Antitrust 1 Prof. E. Fox Fall 2004 1 I. Introduction to Antitrust Law 4 a. General Background 4

Duty to License? – Two Competing Visions

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Duty to License? – Two Competing Visions

  • Image Technical Services v. Eastman Kodak (9th Cir. 1998)

  • Data General Rule

  • Δ may assert the sole use of IPR as a legitimate business justification for alleged exclusionary conduct and the jury may presume that this justification is legitimately pro-competitive

  • Presumption of legitimacy can be rebutted by evidence that a) the monopolist acquired the protection of the IPR laws in an unlawful manner or b) if it is used as pretext

  • CSU v. Xerox (Fed.Cir. 2001)

  • Declined to follow ITS

  • Patents – subjective motivation is immaterial; in the absence of illegal tying, fraud in the Patent and Trademark Office, or sham litigation, patent-holder may enforce statutory right to exclude others from use of patent free from liability under the antitrust laws

  • Burden is on the infringement Δ (antitrust π)!

  • Copyright – IPR granted in copyright cannot be used w/impunity to extend power in the marketplace beyond what Congress intended, but it is a presumptively valid business justification for any immediate harm to consumers

  • Burden is firmly on antitrust π

  • Considerations – What is the scope of IPR?

  • Is the IPR an extension of monopoly power to ancillary markets or is it limited to the primary market for which the product is patented or copyrighted?

  • Is there a sliding scale in which the application of antitrust becomes more relevant as the market becomes more ancillary to the purpose of the IPR

  • Should there be separate approached to patent (process) and copyright (subject)

  • International problems:

  • South African Competition Law declares that a firm abuses it dominant position when it refuses to supply scarce goods to a competitor when economically feasible, unless the firm can show technological, efficiency or other pro-competitive gains which outweigh the anticompetitive effect of its conduct

  • EU – Magill (1995): duty to license; circumvent IPR b/c of consumer demand for such action

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