Misuse of Intellectual Property and Antitrust: A Gradual Reconciliation

Posted: 25 Oct 2005

See all articles by Jay Dratler

Jay Dratler

University of Akron - School of Law

Date Written: October 7, 2005

Abstract

For more than half a century, courts have viewed certain uses of intellectual property (IP) as misuse, rendering the IP unenforceable until the misuse is purged. The doctrine began with patents, but courts have recently extended it to copyrights. In most cases, it reflects concern over contractual restraints on competition. Yet if misuse doctrine aimed at competition is not consistent with antitrust principles, it can act at cross purposes to antitrust law. Accordingly, both Congress and the courts have worked to reconcile misuse with antitrust.

This paper reviews and analyzes that reconciliation and suggests where further work is needed. It divides misuse doctrine into four general categories: (1) attempts to extend the term of IP protection, (2) tying, (3) mandatory package licensing, and (4) attempts to circumvent intrinsic limitations of copyright. The first category is based largely on the Supreme Court's decision in Brulotte, which has been heavily criticized, makes little economic sense, and appears inconsistent with later decisions. Although still good law, this part of misuse doctrine therefore appears vulnerable to legal challenge. The second category of misuse doctrine is the best justified, because it protects the rights of third parties (those foreclosed from the tied market), who might not be aware of the source of their market foreclosure and who otherwise might not be able to compete. However, in the field of copyright it still requires judicial or legislative reconciliation with antitrust principles, of the sort that Congress provided for patents in 1988. The third category also requires reconciliation with antitrust analysis, which the Federal Circuit began to provide for patents in a 2005 decision. The fourth category of misuse doctrine is perhaps the most inconsistent with antitrust principles; it should be eliminated in favor of more precise analysis, under which offending provisions of copyright license agreements (rather than entire copyrights) might be declared unenforceable as in conflict with federal copyright law (and therefore pre-empted) or as invalid covenants not to compete.

Keywords: Misuse, antitrust, competition law, patent, copyright, reconciliation, tying, package licensing, contractual restraint, pre-emption

JEL Classification: K21, K40, K42, L12, L14, L40, L41, L42, O31

Suggested Citation

Dratler, Jay, Misuse of Intellectual Property and Antitrust: A Gradual Reconciliation (October 7, 2005). U of Akron Legal Studies Research Paper No. 05-22, Available at SSRN: https://ssrn.com/abstract=825564

Jay Dratler (Contact Author)

University of Akron - School of Law ( email )

150 University Ave.
Akron, OH 44325-2901
United States

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