For much of the last four decades, American innovation policy has rested on a premise that should be obvious but too often is not: strong intellectual property rights are not an obstacle to competition. Quite the opposite—strong IP rights are the precursor to robust competition. This truth was the main point at the center of my recent conversation with Alden Abbott, Senior Research Fellow at the Mercatus Center at George Mason University and former General Counsel of the Federal Trade Commission (FTC).

Alden brings a rare institutional perspective to these issues. He has worked inside the FTC, the Justice Department, and the Commerce Department, as well as in the private sector at the Heritage Foundation, BlackBerry, and now in academia at the Mercatus Center. More importantly, he has spent decades thinking seriously about the intersection of antitrust, competition policy, patents, licensing, and innovation economics. In a policy environment where slogans often substitute for analysis, Alden remains one of the few competition scholars who understands that patent rights are not merely legal abstractions but market-creating assets.

Our conversation began with Alden’s path into law, economics, and IP. He started as a math major, moved into economics, attended Harvard Law School, and developed an early interest in antitrust. But patents were largely absent from the legal curriculum of that era. As Alden recalled, “before the Reagan period, patents really took a back seat everywhere.” That was not just an academic omission. It reflected a broader policy culture that viewed patents with suspicion and too often treated licensing as inherently problematic instead of driving opportunity.

A Pro-Patent Turn—and the Lessons of Bayh-Dole

The view that patents were the problem began to change in the late 1970s and early 1980s, when policymakers started to better understand how property rights in innovation could unlock massive economic value. Alden pointed to the Bayh-Dole Act, the Semiconductor Chip Protection Act, and the Supreme Court’s Chakrabarty decision as pivotal moments in the shift toward a more pro-patent era. Bayh-Dole, in particular, changed the game by allowing universities to own inventions developed with federal funding, which in turn allowed for the licensing of these technologies into the private sector to support commercialization. The result produced real companies, real jobs, and real medical and technological breakthroughs.

As I explained during our conversation, the genius of Bayh-Dole was that it rejected the superficially logical but failed premise that government-funded research should simply remain in government hands since the government provided the seed money to create the innovation. That approach sounded fair and reasonable in the abstract, but it did not work. Federally funded inventions were sitting on the shelf, and no one was licensing or investing in them. Bayh-Dole flipped the model and created incentives for commercialization. The results were extraordinary.

How the Patent System Drifted Backward

The lessons learned from Bayh-Dole matter today because patent policy is again drifting into a dangerous counterproductive cycle. Alden described the historical pattern: periods of strong patent rights followed by anti-patent retrenchment. From roughly 1890 to 1930, courts respected patent rights. From the 1930s to about 1980, antitrust hostility and the so-called “nine no-nos” chilled patent licensing. The 1980s and 1990s restored some balance. Then, beginning in the 2000s, the pendulum swung back.

The modern damage is all too familiar to patent owners. The Supreme Court’s eBay decision weakened the availability of injunctions. The eligibility cases—particularly Mayo, Myriad, and Alice—created doctrinal uncertainty under Section 101. The America Invents Act created the Patent Trial and Appeal Board, which became a weapon not only against individual patents, but against certain patent owners who repeatedly found all their patents challenged and re-challenged. As I put it in our conversation, “the three problems with the modern patent system are one, eBay, two, the eligibility decisions, and then three, the PTAB.”

Alden agreed that those developments have undermined the reliability of patent rights in the United States. The eBay decision was particularly damaging because it moved patent disputes out of the boardroom and into litigation. In a properly functioning market, parties negotiate licenses against the backdrop of a credible exclusionary right. But when injunctions are unavailable or implausible, the largest implementers have every incentive to infringe first, litigate later, and pay only if forced to do so many years after the fact. This just creates a government-enabled transfer from innovators to infringers.

Efficient Infringement Should Be an Antitrust Problem

The “infringe first” dynamic is what has been called efficient infringement. It is efficient—and just good business—for implementers to ignore patent rights. Injunctions are realistically not available for patent owners. And there is a very long, almost impossible road to navigate for patent owners to get any compensation for infringement. The oddity is the “infringe first” culture creates a distinctly anti-competitive landscape. Those large companies that engage in efficient infringement are simply refusing to pay, which instantly puts them at a competitive advantage over smaller entities that do license instead of litigating. So, current law and policy favors infringing over licensing and large over small, which is precisely the type of anticompetitive marketplace antitrust regulators are supposed to disfavor. Instead, the blame somehow gets put at the feet of the innovator, not the bad actor who is manipulating the market. Very bizarre indeed.

