congress and onto new battlefields, consider the following observation that a reader, who wishes only to be identified as a Palo Alto patent attorney, submitted to me this week:

The Patent and Trademark Office has published some of the comments that have been submitted in connection with the proposed rule changes.  As of today, April 21, 2006, the listing of comments relating to the proposed limits on continuation and request for continued examination practice includes comments from several individuals.  No comments from corporations have been published.

The list includes published comments from four law firms.

…four law firms supporting the proposed rules, one common letter…In stark contrast to the comments received from individuals, the comments from each of the law firms are submitted in favor of the proposed rule that would place limits on continuation and RCE practice.  All of the law firm comments share several paragraphs of identical language.  The similarities are so striking that it becomes immediately clear that they very likely arose from a common template.

Is there a common denominator amongst the law firms?

Maybe.  Here’s one possibility.  Two of the firms have a significant number of issued patents under their name that are assigned to Intel (14/14 for one; 23/24 for the other).  The third firm has a small group of its patents assigned to Intel (7/253).  Nota Bene – the fourth firm only has two issued patents, neither of which are assigned to Intel.

The source isn’t as important as the underlying issue…four letters of support for the new rules are, in essence, one.

It’s interesting to note that three of the four published comments include the following statement:

“Unlike individuals expressing their personal views and bar associations stating a consensus position, we also represent our clients’ interests who both own patents and have to deal with assertions.” (emphasis mine)

The battle for fundamental change is on.  It’s on in Congress, it’s on in the Supreme Court, and, apparently, it’s on in the Patent and Trademark Office as well.