The Misuse Doctrine-Law and Policy

The misuse doctrine protects against conduct that impermissibly
extends intellectual property rights beyond their lawful scope. Such
conduct can create harm in at least two ways. First, it may reduce
competition in a particular market—typically by foreclosing the rights
holder’s rivals from competing. Second, it can undermine the goals of
intellectual property policy by allowing a rights holder to withhold
statutorily intended public benefits from other innovators or the public at
large. Consistent with these concerns, the misuse doctrine has roots in
both intellectual property and antitrust principles. Courts applying the
misuse doctrine, and Congress in defining the scope of the doctrine, have
drawn on both.
However, some courts and commentators have suggested that misuse
should be evaluated under antitrust principles and condemned only in
cases where harm to competition is proved.1 They have argued that to the
extent misuse and antitrust have common goals, it makes sense for courts
to use antitrust principles to screen permissible uses of intellectual
property from impermissible misuse.
Others have suggested that such a screen may be too limiting; barring
an intellectual property rights holder from extending its rights beyond the
granted patent, copyright, or trademark has benefits beyond preserving
competition. Commentators have argued that antitrust standards do not
adequately address the types of harm that misuse is intended to prevent
and misuse should be employed to vindicate intellectual property goals
such as promoting innovation.2 Courts applying the much younger
1. USM Corp. v. SPS Techs., 694 F.2d 505 (7th Cir. 1982); Princo Corp. v.
ITC, 616 F.3d 1318 (Fed. Cir. 2010) (en banc); Mark Lemley, The
Economic Irrationality of the Patent Misuse Doctrine, 78 CAL. L. REV.
1599 (1990). Thomas Cotter, Four Questionable Rationales for the Patent
Misuse Doctrine, 12 MINN. J. L. SCI. & TECH. 457 (2011) goes so far as to
question the need for patent misuse beyond the application of antitrust,
while conceding the need for copyri ght misuse.
2. Robin Feldman, The In sufficiency of Antitrust Analysis for Patent Misuse,
55 HASTINGS L.J. 399 (2003); Christine Bohannon, IP Misuse As
Foreclosure, 96 IOWA L. REV. 476 (2010).
240 Intellectual Property Misuse
doctrine of copyright misuse generally have not required anticompetitive
effects to find challenged conduct to be misuse.
This chapter describes the role the misuse doctrine plays in promoting
intellectual property policy and its goals. It also explores the intersections
between the goals of intellectual property protection and the antitrust
principles that the courts have historically brought to bear on misuse. It
concludes that the modern misuse doctrine continues to be defined by
intellectual property policy principles as well as antitrust law,
notwithstanding the trend in the Federal Circuit of greater use of antitrust
principles in reviewing patent misuse challenges.
A. The Economic Policy Goals of Intellectual Property Protection
The U.S. Constitution authorizes Congress to confer private
intellectual property rights “for limited times” to authors and inventors
“to promote the progress of science and useful arts.”3 Such rights spur
innovation that may not arise from private incentives alone. Innovation is
important because it is the driving force for economic growth.4 The need
for policy to influence incentives for innovation arises because knowledge
is a public (non-rival) good. Once a particular piece of knowledge has
been discovered or created, the information can be used by others without
any reduction in quantity or quality.5
3. U.S. Const. art. I, § 8, cl. 8 (“To promote the progress of science and useful
arts, by securing for li mited times to author s and inventors the excl usive
right to their respective writings and discoveries.”); Eldred v. Ashcroft,
537 U.S. 186, 199 (2003) (construing the “Limited Times” portion of the
4. Robert Solow, “Technical Change and the Aggregate Production
Function,” The Review of Economics and Statistics, Vol. 39, No. 3 (Aug.
1957), pp. 312-320.
5. As Arnold Plant noted in his classic work:
“It is a peculiarity of property rights in patents (and copyrights) that they
do not arise out of the scarcity of the objects which become
appropriated. They are not a consequence of scarcity. They are the
deliberate creation of statute law; and, whereas in general the institution
of private property makes for the preservation of scarce goods, tending
(as we might somewhat loosely say) to lead us "to make the most of
them," property rights in patents and copyright make p ossible the
creation of a scarcity of the products appropriated which could not
otherwise be maintained. Whereas we might expect that public action
concerning private property would normally be directed at the

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