US Supreme Court Rejects Long-Standing Presumption of Tying in Patent Cases

In a unanimous (8-0) ruling, the US Supreme Court has overturned a long-held assumption that in competition law cases holders of rights to patents or copyright, by reason of their intellectual property rights, are exercising market power. In future anti-trust cases, plaintiffs who assert anti-competitive "tying" arrangements will have to tender convincing evidence that the alleged violator was in fact exercising power in the marketplace in relation to the protected product. Tying occurs when a seller conditions the sale of one product on the purchase of another product. In Illinois Tool Works v Independent Ink (2006 WL 468729), the predecessor to Illinois Tool Works (Trident) held a patent to an inkjet device and supply system for printing bar codes on packaging. Trident also made the ink used with its patented printheads. Its standard licence agreement with the manufacturers of its printers required the manufacturers to purchase ink for the Trident systems exclusively from Trident. Lower courts split on the question whether Independent Ink could succeed in its anti-trust action without first proving that Illinois Tool Works actually exercised market power. According to the US Supreme Court, Congress (in the context of legislating regarding patent misuse), anti-trust enforcement agencies and most economists had already concluded that patents do not automatically confer market power on patentees. For news reports and commentary, visit: http://www.law.com/jsp/article.jsp?id=1141207512775 and http://makeashorterlink.com/?F23B13BCC Summary by: The Editor