The Treatment of Specific Licensing Issues

A. Duty to License Third Parties
The Patent Act and Copyright Act afford intellectual property
owners the basic right to exclude others from their inventions and
The Guidelines, however, are less than definitive on one of the
most fundamental questions relating to the application of the antitrust
laws to intellectual property: under what circumstances a unilateral
refusal to license some or all of an intellectual property owner’s rights
can violate the antitrust laws.
The Guidelines state that even where intellectual property confers
market power , s uch market power does not “impose on the intellectual
1. With regard to patents, see generally Dawson Chem. Co. v. Rohm &
Haas Co., 448 U.S. 176, 215 (1980) (the “essence” of the p atent grant is
the “right to exclude others from profiting by the pate nted invention”);
Zenith Radio Corp. v. Hazeltine Research, 395 U.S. 100, 135 (1969) (the
“heart of [the patentee’s] legal monopoly is the right to in voke the State’s
power to prevent others from utilizing his discovery without his
consent”); Hartford-Empire Co. v. United States, 323 U.S. 386, 432
(1945) (“A patent owner is not in the position of a qua si-trustee for the
public or under any obligation to see that the public acq uires the free right
to use the invention. He has no obligation either to use it or to grant its
use to others.”), clarified, 324 U.S. 570 (1945); E thyl Gasoline Corp. v.
United States, 309 U.S. 436, 457 (1940) (hold ing that a patent owner has
a legal “right to refuse to sell . . . [its] patented p roducts”); Continental
Paper Bag Co. v. Eastern Paper Bag Co., 210 U .S. 405, 429 (1908)
(holding that exclusion of competitors is “the ver y essence of the right
conferred by the patent”). With regard to cop yrights, see generally
Stewart v. Abend, 495 U.S. 207, 228-29 (1990) (noting that “nothing in
the copyright statutes would prevent an author fro m hoarding all of his
works during the term of the copyright” and that “a cop yright owner has
the capacity arbitrarily to refuse to license one who see ks to exploit the
work”); Fox Film Corp. v. Doyal, 286 U.S. 123, 12 7 (1932) (“The owner
of the copyright, if he pleases, may refrain fro m vending or licensing and
content himself with simply exercising the right to e xclude others from
using his property.”).
74 Intellectual Property Guidelines Origins and Ap plications
property owner an obligation to license the use of that property to
The Guidelines add, however, that: “As in other antitrust
contexts, . . . market power could be illegally acquired or maintained, or,
even if lawfully acquired and maintained, would be relevant to the ability
of an intellectual property owner to harm competition through
unreasonable conduct in connection with such property.”
reservation, together with General Principle 1, which provides that “for
the purpose of antitrust analysis, the Agencies regard intellectual
property as being essentially comparable to any ot her form of property,”
leave open the possibility that, under certain limited circumstances, the
enforcement agencies will treat a unilateral refusal to deal i n intellectual
property as a violation of the antitrust laws.
The Agencies’ Approach to Unilateral Refusals to License
The Antitrust Division of the U.S. Department of Justice (DOJ or the
Division) enforcement activities since the Guidelines were issued do not
indicate with any precision the circumstances under which it views
unilateral license refusals as unlawful. When the DOJ sued General
Electric Company (GE), challenging GE’s policies for the licensing of
diagnostic software for its medical imaging equipment, it did not claim
that GE was obligated to license its software to its competitors—a claim
that, as discussed below, has formed the basis for numerous private
antitrust actions.
More recently, the DOJ suggested in a brief filed in
2. U.S. Dep’t of Justice & Fed. Trade Comm’n, Antitrus t Guidelines for the
Licensing of Intellectual Property § 2.2 (1995) [hereinafter
Trade Reg. Rep. (CCH) ¶ 13,132 and Appendix A to thi s book.
3. Id.
4. Id. § 2.0.
5. See, e.g., Aspen Skiing Co. v. Aspen Highlands Skiin g Corp., 472 U. S.
585 (1985) (ski operator’s discontinuation of jo int marketing arrangement
with a smaller competitor constituted monopolization); Lorain Journal
Co. v. United States, 342 U.S. 143 (1951) (newspap er’s refusal to deal
with competitor’s customers constituted monopo lization); but cf.
JUSTICE at 8-9 (suggesting possible liability for a mere refusal to license).
6. See United States v. General Elec. Co., 63 Fed . Reg. 40,737, 40,740 (DO J
1998) (Proposed Final Judgment and Competitive I mpact Statement:
“The Complaint did not allege that GE’s refusal to lice nse its intellectual
Special Issues Associated With Standard-Setting Organizations 75
United States v. Microsoft Corp.
that unilateral refusals to license are
not always lawful,
and made the same point in its brief urging the U.S.
Supreme Court to deny the petition for certiorari in In re Independent
Service Organizations Antitrust Litigation.
The position of the Federal T rade Commission (FTC or the
Commission), similarly, has not been set forth precisely. In a decision
issued before the release of the Guidelines, the FTC rejected the
argument that a monopolist has a general duty to license patents because
“imposition of a duty to lice nse might serve to chill the very kind of
innovative process that led to [the respondent’s] cost advantage.”
Subsequently, in In the Matter of Intel Corp.,
the FTC challenged Intel
Corporation’s (Intel’s) refusal to provide advance technical information
about future microprocessors t o three customers that had asserted patent
claims against Intel, allegedly in order to extract an intellectual property
license. Although a decision in private litigation addressing the same
conduct characterized Intel’s conduct as a refusal to license intellectual
the FTC did not characterize the withheld information as
patented or copyrighted, and stated that the decree “does not impose any
property to any or all persons who might seek such lice nses violated the
antitrust laws, and the Final Judgment is silent as to that c onduct.”).
7. United States v. Microsoft Corp., 87 F. Supp. 2d 30 (D.D.C. 2000), aff’d
in part and rev’d in part, 253 F.3d 34 (D.C. Cir. 2 001), cert. denied, 122
S. Ct. 350 (2001).
8. See Plaintiffs’ Joint Reply to Microsoft’s Propo sed Conclusions of Law,
United States v. Microsoft, No. 98-1232, at 27-28 (D.D.C. filed Jan. 25,
2000) (“Even in the context of refusals to license, let alo ne in the less
difficult context of anticompetitive license restrictions (li ke those at issue
here), intellectual property defenses to conduct that violate s the antitrust
laws have been rejected.”), available at htm.
9. See Brief for the United States as Amicus Curiae, CSU, L.L.C. v. Xerox
Corp., No. 00-62 (filed January 2001) (“we do not b elieve the Federal
Circuit’s decision must be read as holding that no Section 2 claim may
ever be based on the unilateral refusal to sell or license such intellectual
property”), available at 000/2pet/
10. E.I. duPont de Nemours & Co., 96 F.T.C. 653, 74 8 (1980).
11. No. 9288 (FTC June 8, 1998) (complaint).
12. See Intergraph Corp. v. Intel Corp., 195 F.3d 1 346, 1362-63 (Fed. Cir.

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