In the United States Congress, the Sherman Antitrust Act of 1890 was the first statute to outlaw trusts. When many companies’ investors agreed to transfer their interests to a single set of trustees, a trust was formed. The Sherman Act empowered the government to dissolve trusts through legal action. This paper aims to discuss how intellectual property laws don’t contradict the Sherman antitrust act of 1890.
The Sherman Antitrust Act was enacted to Congress’ constitutional authority to control interstate commerce. Courts have made it clear that a firm cannot use a legal monopoly in one market. For example, if a market lacks a better product or commercial acumen, an intellectual property right might be used to gain trust in that market (Sawyer, 2019). Second, monopolists are prohibited from engaging in activity that reduces customer welfare. Firms are banned, for example, from linking a protected product to a non-protected product to extend their intellectual property rights.
Antitrust law also opposes monopolization attempts in a protected product’s aftermarket. Antitrust theorists are also working on a nonprice predation theory, in which a monopolistic firm’s efforts to raise its rival’s expenses would be a breach of antitrust laws. A corporation may achieve exclusionary market dominance and hence the ability to raise prices, harming consumer welfare by participating in such behavior. Intellectual property law has evolved several measures that supplement antitrust initiatives to combat intellectual property rights misuse (Sawyer, 2019). Conclusively, exaggerated conceptions of the power granted by IP rights and anticipated dangers to competition abound in the history of antitrust action involving intellectual property. As a result, there have been challenges in antitrust cases involving IP tactics where none previously existed. To be sure, striking the correct balance between maintaining competition and incentivizing innovation is not simple.
Reference
Sawyer, L. P. (2019). US Antitrust Law and Policy in Historical Perspective. Harvard Business School. Web.