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Competition Policy and Intellectual Property Rights in the Knowledge-Based Economy
ABROAD SET OF ISSUES RELATED TO THE INTERACTION between competition policy intellectual property rights (IPRs) has been analysed in this volume, with particular focus on patents and licensing practices. As pointed out in the Introduction to the volume, IPRs provide important incentives for innovation and can also facilitate the diffusion of new technologies in the economy. Occasionally, they also give rise to concerns about the accumulation or abuse of market fower. Competition policy is another important instrument that guards against the abuse of market fower, by limiting the set of practices and contractual arrangements that my be used by firms. This affects both a patentee's exante incentive to innovate and its ex post incentive to diffuse new technologies. In general, the wider the set of practices that are legally permitted, the greater the flexibility that the innovator has to increase the return from its investment in R&D and torestrict imitattion and other potetial rent-dissipating activities of licensees. On the other hand, such restrictions may have the welvare-redicing effect of excessively limiting access to new technologies and suppressing incentives to develop impropements or substitutes. The challenge for policy makers and competition authorities is to balance these various effects so as to achieve an efficient allocation of resouces in dinamic markets. In this final chapter, we identity some of the main conclusions and lessons to be drawn from the papers contained in the volume. Although the various papers present a great diversity of views on issues related to the competition policy treatment of IP, a number of insights and guiding principles emerge from them. We discuss these findings below. First, we consider general principles for competition policy as presented in the introductory papers of Part I: secondd, we outline guiding principles for the competition treatment of particular licensing practices, and third, we identity competition approaches, especially within NAFTA countries, that might have a favoutable impact on innovation and diffusion in international markets.
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