Herbert Hovenkamp ‘Antitrust and Innovation: Where Are We and Where Should We Be Going’ (2011) Faculty Scholarship 1832

This old paper – which can be found here – deals with a constant concern in Hovenkamp’s work, namely the interaction between IP and antitrust. He notes that: “The primary purpose of antitrust law is to promote competition. However, both antitrust law and intellectual property law for large parts of their history have worked so as to undermine innovation competition by protecting too much. Antitrust policy often has reflected exaggerated fears of competitive harm and responded by developing overly protective rules that shielded inefficient businesses from competition at the expense of consumers. By the same token, the intellectual property laws have often undermined rather than promoted innovation by granting intellectual property holders rights far beyond what is necessary to create appropriate incentives to innovate.” Given this, what should antitrust’s stance be as regards innovation in general, and IP in particular? Hovenkamp offers “a few principles for antitrust analysis in innovation-intensive markets, particularly those claims that involve the exercise of patent rights.”…

Raphael De Conink ‘Innovation in EU Merger Control’ (2016) Competition Law & Policy Debate 2(3) 41

This paper – which can be found here – argues that these a consistent framework for taking account innovation is necessary in EU merger control. The article is structured as follows: Section 1 refers to recent Commission decisions addressing the impact of mergers on innovation. In particular, the Commission has been more interventionist in recent pharmaceutical mergers, such as in Novartis/GSK Oncology and in Pfizer/Hospira, and requested divestments of pipeline products – including, in some cases, products at an early stage of development. The Commission has also stressed the need to protect innovation as a rationale for divestment in other technology-driven industries, most recently and prominently in the context of the GE/Alstom. Section 2 summarises some of the economic evidence and debate on this topic. We are treated to a review of the literature on competition and innovation. There is a wealth of empirical analysis addressing the potential effects of competition on innovation. While the insights of such research do…

Reinhilde Veugelers ‘Innovation in EU merger control: Walking the talk’ Bruegel Policy Contribution 2012/04, February 2012

This relatively old paper – which can be found here – argues that the Commission makes all the right sounds on innovation, but it is not putting its “talk” into practice. Few cases have been actually examined for their innovation effects, and even in these few cases innovation effects have not been decisive for the ultimate competition assessments. In particular, verifiability seems to be a major constraint for DG COMP, preventing it from fully incorporating innovation effects into its analyses. The paper begins with a review of how the Commission took innovation claims into account in merger control assessments up until 2012. This section concludes that, while the Commission can take efficiencies into account as part of its substantive analysis of the consequences of a merger – usually to counterbalance perceived anti-competitive effects –, the evidence is that the Commission has made little use of this option. On the basis of the limited sample of cases where efficiencies were explicitly…

Nicolas Petit ‘Significant Impediment to Industry Innovation: A Novel Theory of Harm in EU Merger Control?’ ICLE Antitrust & Consumer Protection Research Program White Paper 2017-1

This paper – which can be found here – discusses a novel theory of harm applicable in EU merger control (Nicolas Petit ‘Significant Impediment to Industry Innovation: A Novel Theory of Harm in EU Merger Control?’). Under this theory, the Commission can intervene in mergers that reduce innovation incentives in an industry as a whole. The author considers that this theory focuses on identifying on Significant Impediment to Industry Innovation (“SIII”). This paper first attempts to describe the content and extent of the SIII theory. Second, it attempts to show that the SIII theory is a marked departure from established EU merger control practice. Third, it discusses the economic foundations of the SIII theory. Finally, it puts forward best practices for the assessment of mergers in R&D intensive industries. We will now look at each in turn. SIII theory provides that a merger can and should be prohibited where it can be demonstrated that it will “lead to a reduction of innovation” in a…

John Taladay ‘Measuring the Impact of Injunctive Relief on Innovation’ (2017) Antitrust Chronicle Vol. 1 · SPRING 2017

This paper – which can be found here –  focuses on the impact of injunctions, or more specifically the lack of the availability of an injunction, on an innovator’s investment decision. It argues that; “(1) it is possible to measure the impact that a “no injunction” in patent infringement actions will have on innovation investment, and that (2) such a policy will necessarily reduce investment in innovation. The reduction in investment is caused by the delay in receipt of licensing revenues that will result from eliminating the potential for injunctions, because this delay will negatively affect the inventor’s expected return on investment.” It also holds that “that interest awards [as an alternative to injunctions] are inadequate to eliminate the reduced incentive to invest in innovation.” The paper begins with a disquisition of the relationship between IP and antitrust. “Antitrust and intellectual property law are often said to be compatible in that they are both supposed to encourage innovation. The intellectual…