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• W136272557 abstract "INTELLECTUAL property law has always been in tension with antitrust law. Intellectual property law protects monopolies; antitrust law disfavors them. Since early years of Sherman Act, pendulum of antitrust law has swung back and forth between treating patentees leniently and disfavoring them. In early years under Sherman Act, a patent was essentially a get out of jail free card as far as Sherman Act was concerned; patent licensees openly leveraged their rights evade antitrust restrictions. Then courts overcorrected and began treat all patent holders with suspicion. That suspicion lasted from 1912 at least 1960s. During those decades, law presumed every patentee enjoys market power, rendering a whole laundry list of license uses per se illegal. Now pendulum has swung back in favor of owners of intellectual property. Today, antitrust laws have relaxed considerably. In fact, there is even some question as whether classic patent tying arrangements are still actually (not just technically) per se illegal. Federal courts, Department of Justice, and Federal Trade Commission now take a gentler, more nuanced approach determining whether any particular intellectual property license triggers antitrust concerns. This paper will provide a brief history of tension between antitrust law and intellectual property law. It will then discuss how courts today treat a variety of intellectual property licenses. 1. A Brief History There have been three major periods in development of relationship between antitrust law and intellectual property law. In first period, lasting for first two decades following passage of Sherman Act, patent holders who wanted license their rights enjoyed virtual immunity from antitrust laws. In Bement v. National Harrow Co., Supreme Court stated the general of absolute freedom in use or sale of rights under patent laws of United States. The very object of these laws is monopoly, and rule is, with few exceptions, that any conditions which are not in their very nature illegal with regard this kind of property, imposed by patentee and agreed by licensee for right manufacture or use or sell article, will be upheld by courts. The fact that conditions in contracts keep up monopoly or fix prices does not render them illegal. (1) In short, patents were Sherman Act's kryptonite in those first two decades. Or, be more precise, it was not patents that allowed dodge around young Sherman Act, but rather, patent license pools that could cleverly leverage patents and extend them beyond their original purpose of protecting commendable ingenuity of inventor. Licensed and pooled, patent rights could be alienated from inventors and collected by corporations whose purpose was abuse market power. One commenter describes these early license pools as unconditional shelter for collusion. (2) The Supreme Court caught on, however, and it put teeth in Sherman Act in 1912 with Standard Sanitary Manufacturing. Standard Sanitary broke up a patent pool that required licensees fix resale prices and deal only with jobbers that sold licensed manufacturers. In a dramatic reversal of its previous attitude of total deference patent licenses, Standard Sanitary court described licenses as having evil consequences. (3) The Court continued crimp patent poolers' style with Morton Salt v. Suppiger Co., a patent misuse case, in 1942. Morton Salt involved a pool that required licensees of a canning invention buy their unpatented salt from Morton Salt. (4) The Supreme Court held that Morton Salt was attempting to secure an exclusive right or limited monopoly not granted by Patent Office and which it is contrary public policy grant. (5) There is nothing shocking about Morton Salt itself; it makes sense that no one should be able leverage his rights in new technology restrict commerce in salt, world's most ancient and commonplace good. …" @default.
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• W136272557 date "2011-07-01" @default.
• W136272557 modified "2023-09-23" @default.
• W136272557 title "Developments in Antitrust Law That Impact Intellectual Property Licensing Transactions" @default.
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