Monday, September 12, 2011
Posted by D. Daniel Sokol
ABSTRACT: Antitrust and intellectual property laws promote innovation and competition. As long as the costs of promotion do not exceed the benefit to society, then the laws act in harmony. Discord arises when patent holders use public and private ordering to restrain competition, restrict downstream trade, prevent the development of competing products and limit output by competitors. Using the Patent Act and the misperception of antitrust immunity to create a parallel and under-regulated legal system allows a small number of patent holders to coordinate their behavior to maximize profits and minimize competition. The Patent Act provides no shield to prosecution for antitrust violations - such is a patent misperception only. Harmony comes from balancing the costs of protection with the benefit to society. Innovation is best protected through the protection of intellectual property rights and the protection of competition.