Antitrust and patent law are complementary---both are necessary components of effective innovation policy
Leslie 09 [Christopher; 2009; a Professor of Law at the University of California, Irvine School of Law, Former Visiting Professor of Law at Stanford Law School, the University of Texas School of Law, and N.Y.U. School of Law, J.D. from the University of California, Berkeley School of Law, Master’s in Public Policy from the Kennedy School of Government at Harvard University, B.A. in Economics and Political Science from UCLA; Iowa City: University of Iowa, College of Law; “Antitrust and Patent Law as Component Parts of Innovation Policy”; Vol. 34:4; p. 1260] zy
In response to this saga of laws in tension, courts and commentators began to argue that antitrust and patent law were more properly viewed as complementary, because ―both are aimed at encouraging innovation, industry and competition.‖3 In their recent report on antitrust, IP, and innovation, the antitrust enforcement agencies argued that: [A]ntitrust and intellectual property are properly perceived as complementary bodies of law that work together to bring innovation to consumers: antitrust laws protect robust competition in the marketplace, while intellectual property laws protect the ability to earn a return on the investments necessary to innovate. Both spur competition among rivals to be the first to enter the marketplace with a desirable technology, product, or service.4 So antitrust and patent law both try to stimulate innovation: the former by stimulating competition, and the latter by temporarily suppressing it.5
We have two conceptions of the relationship between antitrust and patent: in tension or complementary. In reality, both conceptions have an element of truth, but antitrust and patent are neither always in tension nor always complementary. Rather, the relationship is multidimensional. Antitrust law and patent law are in tension in some contexts, particularly in the short run. For example, a patent holder can exclude infringing competitors from the market, even if the competitors can make the product more efficiently. In the long run, after the patent expires, consumers can purchase the innovation in a competitive marketplace.
The relationship between antitrust law and patent law involves a series of trade-offs: How much should competition be suppressed in the short run in order to encourage innovation in the long run? Are there instances and industries where intellectual property rights are unnecessarily expansive, such that competition is suppressed more than needed to incentivize innovation? These trade-offs between antitrust and patent take place in the context of broader innovation policy
Instead of thinking about patent policy versus antitrust policy, we should be discussing an innovation policy that has two constituent parts: IP and competition law. IP law may be a cornerstone of innovation policy, but the patent system—as currently constructed—cannot maximize innovation without the assistance of a strong antitrust regime. Antitrust and patents are not merely complementary in that they pursue the goal of innovation; instead, they affirmatively depend on each other. Both are necessary; neither is sufficient. They are components of an overall innovation policy that maximizes both static and dynamic competition.