Working Paper No. 08-01:
Spilled Ink or Economic Progress? The Supreme Court's Decision in Illinois Tool Works v. Independent Ink

Author(s):

Bruce Kobayashi

Date Posted: 2008

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Abstract:

This article examines the Supreme Court’s recent decision in Illinois Tool Works v. Independent Ink.  In that decision, the Court extended its remarkable run of pro-defendant decisions in antitrust cases, holding that plaintiffs in patent tying cases must prove and not presume market power.  The Court’s rejection of the presumption of market power in the presence of a patent, as well as a special per se rule of illegality for patent ties is consistent with the broad consensus that views patents as distinct from monopolies, and recognizes the pro-competitive uses of tying.  While this is a positive step, the Court’s decision may be limited by the flawed and outdated modified per se rule used to evaluate tying arrangements generally.  Moreover, while the Court undermined the underlying rationale for the modified per se rule against tying, it chose not to revisit this issue.  In addition, while the Court’s opinion implicitly adopts a robust standard for market power, it failed to address its contradictory holding in Kodak v. ITS, its most recent decision evaluating a tying arrangement.