15,658 research outputs found
Intellectual Property, Antitrust and Strategic Behavior
Economic growth depends in large part on technological change. Laws governing intellectual property rights protect inventors from competition in order to create incentives for them to innovate. Antitrust laws constrain how a monopolist can act in order to maintain its monopoly in an attempt to foster competition. There is a fundamental tension between these two different types of laws. Attempts to adapt static antitrust analysis to a setting of dynamic R&D competition through the use of 'innovation markets' are likely to lead to error. Applying standard antitrust doctrines such as tying and exclusivity to R&D settings is likely to be complicated. Only detailed study of the industry of concern has the possibility of uncovering reliable relationships between innovation and industry behavior. One important form of competition, especially in certain network industries, is between open and closed systems. We have presented an example to illustrate how there is a tendency for systems to close even though an open system is socially more desirable. Rather than trying to use the antitrust laws to attack the maintenance of closed systems, an alternative approach would be to use intellectual property laws and regulations to promote open systems and the standard setting organizations that they require. Recognition that optimal policy toward R&D requires coordination between the antitrust and intellectual property laws is needed.
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Standard Essential Patents and Antitrust Law: Balancing Innovation and Competition
Antitrust and patent law have always been uneasy allies. Although both seek to encourage innovation and competition in the long run, patent law does so primarily by granting creators exclusive fiefdoms over their intellectual property, and antitrust law does so primarily by proscribing firms from anticompetitive conduct. Yet today’s world is flush with patent-rich products and industries that depend on the fruitful, simultaneous application of both of these bodies of law. Industries reliant on flourishing networks, such as those in the information and communication technology sector, are particularly influenced by the intersection of antitrust and patent law.1 Because of the central importance of well-functioning networks to these industries, many have developed standard setting organizations (“SSOs”) to designate technical standards that ensure product compatibility and interoperability between offerings from different firms. These standards incorporate many specific patents, known as standard essential patents (“SEPs”). Further, standards promulgated by SSOs oblige SEP holders to license their SEPs to implementers of the standard in a fair, reasonable, and non-discriminatory (“FRAND”) fashion.2 As a result, SEP holders and their counterparties stand, precariously, where antitrust and patent law meet.
This Note will argue that an SEP holder who violates their FRAND commitments by unilaterally refusing to deal with a prospective implementer of the relevant standard should be presumed to have antitrust liability under Section 2 of the Sherman Act. In other words, such a firm should be presumed to have market power and to have participated in exclusionary conduct with anticompetitive effects. Part I will describe the landscape of standard setting, its effect on competition, and the place of antitrust and patent law in the standards landscape. Part II will explore the antitrust case law concerning refusals to deal in greater depth, paying particular attention to cases involving intellectual property and patents. Finally, Part III will build off of the previous two Parts to make and justify the argument that SEP holders should face a presumption that they have violated Section 2 of the Sherman Act when they violate their FRAND commitments by refusing to deal
Navigating the Patent Thicket: Cross Licenses, Patent Pools, and Standard-Setting
In several key industries, including semiconductors, biotechnology, computer software, and the Internet, our patent system is creating a patent thicket: an overlapping set of patent rights requiring that those seeking to commercialize new technology obtain licenses from multiple patentees. The patent thicket is especially thorny when combined with the risk of hold-up, namely the danger that new products will inadvertently infringe on patents issued after these products were designed. The need to navigate the patent thicket and hold-up is especially pronounced in industries such as telecommunications and computing in which formal standard-setting is a core part of bringing new technologies to market. Cross-licenses and patent pools are two natural and effective methods used by market participants to cut through the patent thicket, but each involves some transaction costs. Antitrust law and enforcement, with its historical hostility to cooperation among horizontal rivals, can easily add to these transaction costs. Yet a few relatively simple principles, such as the desirability package licensing for complementary patents but not for substitute patents, can go a long way towards insuring that antitrust will help solve the problems caused by the patent thicket and by hold-up rather than exacerbating them.
Technology standards, patents and antitrust
From the perspective of antitrust authorities, the multiplication of patents embodied in technology standards is a source of concerns. Certainly it is necessary and efficient that patents owners derive a revenue from the use of the standard. Yet by their function - ensuring compatibility between different products by promoting a common technology platform in a particular industry - standards generate potential for market power far beyond the legal protection conferred by patents. Patent holders may thus be tempted to leverage their position to make illegal profits. Such concerns arise in two different cases that have fueled antitrust debates and economic research during the last decade. On the one hand, patent owners may be tempted to collude by coordinating their licensing policies. The difficulty here is that some coordination between them within a patent pool may actually be pro-competitive. After a brief introduction, we explain in the first part why, and on what conditions, patent pools should be accepted by antitrust authorities. On the other hand, patent owners may be tempted to manipulate the standard setting process by waiting for the wide adoption of the standard before charging excessive royalties to its users. We present this hold-up problem in the second part, and show how appropriate rules for standard setting processes can help mitigate it.Antitrust, Hold-up, Innovation, Licensing, Patent, Patent Pool, Royalty, Standard
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