The Anticompetitive Effects of Unenforced Invalid Patents

Abstract

Antitrust law and patent law assume that an invalid patent cannot distort competition unless the patentee enforces the patent by initiating infringement litigation or explicitly threatening to do so. The Article argues that invalid patents can destroy competition - even without such enforcement efforts - by creating legitimate fears of litigation, increasing the costs of market entry, delaying market entry, scaring away competitors' customers and business partners, and deterring research. Despite the anticompetitive risks posed by invalid patents, neither patent law nor antitrust law does an effective job of ridding the marketplace of invalid patents. In particular, because antitrust law currently holds that a monopolist does not violate the Sherman Act unless it actually enforces its invalid patent, a monopolist with an invalid patent can improperly exclude competitors while not exposing itself to antitrust liability. Finally, the Article argues that eliminating the enforcement requirement from antitrust claims based on invalid patents would better accomplish the goals of both antitrust law and the patent system.