UniqueWorks/Unique Challenges at the Intellectual Property/Competition Law Interface
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Description
In the past quarter century, competition law has significantly relaxed its position on intellectual property. In the United States, for example, licensing strategies that were once considered No-No’s—per se illegal—are now analyzed under the rule of reason, with the result that many practices that were once attacked as anticompetitive are now commonly utilized. To a great extent, the new attitude can be understood within the frame of antitrust enforcement generally, where it can be attributed to increased reliance on microeconomics, including a focus on the probable behaviour of rational actors and on institutions. For intellectual property, however, the change also emerges from the realization that usually, patented inventions have substitutes, that copyrighted material can be re-produced through independent creation, and that these alternatives constrain the ability of rights holders to set high prices or limit output. As the fallacy of thinking of intellectual property rights as monopolies has become evident, competitive concerns about how they are exploited have receded. The question for today is whether this relaxed attitude has gone too far. As important as these new analytical approaches have been, it can be argued that they are now too readily applied. There are advances protected by intellectual property laws that are (what might be termed) unique works and works that become unique. Examples include human genome sequences and computer operating systems. The former are intrinsically unique because, as the building blocks of the human organism, they are required in the study of human biological functioning. Works can become unique through, among other things, marke forces. For instance, network, lock-in, and tipping effects can select from a multitude of possible operating systems, one particular system; the features of that system then become necessary to develop the complementary products that consumers wish to buy. Obviously, assumptions of substitutability do not hold for these works. More subtly, the scientific and market forces that create uniqueness can also undermine assumptions about rational exploitation. Thus, there is significant danger that rights in these works could be exercised in ways that impede innovation and impair consumer welfare. Unfortunately, intellectual property law lacks the capacity to deal with these problems effectively. While the power associated with rights over unique works could be diminished by enhancing the criteria for receiving protection in the first instance or by redefining the reach of protection, these approaches would reduce incentives to innovate across the board. In contrast, competition law applies ex post. It has the analytical tools to assess the effect of specific practices on consumer welfare and can be read to require those who allege improper use of the power conferred by intellectual property rights to demonstrate competitive harm. As a result, competition law is arguably better suited than intellectual property law to curb excesses effectuated with these rights. In this paper, I describe what I mean by unique works, why their prevalence is increasing, the difficulties they can create, and the problems intellectual property law has for dealing with them internally. Then, as a non-specialist, I gesture at ways that competition law might be adapted to respond to potentials for abuse.
Source Publication
European Competition Law Annual: 2005—The Interaction between Competition Law and Intellectual Property Law
Source Editors/Authors
Claus-Dieter Ehlermann, Isabela Atanasiu
Publication Date
2007
Recommended Citation
Dreyfuss, Rochelle C., "UniqueWorks/Unique Challenges at the Intellectual Property/Competition Law Interface" (2007). Faculty Chapters. 1191.
https://gretchen.law.nyu.edu/fac-chapt/1191
