challenge to a transaction or conduct that threatens innovation alone. In fact, the best case on this point to my knowledge is the Second Circuit’s 1981 decision in SCM Corp. v. Xerox Corp.[1] There, the Second Circuit held that a defined product market is a prerequisite to an antitrust claim.[2] Moreover, while there have been challenges to innovation markets in pharmaceutical merger cases, those challenges have all resulted in consents that the parties agreed to in order to get the deal through.[3] I find this objection—that we should not be in the business of challenging innovation markets as such—to have the most credibility.
- ↑ SCM Corp. v. Xerox Corp., 645 F.2d 1195 (2d Cir. 1981).
- ↑ Id. at 1206 (rejecting the claim that acquisition of patents alone could create antitrust liability and observing that “[t]he patent system would be seriously undermined . . . were the threat of potential antitrust liability to attach upon the acquisition of a patent at a time prior to the existence of the relevant market and, even more disconcerting, at a time prior to the commercialization of the patented art.”). More recently, courts have reiterated in cases that did not concern innovation that a pre-existing market is a prerequisite to liability under Section 7 of the Clayton Act. See Crucible, Inc. v. Stora Kopparbergs Bergslags AB, 701 F. Supp. 1157, 1162-63 (W.D. Pa. 1988) (ruling that “the absence of a relevant [product] market . . . at the time of patent acquisition precludes the applicability of Section 7”); Fraser v. Major League Soccer, LLC, 97 F. Supp. 2d 130, 140-41 (D. Mass. 2000) (“Where there is no existing market, there can be no reduction in the level of competition . . . Competition that does not exist cannot be decreased.”), aff’d 284 F.3d 47, 71 (1st Cir. 2002) (“Even advocates of a broader reading of Section 7 concede that striking down a combination that does not threaten present competition could be justified . . . only in already concentrated markets.” (emphasis added)).
- ↑ See generally Commissioner J. Thomas Rosch, Antitrust Regulation of Innovation Markets, Remarks presented at the ABA Antitrust Intellectual Property Conference (Feb. 5, 2009), available at http://www.ftc.gov/speeches/rosch/090205innovationspeech.pdf (discussing the agencies’ various challenges to mergers under innovation market theories).
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