BPEA | 1997: Microeconomics

Antitrust Issues in the Licensing of Intellectual Property: The Nine No-No’s Meet the Nineties

Carl Shapiro and
Carl Shapiro University of California at Berkelev
Richard Gilbert
Richard Gilbert University of California at Berkelev

Microeconomics 1997

“KNOWLEDGE ASSETS”-research and development know-how and intellectual property protected by patent, copyright, and trade secrethave become increasingly important as a determinant of U.S. industrial progress. In 1995 seven knowledge-intensive industries (aerospace, computers, communications equipment, electrical machinery, electronic components, instruments, and drugs) accounted for 27 percent of total manufacturing output in the United States, up from 21 percent in 1982. Royalties and fees collected by U.S. firms from international trade in intellectual properties exceeded $20 billion in 1993, nearly double the amount collected just five years earlier. Licensing royalties and fees, although considerable, greatly understate the value of intellectual property to the U.S. economy. Technology licensing and related partnerships are essential in today’s economy to remain globally competitive and to market the products that knowledge assets help to create.