Intersection Between the Patent System and Antitrust Laws: Patents Speeding, Antitrust Yielding, Innovation Bleeding!

In this article, I explain the interaction between the two laws and describe the ways in which these two extremely important areas of government regulation are and are not in tension. I argue that the conflict between the two laws is overstated, but the proper balance is far from being found. The reason for that is a notion that the current state of the patent system is more of a hindrance than a spur to innovation and competition due to overprotection and broadening of patent rights, lowering of standards to grant patents, chronic inefficiency of the Patent and Trademark Office (PTO) that issues far too many “questionable” patents and, as a result of all that, the skyrocketing number of issued patents. Furthermore, I propose that any meaningful attempt to improve the current state of the patent system must center on the fact that patentees seek patents under many circumstances, rather than only when they wish to protect a newly developed technology from imitation and exploit it commercially. It is now known that most firms rely on patents the least among a variety of methods for protecting the returns from their inventions and that in no industry are patents identified as the most effective appropriability mechanism.5 Because of the current state of the patent system, patents have become largely a strategic tool that patentees can use solely for anticompetitive reasons, such as blocking competitors’ development activities, protecting against infringement suits, and using patents as leverage in negotiations over technology rights. My argument is that preventing reliance on patents for anticompetitive reasons that do not concomitantly advance the “Progress of Science and useful Arts” is crucial for the improvement of the patent system and striking the balance with antitrust laws. We are mistaken to believe that seeking an optimal level of patent protection and improving the efficiency of the PTO by raising its budget and providing more qualified patent examiners will be enough to improve the patent system and preclude reliance on patents for “illegitimate” reasons because “patents are either two weak or too strong” and “improper patents will always be issued,” regardless of how efficient the PTO might be