Fifteen Years of Experience with the Guidelines - An Overview

• Pages: 15-18

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CHAPTER II

FIFTEEN YEARS OF EXPERIENCE WITH THE

GUIDELINES - AN OVERVIEW

Since the Guidelines were issued in 1995, the enforcement agencies

have demonstrated their commitment to application of the antitrust laws

to intellectual property transactions. The law in this ar ea remains very

much unsettled, however, as reflected in the results of the agencies’

enforcement actions and the private antitrust litigation during this period.

Whether the antitrust laws condemn a mere refusal by a patent holder

to license its intellectual property has been raised repeatedly since 1995,

yet still has not been resolved in any uniform way b y the courts. Shortly

after the Guidelines were issued, the Ninth Circuit in Image Technical

Services v. Eastman Kodak Co.

1

affirmed a j udgment that Kodak was

liable under the antitrust laws for refusing to sell its patented parts to

independent service organizations t hat competed with the copier maker

in the service of its machines. The Ninth Circuit held that a jury was

entitled to reject the procompetitive business justification offered by

Kodak, and to find that the company did not actually base its refusal to

deal on its desire to protect its patent rights. In stark contrast, the Federal

Circuit, in its subsequent decision in In re Independent Service

Organizations Antitrust Litigation,

2

affirmed summary judgment in favor

of Xerox concerning a similar unlawful refusal to deal.

3

By denying the

subsequent petition for certiorari in the case against Xerox,

4

the U.S.

Supreme Court may have foreclosed any prospect of resolving this

conflict any time soon.

On the other hand, as of 2007, the Antitrust Division of the U.S.

Department of Justice (DOJ or the Division) and the Federal Trade

Commission (FTC or the Commission) appear to be of a single mind that

“liability for mere refusals to license will not play a meaningful part in

the interface between patent rights and antitrust protections.”

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1. 125 F.3d 1195, 1215 (9th Cir. 1997).

2. 203 F.3d 1322, 1327 (Fed. Cir. 2000).

3. See Chapter V.A for a discussion of the duty to license t hird parties.

4. CSU, L.L.C. v. Xerox Corp., 531 U.S. 1143 (200 1).

5. Antitrust Enforcement and Intellectual Property Rights: P romoting

Innovation and Competition at 23-24 [hereinafter 2 007 IP REPORT]; but