IP and Antitrust: Reformation and Harm

Abstract

Antitrust and intellectual property (“IP”) law both seek to improve economic welfare by facilitating competition, and investment in innovation. At various times both antitrust and IP law have wandered off this course and have become more driven by special interests. Today, antitrust and IP are on very different roads to reform. Antitrust reform began in the late 1970s and is largely complete. Today, patent law has begun its own reform journey, but it is in a much earlier stage. The U.S. Supreme Court’s recent decision in Bilski v. Kappos did not reform patent law significantly, however, some of its language may lead to closer examination of some method patent applications. Unfortunately, the outlook for copyright reform is bleaker. An important component of antitrust reform has been the development of a concept of harm that effectuates the underlying policy of making markets more competitive. In its 1977 decision in Brunswick Corp. v. Pueblo Bowl-O-Mat, Inc., the Supreme Court largely ignored the language of an expansive antitrust damages provision that apparently gives private plaintiffs a remedy for every injury caused by an antitrust violation. Rather, the Court said, harm is cognizable only when it threatens to make markets less competitive. We propose a concept of “IP injury” that limits IP remedies to situations in which the IP holder has suffered or is likely to suffer harm sufficiently linked to the purpose of IP law, which is to incentivize innovation. As in antitrust, reformation in IP is more likely to come from the judiciary and not from Congress.