Academic journal article Harvard Journal of Law & Technology

The Antitrust Assault on Intellectual Property

Academic journal article Harvard Journal of Law & Technology

The Antitrust Assault on Intellectual Property

Article excerpt

TABLE OF CONTENTS    I. INTRODUCTION                                                    665      A. The Role of Intellectual Property Rights in Stimulating      666         Innovation         1. Intellectual Property Rights Incentivize Innovation       666         2. Intellectual Property Is a U.S. Success Story             668  II. ANTITRUST LAW & INTELLECTUAL PROPERTY: HISTORICAL               669      RECONCILIATION, ONGOING TENSION      A. The Historical Deference of Antitrust Law to IPRs            669      B. The Ongoing Tension between Antitrust and IPRs               672 III. ANTITRUST MEASURES AGAINST PATENT HOLD-UP: A DANGEROUS "CURE"   673      FOR AN ILLUSORY DISEASE      A. The Patent Hold-Up Chimera                                   673      B. Hold-Up as a Pretext for Attacking IPRs                      676      C. Existing Legal and Market Forces Constrain Hold-Up           678      D. Tilting at Illusory Patent Hold-Up Enables Harmful Patent    680         Hold-Out  IV. WEAKENING COPYRIGHT IPRs: PERFORMING RIGHTS ORGANIZATIONS       682      THWARTED FROM WELL-SETTLED LICENSING MODELS   V. THE WAY FORWARD IS A RETURN TO PRUDENCE AND DEFERENCE           685 

I. INTRODUCTION

Before deciding a patent law question in the 1873 case of Adams v. Burke, (1) the Supreme Court noted that "[t]he vast pecuniary results involved in such cases, as well as the public interest, admonish us to proceed with care[.]" (2) The importance of intellectual property ("IP") and its role in promoting economic growth and consumer welfare have only increased since then. (3) But despite the risks involved in tampering with a system that has served this country well since its inception, some agencies of the United States Government have become anything but careful in their approach to intellectual property issues. Abandoning antitrust law's historical deference to the exercise of core intellectual property rights, (4) these agencies have taken to using antitrust enforcement to favor intellectual property users over innovators and to reduce the value of intellectual property, threatening innovation incentives. Neither antitrust principles nor sound policy supports such measures. These agencies must stop before they do permanent damage to innovation and the national economy.

This Article first establishes the importance of intellectual property rights to future innovation and past success. Part II then discusses the differences and interactions between intellectual property and antitrust, overviewing the pattern of antitrust deference to intellectual property in the past and introducing more recent tensions that break from this trend. Part III focuses on patents and discusses hold-up, a common justification for antitrust authorities' breach of the boundary between antitrust and intellectual property, while Part IV focuses on antitrust's intrusion into IP in the context of copyrights, specifically in regard to performing rights organizations. Finally, this article cautions against prioritizing antitrust over intellectual property, and calls for a return to the deference of the past.

A. The Role of Intellectual Property Rights in Stimulating Innovation

1. Intellectual Property Rights Incentivize Innovation

Over 240 years ago, the Framers laid the foundation for the U.S. patent and copyright system by giving Congress the power "[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries[.]" (5) As the constitutional text makes clear, the goal is to encourage creativity and innovation. To that end, the Constitution prescribes but one incentive: awarding exclusive rights to the fruits of creativity and innovation. This exclusivity takes legal form in patents and copyrights.

Patents and copyrights (collectively, intellectual property rights or "IPRs") incentivize innovation on multiple levels. …

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