I. Background Competition Policy for Intellectual Property: Balancing Competition and Reward

Intellectual property rights afford inventors, and authors in the case of copyright, protection from imitation and give rights holders substantial discretion over how to use or license their intellectual property. Antitrust laws prohibit arrangements that restrain competition. There is an apparent conflict between the two regimes. One body of law promotes higher prices by excluding at least some competition, while the other body of law promotes lower prices by prohibiting conduct that limits competition. Courts, practitioners, academics, and enforcement agencies have attempted to reconcile the apparent conflict by noting the rewards of the intellectual property system also enhance competition by creating incentives to develop new products and processes. 1 Nevertheless, the large number of antitrust cases in both the US and the EU involving intellectual property and the confusing opinions in many of these cases suggest that the boundaries that define the scope of intellectual property and antitrust law are far from clear, indeed, the differences between antitrust-centric and patentcentric lawyers, economists and academics are suggestive of a theological conflict. The indicia of theological conflict include: (i) strong beliefs that either a strong patent system or * University of California at Berkeley. Parts of this chapter are from Gilbert (2005)