Refusals to License Intellectual Property After Trinko

Abstract:     
Refusals to license intellectual property (IP) present one of the thorniest issues in antitrust law. Such activity is privileged under the IP regime, the foundation of which is the right to exclude. But it may be punished under antitrust law, which focuses on competition. The courts have promulgated a number of inconsistent tests in determining whether IP refusals to license constitute monopolization. They have granted absolute immunity to the patentee, applied various rebuttable presumptions, and examined whether an essential facility was denied.

Throughout this disarray, the Supreme Court has stayed on the sidelines. But the decision of Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, L.L.P. (Trinko), which addressed a telephone company's refusal to share its network with rivals, provides a range of clues as to how the Court would treat IP refusals to license.

In this short symposium piece, I analyze six elements of the Trinko opinion that shed light on the Court's likely treatment of such conduct. In particular, I examine the Court's general themes of the benefits of monopoly power, the dangers of sharing, and the costs of antitrust, and specific treatment of claims addressing refusals to deal, essential facilities, and monopoly leveraging.

I conclude that the Court's likely deference to IP refusals to license would support lower court cases proffering immunity and not support intent-based rebuttable presumptions or essential facility approaches. In short, Trinko will make it more difficult for plaintiffs to challenge IP refusals to license.

Number of Pages in PDF File: 20

Keywords: Trinko, refusals to license, monopolization, intellectual property, telecommunications

JEL Classification: K11, K21, L12, L40, L41, L50, L96, O34

Accepted Paper Series