Any legal regime must attempt to assess the trade-offs associated with rules that will affect incentives to innovate, allocative efficiency, competition, and freedom of economic actors to commercialize the fruits of their innovative labors. The essays in this book approach this critical set of problems from an economic perspective.
Innovation benefits consumers through the development of new and improved goods, services, and processes. Competition and patents stand out among the federal policies that influence innovation. Both competition and patent policy can foster innovation, but each requires a proper balance with the other to do so. This report by the Federal Trade Commission discusses and makes recommendations for the patent system to maintain a proper balance with competition law and policy.
The Federal Circuit is the most visible point of the intersection between competition and patent law. When a single case contains both competition and patent issues, precedents of that court, including those pertaining to governing legal burdens or presumptions, will be critical. It is worth considering whether and how actual or assumed consumer welfare trade-offs are reflected in those decisions. Additionally, the basic decision to confer patents, and the attendant choices regarding their breadth, scope, and other aspects, also reflect social value judgments that directly implicate competition. The competition community can help both to focus attention upon and to illuminate certain consumer welfare trade-offs that inhere in our system for both granting patents and resolving patent disputes. Clarifying the nature of the trade-offs patents require, in turn, will help society refine its treatment of issues implicating both patent and competition law. The importance of these trade-offs, coupled with the uncertainty surrounding them, may explain why the legal and economic assumptions upon which the patent system is based are undergoing a broad-based review in academia and elsewhere. Given the important role that patent protection plays in the economy, and the fact that both patent and antitrust laws are intended to promote consumer welfare by encouraging innovation, industry and competition,' the competition community has an affirmative obligation to participate in this review. Such an interdisciplinary discourse between the patent and competition communities is essential if society is to best promote innovation. This Afterword focuses on the role the competition community, through an understanding of antitrust law and its economic underpinnings, can play in patent policy debate. Towards that end, three distinct aspects of the discourse surrounding patent trade-offs are analyzed: (1) how the constitutional underpinning of the patent system itself recognizes patents as trade-offs; (2) how the attempted banishment of the word monopoly may obscure those trade-offs; and (3) how patents are assumed to enhance innovation, without adequate recognition of the potential trade-offs involved. Significantly, this assumption is extended to specific aspects of patents, as well as to the patent system as a whole. Ideally, increased clarity in identifying the trade-offs patents impose will underscore the importance of the competition community's role in a broader social assessment of the consequences of those trade-offs.
This book of CASES AND MATERIALS ON INNOVATION AND COMPETITION POLICY is intended for educational use. The book is free for all to use subject to an open source license agreement. It differs from IP/antitrust casebooks in that it considers numerous sources of competition policy in addition to antitrust, including those that emanate from the intellectual property laws themselves, and also related issues such as the relationship between market structure and innovation, the competitive consequences of regulatory rules governing technology competition such as net neutrality and interconnection, misuse, the first sale doctrine, and the Digital Millennium Copyright Act (DMCA). Chapters will be updated frequently. The author uses this casebook for a three-unit class in Innovation and Competition Policy taught at the University of Iowa College of Law and available to first year law students as an elective. This document is Chapter One of a complete revision, now the second edition, covering the fundamental relationship between innovation and competition policy, including doctrines relating to patent scope, sequential innovation, and exclusion of rivals.
For decades, the debate about the tension between IP and antitrust law has revolved around the question to what extent antitrust should accept that IP laws may bar competition in order to stimulate innovation. The rise of IP rights in recent years has highlighted the problem that IP may also impede innovation, if research for new technologies or the marketing of new products requires access to protected prior innovation. How this 'cumulative innovation' is actually accounted for under IP and antitrust laws in the EU and the US, and how it could alternatively be dealt with, are the central questions addressed in this unique study by lawyer and economist Thorsten Käseberg. Taking an integrated view of both IP and antitrust rules – in particular on refusals to deal based on IP – the book assesses policy levers under European and US patent, copyright and trade secrecy laws, such as the bar for and scope of protection as well as research exemptions, compulsory licensing regimes and misuse doctrines. It analyses what the allocation of tasks is and should be between these IP levers and antitrust rules, in particular the law on abuse of dominance (Article 102 TFEU) and monopolisation (Section 2 Sherman Act), while particular attention is paid to the essential facilities doctrine, including pricing methodologies for access to IP. Many recent decisions and judgments are put into a coherent analytical framework, such as IMS Health, AstraZeneca, GlaxoSmithKline (in the EU), Apple (France), Orange Book Standard (Germany), Trinko, Rambus, NYMEX, eBay (US), Microsoft and IBM/T3 (both EU and US). Further topics covered include: IP protection for software, interoperability information and databases; industry-specific tailoring of IP; antitrust innovation market analysis; and the WTO law on the IP/antitrust interface.
