Innovation, Monopoly, and Market Regulation: Examining the Interface between Intellectual Property and Competition Law in the USA and UK

Abstract

The interactions between the intellectual property (IP) law and the competition law have become one of the most intricate and dynamic points in the contemporary economic regulation. Whereas IP law aims to create exclusive rights in order to encourage inventions and innovativeness, competition law aims at avoiding the abuse of monopolies and maintaining market efficiency. This perceived conflict is more pronounced especially in technologically developed economies like United States and the United Kingdom. This research essay explores how the two jurisdictions are able to balance the conflicting objectives of the promotion of innovation and regulation of the market. The study examines the critical areas of contention such as refusal to license, tying practices, patent settlements and standard-essential patent (SEP) licensing through the analysis of doctrines of statutory frameworks, judicial interpretation and policy developments. The US takes a rule-of-reason, largely economics-oriented approach as a part of the Sherman Antitrust Act and other laws, whereas the United Kingdom uses an effects-based, proportionality-based analysis under Competition Act 1998 and principles retained under the EU. Regardless of the differences in their doctrines, both jurisdictions are becoming more and more aware that IP rights do not give immunity against any competition examination. It is contended in the paper that innovation incentives and the competitive market structures should be balanced in a subtle and context sensitive manner especially in the digital and globalized economy.