The Ministry of Information and Communications should consider the work of Carl Shapiro on patent settlements in moving ahead with horizontal cooperation in the five target industries where patent disputes are (apparently) blocking innovation.
In his article published in the RAND Journal of Economics in Summer 2003, Shapiro argues that patents settlements can stifle competition and harm consumers. Shapiro proposes a specific antitrust rule limiting such settlements - a settlement must leave consumers at least as well off as they would have been from ongoing patent litigation.
In other words, the Ministry of Information and Communications should give the foremost consideration to consumer welfare if it decides to intervene in patent settlements in the five target industries. In this regard, I suggest that it has the obligation to consult with the KFTC lest the Ministry becomes involved in anti-competitive patent settlements that harm Korean consumers.
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