Appropriability in Antitrust: How Much is Enough?

Abstract

This article identifies a recent phenomenon in antitrust discourse of using the economic rationale for patents and intellectual property - that they provide a necessary incentive for innovation - to justify other property rights and limit antitrust enforcement, particularly in high-technology industries. Applying sometimes overlooked insights from the economics of innovation, the article illustrates and develops a series of "pro-competition" counterarguments to the incentive rationale for limiting antitrust enforcement, and shows that the resolution of these competing arguments is indeterminate. The article considers such arguments across several antitrust doctrines, including no-fault monopoly, essential facilities, compulsory access to joint ventures, research joint ventures, and monopoly conduct in high-tech industries. The article concludes that the indeterminacy of appropriability arguments in these areas limits the usefulness of economics as a guide for making antitrust policy and counsels in favor of giving more explicit consideration to "non-economic" values.

Keywords: Antitrust, patent, intellectual property, appropriability, innovation, monopoly, values, competition, no fault, Schumpeter, mandatory access, Microsoft, indeterminacy, Areeda, Sullivan, Mountainwest, essential facility, joint ventures, Jorde, Teece, Bresnahan, Scherer

JEL Classification: K00, K21