Patents and Price Fixing by Serial Colluders

Forthcoming in N.Y.U. J. Intell. Prop. & Ent. L.

Boston Univ. School of Law Research Paper No. 21-1

71 Pages Posted: 9 Jun 2021 Last revised: 10 Jun 2021

See all articles by William E. Kovacic

William E. Kovacic

George Washington University - Law School; King's College London - The Dickson Poon School of Law

Robert C. Marshall

Pennsylvania State University, College of the Liberal Arts - Department of Economic

Michael J. Meurer

Boston University - School of Law

Date Written: 2021

Abstract

Antitrust law has long been mindful of the danger that firms may misuse their patents to facilitate price fixing. Courts and commentators addressing this danger have assumed that patent-facilitated price fixing occurs in a single market. In this Article, we extend conventional analysis to address firms’ patent misuse to facilitate price fixing across multiple products lines. By doing so, we expose gaps in existing agency enforcement and scholarly proposals for reform. Important legal tests that make sense in the single market setting do not carry over to the context we call serial collusion, where certain offenders engage in repeat collusion across product lines. This Article argues that there is an urgent need to recast these tests to address serial collusion of the sort that prevails in the chemicals, auto parts and electronics industries. To support this argument, we develop empirical evidence consistent with the possibility that serial colluders in the chemical industry acquired and used patents to support their collusion, either directly to coordinate and monitor output and pricing or indirectly to deter new firm entry by erecting patent thickets as a barrier to entry. Throughout this Article, we describe the flaws of current antitrust doctrine when it comes to assessing patents and price fixing, suggest doctrinal improvements, and provide guidance to antitrust enforcers about how to better understand and combat serial collusion facilitated by patents.

Keywords: Collusion, patent, price-fixing, antitrust

JEL Classification: K21, L13, L41, L44, O34

Suggested Citation

Kovacic, William E. and Marshall, Robert C. and Meurer, Michael J., Patents and Price Fixing by Serial Colluders (2021). Forthcoming in N.Y.U. J. Intell. Prop. & Ent. L., Boston Univ. School of Law Research Paper No. 21-1, Available at SSRN: https://ssrn.com/abstract=3863378

William E. Kovacic

George Washington University - Law School ( email )

2000 H Street, N.W.
Washington, DC 20052
United States
202.994.8123 (Phone)

HOME PAGE: http://www.law.gwu.edu/faculty/profile.aspx?id=1731

King's College London - The Dickson Poon School of Law

Somerset House East Wing
Strand
London, WC2R 2LS
United Kingdom

Robert C. Marshall

Pennsylvania State University, College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
United States
814-865-0030 (Phone)
814-865-0013 (Fax)

Michael J. Meurer (Contact Author)

Boston University - School of Law ( email )

765 Commonwealth Avenue
Boston, MA 02215
United States
617-353-6292 (Phone)
617-353-3077 (Fax)

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