CROSSING THE GREAT DIVIDE: USING ADVERSE POSSESSION TO RESOLVE CONFLICTS BETWEEN THE ANTITRUST AND INTELLECTUAL PROPERTY REGIMES

Abstract

This paper focuses on two related questions at the intersection of antitrust and intellectual property law. First, under what circumstances must the holder of a patent or a copyright or the owner of a trade secret allow others to use that intellectual property? Second, under what circumstances can the holder of an intellectual property right use that right to make it difficult for another party to succeed in a related market? These questions have vexed antitrust and intellectual property scholars alike ever since the Federal Circuit ruled in 2000 that patent holders “may enforce the statutory right to exclude others from making, using, or selling the claimed invention free from liability under the antitrust laws,” a ruling that directly contradicted the Ninth Circuit ruling that antitrust liability could be imposed for almost identical conduct, depending on the motivations of the patent holder. The various proceedings in United States v. Microsoft only added fuel to the firestorm of controversy.After briefly retracing the jurisprudential path to see how this situation arose, we propose a solution that primarily involves a variation on the real property concept of adverse possession for the intellectual property space along with a slight extension of the Essential Facilities Doctrine for industries that exhibit network effects. We examine, both for firms with and without market power, how our proposal would resolve the situations presented by large fixed asset purchases, the introduction of entirely new products, and operating systems with network effects. We also demonstrate how our proposal could be applied in the European antitrust enforcement context.

Citation

Bagley, C.E. and Clarkson, G. (2004), "CROSSING THE GREAT DIVIDE: USING ADVERSE POSSESSION TO RESOLVE CONFLICTS BETWEEN THE ANTITRUST AND INTELLECTUAL PROPERTY REGIMES", Libecap, G.D. (Ed.) Intellectual Property and Entrepreneurship (Advances in the Study of Entrepreneurship, Innovation and Economic Growth, Vol. 15), Emerald Group Publishing Limited, Leeds, pp. 149-199. https://doi.org/10.1016/S1048-4736(04)01505-X