Tuesday, June 21, 2005

SUPREME COURT REVISITS PATENT TYING CASE: The court will hear the case of Illinois Tool Works v. Independent Ink late this year and could restrict anti-trust lawsuits against patent-holders.

The case involves claims of anti-trust "tying" - where the purchase of a popular product is linked to the purchase of a related item. Tying is illegal when a company has "market power" in selling the popular product and can use that power to piggy-back the less desirable product along with it. The particular case involves an Illinois company that makes patented print-heads, and requires printer manufacturers to buy their ink from the company too.

Intellectual property owners are keen to overturn a decades-old precedent that says a company with a patent is presumed to have market power. The view is that this precedent is "outdated" and should be overturned, because of its alleged interference with the market.

According to the Intellectual Property Owners Association (IPO), "plaintiffs in tying cases involving patents should be required, like all other tying cases, to prove that the seller has market power in the tying product." The IPO joined Pfizer in an amicus brief to discard that presumption. The Federal Trade Commission (FTC) and the Department of Justice do not use such a presumption in cases involving patents.

The Federal Circuit appeals court said when it ruled in the Illinois case: "The Supreme Court has held that there is a presumption of market power in patent tying cases, and we are obliged to follow the Supreme Court's direction in this respect. The time may have come to abandon the doctrine, but it is up to the Congress or the Supreme Court to make this judgment."

So let it be written . . . . so let it be done.

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