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Competition does not always benefit competitors. The very process of competition means that there will be “winners” and “losers” in the market. Antitrust policy is designed to ensure that firms “win” the marketplace competition by providing lower prices, better products, and greater variety, not by eliminating competition in such as way as to harm consumers. Defining the relevant market is typically the first step in analyzing the competitive impact of a merger or business practice under antitrust investigation, since a competitor with low market share is presumed to lack market power. The authors outline the important issues to focus on when determining the relevant market, including questions for determining economic substitutability and the evidence to assess the dimensions of the relevant market.

The authors contrast this methodology with the definition of markets for intellectual property damage analyses. Intellectual property laws are specifically designed to protect an invention from competition, so an inherent tension exists between these laws. For instance, when faced with an antitrust counterclaim, a patent holder faces conflicting incentives. He benefits from a narrow market definition for the calculation of damages but prefers a broad market definition with respect to the antitrust counterclaim.

This article is republished here with the permission of IP Litigator, Volume 9, Number 4, Copyright (c) Aspen Publishers, Inc., All rights reserved.