Monday, March 15, 2010
Posted by D. Daniel Sokol
Catherine Bobtcheff (Toulouse School of Economics) and Thomas Mariotti (Toulouse School of Economics) have posted Potential Competition in Preemption Games.
ABSTRACT: We consider a preemption game with two potential competitors who come into play at some random secret times. The presence of a competitor is revealed to a player only when the former moves, which terminates the game. We show that all perfect Bayesian equilibria give rise to the same distribution of players' moving times. Moreover, there exists a unique perfect Bayesian equilibrium in which each player's behavior from any time on is independent of the date at which she came into play. We find that competitive pressure is nonmonotonic over time, and that private information tends to alleviate rent dissipation. Our results have a natural interpretation in terms of eroding reputations.
Posted by D. Daniel Sokol
Gary Myers (Mississippi - Law) pushes Toward a Unified Theory of Intellectual Property Misuse.
ABSTRACT: The misuse doctrine in intellectual property law has been the subject of frequent commentary and litigation. The doctrine in basic form provides that the owner of an otherwise valid copyright or patent is precluded from enforcement of its intellectual property rights if it has been found to have engaged in impermissible conduct in connection with the exercise of its legal rights. The misuse doctrine is equitable in nature and origin, drawing its force from the concept of unclean hands - i.e., when a party petitions the court for relief, it must do so free of the taint of impermissible conduct. The early misuse findings were in patent cases, typically involving a tying arrangement in which the patent holder would refuse to sell the patented product unless the buyer also purchased an unpatented article. From these early rulings, the doctrine expanded to reach a variety of conduct. More recently, courts have generally adopted a counterpart to the misuse doctrine in copyright cases. In the heyday of the misuse doctrine, courts indicated that the doctrine would reach conduct that was not violative of the antitrust laws. Some more recent decisions, however, have suggested that the misuse doctrine is coterminous with the antitrust laws. Thus, under this view, which is particularly prevalent in Federal Circuit patent cases, an alleged patent infringer must essentially prove an underlying antitrust violation involving the patent in order to assert a successful misuse defense. Judge Richard Posner essentially endorsed this view in USM Corp. v. SPS Technologies. Donald Chisurn has observed that "it is clear that the courts lack a clear and general theory for resolving th[e misuse/antitrust] inquiry." The misuse doctrine serves important intellectual property policies that frequently - but not always - intersect with antitrust law principles. Although it is often stated that the fundamental premise of intellectual property protection - by virtue of its grant of a right to exclude - conflicts with antitrust law's policy favoring free competition, the misuse doctrine can serve as one of several harmonizing doctrines between the two areas of law. The principal normative thesis of this article is that the misuse doctrine should draw its analytical framework from two sources. The first source is quite conventional - antitrust principles can certainly serve to give the misuse doctrine meaning and content, particularly with regard to the substantive content of misuse doctrine - i.e., what types of conduct may be proscribed. The second source for the misuse doctrine should be patent and copyright law and policy. Allowing patent and copyright policy to provide substantive con tent to the misuse doctrine will result in analytically distinct outcomes in certain cases. Contrary to Judge Posner's prediction, copyright and patent law can provide an alternative framework for analysis of misuse problems. Although courts and commentators have sometimes suggested that the misuse doctrine should be linked to the substantive framework of intellectual property law, no systematic attempt has been made to develop a general approach to the problem.
This article suggests that intellectual property law can meaningfully inform the misuse analysis and can lead to outcomes that differ from the traditional antitrust analysis. Moreover, it is not clear that a properly defined misuse doctrine would necessarily capture all conduct that would violate the antitrust laws and simply add an additional category of impermissible behavior. Instead, it may well be that the misuse doctrine would not reach some conduct that would potentially violate the antitrust laws, while reaching other conduct that would not be actionable under the Sherman and Clayton Acts. By doing so, the misuse doctrine can further both the purpose of the antitrust laws and the substantive policy goals and limitations of intellectual property law.
Posted by D. Daniel Sokol
Ronn Cass (Center for Rule of Law) has forthcoming COMPETITION IN ANTITRUST REGULATION: LAW BEYOND LIMITS.
ABSTRACT: Twenty-five years ago, Frank Easterbrook published his essay The Limits of Antitrust, in which he argued for a set of filters that government enforcement authorities and judges could use to test the propriety of a given action under the antitrust laws. That essay aptly exposed serious concerns about expansive use of antitrust laws, especially at the behest of lagging competitors of the enforcement target, contributing to a movement toward less ambitious use of antitrust law in the United States. More recently, changes in academic theories coupled with developments in the law outside the United States have set the stage for a reversal of the forces aligned with Judge Easterbrook's arguments. This article identifies reasons for supporting a more limited deployment of antitrust (competition) law, describes ways in which law in the United States has evolved toward greater congruence with that approach, and explores the forces that are now pulling the law in the opposite direction. Critically, the increased availability of alternative enforcement regimes with relatively low jurisdictional thresholds has created forum-shopping incentives for complainants. At the same time, antitrust regulators frequently will have incentives to behave in ways that encourage forum-shopping. This behavior will threaten to undermine results in line with Judge Easterbrook's work, creating special risks to competition in markets with a dominant firm.
Posted by D. Daniel Sokol
Robert M. Feinberg, Mieke Meurs, and Kara M. Reynolds (all American University, Ecvonomics) explain Maintaining New Markets: Determinants of Antitrust Enforcement in Central and Eastern Europe.
ABSTRACT: While others have examined the implementation and/or the stringency of enforcement of antitrust laws in post-socialist economies, this paper is the first study that attempts to explain the determinants of antitrust enforcement activity across post-socialist countries using economic and political variables. Using a panel of ten European post-socialist countries over periods ranging from 4 to 11 years, we find a number of significant determinants of enforcement in these countries. For example, larger economies engage in more antitrust enforcement, and countries have tended to increase their enforcement efforts over time. Our results also suggest that countries characterized by more unionization and less corruption tend to engage in greater antitrust enforcement of all types. Countries more successful in privatizing have filed fewer cases, while more affluent or developed countries investigate fewer cases of all types, cons! istent with an income-shifting motivation for antitrust.
Sunday, March 14, 2010