IP FORUM : PUBLICATIONS

USA / INTELLECTUAL PROPERTY / ANTI-TRUST

Berkeley Technology Law Journal, Vol 16 No 2, Spring 2001

Anti-Trust and Intellectual Property: Unresolved Issues in the New Economy

Robert Pitofsky

In this article the author, who was Chairman of the United States Federal Trade Commission, before Timothy J Muris took over on 4 June, 2001, defines the new economy, discusses the balance to be maintained between anti-trust and intellectual property, looks at recent United States case law in this field and reviews briefly some of the institutional issues. Most of the article refers to technical innovation protected by patent law; copyright aspects are covered only marginally. According to the author, the new economy is characterised by a shift in such areas as the relationships between fixed and variable costs and between demand and widespread use (the "network effects"); by the increasing importance of innovation in a dynamic economy; and by the uncertain durability of market power in the high technology sector. In this new economy certain principles need to be observed. Incentives to innovate must be protected, but not excessively: the patent system needs to be reviewed from this point of view. So, too, should cases like CSU v Xerox Corporation, which upheld the right of a legitimate holder of an intellectual property right to refuse to license anyone, regardless of intent or of the effect on competition. At the same time, courts and enforcement agencies need to be cautious when imposing remedial conditions so as not to undermine innovation. Applying these principles, the author examines a number of cases (Hoechst-Andrx, Abbott-Geneva, In re Intel Corporation, Dek\ll Computer, Lilly-Jeepracor, CIBA Geigy / Sandoz, Glaxo / Smith-Kline, Silicon Graphics, AOL / Time Warner). On the institutional aspects, the author emphasizes the need for the speedy review of cases involving anti-trust and intellectual property and points to the problem of acquiring sufficient technical expertise to conduct high technology reviews. The new technology is "not so new as to render obsolete the sound principles of competition … but new enough to pose some substantial challenges". There is also a need to to revisit intellectual property policy to assess whether intellectual property protection has expanded in a way that threatens the appropriate balance between intellectual property rights and competition. [20050]