Jonathan Barnett is the Torrey H. Webb Professor of Law at the Gould School of Law at the University of Southern California. He is the director of the law school’s Media, Entertainment and Technology Law Program and specializes in antitrust, intellectual property and corporate law and policy. He has published widely in academic journals, regularly comments on IP and antitrust policy, and is the author of Innovators, Firms and Markets: The Organizational Logic of Intellectual Property (Oxford University Press 2021).
Advocates for “patent reform” have long argued that reducing patent protection will open up markets and accelerate innovation by lowering entry barriers and expanding access to existing technologies. Yet, over 15 years of patent reform since the landmark 2006 decision in eBay, Inc. v. MercExchange LLC, followed by enactment of the America Invents Act in 2011, we have witnessed the rise of a technology ecosystem led by a handful of dominant platforms. In my recently published book, Innovators, Firms and Markets: The Organizational Logic of Intellectual Property, I show that this outcome should not be surprising. Almost 120 years of U.S. patent and antitrust history (1890-2006) indicate that reducing patent protection can often shield incumbents against the entry threats posed by smaller firms that have strong capacities to innovate but insufficient resources to transform innovations into commercially viable products and services.
It is commonly asserted that patents are a “bad deal” for developing countries. According to this view, patents boost the returns of firms in developed countries that hold necessary technology assets at the expense of firms in developing countries that require access to those assets. It naturally follows that patents are likely to impede local innovation and economic development. In recently published empirical research, I present findings that cast doubt on this conventional view. In the case of several countries that have made significant moves up the economic ladder, patenting strategies appear to have enabled innovators in these emerging-market economies to monetize R&D investments by supplying critical inputs to global technology markets. Without a secure patent portfolio, those entry opportunities may have been foreclosed.
As judges, former judges and government officials, legal academics and economists who are experts in antitrust and intellectual property law, we write to express our support for your recent announcement that the Antitrust Division of the Department of Justice will adopt an evidence-based approach in applying antitrust law equally to both innovators who develop and implementers who use technological standards in the innovation industries. We disagree with the letter recently submitted to you on January 24, 2018 by other parties who expressed their misgivings with your announcement of your plan to return to this sound antitrust policy.