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Full-Text Articles in Policy Design, Analysis, and Evaluation

Markets In Ip And Antitrust, Herbert J. Hovenkamp Dec 2011

Markets In Ip And Antitrust, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

The purpose of market definition in antitrust law is to identify a grouping of sales such that a single firm who controlled them could maintain prices for a significant time at above the competitive level. The conceptions and procedures that go into “market definition” in antitrust can be quite different from those that go into market definition in IP law. When the issue of market definition appears in IP cases, it is mainly as a query about the range over which rivalry occurs. This rivalry may or may not have much to do with a firm’s ability to charge ...


Mergers, Market Dominance And The Lundbeck Case, Herbert J. Hovenkamp Dec 2011

Mergers, Market Dominance And The Lundbeck Case, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

In Lundbeck the Eighth Circuit affirmed a district court’s judgment that a merger involving the only two drugs approved for treating a serious heart condition in infants was lawful. Although the drugs treated the same condition they were not bioequivalents. The Eighth Circuit approved the district court’s conclusion that they had not been shown to be in the same relevant market.

Most mergers that are subject to challenge under the antitrust laws occur in markets that exhibit some degree of product differentiation. The Lundbeck case illustrates some of the problems that can arise when courts apply ideas derived ...


Private Enforcement Of Statutory And Administrative Law In The United States (And Other Common Law Countries), Stephen B. Burbank, Sean Farhang, Herbert M. Kritzer Nov 2011

Private Enforcement Of Statutory And Administrative Law In The United States (And Other Common Law Countries), Stephen B. Burbank, Sean Farhang, Herbert M. Kritzer

Faculty Scholarship at Penn Law

Our aim in this paper, which was prepared for an international conference on comparative procedural law to be held in July 2011, is to advance understanding of private enforcement of statutory and administrative law in the United States, and, to the extent supported by the information that colleagues abroad have provided, of comparable phenomena in other common law countries. Seeking to raise questions that will be useful to those who are concerned with regulatory design, we briefly discuss aspects of American culture, history, and political institutions that reasonably can be thought to have contributed to the growth and subsequent development ...


Disparate Impact Realism, Amy L. Wax Oct 2011

Disparate Impact Realism, Amy L. Wax

Faculty Scholarship at Penn Law

In Ricci v. DeStefano, 129 S. Ct. 2658 (2009), the Supreme Court recently reaffirmed the doctrine, first articulated by the Court in Griggs v. Duke Power Company, 401 U.S. 424 (1971), that employers can be held liable under Title VII of the 1964 Civil Rights Act for neutral personnel practices with a disparate impact on minority workers. The Griggs Court further held that employers can escape liability by showing that their staffing practices are job related or consistent with business necessity.

In the interim since Griggs, social scientists have generated evidence undermining two key assumptions behind that decision and ...


Tying Arrangements And Lawful Alternatives: Transaction Costs Considerations, Herbert J. Hovenkamp Aug 2011

Tying Arrangements And Lawful Alternatives: Transaction Costs Considerations, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Tying arrangements often increase welfare by promoting product quality and protecting the supplier's goodwill in the tying product. When the tying product works effectively only with ancillary materials or accessories or services of a particular kind or quality, its supplier can assure the requisite quality of the ancillary product only by supplying that product itself. The cost savings defense and the defenses of quality control or good will are the most widely recognized and accepted tying defenses.

One characteristic of manufactured products is differentiation among the offerings of various brands. This in turn produces a need for more specialized ...


Quasi Exclusive Dealing, Herbert J. Hovenkamp Aug 2011

Quasi Exclusive Dealing, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

A firm's discounting policies over a single product raise concerns analogous to exclusive dealing in two situations. First, the firm may offer conditional discounts structured in such a way as to induce customers to take most of their requirements for a given product from the defendant. In addition, a firm may employ “slotting” fees or similar allowances paid by manufacturers to retailers, with the possible result that rivals have difficulty obtaining access to shelf space. Neither practice is literally "exclusive dealing," because neither involves a condition that the purchaser not deal in the goods of a rival, although they ...


Tying Noncompetitive Goods, Herbert J. Hovenkamp Jul 2011

Tying Noncompetitive Goods, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Many of the classic tying cases involved tied products that were common staples such as button fasteners, canned ink, dry ice, or salt. These products were sold in competitive markets, presumably at prices very close to cost. For most of them the most likely explanations for the tie were quality control or price discrimination, both with competitively benign results in the great majority of situations. When the tied good is sold in a noncompetitive market, however, an additional consumer welfare enhancing result is likely to obtain – namely, the elimination of double marginalization, which occurs when separate sellers of complementary products ...


