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Technological Innovation and Monopolization

Frederic M. Scherer

Harvard University - Harvard Kennedy School (HKS)

October 2007

KSG Working Paper No. RWP07-043

This paper, written for an American Bar Association compendium on competition policy, reviews seven of the most important U.S. antitrust cases charging firms in high-technology industries with violations of Sherman Act Section II - i.e., with monopolization. The principal target firms were Standard Oil of New Jersey, General Electric (in lamps), AT&T, du Pont (for cellophane), Xerox, IBM, and Microsoft (both in the United States and Europe). From an analysis of the historical records, it is clear that in most instances, the legal system took far too long to deal with the contested issues. In the interim, firms that had achieved dominant positions through innovation often embraced new technologies slowly, sometimes pursuing an explicit fast second strategy - that is, waiting to innovate until their positions were threatened by outsiders. The stimulating effect of outside challenges suggests that entry should be kept open, among other things by combating the extension over time of blocking patent positions. Procedural reforms for accelerating the adjudication of complaints are proposed.

Number of Pages in PDF File: 52

Keywords: Business and Government Policy, Law and Legal Institutions

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Date posted: November 11, 2007  

Suggested Citation

Scherer, Frederic M., Technological Innovation and Monopolization (October 2007). KSG Working Paper No. RWP07-043. Available at SSRN: http://ssrn.com/abstract=1019023 or http://dx.doi.org/10.2139/ssrn.1019023

Contact Information

Frederic M. Scherer (Contact Author)
Harvard University - Harvard Kennedy School (HKS) ( email )
79 John F. Kennedy Street
Cambridge, MA 02138
United States
617-495-1154 (Phone)
617-496-0063 (Fax)
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