The United States Supreme Court and the Congress have moved to weaken patents over the past seven years without realizing the inherent danger to national interests.  

“Strong patents rights are vital to the economic and national security interests of this country,” say James Rill and David J. Teece in an article published last week, “The DOJ must Exalt Intellectual Property Rights,” in RealClear Markets.

The article states that the U.S. Department of Justice must use its power to move intellectual property rights like patents into mainstream acceptability, and prevent them from being undermined “under the guise of anti-competitive behavior.”

Authors James Rill, Senior Counsel at Baker & Botts, served as Assistant Attorney General for Antitrust at the U.S. Department of Justice; David J. Teece is Professor in Global Business and director of the Tusher Center for the Management of Intellectual Capital at the Walter A. Haas School of Business UC Berkeley and a renowned economist.

“Assistant Attorney General Makan Delrahim’s recent policy statements and enforcement actions have re-asserted the historical value of intellectual property rights,” say Rill and Teece.

“He has suggested that the value of these rights have been inappropriately curtailed by the misapplication of antitrust principles, which could threaten the future of U.S. innovation efforts. As a result, AAG Delrahim has begun to restore the balance between antitrust and intellectual property rights, and has moved this important issue to the forefront of antitrust discourse.”

For the full article, go here.

Better Incentives Needed

Also published last week by Professor Teece in Competition Policy International, is a related in-depth article, “Enabling Technology, Social Returns to Innovation, and Antitrust: The Tragedy Of Depressed Royalties.” 

“Empirical studies show that almost all classes of R&D activity are under-supported,” argues Professor Teece. “Two in particular are grossly under-compensated: (a) basic research and (b) enabling (or general purpose) technologies… consideration needs to be given to amplifying, not diminishing, incentives for upstream investment in R&D. Such investment is perhaps among the most precious that society makes.”

Teece cites Nobel Laureate economist Douglass North on the impact of innovation incentives:

Throughout man’s past he has continually developed new techniques, but the pace has been slow and intermittent. The primary reason has been that the incentives for developing new techniques have occurred sporadically. Typically, innovations could be copied at no cost by others and without any reward to the inventor or innovator.

Recent efforts to enlist antitrust as a lever against patents, says Professor Teece, “have threatened to undermine incentives for R&D in several important areas.”

Subtle, theory-based antitrust arguments around patent “hold up” are a handy disguise for implementers and antitrust agencies to use to under-reward and thereby under-incentivize legitimate innovators.

Image source: cjnotebook.com; wsj.com