Innovation Markets: New Wine in Old Bottles
![handle is hein.journals/antil64 and id is 59 raw text is: INNOVATION MARKETS:
NEW WINE IN OLD BOTTLES?
ROBERT J. HOERNER*
On April 6, 1995, the Department of Justice and the Federal Trade
Commission issued the Antitrust Guidelines for the Licensing of Intellec-
tual Property (Intellectual Property Guidelines).' The Guidelines went
well beyond mere licensing issues. In part 3.2.3, they considered merger
analysis under Section 7 of the Clayton Act,2 addressing what the agencies
called a separate innovation market, defined to consist of:
the research and development directed to particular new or improved
goods or processes, and the close substitutes for that research and devel-
opment. The close substitutes are research and development efforts,
technologies, and goods25 that significantly constrain the exercise of
market power with respect to the relevant research and development,
for example by limiting the ability and incentive of a hypothetical mo-
nopolist to retard the pace of research and development.
25 For example, the licensor of research and development may be con-
strained in its conduct not only by competing research and develop-
ment efforts but also by other existing goods that would compete
with the goods under development.3
Thus, in Example 4, which concerned ajoint research and development
venture, the agencies indicated that they would consider whether the
joint venture would give the parties to the joint venture an incentive and
ability collectively to reduce investment in, or otherwise to retard the
pace or scope of, research and development efforts.4
* Member of the Ohio Bar. The views expressed herein are the present views of the
author and not necessarily those of any other person, firm, corporation, or entity.
U.S. Department of Justice and Federal Trade Commission Antitrust Guidelines for
the Licensing of Intellectual Property (1995), reprinted in 4 Trade Reg. Rep. (CCH) 13,132
[hereinafter Intellectual Property Guidelines]. Compare earlier draft at 7 Trade Reg. Rep.
(CCH) 50,141.
2 15 U.S.C. § 18.
3 Intellectual Property Guidelines, supra note 1, at 20,738.
' Id. at 20,739.](ViewImageLocal?handle=hein.journals/antil64&div=10&collection=&method=preview&ext=.png&size=3)
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Innovation Markets: New Wine in Old Bottles
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