This is especially acute in the standard essential patent context. Large implementers often use thousands of patented technologies while refusing to pay unless and until a court order or credible injunction threat forces them to the table. Smaller implementers, by contrast, often want licenses and need them, but if they voluntarily pay while larger competitors do not, they immediately place themselves at a competitive disadvantage. The result is a distorted market that punishes good-faith licensing and rewards efficient infringement.

Alden framed the economic problem clearly. “If you get injunctions quickly, people come to the table and they settle these things instead of getting into fights,” he said. That should not be controversial. Injunctions are not a nuclear weapon. They are the mechanism that gives the property right practical meaning. Without them, the patent owner is left with years of litigation, unpredictable damages, and no real leverage against an entrenched infringer.

This is where antitrust rhetoric has done real damage. Too many policymakers have been trained to see patents as monopolies rather than as property rights that support innovation, disclosure, licensing, investment, and market entry. But a patent does not merely exclude. It teaches. It publishes technical information that otherwise might remain hidden. It creates an asset that can be licensed, financed, transferred, bundled, enforced, and used as the foundation for follow-on innovation.

Alden made that point directly: “The public patent files creates new public information.” That public disclosure is not incidental. It is the bargain at the heart of the patent system. The inventor discloses the invention to the world, and in return receives a limited property right. Competitors can study the invention, design around it, improve upon it, or pursue alternative technical pathways. That moves innovation forward and is how innovation compounds.

The alternative to a robust patent system is not some frictionless utopia of open competition. The alternative is secrecy, copying, and underinvestment. If patents are too weak, companies will rely more heavily on trade secrets. That means less disclosure, less technical diffusion, and fewer opportunities for others to build upon what has been invented. Weak patents do not democratize innovation—they often bury it. Weak patents also reward copycats who find it far more expedient and financially rewarding to take rather than to innovate themselves.

Europe Should Not Import America’s Patent Mistakes

What is increasingly troubling is that America seems to have forgotten a lesson Europe may be starting to learn. Historically, the United States understood the value of empowering small inventors, startups, and emerging companies. Europe often favored incumbents. Today, in important respects, the roles appear to be reversing. Some European jurisdictions remain more willing to issue injunctions, while the United States has made patent enforcement more expensive, more uncertain, and less effective.

Yet Alden warned that Europe may be tempted to import America’s mistakes. European policymakers are increasingly studying the supposed benefits of eBay and considering whether injunctions are too readily available in jurisdictions such as Germany. That would be a strategic error. Europe says it wants more innovation. The Draghi report and broader European competitiveness debates all point in that direction. But if Europe weakens patent remedies, it will undercut the very incentives necessary to support innovation-led growth.

The same point applies to pharmaceuticals and biotechnology. Price controls may sound politically attractive, but they attack the economic model that makes high-risk drug development possible. Alden emphasized that price controls reduce incentives to invest in new products, which is just basic economics. If innovators cannot expect a return sufficient to cover risk, capital will move elsewhere, pipelines will shrink, and patients will eventually lose access to therapies that will never be developed.

The Fight to Restore Patent Reliability

Our conversation closed on a cautiously constructive note. There are reasons for optimism because the current Justice Department has shown a more sophisticated understanding of intellectual property and competition policy, particularly with respect to standard essential patents and Section 337 remedies. At the USPTO, administrative reforms have begun to curb some of the worst PTAB abuses. And there remains a bipartisan core of policymakers, former USPTO directors, scholars, and practitioners who understand that innovation policy cannot succeed if patent rights are unreliable.

But the broader fight is far from over. Congress still needs to address eligibility. The eBay damage still needs to be corrected. PTAB reform should be codified rather than left to shifting administrative discretion. And antitrust agencies must resist the temptation to micromanage licensing markets under the banner of competition.

The big picture is straightforward. A serious innovation economy requires enforceable property rights. It requires licensing markets that function without forcing every dispute into court. It requires policymakers to understand the difference between competition and copying. And it requires a patent system strong enough to reward the inventors, startups, universities, and research-driven companies that create the technologies others later want to use.

Patents are not the enemy of competition. In many of the most important sectors of the modern economy, patents are often the force that makes competition possible.

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