Reporter Resources: Intellectual Property and Antitrust Law
Our society’s capacity for invention and innovation drives economic growth and improves standards of living. Intellectual property (IP), and patents in particular, play a vital role in promoting innovation and stimulating the economy by providing incentives to develop and commercialize inventions. Robust competition is also crucial to a well-functioning market economy. Antitrust law ensures that new products and services are bought and sold in a competitive environment. That competition, in turn, can drive firms to improve existing products and create new ones. Both IP and antitrust policy share a common goal: enhancing consumer welfare. Indeed, the two bodies of law are complementary, with both playing an essential role in promoting innovation.
An important focus of the FTC is the proper alignment and interaction of the antitrust and IP laws. Errors or biases in how one policy’s rules are interpreted and applied can harm the other policy’s effectiveness. For example, antitrust law can undermine the value of patents and the innovation that the patent system promotes if antitrust enforcement restricts the efficient use of patents. The joint FTC/Department of Justice 2007 report, Antitrust Enforcement and Intellectual Property Rights: Promoting Innovation and Competition examines the proper application of antitrust principles to particular activities involving IP rights. Conversely, if the patent system grants undeserved patents, those patents could thwart competition that otherwise might have developed. For this reason, the FTC’s 2003 report on patent policy, To Promote Innovation: The Proper Balance of Competition and Patent Law and Policy strongly endorses a properly functioning patent system.
Although there is a broad consensus that the goals of antitrust and IP law are aligned, difficult questions of antitrust enforcement can arise in particular cases. Failure to challenge collusive or exclusionary conduct involving IP can have significant negative consequences for consumers. The FTC has addressed complex IP/antitrust questions in enforcement actions, reports, testimony, guidelines, and amicus curiae or “friend of the court” briefs. For instance, the FTC’s recent decisions in the Rambus matter examine a situation in which a standard of manufacture for an entire industry incorporates patented technology. Other recent cases, such as the Mylan/Merck matter and the Warner Chilcott/Barr matter the consider the settlement of patent litigation between brand and generic pharmaceutical manufacturers. The FTC’s Intellectual Property website further details the agency’s activities related to the interaction of IP and antitrust law.
