An Analysis of Tying and Technological Integration
New Horizons in Competition Law and Economics series
Chapter 1: Introduction
1. BACKGROUND The antitrust law of tying arrangements was born amid policy disputes about the proper scope of patent coverage. Initially, the complaints were that the defendant was attempting to expand the scope of its patents monopoly by requiring the licensee to purchase unpatented complementary products as a condition of obtaining a license to the patent. The Supreme Court’s conclusion that tying arrangements in the presence of tying product power are unlawful ‘per se’ expressed a policy judgment that severely limited the scope of the intellectual property grant, particularly because the rule was applied to IP owners who in fact lacked significant market power.1 The US IP law has since changed its approach to tying and now sees it as legal per se and importantly recognises that tying requires significant market power to be harmful and that this market power does not stem exclusively from the IP right itself. US antitrust law appears to be moving in the same direction. However, it is doubtful whether the same can be said for EC competition law. In a time when globalisation and increased cooperation between states, not least in the sphere of competition law, are becoming more significant for the world economy, harmonisation or at least a similar mindset on how to treat multinational corporations and their actions in the market place plays a crucial role. In the last couple of years there have been two major developments which have sparked the writing of this book. First, two major and very similar...