We study the effects of antitrust policy in industries with continual innovation. A more protective antitrust policy … may have conflicting effects on innovation incentives, raising the profits of new entrants, but lowering those of … continuing incumbents. We show that the direction of the net effect can be determined by analyzing shifts in innovation benefit …

advocates a return to the utilitarian premise of the patent system, which posits that innovation incentives are preserved so … long as the costs of innovation are recovered. While this premise is widely accepted, it is seldom applied by the courts in … genuinely essential to generating innovation incentives. Under the constrained maximization approach, the antitrust courts …