The Damaging Impact of the Eastman Kodak Precedent upon Product Competition: Antitrust Law in Need of Correction

In the dynamic markets of the present day, competition is the driving force behind the widespread and pervasive development of new products and new product capabilities. Innovative activity, which is especially manifest in the high-technology sectors, contributes significantly to national economic well-being. 1 Yet the courts, the bar, and most legal scholars have given inadequate attention to the critical role that antitrust rules can play in encouraging or stifling innovative activity. 2 Rather, a good deal of the traditional antitrust literature has focused narrowly upon price and output in relatively static market settings, and the newer strategic behavior branch of antitrust writing has not focused on the potential dampening effect of antitrust rules on innovative activity. 3 The challenge for the antitrust law of the 1990s, however, is to foster competition in the creation of new products and new product capabilities; to act as a stimulus (and not as a deterrent) to innovation.