Tying And The Rule Of Reason: Understanding Leverage, Foreclosure, And Price Discrimination, Herbert J. Hovenkamp Mar 2011

Tying And The Rule Of Reason: Understanding Leverage, Foreclosure, And Price Discrimination, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Many tying arrangements are used by firms that do not have substantial market power in either of the two markets linked together by the tie. Their function must be something other than the enlargement or perpetuation of power. A few ties do involve fairly explicit exercises of market power, but they need not be used for a different purpose than the ties imposed by more competitive firms. This paper considers firms’ use of ties to exploit whatever power they already have over the tying product. The "leverage" theory sees ties as exploiting customers as a group via higher prices, whether ...


A Primer On Antitrust Damages, Herbert J. Hovenkamp Mar 2011

A Primer On Antitrust Damages, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

This paper considers the theory of antitrust damages and then discusses some simple models for proving them. Antitrust damages theory begins with the premise that many practices alleged to violate the antitrust laws cause no consumer harm. Others are inefficient and have few socially redeeming virtues. Still others may simultaneously increase both the efficiency of the participants and their market power. A perfectly designed antitrust policy would exonerate the first set of practices, condemn the second set, and condemn the third set only when the social cost of the restraint exceeds its social value or they produce net harm to ...


Report On Offense Grading In New Jersey, Paul H. Robinson, Rebecca Levenson, Nicholas Feltham, Andrew Sperl, Kristen-Elise Brooks, Agatha Koprowski, Jessica Peake, Benjamin Probber, Brian Trainor Feb 2011

Report On Offense Grading In New Jersey, Paul H. Robinson, Rebecca Levenson, Nicholas Feltham, Andrew Sperl, Kristen-Elise Brooks, Agatha Koprowski, Jessica Peake, Benjamin Probber, Brian Trainor

Faculty Scholarship at Penn Law

The University of Pennsylvania Criminal Law Research Group was commissioned to do a study of offense grading in New Jersey. After an examination of New Jersey criminal law and a survey of New Jersey residents, the CLRG issued this Final Report. (For the report of a similar project for Pennsylvania, see Report on Offense Grading in Pennsylvania, http://ssrn.com/abstract=1527149, and for an article about the grading project, see The Modern Irrationalities of American Criminal Codes: An Empirical Study of Offense Grading, http://ssrn.com/abstract=1539083, Journal of Criminal Law and Criminology (forthcoming 2011).) The New Jersey ...


Quantification Of Harm In Private Antitrust Actions In The United States, Herbert J. Hovenkamp Feb 2011

Quantification Of Harm In Private Antitrust Actions In The United States, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

This paper discusses the theory and experience of United States courts concerning the quantification of harm in antitrust cases. This treatment pertains to both the social cost of antitrust violations, and to the private damage mechanisms that United States antitrust law has developed. It is submitted for the Roundtable on the Quantification of Harm to Competition by National Courts and Competition Agencies, Organization for Economic Cooperation and Development (OECD), Feb., 2011.

In a typical year more than 90% of antitrust complaints filed in the United States are by private plaintiffs rather than the federal government. Further, when the individual states ...


Antitrust And Patent Law Analysis Of Pharmaceutical Reverse Payment Settlements, Herbert J. Hovenkamp Jan 2011

Antitrust And Patent Law Analysis Of Pharmaceutical Reverse Payment Settlements, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Patent settlements in which the patentee pays the alleged infringer to stay out of the market are largely a consequence of the Hatch-Waxman Act, which was designed to facilitate the entry of generic drugs by providing the first generic producer to challenge a pioneer drug patent with a 180 day period of exclusivity. This period can be extended by a settlement even if the generic is not producing, and in any event all subsequent generic firms are denied the 180 day exclusivity period, significantly reducing their incentive to enter.

The Circuit Courts of Appeal are split three ways over such ...


Three Models Of Health Insurance: The Conceptual Pluralism Of The Patient Protection And Affordable Care Act, Allison K. Hoffman Jan 2011

Three Models Of Health Insurance: The Conceptual Pluralism Of The Patient Protection And Affordable Care Act, Allison K. Hoffman

Faculty Scholarship at Penn Law

What risks should health insurance mitigate? American health scholars, politicians, and the public at large answer this question ambivalently. This Article defines three dominant conceptions of health insurance that weave throughout popular and academic discourse and that echoed in the 2010 health reform debates. The first conception is that health insurance should primarily serve to mitigate harms to health. This “Health Promotion” theory relies on using health insurance to pay for medical care that most cost-effectively preserves and improves health. Alternately, health insurance might primarily mitigate risks to wealth from high medical care costs. This “Financial Security” theory demands that ...


