Why the New Administration Should Bury the New Madison Approach

The “New Madison” approach sounds so promising. Old but new. Updating the classics for the modern era. What could be bad? In a word: everything. The intersection of patent and antitrust law has a long pedigree. For decades, antitrust’s role in patent-based activity has been acknowledged. Patent licenses are subject to antitrust scrutiny. “Pay for delay” settlements are not entitled to antitrust immunity. And activity in the context of standard setting organizations could conceivably violate antitrust law. That history has recently come under attack. Between 2017 and 2020, the head of the Department of Justice’s Antitrust Division, Makan Delrahim, introduced a radical framework — the “New Madison” approach — that extricated patent-based conduct from antitrust scrutiny. Such a gambit diverged from the longstanding bipartisan approach that had recognized antitrust’s role in policing standards-based conduct. This essay introduces standards and then addresses five tenets of Delrahim’s approach. For each, it presents the argument and then discusses its flaws