Illinois Tool Works Inc. v. Independent Ink, Inc.

Background

A company that makes printing systems with a patented printhead and patented ink container sold systems bundled with unpatented ink and required equipment makers to buy ink only from them and not refill containers. A rival developed the same ink. After an infringement suit was dismissed for lack of jurisdiction, the rival sued claiming the sellers’ rules were illegal tying and monopolization under the Sherman Act. The District Court granted the sellers summary judgment because the rival offered no market-definition or market-power evidence. The Federal Circuit reversed on the tying claim and this Court then agreed to review the legal rule involved.

Reasoning

The Court examined whether owning a patent automatically proves market power for antitrust tying claims. It concluded that a patent by itself does not prove market power and that plaintiffs must show actual power in the relevant market. The Court relied on changes in patent law, including a 1988 Congressional amendment that removed a similar presumption in patent misuse cases, and on more recent antitrust decisions that require proof rather than assumptions. The Court rejected proposals to create a new rebuttable presumption or to treat “requirements” ties differently without market evidence.

Real world impact

The decision means companies cannot win tying claims merely by showing they own a patent; plaintiffs must define the market and present evidence of market power. The case is not a final decision on the facts here; the Court vacated the appeals court judgment and sent the case back so the rival can try to develop and introduce market evidence in the trial court.

Dissents or concurrances

Justice O’Connor previously noted the presumption’s origins in patent law, and Justice Alito did not participate in this case.