How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree

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Citation: Martin Watzinger, Thomas A Fackler, Markus Nagler, Monika Schnitzer (2017) How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree.
Internet Archive Scholar (search for fulltext): How Antitrust Enforcement Can Spur Innovation: Bell Labs and the 1956 Consent Decree
Download: https://economics.yale.edu/sites/default/files/how antitrust enforcement.pdf
Tagged: Patents (RSS), competition (RSS), Innovation (RSS)

Summary

1956 consent decree had AT&T license royalty free all its patents in both telecommunications and other fields. Authors consider patent citations (proxy for follow-on innovation) over next five years to examine impact. Follow-on innovation increased in non-telecommunications fields but not telecommunications. Shows patents can impede innovation, but also that compulsory licensing an incomplete intervention when target is dominant producer and consumer within a field, as Western Electric and its parent (AT&T) were of telecommunications equipment.

Theoretical and Practical Relevance

Video summary by one of the authors (Schnitzer): https://lt.org/publication/does-compulsory-licensing-work-effective-antitrust-tool

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