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.

The road not taken*

The annual Janet Doe Lecture was established in l966 to honor Janet Doe, emerita librarian of the New York Academy of Medicine. The lecture focuses on either the history or philosophy of health sciences librarianship. This lecture addresses three fundamental values of the field, highlighting basic beliefs of the profession that are at risk: privacy, intellectual property rights, and access to quality information. It calls upon readers to make the everyday choices required to keep the value system of health sciences librarianship in place. Robert Frost's poignant poem ”The Road Not Taken” provides the metaphor for examining choices in an information economy.