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Intellectual Property, Antitrust and Strategic Behavior

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  • Dennis W. Carlton
  • Robert H. Gertner

Abstract

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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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8976.

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Date of creation: Jun 2002
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Publication status: published as Intellectual Property, Antitrust, and Strategic Behavior , Dennis W. Carlton, Robert H. Gertner. in Innovation Policy and the Economy, Volume 3 , Jaffe, Lerner, and Stern. 2003
Handle: RePEc:nbr:nberwo:8976

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  8. Dennis W. Carlton & Michael Waldman, 1998. "The Strategic Use Of Tying To Preserve And Create Market Power In Evolving Industries," University of Chicago - George G. Stigler Center for Study of Economy and State, Chicago - Center for Study of Economy and State 145, Chicago - Center for Study of Economy and State.
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Citations

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Cited by:
  1. Dennis W. Carlton & Ken Heyer, 2008. "Appropriate Antitrust Policy Towards Single-Firm Conduct," EAG Discussions Papers, Department of Justice, Antitrust Division 200802, Department of Justice, Antitrust Division.
  2. Møllgaard, Peter & Lorentzen, Jo, 2006. "Competition Policy and Innovation," Working Papers, Copenhagen Business School, Department of Economics 09-2005, Copenhagen Business School, Department of Economics.
  3. Dennis W. Carlton, 2007. "Does Antitrust Need to be Modernized?," EAG Discussions Papers, Department of Justice, Antitrust Division 200703, Department of Justice, Antitrust Division.
  4. Klaus Kultti & Tuomas Takalo & Juuso Toikka, 2005. "Patents Hinder Collusion," Industrial Organization, EconWPA 0503015, EconWPA.
  5. Christine Greenhalgh & Padraig Dixon, 2002. "The Economics of Intellectual Property: A Review to Identify Themes for Future Research," Economics Series Working Papers 135, University of Oxford, Department of Economics.
  6. Giovanni B. Ramello, 2002. "Copyright and Antitrust Issues," LIUC Papers in Economics, Cattaneo University (LIUC) 114, Cattaneo University (LIUC).
  7. Shastitko, A. & Kurdin, A., 2014. "Protection of Intellectual Property Rights and Competition Policy: Seeking for a Better Balance," Journal of the New Economic Association, New Economic Association, New Economic Association, vol. 21(1), pages 111-135.
  8. Seifert, Jacob, 2013. "Compulsory Licensing, Innovation and Welfare," Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79778, Verein für Socialpolitik / German Economic Association.
  9. Leonardo Burlamaqui, 2006. "How Should Competition Policies and Intellectual Property Issues Interact in a Globalised World? A Schumpeterian Perspective," The Other Canon Foundation and Tallinn University of Technology Working Papers in Technology Governance and Economic Dynamics, TUT Ragnar Nurkse School of Innovation and Governance 06, TUT Ragnar Nurkse School of Innovation and Governance.

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