Antitrust Issues Involving Intellectual Property

AuthorRonan P. Harty
A. Introduction
This chapter addresses the antitrust issues that arise from the acquisition,
exploitation, and enforcement of intellectual property rightspatents, copyrights,
trademarks, trade secrets, and other similar rights created by statute or recognized by
common law.1 These issues can surface either in standalone antitrust claims, which are
frequently asserted as counterclaims to infringement actions, or through the doctrine
of misuse.
As this chapter explains, the affirmative defense of patent or copyright misuse
enables a party accused of patent infringement to block enforcement of a patent or
copyright by pointing to anticompetitive conduct by a patentee or copyright holder.2
1. The Nature of Patents and Copyrights
The U.S. Constitution grants Congress the power to create a patent system and a
copyright system. It provides that: “[t]he Congress shall have Power . . . To promote
the Progress of Science and useful Arts, by securing for limited Times to Authors and
Inventors the exclusive Right to their respective Writings and Discoveries.”3
A patent may be issued to the inventor of any “new and useful process, machine,
manufacture, or composition of matter, or any new and useful improvement” to any of
the same.4 A valid, enforceable patent provides its owner, whether the inventor or an
assignee, with the right to exclude others from making, using, or selling the patented
1. For example, Congress has by statute given creators of certain semiconductor “mask works” used in
the fabrication of integrated circuits a right to prohibit, for a limited time, the importation,
reproduction, and distribution of such works. 17 U.S.C. §§ 90114. In addition, state statutes and
common law can create intellectual property rights, although those rights are qualified in that any
state law that is inconsistent with the federal patent system is preempted. See generally Bonito Boats
v. Thunder Craft Boats, 489 U.S. 141 (1989). However, state law can, and does, create intellectual
property rights that federal patent and copyright laws do not preempt, e.g., involving trademarks and
trade secrets.
2. See part H of this chapter.
3. U.S. CONST. art. I, § 8, cl. 8.
4. 35 U.S.C. § 101; see also id. § 161 (specifying that a patent may be granted to one who “invents or
discovers and asexually reproduces” certain “distinct and new variet[ies] of plant[s]”). A patent also
may issue to the inventor of a “new, original[,] and ornamental design for an article of manufacture.”
Id. § 171.
invention throughout the United States.5 Patents have the attributes of personal
property.6 The period of exclusivity of a U.S. patent begins from the date of its issuance
and normally expires twenty years from the date on which the application for the patent
was filed. If the application contains a specific reference to an earlier filed application,
the term begins from the date on which the earliest such application was filed.7
Each patent contains one or more “claims.”8 The claims are analogous to the “metes
and bounds” of a deed to real property. They define the scope of exclusivity granted
to the patentee.9 To determine their scope, however, the claims must be read in view
of the remainder of the disclosure in the patent.10 This required disclosure includes a
5. See 35 U.S.C. §§ 102, 103, 112, 154, 271; Kingsdown Med. Consultants v. Hollister, Inc., 863 F.2d
867, 877 (Fed. Cir. 1988) (en banc portion of opinion); cf. eBay Inc. v. MercExchange, L.L.C., 547
U.S. 388, 392 (2006) (noting that “creation of a right is distinct from the provision of remedies for
violations of that right”). The exclusive rights patent laws provide are intended to offer incentives
for inventors to take risks in performing research and development. See, e.g., Kewanee Oil Co. v.
Bicron Corp., 416 U.S. 470, 480–81, 484 (1974); Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225,
229–30 (1964); Johnson & Johnson, Inc. v. Wallace A. Erickson & Co., 627 F.2d 57, 59 (7th Cir.
1980); S.C. Johnson, Inc. v. Carter-Wallace, Inc., 225 U.S.P.Q. (BNA) 968, 973 (S.D.N.Y. 1985),
aff’d in part & vacated in part, 781 F.2d 198 (Fed. Cir. 1986). The patent laws are also intended to
encourage disclosure of new ideas to the public, which in turn may lead to the development of further
advances. See Troxel Mfg. v. Schwinn Bicycle Co., 465 F.2d 1253, 1258 (6th Cir. 1972). When the
patent expires, the invention becomes freely available to the public without restriction. See Brulotte
v. Thys Co., 379 U.S. 29, 31 (1964); Special Equip. Co. v. Coe, 324 U.S. 370, 378 (1945). A
patentee’s remedies for infringement are specified in 35 U.S.C. §§ 283–89, and include damages and
injunctive relief. The traditional four-part equitable test, however, applies to the issuance of
permanent injunctions for patent infringement. eBay, 547 U.S. at 391–92. In addition, under § 337
of the Tariff Act of 1930, as amended, 19 U.S.C. § 1337(a)(1)(B)(i), a patentee may seek relief
through the U.S. International Trade Commission against the importation of products that infringe a
U.S. patent, subject to certain threshold requirements relating to the existence of a domestic industry
practicing the patent. See also Crocs, Inc. v ITC, 598 F.3d 1294, 1306 (Fed Cir. 2010) (“One
requirement of a patent-based section 1337 action is that a domestic industry relating to the articles
protected by the patent . . . exists or is in the process of being established.”).
6. See 35 U.S.C. § 261; see also eBay Inc. v. MercExchange, L.L.C., 547 U.S. 388, 392 (2006) (noting
that patents are “‘[s]ubject to the provisions of this title,35 U. S. C. §261, including, presumably,
the provision that injunctive relief ‘may’ issue only ‘in accordance with the principles of equity,
§283.”). Congress enacted the statutory provision to negate any inference that a patent is a “public
trust” or “privilege.” See, e.g., Precision Instrument Mfg. Co. v. Automotive Maint. Mach. Co., 324
U.S. 806, 816 (1945); see also Patlex Corp. v. Mossinghoff, 758 F.2d 594, 599 (Fed. Cir. 1985) (“‘A
patent for an invention is as much property as a patent for land. The right rests on the same foundation
and is surrounded and protected by the same sanctions.’”) (quoting Consolidated Fruit Jar Co. v.
