The Twisted Path to Innovation Policy

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Book Chapter

Publication Date



Why did intellectual property law develop in comparative isolation from any economic concept of growth? Twentieth-century antitrust law, contract law, and even trademark law became acutely aware of their role in facilitating markets and economic development, but patent law adhered to a functionally obsolete conception of property rights and boundaries. One example of this difference is the pervasive role of economics in the 1950 Celler-Kefauver amendments to the antitrust merger law, and its relative absence from the contemporaneous debates over the 1952 Patent Act. The powerful “Schumpeter-Arrow” literature on innovation and economic growth came to have a much greater influence on antitrust law than patent law. The best explanation is that because innovation is so poorly understood IP law became a playground for special interest groups, dominated by producers, while antitrust became much more attentive to consumer welfare concerns.


intellectual property, patent, innovation, Schumpeter, Arrow, antitrust

Publication Title

The Opening of American Law: Neoclassical Legal Thought, 1870-1970