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Abstract:
The paper discusses three claims as the framework for rethinking the relationship between antitrust and intellectual property rights (IP) in the United States: (1) the claim that antitrust has always been the product of a fundamental tension between competition policy and private property rights; (2) the claim that IP reflects its own tensions between competition and property rights - in particular, the paper argues that patent law, like copyright, advances progress best when it fosters competition in ideas, when it replenishes the reservoir of public knowledge; (3) the corollary claim that understanding the relationship between antitrust and patent law calls for recognition of the dual competition regime involved - antitrust law for commercial markets, patent law for the marketplace of ideas.

The paper concludes with a brief discussion of the "So what?" question: What difference would it make - this new vision of two competition logics working in these two linked but separate domains?

antitrust, competition, intellectual property, patents, economics, law and economics, political economy

Abstract:
The paper contrasts U.S. and E.C. approaches to their Microsoft cases in light of three issues central to both cases: First, leverage theory, the central issue in both cases, which is articulated in the E.C. case but repressed in the U.S. case. Second, Microsoft's longstanding strategy of software integration. Third, attitudes toward technology interoperability. The paper concludes that U.S. judges and antitrust enforcement officials, as well as practitioners and scholars, can take three lessons from the E.C. case:
1. The value of leverage theory, particularly to analyze network industries with links to adjacent markets for system components.
2. The competitive harms of software integration, especially when an application program is bundled into a privately owned industry standard platform such as Windows.
3. The need for strong interoperability requirements, again where there is a privately owned industry standard.

antitrust, microsoft, E.C.

Abstract:
The Supreme Court under Chief Justice John Roberts has rendered only one decision, Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28 (2006) that explicitly addresses the relationship between antitrust and intellectual property rights. But there have been at least five more decisions that bear on the broader topic of competition policy and intellectual property rights. An interesting dynamic emerges from this cluster of opinions: While the antitrust cases apply intellectual property rights to justify restraints on competition, the three patent cases call for limits on their exclusionary logics and effectively seek to open the door to increased competition. Altogether, these six decisions seem to extend rather than alter the Court's preceding jurisprudential trajectories in antitrust and intellectual property rights. In this light, they offer some insights into the divergent approaches to competition policies that have developed in these overlapping regimes.

Especially for those who correlate progress with open access and competitive markets, these divergences summon closer attention to a neglected competition policy working within the patent regime, as well as to the broader array of competition logics working in the domain of intellectual property. The first section investigates some relationships between antitrust and intellectual property rights. It begins with Independent Ink, a tying case that involves a patented product, and then proceeds to explicate the power of trademark rights to shape the antitrust analysis of two price-fixing claims, one involving resale price maintenance and the other a joint venture in refining and marketing. The second section examines three patent cases, whose array of opinions seek to limit exclusionary rights and effectively open space for increased competition. The essay concludes with some observations about the crosscurrents of competition policy.

antitrust, intellectual property, Supreme Court, patents, trademarks, vertical restraints, tying, price fixing

Abstract:
In the spring of 1911, the Supreme Court issued four opinions involving the Sherman Anti-Trust Act, all of them landmark decisions and each in its own way reflective of the era. One of them was Dr. Miles Medical Company v. John D. Park & Sons. Justice Charles Evans Hughes, writing for the Court, not only pronounced the doctrine that resale price maintenance was prohibited but set in motion the analytical dynamics of modern doctrine. Moreover, the underlying controversy offers a striking sight line into the era's swirling cultural and economic currents. Dr. Miles arose at the confluence of three federal statutes emblematic of Progressive Era responses to entrepreneurial excess. As every student of antitrust knows, the Sherman Act grounded Park's successful defense that the resale price provisions in Miles' form contracts were unenforceable. The context was also framed by the Trademark Act of 1905 and the Pure Food & Drug Act of 1906, both of which collided with the dominant marketing strategies of patent medicine firms. Because the costs of market entry and product imitation were low, supply tended to exceed demand, spurring intense brand competition. But the trademark statute's stronger protection of nationwide brands in the patent medicine industry, one of the first product markets driven by mass advertising, enabled large manufacturers to distance themselves from smaller firms and discourage upstarts. Moreover, the food and drug act's ingredient disclosure requirements and its ban on ill-founded therapeutic claims tended to benefit well-established firms as much as consumers.

