Spotlight Research: Is Pepsi Really a Substitute for Coke? Market Definition in Antitrust
Mark A.Lemley and Mark P. McKenna, Is Pepsi Really a Substitute for Coke? Market Definition in Antitrust and IP, 100 Georgetown Law Journal 2055 (2012).
This paper considers the impact of IP rights on market power generally, and insight into the use of market definition in IP cases using popular cola brands Pepsi and Coke as an example.
Antitrust law explicitly depends on market definition. Many issues in IP law also depend on market definition, though that definition is rarely explicit. Applying antitrust’s traditional market definition to IP goods leads to some startling results. Despite the received wisdom that IP rights don’t necessarily confer market power, a wide array of IP rights do exactly that under traditional antitrust principles. This result requires us to rethink both the overly-rigid way we define markets in antitrust law and the competitive consequences of granting IP protection. Both antitrust and IP must begin to think realistically about those consequences, rather than falling back on rigid formulas or recitation of the mantra that there is no conflict between IP and antitrust.
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