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Industry-Specific Antitrust Policy for Innovation

Mark A. Lemley

Stanford Law School

September 1, 2010

Stanford Law and Economics Olin Working Paper No. 397

The premise that IP promotes dynamic efficiency while antitrust concentrates on static welfare is wrong, or at least oversimplified. It proceeds from a fundamentally Schumpeterian assumption that competition will not lead to innovation, and we need the lure of monopoly to drive investment in new products. In fact, however there is substantial economic evidence suggesting that competition itself may act as a greater spur to innovation than monopoly. Critically, different market structures will promote innovation in different industries. Sometimes - as in the pharmaceutical industry - we need the incentive provided by strong patents, but in other industries - like the Internet - competition is more likely to spur innovation. Both patent and antitrust law need to take these industry differences into account. And to do so, antitrust will need to shed its subservience to IP law.

Number of Pages in PDF File: 15

Keywords: Intellectual Property, Patent, Innovation, Antitrust, Schumpeter

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Date posted: September 1, 2010  

Suggested Citation

Lemley, Mark A., Industry-Specific Antitrust Policy for Innovation (September 1, 2010). Stanford Law and Economics Olin Working Paper No. 397. Available at SSRN: http://ssrn.com/abstract=1670197 or http://dx.doi.org/10.2139/ssrn.1670197

Contact Information

Mark A. Lemley (Contact Author)
Stanford Law School ( email )
559 Nathan Abbott Way
Stanford, CA 94305-8610
United States
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