Industry-Specific Antitrust Policy for Innovation
The premise that intellectual property law promotes dynamic efficiency while antitrust law concentrates on static welfare is wrong, or at least oversimplified. It proceeds from a fundamentally Schumpeterian assumption that competition will not lead to innovation, and that we need the lure of monopoly to drive investment in new products. In fact, there is substantial economic evidence suggesting that competition itself may act as a greater spur to innovation than monopoly. Critically, different market structures will promote innovation in different industries. Sometimes—as in the pharmaceutical industry—we need the incentive provided by strong patents, but in other industries—like the Internet—competition is more likely to spur innovation. Both patent and antitrust law need to take these industry differences into account. And to do so, antitrust will need to shed its subservience to intellectual property.