Creation Without Restraint: Promoting Liberty And Rivalry In Innovation, Christina Bohannan, Herbert J. Hovenkamp Jan 2011

Creation Without Restraint: Promoting Liberty And Rivalry In Innovation, Christina Bohannan, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

This document contains the table of contents, introduction, and a brief description of Christina Bohannan & Herbert Hovenkamp, Creation without Restraint: Promoting Liberty and Rivalry in Innovation (Oxford 2011).

Promoting rivalry in innovation requires a fusion of legal policies drawn from patent, copyright, and antitrust law, as well as economics and other disciplines. Creation Without Restraint looks first at the relationship between markets and innovation, noting that innovation occurs most in moderately competitive markets and that small actors are more likely to be truly creative innovators. Then we examine the problem of connected and complementary relationships, a dominant feature of high technology markets. Interconnection requirements, technological compatibility requirements, standard setting, and the relationship between durable products and aftermarkets all involve interconnection, or “tying.” Some see tying as inherently anticompetitive, while others view it as unexceptionally benign. In fact, bundling products or technologies is essential in high technology markets and most of it is socially beneficial, but possibilities of abuse nevertheless remain.

Identifying good substantive legal rules for facilitating innovation is often very difficult. Two generations ago antitrust law addressed problems of complexity by shifting the focus to harm. The courts reasoned that they could often avoid unmanageable substantive doctrine by considering whether the plaintiff had suffered the appropriate kind of injury. Plaintiffs who are injured by more rather than less competition should be denied a remedy. In the case of patent and copyright law, the appropriate question is whether an infringer’s conduct served to undermine the right holder’s incentive to innovate, with incentives measured from before the innovation occurred. Some IP infringements do no harm to the incentive to innovate; others actually make the right more rather than less valuable. In these situations relief should be denied.

Patent and copyright law are both in crisis today – major problems include overissuance, overly broad and ambiguously defined protections, and rules that permit both patentees and copyright holders to make broad claims on unforeseen innovations. The result has been that many patents are valueless, while others have very considerable value precisely because they enclose ideas or technologies that rightfully belong in the public domain. Patent law could be ...


Promoting The Buildout Of New Networks Vs. Compelling Access To The Monopoly Loop: A Clash Of Regulatory Paradigms, Christopher S. Yoo Jan 2011

Promoting The Buildout Of New Networks Vs. Compelling Access To The Monopoly Loop: A Clash Of Regulatory Paradigms, Christopher S. Yoo

Faculty Scholarship at Penn Law

No abstract provided.


Notice And Patent Remedies, Herbert J. Hovenkamp Jan 2011

Notice And Patent Remedies, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

In private enforcement systems such as the one for patents, remedies perform the “public” function of determining the optimal amount of protection and deterrence. If every patent were properly granted and had just the right scope to incentivize innovation, then strict enforcement and harsh penalties for infringement would be a good idea. But in a world where too many patents are granted, their boundaries are often ambiguous and scope excessive, things are not so simple. The expected likelihood and magnitude of the penalty determines the number of infringement suits and the litigation resources that will be poured into them. As ...


Antitrust And Innovation: Where We Are And Where We Should Be Going, Herbert J. Hovenkamp Jan 2011

Antitrust And Innovation: Where We Are And Where We Should Be Going, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

For large parts of their history intellectual property law and antitrust law have worked so as to undermine innovation competition by protecting too much. Antitrust policy often reflected exaggerated fears of competitive harm, and responded by developing overly protective rules that shielded inefficient businesses from competition at the expense of consumers. By the same token, the IP laws have often undermined rather than promoted innovation by granting IP holders rights far beyond what is necessary to create appropriate incentives to innovate.

Perhaps the biggest intellectual change in recent decades is that we have come to see patents less as a ...


Examining Gender Stereotypes In New Work/Family Reconciliation Policies: The Creation Of A New Paradigm For Egalitarian Legislation, Rangita De Silva De Alwis Jan 2011

Examining Gender Stereotypes In New Work/Family Reconciliation Policies: The Creation Of A New Paradigm For Egalitarian Legislation, Rangita De Silva De Alwis

Faculty Scholarship at Penn Law

No abstract provided.


The Political Economy Of Fraud On The Market, William W. Bratton, Michael L. Wachter Jan 2011

The Political Economy Of Fraud On The Market, William W. Bratton, Michael L. Wachter

Faculty Scholarship at Penn Law

No abstract provided.