Innovation: The role of patents and antitrust and competition law regulation of patent licensing arrangements. A comparative analysis of the United States and the European Community

Society thrives on the continuous development of goods, services and ideas which can be applied to enhance the welfare and livelihood of its members. The creation of these new goods and services is often a long and complex process which calls for a variety of skills and resources in a number of areas, such as research, engineering, manufacturing, marketing, and service, as well as significant amounts of financial and human capital. This creative process, which brings novel and useful ideas from the mind to the marketplace, has been referred to innovation.; While the state may encourage innovation through direct grants or prizes, it is more typical for innovation to be left to the private sector. However, in order for entrepreneurs and firms to respond to the challenges of innovation, they must have a reasonable expectation that they will be rewarded for their efforts and investment by returns commensurate with the level of risk involved in a particular project. Specifically, private innovators, while appreciative of the intangible rewards of contributing to social progress, need to have the economic incentives to finance the innovation process.; One method for establishing that incentive that has been used for a number of years is the recognition of a state-created property right--the patent--which can be used by the owner to exclude others from using novel inventions covered by the patent. There are a number of legal, economic, and social issues associated with the creation, enforcement, and use of exclusive property rights in new ideas. This work is concerned with two of those issues. First, the legal and economic justifications for intellectual property rights as a whole, and for patent rights in particular, are examined. Second, assuming the existence of adequate justification for patent rights, an analysis is made of the effect of such rights on competition in the marketplace and the ways in which state has attempted to regulate exploitation of patents right by licensing under antitrust and competition laws.; The first part of the work focuses on the public policy objectives of the patent system.; The next part of the work studies and analyzes how jurists and regulators have attempted to police the competitive effects of patent licensing in the marketplace.; The final part of the work sets out recommendations for further studies in this area. (Abstract shortened by UMI.)...