The Intersection of Antitrust and Intellectual Property Economics: A Schumpeterian View
1 July 2004
By Dr. Phillip Beutel
The roots of most, if not all, modern economic analyses concerning innovation and technological change can be traced to the work and ideas of Joseph A. Schumpeter. In 1942, Schumpeter described the process of "creative destruction" and the dynamics of innovation as the prime drivers of the competitive process. Moreover, in making the case that innovation is more likely in monopolistic than in competitive markets, Schumpeter's ideas place him directly at the intersection of antitrust and intellectual property economics.
In this chapter from Economics of Antitrust: New Issues, Questions, and Insights, NERA Senior Vice President Dr. Phillip Beutel discusses the antitrust implications of Schumpeter's views on intellectual property protection and the role of innovation as a source of competition. As Dr. Beutel points out, if Schumpeter is right, whether and how patent holders can deter innovation by their rivals through the use of technology fees, minimum purchase requirements, and other types of contractual arrangements will continue to be the subject of much debate and dispute.