The chapter's first section describes the era's patent medicine markets and pays close attention to the commercial importance of trademarks and advertising. In this light, the second section analyzes Dr. Miles through the prism of prior litigation in the industry, an analysis that uncovers the centrality of property rights to the Court's competition policy as well as the industry-wide use of standard form contracts, use that was organized by national trade associations. In the patent medicine industry and perhaps in other emerging mass markets, standard form contracts were no less effective in restraining competition and maintaining price levels than the more visible business strategies of merger and cartelization. The focus on branded competition and standard form contracts illuminates the era's competition policy. The policy is misunderstood today, particularly its underlying classical economics, which informed the twin common law competition doctrines of contracts in restraint of trade and restraints on alienation of property. The chapter concludes with an afterword about modern doctrine, its modern economic rhetoric and its common law underpinnings.

Abstract:
Almost twenty-five years ago, the Federal Circuit turned unauthorized experimental use of another's patented invention into patent infringement. As with other patent doctrines standing at the intersection of exclusion and competition, the court has taken a hard line in favor of exclusion. The hard and fast rule here is particularly significant because experimental use is the most important form of competition in the patent domain. Over the same period, the Supreme Court has consistently rejected the Federal Circuit's hard line approach. The Court's decisions, most recently in eBay and KSR, have favored more nuanced approaches and, as a result, opened the patent domain to increased competition. The Supreme Court has not spoken to the experimental use defense.

This article examines the demise of the currently comatose experimental use defense and then reformulates it into a robust doctrine that better reflects the constitutional policy of promoting progress in science and useful arts. It begins by showing how a distended profit logic emerged in the 1980s to turn the virtue of independent experimentation into the vice of patent infringement. This inflated profit logic is an overstatement of incentive theory, the intuitively attractive precept that has long dominated patent policy despite its profound difficulties. More broadly, the current jurisprudence short-circuits analysis of interactions between key patent law conceptions of public benefit and private right, idea and invention, process and product. In this light, the second section builds the foundation for a revised patent policy that is more faithful to the constitutional norm of promoting progress and practically superior to the current approach and its unworkable incentive theory. In particular, the section introduces a concept of inventor welfare and, with it, begins to reshape dynamic efficiency as the logic of progress. The final section presents a schematic phenomenology of the invention process to serve as the framework for restoring independent experimentation to its vital role in the constitutionally inscribed process of invention.

patents, experimental use, invention, progress, competition, dynamic efficiency, patent infringement, innovation

Abstract:
The short essay develops the concept of strategic parallel conduct by filling the old bottle of interdependent conscious parallelism with the new wine of game theory. The conduct underlying the Kodak and Xerox cases is taken as the example of a positive sum game that is better understood and more appropriately litigated under Sherman Act Section One as strategic parallel conduct than under Section Two as monopolization or attempts to monopolize.

antitrust, parallel conduct, aftermarkets, game theory, complexity theory

Abstract:
This paper is an edited and lightly footnoted version of Remarks made at a session convened during the American Antitrust Institute’s most recent annual conference. The session was entitled “Can FTC Section 5 and E.U. Article 82 Converge?” The paper distinguishes between the “domestic question” of whether FTC Section 5 should be interpreted to go beyond Sherman Act Section 2, and the “cosmopolitan question” of whether convergence with Article 82 is desirable and achievable. The paper focuses on the domestic question; to the extent an expansive use of Section 5 would foster convergence, that would be a side benefit. The paper asserts three propositions: First, there is a strong and undisputed historical basis for the view that the FTCA is something different in kind from both the Sherman and Clayton Acts. Second, in this light, the FTC’s institutional character is properly understood as a competition commission to investigate, report, advise against, and if necessary stop practices deemed unfair methods of competition, ex ante, in their incipiency. The FTC is not an antitrust enforcement agency like the DOJ Antitrust Division. Third, federal court decisions beginning in the 1960s unanimously support the view that the FTC Section 5 and its enforcement by the Commission legitimately serve competition policy understood more broadly than antitrust law, i.e., than the Sherman Act. In sum, the FTC has a long-standing Congressional mandate and judicial invitation to be bold, to push past the antitrust laws, to investigate and stop in their incipiency “unfair methods of competition.” The Commission should be an innovator and investigator rather than an enforcer; it should spend significant resources working at the cutting edge of economic theory and legal doctrine. The FTC mission, properly understood, is to engage in research and development of competition policy at the forefront of changing commercial circumstances.

unfair methods of competition, monopolization, Federal Trade Commission, refusals to deal, predatory pricing, Trinko, Post-Chicago