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

Antitrust And The Design Of Production, Herbert J. Hovenkamp Jan 2018

Antitrust And The Design Of Production, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Both economics and antitrust policy have traditionally distinguished “production” from “distribution.” The former is concerned with how products are designed and built, the latter with how they are placed into the hands of consumers. Nothing in the language of the antitrust laws suggests much concern with production as such. Although courts do not view it that way, even per se unlawful naked price fixing among rivals is a restraint on distribution rather than production. Naked price fixing assumes a product that has already been designed and built, and the important cartel decision is what should be each firm’s output ...


Intellectual Property And Competition, Herbert J. Hovenkamp Aug 2017

Intellectual Property And Competition, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

A legal system that relies on private property rights to promote economic development must consider that profits can come from two different sources. First, both competition under constant technology and innovation promote economic growth by granting many of the returns to the successful developer. Competition and innovation both increase output, whether measured by quantity or quality. Second, however, profits can come from practices that reduce output, in some cases by reducing quantity, or in others by reducing innovation.

IP rights and competition policy were traditionally regarded as in conflict. IP rights create monopoly, which was thought to be inimical to ...


The Impact Of Intellectual Property On Provincial Unemployment Rates In South Korea, Soon Ho Shin Jan 2017

The Impact Of Intellectual Property On Provincial Unemployment Rates In South Korea, Soon Ho Shin

MPA/MPP Capstone Projects

Intellectual property is drawing attention as an important policy tool to lower the unemployment rate in low-growth economies. The Korean Intellectual Property Office (KIPO) provides services that facilitate companies to effectively create intellectual property by operating local intellectual property support centers in connection with local governments. In this context, this research examine how the differences of intellectual property registration affect provincial unemployment rates by analyzing 10 years (2006-2015) of panel data with a fixed-effects regression model. According to my estimation results, intellectual property registrations have a statistically significant impact on provincial unemployment rates in South Korea. Since the reduction of ...


Public Good Economics And Standard Essential Patents, Christopher S. Yoo Aug 2014

Public Good Economics And Standard Essential Patents, Christopher S. Yoo

Faculty Scholarship at Penn Law

Standard essential patents have emerged as a major focus in both the public policy and academic arenas. The primary concern is that once a patented technology has been incorporated into a standard, the standard can effectively insulate it from competition from substitute technologies. To guard against the appropriation of quasi-rents that are the product of the standard setting process rather than the innovation itself, standard setting organizations (SSOs) require patentholders to disclose their relevant intellectual property before the standard has been adopted and to commit to license those rights on terms that are fair, reasonable, and non-discriminatory (FRAND).

To date ...


Competition For Innovation, Herbert J. Hovenkamp Dec 2013

Competition For Innovation, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Both antitrust and IP law are limited and imperfect instruments for regulating innovation. The problems include high information costs and lack of sufficient knowledge, special interest capture, and the jury trial system, to name a few. More fundamentally, antitrust law and intellectual property law have looked at markets in very different ways. Further, over the last three decades antitrust law has undergone a reformation process that has made it extremely self conscious about its goals. While the need for such reform is at least as apparent in patent and copyright law, very little true reform has actually occurred.

Antitrust has ...


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 ...


Innovation Cooperation: Energy Biosciences And Law, Prof. Elizabeth Burleson Jan 2011

Innovation Cooperation: Energy Biosciences And Law, Prof. Elizabeth Burleson

Prof. Elizabeth Burleson

This Article analyzes the development and dissemination of environmentally sound technologies that can address climate change. Climate change poses catastrophic health and security risks on a global scale. Universities, individual innovators, private firms, civil society, governments, and the United Nations can unite in the common goal to address climate change. This Article recommends means by which legal, scientific, engineering, and a host of other public and private actors can bring environmentally sound innovation into widespread use to achieve sustainable development. In particular, universities can facilitate this collaboration by fostering global innovation and diffusion networks.


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 ...


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 ...


The Obama Administration And Section Two Of The Sherman Act, Herbert J. Hovenkamp Jan 2010

The Obama Administration And Section Two Of The Sherman Act, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

During the administration of President George W. Bush, the Antitrust Division was not enthusiastic about use of §2 of the Sherman Act to pursue anticompetitive single-firm conduct. Indeed, its most prominent contribution on the issue was the Antitrust Division’s §2 Report, which the Obama Antitrust Division withdrew only eight months after it was issued.This withdrawal was entirely in keeping with candidate Obama’s repeated promises to reinvigorate antitrust enforcement.

This essay analyzes the current state of antitrust and makes recommendations concerning structures and practices where increased §2 enforcement is warranted and those where it is not. Wise use ...


Restraints On Innovation, Herbert J. Hovenkamp Jan 2007

Restraints On Innovation, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

Beginning with the work of Joseph Schumpeter in the 1940s and later elaborated by Robert W. Solow's work on the neoclassical growth model, economics has produced a strong consensus that the economic gains from innovation dwarf those to be had from capital accumulation and increased price competition. An important but sometimes overlooked corollary is that restraints on innovation can do far more harm to the economy than restraints on traditional output or pricing. Many practices that violate the antitrust laws are best understood as restraints on innovation rather than restraints on pricing.

While antitrust models for assessing losses that ...


Unilateral Refusals To License In The U.S., Herbert J. Hovenkamp, Mark D. Janis, Mark A. Lemley Jun 2005

Unilateral Refusals To License In The U.S., Herbert J. Hovenkamp, Mark D. Janis, Mark A. Lemley

Faculty Scholarship at Penn Law

Most antitrust claims relating to intellectual property involve challenges to agreements, licensing practices or affirmative conduct involving the use or disposition of the intellectual property rights or the products they cover. But sometimes an antitrust claim centers on an intellectual property owner's refusal to use or license an intellectual property right, perhaps coupled with efforts to enforce the intellectual property right against infringers. The allegation may be that the intellectual property right is so essential to competition that it must be licensed across the board, or that a refusal to license it to one particular party was discriminatory, or ...


United States Antitrust Policy In An Age Of Ip Expansion, Herbert J. Hovenkamp Dec 2004

United States Antitrust Policy In An Age Of Ip Expansion, Herbert J. Hovenkamp

Faculty Scholarship at Penn Law

The idea that there is a tension between antitrust and the intellectual property laws is readily exaggerated. The tension that exists results mainly from our uncertainty about the optimal amount and scope of IP protection. In general, antitrust draws clearer lines than intellectual property law does, although one should not push the point too far. Antitrust policy as manifested in the courts has achieved a fair amount of consensus today. By contrast, deep uncertainty remains about fundamental questions concerning the socially optimal outcome of IP disputes. In addition, while the antitrust statutes are for the most part public regarding provisions ...


Anticompetitive Settlement Of Intellectual Property Disputes, Herbert J. Hovenkamp, Mark D. Janis, Mark A. Lemley Jan 2003

Anticompetitive Settlement Of Intellectual Property Disputes, Herbert J. Hovenkamp, Mark D. Janis, Mark A. Lemley

Faculty Scholarship at Penn Law

The overwhelming majority of intellectual property lawsuits settle before trial. These settlements involve agreements between the patentee and the accused infringer, parties who are often competitors before the lawsuit. Because these competitors may agree to stop competing, to regulate the price each charges, and to exchange information about products and prices, settlements of intellectual property disputes naturally raise antitrust concerns. In this paper, we suggest a way to reconcile the interests of intellectual property law and antitrust law in evaluating intellectual property settlements. In Part I, we provide background on the issue. Part II argues that in most cases courts ...