An economic analysis of unilateral refusals to license intellectual property

The intellectual property laws in the United States provide the owners of intellectual property with discretion to license the right to use that property or to make or sell products that embody the intellectual property. However, the antitrust laws constrain the use of property, including intellectual property, by a firm with market power and may place limitations on the licensing of intellectual property. This paper focuses on one aspect of antitrust law, the so-called “essential facilities doctrine,” which may impose a duty upon firms controlling an “essential facility” to make that facility available to their rivals. In the intellectual property context, an obligation to make property available is equivalent to a requirement for compulsory licensing. Compulsory licensing may embrace the requirement that the owner of software permit access to the underlying code so that others can develop compatible application programs. Compulsory licensing may undermine incentives for research and development by reducing the value of an innovation to the inventor. This paper shows that compulsory licensing also may reduce economic efficiency in the short run by facilitating the entry of inefficient producers and by promoting licensing arrangements that result in higher prices.

Integration of transplanted hepatocytes into host liver plates demonstrated with dipeptidyl peptidase IV-deficient rats.

To analyze mechanisms of liver repopulation, we transplanted normal hepatocytes into syngeneic rats deficient in dipeptidyl peptidase IV activity. When isolated hepatocytes were injected into splenic pulp, cells promptly migrated into hepatic sinusoids. To examine whether transplanted hepatocytes entered liver plates and integrated with host hepatocytes, we analyzed sharing of hepatocyte-specific gap junctions and bile canaliculi. Colocalization studies showed gap junctions uniting adjacent transplanted and host hepatocytes in liver plates. Visualization of bile canalicular domains in transplanted and host hepatocytes with dipeptidyl peptidase IV and ATPase activities, respectively, demonstrated hybrid bile canaliculi, which excreted a fluorescent conjugated bile acid analogue. These results indicate that transplanted hepatocytes swiftly overcome mechanical barriers in hepatic sinusoids to enter liver plates and join host cells. Integration into liver parenchyma should physiologically regulate the function or disposition of transplanted hepatocytes and benefit applications such as gene therapy.