Edited by John Duns, Arlen Duke and Brendan Sweeney
Chapter 7: Antitrust treatment of intellectual property rights
One of the most challenging and important issues in antitrust law today involves the appropriate treatment of intellectual property (IP) rights. By its very nature, IP grants its owners rights to exclude. How antitrust (or, as it is referred to outside the United States (US), competition) law should address such a regime is far from clear.This chapter first explains the tension between the laws. It next traces the history of the intersection in the US. It then discusses several types of activity that demonstrate the tension, focusing on the law in the US and European Union (EU), the jurisdictions that have most closely examined these issues. In particular, it analyzes refusals to license, conduct in the pharmaceutical industry including settlements between brand and generic companies and ‘product hopping’ to new versions of drugs, innovation markets, standard-setting (in general and in the smartphone setting), and patent pools. For the past century, the intersection of the antitrust and IP laws has presented difficult issues for courts and commentators. Although the two systems attempt to increase total societal welfare, they pursue this goal through different paths. The foundation of the IP system – the patent and copyright laws in particular – is the right to exclude. Such a right is designed to allow innovators to charge prices high enough to recover their investment costs and gain profits, thereby encouraging future innovation. The exclusion at the core of IP nonetheless may be punished under the antitrust laws.
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