Wright, 94 U.S. 92, 96 (1876)).
7. 35 U.S.C. § 154(a)(2). “The term of a patent that [wa]s in force on[,] or that results from an
application filed before” June 8, 1995 is “the greater of the 20-year” period provided in § 154(a)(2)
“or 17 years” from the grant of the patent. Id. § 154(c)(1). Under certain circumstances, a patent’s
term may be extended if the issuance of the patent is delayed by an interference proceeding, appellate
review of the decision to grant the patent, or if the patentee was subject to regulatory review prior to
commercial marketing or use of the patented product. Id. §§ 154(b), 156.
8. See id. § 112(b).
9. See, e.g., Merrill v. Yeomans, 94 U.S. 568, 570 (1876); Phillips v. AWH Corp., 415 F.3d 1303, 1313
(Fed. Cir. 2005) (en banc).
10. Phillips, 415 F.3d at 1315. Claims must be “sufficiently definite” to allow “those skilled in the art
[to] understand what is claimed.” Enzo Biochem, Inc. v. Applera Corp., 599 F.3d 1325, 1332 (Fed.
Cir. 2010). Furthermore, whether a patent clearly differentiates itself from specific prior art “is an
important consideration in the definiteness inquiry.” Halliburton Energy Servs. v. M–I LLC, 514
F.3d 1244, 1252 (Fed. Cir. 2008). “Prior art” is “technology already available to the public.”
Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 1446, 1453 (Fed. Cir. 1984).
written description of the invention in terms sufficient to enable a person skilled in the
art to make and use it, and that sets forth what the inventor believes is the best mode
of carrying out the invention.11 To obtain a patent, the patent applicant must persuade
a U.S. Patent and Trademark Office (USPTO) examiner that the invention meets the
statutory standards of novelty, utility, and non obviousness.12
Copyrights are federal statutory grants13 that protect “original works of authorship
fixed in any tangible medium of expression.” 14 Others may use the ideas expressed in
a copyrighted work,15 but those who copy the original author’s expression of those
ideas may be liable as copyright infringers.16 No copyright infringement liability flows
from the independent creation of an identical work, which is in contrast to patent law,
where liability attaches even if the infringing copy results from independent creation.17
Copyright protection, moreover, “has never accorded the copyright owner complete
control over all possible uses of his work.”18 For example, copyright law includes a
doctrine of “fair use” that, in certain circumstances, allows others to make limited use
of the copyright holder’s original work.19 The Federal Circuit has also held that the
Digital Millennium Copyright Act (DMCA)20 does not create an additional property
right for a copyright holder to block otherwise lawful access by competitors and the
11. See 35 U.S.C. § 112(a).
12. See id. §§ 101, 102, 103. The Leahy-Smith America Invents Act (“AIA”) introduced significant
changes in the U.S. patent system, incuding inter partes review proceedings that allow the USPTO
to review the patentability of one or more claims in a patent on a ground that could be raised under
§§ 102 or 103 on the basis of prior art consisting of patents or printed publications. See Pub. L. No.
112-29, 125 Stat. 284 (2011) (codified in scattered sections of 35 U.S.C.). Moroever, before the AIA,
the U.S. had a “first-to-invent” system in which conflicting claims as to who was the first to invent
could be resolved in proceedings called “interferences.” 35 U.S.C. § 135 (pre-AIA). The AIA
transitions the U.S. to a “first inventor to file” system, in which the patent is issued to the first
inventor to file a patent application claiming the invention. Derivation proceedings to determine the
“first inventor to file” apply to applications with an effective filing date on or after March 16, 2013.
35 U.S.C. § 135. For applications with an effective filing date before March 16, 2013, interference
proceedings apply. Id.
13. See generally 17 U.S.C. §§ 101–21. The 1976 revision of the Copyright Act specifically provides
for federal preemption of all state laws directed to copyrightable subject matter. Id. § 301. Article I,
§ 8, clause 8 of the Constitution contemplates copyright grants, as well as patents.
14. 17 U.S.C. § 102(a).
15. Id. § 102(b) (“In no case does copyright protection for an original work of authorship extend to any
idea, procedure, process, system, method of operation, concept, principle, or discovery . . . .”); see
also Mazer v. Stein, 347 U.S. 201, 217 (1954) (“protection is given only to the expression of the
idea—not the idea itself”), superseded by statute, Copyright Act of 1976, Pub. L. No. 94-553, 90
Stat. 2541.
16. 17 U.S.C. § 106
17. Mazer, 347 U.S. at 218 (“Absent copying there can be no infringement of copyright.”); cf. Kewanee
Oil Co. v. Bicron Corp., 416 U.S. 470, 477–78 (1974) (stating that patent protection goes “not only
to copying the subject matter, which is forbidden under the Copyright Act, . . . but also to
independent creation”). Compare 17 U.S.C. §§ 106–18, 501 (copyright) with 35 U.S.C. § 271(a)
18. Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417, 432 (1984), superseded by statute,
Digital Millenium Copyright Act of 1998, Pub. L. No. 105-304, 112 Stat. 2863.
19. 17 U.S.C. § 107. See generally Campbell v. Acuff-Rose Music, 510 U.S. 569, 592 (1994) (“The
market for potential derivative uses [protectable by copyright] includes only those that creators of
original works would in general develop or license others to develop. Yet the unlikelihood that
creators of imaginative works will license critical reviews or lampoons of their own productions
removes such uses from the very notion of a potential licensing market.”).
20. 17 U.S.C. § 1201, et seq.

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