This unique book provides a comprehensive account of the patent misuse doctrine and its relationship with antitrust law. Created to remedy and discourage misconduct by patent owners a century ago, its proper role today is debated more than ever before.
Dr Jae Park is to be congratulated for turning our attention to this difficult and underexplored area. His work focuses on standards and patents but goes well beyond an initial first analysis. He examines the finer points of both sets of rules in order to find out exactly where the problem lies and he then looks at the existing mechanisms that could provide a solution. Many of these have their roots in the area of competition law, but his thorough analysis shows that competition law in its current form and with its current limitations is not the perfect tool to address the problems that arise when patented technology becomes the object of standardisation. This leads Dr Park to develop his own solution for the problem at hand: a solution which he finds in the dynamic liability rules regime. This book really breaks new ground and provides a first and thorough analysis of this rarely addressed but increasingly important area. From the foreword by Paul L.C. Torremans, University of Nottingham, UK This insightful book reviews the inherent conflict between patent rights and industry standards and through analysis of both US and European case law proposes measures to improve current systems and foster greater innovation. Jae Hun Park searches for the appropriate balance between the rights of patent owners and the need for industry standards within the scope of patent law. He considers the current solutions provided by legal systems and using cost benefit analysis evaluates, from a legal and economic perspective, whether patent systems can be improved. Jae Hun Park proposes reform to the patent system that would introduce a dynamic liability rule regime , rather than property rules . The dynamic liability rule regime adopts property rules at the stage when there are still competing standards, and liability rules at the stage when there are no competing standards. This would, he argues, resolve the conflict between patents and standards and mitigate the patent hold-up problem. This is a must-read book for scholars interested in technology patents, innovation and competition law and policy, as well as those individuals working in standard setting organisations. It will also be of great interest to patent offices, patent attorneys and competition lawyers.
Patent assertion entities (commonly known as 'patent trolls') hurt competition and innovation. This book, the first to analyze the most salient issues related to patent assertion entities around the world, integrates economic theory with economic and legal reality to examine how the entities function and their impact on competition. It also offers legal and policy solutions that might be used to combat them. Edited by D. Daniel Sokol, the volume collects chapters from an array of leading scholars who describe patent assertion entities in the United States, Europe, Korea, Taiwan, Japan, and China, while offering empirical accounts of the entities' economic consequences and their use of litigation as a means of legal extortion against many of the most innovative companies in the world, from startups to multinationals. It should be read by anyone interested in how patent assertion entities operate and how they might be stopped.
This book uses the principles and tools of law and economics to examine the impact of regulation on the strategies of firms engaged in innovation. Specifically, the publication examines several key issues: economic aspects of patent rights, a state-created form of market exclusivity; the competitive exploitation of patent rights, in the form of licensing, from the perspectives of antitrust and competition law; the use of collaborative research and development arrangements as a means for reducing the costs and difficulties associated with new product development; and the attitudes of antitrust and competition regulators. In each of these areas, Innovation and Competition Policy makes reference to judicial decisions, economic theory, and the actual practices of firms in the marketplace. the book takes a comparative approach, evaluating both United States and in the European Community (EC) by: Reviewing past and current regulatory practices, and particularly contrasting and comparing recent proposed changes relating to the review of intellectual property licensing arrangements under antitrust and competition law. Examining how both have dealt with joint research and development ventures and with other pre-distribution collaborative arrangements, including the National Cooperative Research and Production Act in the United States and the EC's block exemption for research and development arrangements.
