Competition Policy for Intellectual Property: Balancing Competition and Reward

This chapter reviews the history of antitrust enforcement for intellectual property and identifies reasons why appropriate antitrust enforcement for intellectual property may differ from antitrust enforcement for ordinary property. The complex interplay between the scope of patent protection and incentives for innovation in different industries make it difficult to craft antitrust rules that take these differences into account. Instead, antitrust policy generally should recognize that innovators need to be compensated for their innovative efforts, and that this sometimes requires practices that may exclude potential competitors. At the same time, one must be careful not to lean too heavily on practices that focus on rewards to innovation, because these practices incur costs in the short run by limiting the use of innovations and possibly in the long run by raising the costs for future innovators who use protected innovations as inputs into their own innovative efforts.