ABSTRACT How does antitrust enforcement affect innovation when patents are the main barrier to entry? I address this question by empirically studying the US antitrust case against Xerox, the former monopolist in the market for plain‐paper copiers. In 1975, Xerox accepted a consent decree whose primary remedy was compulsory licensing of all its copier‐technology patents in the US and abroad. I show that this antitrust intervention promoted innovation by other firms in the copier industry, measured by a disproportionate increase in patenting in technology classes with a higher propensity for containing copier‐related inventions. This effect is driven by Japanese competitors, whose patenting became more novel and diverse as they started developing smaller desktop copiers.
Robin Mamrak (2026) studied this question.