Competition Advocacy and the Patent System: Promoting Competitive Markets for Technology

Abstract

Current efforts at patent reform, through vehicles such as legislation, regulation, and appellate caselaw, are often met with advocacy advancing competing concerns reflecting the interests of discrete and separate groups of market participants. These viewpoints may not necessarily align with the policy goal of promoting consumer welfare. Historically, competition advocacy by competition authorities has been one mechanism for advocating for reforms that advance consumer welfare. Competition authorities such as the Federal Trade Commission have a lengthy history of empirical research and policy advocacy regarding the patent system. This paper reviews that advocacy and examines the circumstances under which competition advocacy has been employed. It observes that advocacy has been directed to two markets in which the patent system impacts competition: patents influence competition in the market for goods that embody them and patents are also themselves articles traded in technology markets. Regarding the latter form of competition, advocacy has been used to address legal doctrines that give rise to transaction costs and market failures in the market for the trade and license of patent rights.

Keywords: Patent, Antitrust

JEL Classification: K21