A Comparative Study of US and EU Approaches
New Horizons in Competition Law and Economics series
Chapter 2: Striking the balance between antitrust and IP
* IP law and antitrust law are both designed to correct market failures. Antitrust policy targets anticompetitive conduct, which, in essence, is the type of conduct that limits the output or increases prices. The purpose of IP laws is to increase the incentives for private investment in the development of new products or more efficient production processes. To this end, IP laws create exclusive rights that limit the access of third parties to information, technologies, and other intangible goods. The product of R&D, information, is a public good, and as such can easily be appropriated by rivals, who did not bear the R&D cost. Assigning exclusive rights in the outcomes of creative and intellectual efforts allows the inventor to make a return on his investment by preventing free riding by his competitors.1 * Parts of this Chapter have previously been published as: Katarzyna Czapracka (2006), Where Antitrust Ends and IP Begins, 9 YALE J.L. & TECH. 44 (2007). 1 See, e.g., Kenneth Arrow, Economic Welfare and the Allocation of Resources for Inventions, in R.R. NELSON (ED.), THE RATE AND DIRECTION OF INVENTIVE ACTIVITY: ECONOMIC AND SOCIAL FACTORS 619 (1962); WILLIAM NORDHAUS, INVENTION, GROWTH, AND WELFARE: A THEORETICAL TREATMENT OF TECHNOLOGICAL CHANGE (1969); 1 HERBERT HOVENKAMP ET AL., IP AND ANTITRUST: AN ANALYSIS OF ANTITRUST PRINCIPLES APPLIED TO INTELLECTUAL PROPERTY LAW ¶1.1 (2002); William M. Landes & Richard A. Posner, An Economic Analysis of Copyright Law, 18 J. LEGAL STUD. 325 (1989); Richard A. Posner, IP: The Law and Economics Approach, 19 J....
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