South-Western Legal Studies in Business

Existence of Patent Not Relevant in Tying Cases; Market Power Must Always Be Shown
Description

Supreme Court, overturning a number of older cases, held that just because a seller has a patent on a product tied to other products, there is no presumption of monopoly power in the market. Plaintiff must give evidence of market power and monopolization.

Topic Antitrust
Key Words

Monopolization; Tying Arrangement; Market Power

C A S E   S U M M A R Y
Facts

Trident makes and sells printing systems that include patented printheads and ink containers and unpatented ink. They sell this product to original equipment manufacturers who agree to buy ink exclusively from Trident and that they will not fill the patented ink containers with any other kind of ink. Independent Ink made an ink of the same chemical formula as Trident. It sued Trident, contending the patents were invalid on the grounds that Trident engaged in illegal tying and monopolization in violation of the Sherman Act. The district court rejected the claims, but the appeals court held that there was illegal tying. Trident appealed.

Decision

Vacated and remanded. Reversing older cases, the Court held that the mere fact that a tying product is patented does not support a presumption of market power in a patented product. This is now a part of patent law. In all cases involving a tying arrangement, patented or not, the plaintiff must prove that the defendant has market power in the tying product.

Citation

Illinois Tool Works, Inc. v. Independent Ink, Inc., 126 S.Ct. 1281 (Sup. Ct., 2006)

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