Issues at the interface of antitrust and intellectual property laws

Alternate Titles

• Antitrust and intelelctual property laws

Description

Chapter Two challenges the practice of collective administration of performing rights, its underlying natural monopoly theory, and the prevailing corresponding view that some form of price regulation is the preferred regulatory response. I expose many flaws in this natural monopoly theory, and demonstrate that technological changes undermine it even further, by effectively facilitating the formation of a competitive marketplace for performing rights. Some economic, legal and political barriers, however, may inhibit the transition from monopoly to competition.This three-Chapter thesis discusses some issues that lie at the interface of antitrust and intellectual property (IP) laws. Chapter One discusses the relationships between the concept of 'market power' and IP rights, and addresses the question whether antitrust law should presume that owners of IP rights possess market power. I argue that this question cannot be asked in the abstract but must be related to a specific challenged conduct, in light of the underlying substantive and procedural rules. By analyzing the role of presumptions as a legal device I show that the existence of presumptions is highly context specific, and is related to a variety of reasons: a mix of assumptions on probabilities and policy considerations. Accordingly, I show when and where a presumption of market power may or may not make sense.Chapter Three explains the strategic motivations behind many software publishers' decision to tolerate piracy and behind their failure of to employ technological measures to prevent it. I argue that tolerated piracy is a form of implicit price discrimination, in which some customers do not pay for their software---one that has some advantages over explicit forms of price discrimination. In the face of network effects, this strategy achieves wide and expeditious dissemination of software, maximizes the value of the network, may accelerate the tipping of the market in favor of the more dominant publisher and later create higher barriers to entry. At a second stage, software publishers are able to charge higher prices by holding-up locked-in pirates who face a threat of litigation. Legal implications of this theory, particularly in antitrust and copyright law, are explored as well.

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