Research Handbook on Intellectual Property and Competition Law
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Research Handbook on Intellectual Property and Competition Law

Edited by Josef Drexl

This comprehensive Handbook brings together contributions from American, Canadian, European, and Japanese writers to better explore the interface between competition and intellectual property law. Issues range from the fundamental to the specific, each considered from the angle of cartels, dominant positions, and mergers. Topics covered include, among others, technology licensing, the doctrine of exhaustion, network industries, innovation, patents, and copyright.
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Chapter 10: Patent Power and Market Power: Rethinking the Relationship between Intellectual Property Rights and Market Power in Antitrust Analysis

Clifford A. Jones


Clifford A. Jones 1 Introduction – Spilled ink: the Supreme Court, patent tying, and presumptions of market power On 1 March 2006, the Supreme Court of the United States decided in Illinois Tool Works, Inc. v. Independent Ink, Inc.1 that it would abandon its longstanding rule that market power is presumed in cases where a patented product is tied to the purchase of unpatented products in a tying arrangement giving rise to claims under the Sherman and Clayton Antitrust Acts. Speaking for a unanimous Supreme Court, Justice Stevens stated: 2 Congress, the antitrust enforcement agencies, and most economists have all reached the conclusion that a patent does not necessarily confer market power upon the patentee. Today, we reach the same conclusion, and therefore hold that, in all cases involving a tying arrangement, the plaintiff must prove that the defendant has market power in the tying product. In so ruling, the Supreme Court both brought an end to an arguably unhealthy intertwining of patent law and antitrust law that had existed since the early twentieth century and simultaneously brought about a new convergence of antitrust tying law and the law of patent abuse. Whether this results in an improvement in antitrust tying law is open to question,3 but indisputably there is a new or restored alignment with regard to the role of market power in both antitrust tying and the law of patent abuse. In Illinois Tool Works, the antitrust claim of the plaintiff Independent Ink arose from its manufacture of...

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