- § 1 Sherman Act, 15 U.S.C. § 1; Trusts, etc., in restraint of trade illegal; penalty
- § 2 Sherman Act, 15 U.S.C. § 2; Monopolizing trade a felony; penalty
Robinson-Patman Antidiscrimination Act
Types of IP with Antitrust concern
- Trade Secrets
Concepts of Antitrust Analysis
- Market Power
- Per Se vs Rule of Reason
- Vertical vs. Horizontal
Per Se Illegal
- Two products
- Sale conditional
- Economic power
- Effect on commerce
- Illinois Tool Works v. Independent Ink, 547 U.S.28 (2006) (fact that tying product is patented does not support per-se assumption of market power)
- Digidyne Corp. v. Data General Corp., 734 F.2d 1336 (lock-in effect of copyrighted operating system)
- Will v Comprehensive Accounting, 776 F.2d 665 (7th Cir. 1985) (not enough market power in tied data processing services services market)
- IBM v. United States, 298 U.S. 131 (1936) (punch-card case; computer and paper)
- Kodak v. Image Technical Services, 504 U.S. 451 (1992) (Hardware/Software services)
- United States v. Microsoft, 253 F.3d 34 (D.C. Cir. 2001) (Browser and operating system)(in notes in text at p. 638)
Refusals to License
- Image Technical Services v. Eastman Kodak, 125 F.3d 1195 (9th Cir. 1997) (NOTE: subsequent proceeding Kodak Supreme Court Case noted above Kodak v. Image Technical Services) (was the refusal of Kodak's to provide products a legitimate business justification for refusal to license or a pretext given many were not patented?)
- In Re Independent Service Organizations Antitrust Litigation, 203 F.3d 1322 (Fed. Cir. 2000) (similar analysis for Xerox but in this case the parts were patented)
Essential Facilities and the Duty to License
Intergraph v. Intel, 195 F.3d 1346 (Fed. Cir. 1999) (rejection of essential facilities doctrine)
Resale Price Maintenance
Definition of Resale Price Maintenance
Recent Case Law
- Leegin Creative v. PSKS, 551 U.S. 877 (2007) (Minimum resale price not a per se violation)
- See also State Oil v. Kahn, 522 U.S. 3 (1997) (Maximum resale price restriction not a per se violation)
- Consignment vs. Dealer; United States v. General Electric, 272 U.S. 476 (1926) (fixing resale price not per se violation under true consignment sales)
- Minimum royalties
Other Behavior (Monopolizing)
Original "Nine No No's:" in licensing
- tying the purchase of unpatented materials as a condition of the license,
- requiring the licensee to assign back subsequent patents,
- restricting the right of the purchaser of the product in the resale of the product,
- restricting the licensee's ability to deal in products outside the scope of the patent,
- a licensor's agreement not to grant further licenses,
- mandatory package licenses,
- royalty provisions not reasonably related to the licensee's sales,
- restrictions on a licensee's use of a product made by a patented process, and<
- minimum resale price provisions for the licensed products.
Subsequent Evolution - see Address by R. Hewitt Pate, Acting Assistant Attorney General, Antitrust Division, U.S. Department of Justice before the American Intellectual Property Law Association, January 24, 2003:
- Mandatory package licensing: Also known as patent pools, we now recognize that they may provide competitive benefits by integrating complementary technologies, reducing transaction costs, clearing blocking positions, and avoiding costly infringement litigation. At the same time, we recognize that some patent pools can restrict competition, whether among intellectual property rights within the pool, downstream products incorporating the pooled patents, or in innovation among parties to the pool.
- Tying of unpatented supplies: This sort of tying could minimize the risks associated with the uncertainty that a patent owner may have regarding the value of his/her patented technology. And without a showing that the patent actually conveys market power, antitrust concerns do not arise.
- Compulsory payment of royalties in amounts not reasonably related to sales of the patented product: It might be far more efficient, for example, to base royalties upon the total units produced by the licensee. Again, any antitrust concern depends upon the presence of market power.
- Mandatory Grantbacks: The IP Guidelines recognize that grantbacks can have procompetitive effects, and will be evaluated under the rule of reason. On the other hand, grantbacks may adversely affect competition if they substantially reduce the licensee's incentives to engage in research and development and thereby limit rivalry in innovation markets. Again, an important factor in the agencies' analysis of a grantback will be whether the licensor has market power in a relevant market. A non-exclusive grantback is less likely to produce anticompetitive effects because the licensee remains free to license its improvements to others.
- Licensee veto power over the licensor's grant of further licenses: Absent any showing of market power or foreclosure, such a restriction may have a net procompetitive effect.
- Restrictions on sales of unpatented products made by a patented process: Such a restriction is unlikely to raise concerns to the extent that the licensee and licensor would not be actual or potential competitors absent the licensing relationship, or that the licensor does not have market power.(12)
- Vertical Restraints: Post-sale restrictions on resale by purchasers of patented products; Specifying price licensee could charge upon resale of licensed products; Tie-outs (Tie-outs are restrictions on a licensee's ability to sell products that compete with the patented product): With respect to tie-outs, at least, anticompetitive concerns are unlikely to arise unless the patentee has "market power in the relevant market for the patent or patented product" under the patent misuse statute.(13)
Rules in Europe are Different
See for example COMMISSION REGULATION (EU) No 330/2010 of 20 April 2010 on the application of Article 101(3) of the Treaty on the Functioning of the European Union to categories of vertical agreements and concerted practice.