Subjective Intent in the Determination of Antitrust Violations by Patent Holders

Abstract:     
Recently, cases have questioned the antitrust liabilities of patentees who gain a competitive advantage in a second market due to their discriminatory selling practices in a patent-monopolized market, a process known as monopoly leveraging. Courts have accepted monopoly leveraging as a manner to break antitrust laws, but exactly what must be proven in a case where the monopoly is legally obtained through a patent is still subject to question. A circuit split exists as to what must be established for a valid Section 2 Sherman Act claim under a monopoly leveraging theory.

In Image Technical Serices v. Eastman Kodak, the Ninth Circuit held that a monopoly leveraging theory Sherman Act claim was actionable only if the plaintiff could rebut a presumption that the defendant had selectively withheld sales of patented goods for a valid business purpose (a question of the defendant's subjective intent). This article argues that case law and public policy both favor the Ninth Circuit's subjective intent test. Specifically, the Ninth Circuit's rule is consistent with prior antitrust case law because there is a significant history in antitrust jurisprudence of the consideration of an actor's subjective intent. Moreover, the alternative rules are improper because they render all prior case law on monopoly leveraging applied to patent holders to be a mere tautology.

Keywords: patent, antitrust, monopoly leveraging, Image Technical Serices v. Eastman Kodak, In re Independent Service Organizations Antitrust Litigation, discriminatory selling

Accepted Paper Series