Competition Policy for Intellectual Property: Balancing Competition and Reward

Intellectual Property and Competition Policy and Antitrust

Article Snapshot


Richard Gilbert


Issues in Competition Law & Policy, Wayne Dale Collins, ed., American Bar Association Antitrust Section, 2006


This paper looks at how rights like patents affect competition.

Policy Relevance

Courts hearing competition cases should look closely at whether a patent is likely to be valid and other economic realities.

Main Points

  • Some argue that vigorous antitrust law enforcement and competition are better for innovation, others that giving exclusive right like patents to one firm is better.
    • Antitrust cases often look closely at economic realities, but when patents are involved courts simply assume the patent is valid.

  • Key factors courts should look at include whether the patent gives its holder too much market power, and whether the patent is weak and unlikely to be valid.

  • After World War II, courts viewed patents as a threat to competition, especially in the 1960s. Since, patent holders have been given more freedom.
    • The Federal Circuit Court of Appeals, given sole jurisdiction over patent appeals, seems to favour upholding patent validity and larger awards to patent holders.

  • Today antitrust regulators ask what competition would look like in the absence of a questionable patent license, but treat intellectual property like other property.

  • Intellectual property differs from other property in pricing, the clarity of boundaries, its role in innovation, in problems with copying, in being used strategically, and other ways.

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