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New Antitrust Considerations for Tying Schemes

By Matthew W. Siegal and Bruce H. Schneider

The Supreme Court has recently abolished the presumption that a patent confers 'market power' on the patent owner, ending the presumption of antitrust liability arising from the conditioning of a patent license to the purchase of unpatented articles. See Illinois Tool Works v. Indep. Ink, Inc., 126 S. Ct. 1281 (2006). As discussed below, this decision will have wide-ranging implications to the field of patent licensing, where fear of antitrust liability has tended to dampen the creativity of patent license schemes.

Consider that your client, the CEO of the hypothetical Tie-Co Int'l, excitably arrives at your office, eager to talk about his new product. 'We've invented a new peach scent to go into children's lip gloss,' he tells you, 'it blows all other peach scents out of the water. I bet in a year or so, we have over 90% of the peach scent market for children's lip gloss.'

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