Antitrust, Innovation, and Uncertain Property Rights: Some Practical Considerations

Abstract

The intersection of antitrust and intellectual property circumscribes two century-long debates. The first pertains to questions about how antitrust law and intellectual property law interact, and the second pertains to questions about how parties can exploit property rights, including intellectual property rights, to exclude competitors. In this paper I finesse these questions and turn to practical considerations about how innovation and intellectual property can impinge antitrust enforcement. I develop two propositions. First, collaborative research and development has often been unwittingly misunderstood and remains poorly understood, but what is understood about it is consistent with the long-standing observation that antitrust has rarely interfered with collaborative ventures. Second, shifting focus from intellectual property rights to uncertain property rights makes it easier to understand what innovation and intellectual property imply for enforcement processes. Both intellectual property and tangible assets imply the same processes, but the boundaries of intellectual properties may be uncertain and may, in turn, allow parties to game enforcement processes in ways that would not be feasible in antitrust matters that principally feature tangible assets. Even so, uncertain property rights might not frustrate enforcement processes as the antitrust authorities may yet be able to factor parties' strategic behaviors into the design of antitrust remedies. I illustrate these propositions with examples.

Keywords: antitrust, intellectual property, uncertain property rights, innovation, collaborative research and development, research joint ventures

JEL Classification: O34, L49, K21