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Lemley on Industry-Specific Antitrust & Innovation

By Lawrence Solum

Mark A. Lemley (Stanford Law School) has posted Industry-Specific Antitrust Policy for Innovation on SSRN. Here is the abstract:

The premise that IP promotes dynamic efficiency while antitrust concentrates on static welfare is wrong, or at least oversimplified. It proceeds from a fundamentally Schumpeterian assumption that competition will not lead to innovation, and we need the lure of monopoly to drive investment in new products. In fact, however there is substantial economic evidence suggesting that competition itself may act as a greater spur to innovation than monopoly. Critically, different market structures will promote innovation in different industries. Sometimes - as in the pharmaceutical industry - we need the incentive provided by strong patents, but in other industries - like the Internet - competition is more likely to spur innovation. Both patent and antitrust law need to take these industry differences into account. And to do so, antitrust will need to shed its subservience to IP law.

Highly recommended!

Full post as published by Legal Theory Blog on September 03, 2010 (boomark / email).