In United States patent law, patent misuse is a patent holder's use of a patent to restrain trade beyond enforcing the exclusive rights that a lawfully obtained patent provides. If a court finds that a patent holder committed patent misuse, the court may rule that the patent holder has lost the right to enforce the patent. Patent misuse that restrains economic competition substantially can also violate United States antitrust law.
Under the Noerr–Pennington doctrine, private entities are immune from liability under the antitrust laws for attempts to influence the passage or enforcement of laws, even if the laws they advocate for would have anticompetitive effects. The doctrine is grounded in the First Amendment protection of political speech, and "upon a recognition that the antitrust laws, 'tailored as they are for the business world, are not at all appropriate for application in the political arena.'"
Illinois Tool Works Inc. v. Independent Ink, Inc., 547 U.S. 28 (2006), was a case decided by the Supreme Court of the United States involving the application of U.S. antitrust law to "tying" arrangements of patented products. The Court ruled unanimously that there is not a presumption of market power under the Sherman Antitrust Act when the sale of a patented product is conditioned on the sale of a second product in a tying arrangement. A plaintiff alleging an antitrust violation must instead establish the defendant's market power in the patented product through evidence.
MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118 (2007), was a decision by the Supreme Court of the United States involving patent law. It arose from a lawsuit filed by MedImmune which challenged one of the Cabilly patents issued to Genentech. One of the central issues was whether a licensee retained the right to challenge a licensed patent, or whether this right was forfeited upon signing of the license agreement. The case related indirectly to past debate over whether the US should change to a first to file patent system - in 2011, President Obama signed the Leahy-Smith America Invents Act, which shifted the United States to a first-inventor-to-file patent system.
Cox v. New Hampshire, 312 U.S. 569 (1941), was a case in which the Supreme Court of the United States held that, although the government cannot regulate the contents of speech, it can place reasonable time, place, and manner restrictions on speech for the public safety. Here, the Court held that government may require organizers of any parade or procession on public streets to have a license and pay a fee.
General Talking Pictures Corp. v. Western Electric Co., 304 U.S. 175 (1938), was a case that the Supreme Court of the United States decided in 1938. The decision upheld so-called field-of-use limitations in patent licenses: it held that the limitations were enforceable in a patent infringement suit in federal court against the licensee and those acting in concert with it—for example, a customer that knowingly buys a patented product from the licensee that is outside the scope of the license.
Quanta Computer, Inc. v. LG Electronics, Inc., 553 U.S. 617 (2008), is a case decided by the United States Supreme Court in which the Court reaffirmed the validity of the patent exhaustion doctrine. The decision made uncertain the continuing precedential value of a line of decisions in the Federal Circuit that had sought to limit Supreme Court exhaustion doctrine decisions to their facts and to require a so-called "rule of reason" analysis of all post-sale restrictions other than tie-ins and price fixes. In the course of restating the patent exhaustion doctrine, the Court held that it is triggered by, among other things, an authorized sale of a component when the only reasonable and intended use of the component is to engage the patent and the component substantially embodies the patented invention by embodying its essential features. The Court also overturned, in passing, that the exhaustion doctrine was limited to product claims and did not apply to method claims.
Bond v. United States, 564 U.S. 211 (2011), is a decision by the Supreme Court of the United States that individuals, just like states, may have standing to raise Tenth Amendment challenges to a federal law.
FTC v. Actavis, Inc., 570 U.S. 136 (2013), was a United States Supreme Court decision in which the Court held that the FTC could make an antitrust challenge under the rule of reason against a so-called pay-for-delay agreement, also referred to as a reverse payment patent settlement. Such an agreement is one in which a drug patentee pays another company, ordinarily a generic drug manufacturer, to stay out of the market, thus avoiding generic competition and a challenge to patent validity. The FTC sought to establish a rule that such agreements were presumptively illegal, but the Court ruled only that the FTC could bring a case under more general antitrust principles permitting a defendant to assert justifications for its actions under the rule of reason.
Zenith Radio Corp. v. Hazeltine Research, Inc. is the caption of several United States Supreme Court patent–related decisions, the most significant of which is a 1969 patent–antitrust and patent–misuse decision concerning the levying of patent royalties on unpatented products.
Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917), is United States Supreme Court decision that is notable as an early example of the patent misuse doctrine. It held that, because a patent grant is limited to the invention described in the claims of the patent, the patent law does not empower the patent owner, by notices attached to the patented article, to extend the scope of the patent monopoly by restricting the use of the patented article to materials necessary for their operation but forming no part of the patented invention, or to place downstream restrictions on the articles making them subject to conditions as to use. The decision overruled The Button-Fastener Case, and Henry v. A.B. Dick Co., which had held such restrictive notices effective and enforceable.
United States v. Bell Telephone Co., 167 U.S. 224 (1897), is an 1897 decision of the United States Supreme Court that held that the United States lacked standing to challenge the validity of its issued patents “on the mere ground of error of judgment” in issuing them. The United States had standing to seek to invalidate patents, however, on grounds of fraudulent procurement and also as a defense to a charge of patent infringement. The decision operated for many decades as a bar to government efforts to seek invalidation of patents that it considered spurious until the Supreme Court limited Bell Telephone, first to a limited extent in United States v. United States Gypsum Co., and then more broadly in United States v. Glaxo Group Ltd.
United States v. Singer Mfg. Co., 374 U.S. 174 (1963), was a 1963 decision of the Supreme Court, holding that the defendant Singer violated the antitrust laws by conspiring with two European competitors to exclude Japanese sewing machine competition from the US market. Singer effectuated the conspiracy by agreeing with the two European competitors to broaden US patent rights and concentrate them under Sanger's control in order to more effectively exclude the Japanese firms. A further aspect of the conspiracy was to fraudulently procure a US patent and use it as an exclusionary tool. This was the first Supreme Court decision holding that exclusionary use of a fraudulently procured patent could be an element supporting an antitrust claim.
United States v. Motion Picture Patents Co., 225 F. 800, was a civil antitrust prosecution overlapping to some extent with the issues in the decision in the Supreme Court's Motion Picture Patents case. After the trial court found that the defendants violated §§ 1 and 2 of the Sherman Act by establishing control over "trade in films, cameras, projecting machines, and other accessories of the motion picture business," by their patent licensing practices and other conduct, they appealed to the Supreme Court. After the Supreme Court's 1917 decision in Motion Picture Patents Co. v. Universal Film Manufacturing Co., however, the parties dismissed the appeal by stipulation in 1918 that the decision had made the defendants' appeal futile.
United States v. Vehicular Parking Ltd. is a patent–antitrust case in which the United States Government eroded the doctrine of United States v. General Electric Co. permitting patentees to fix licensee prices, but failed to persuade the court to decree royalty-free licensing as a remedy.
United States v. United States Gypsum Co. was a patent–antitrust case in which the United States Supreme Court decided, first, in 1948, that a patent licensing program that fixed prices of many licensees and regimented an entire industry violated the antitrust laws, and then, decided in 1950, after a remand, that appropriate relief in such cases did not extend so far as to permit licensees enjoying a compulsory, reasonable–royalty license to challenge the validity of the licensed patents. The Court also ruled, in obiter dicta, that the United States had standing to challenge the validity of patents when a patentee relied on the patents to justify its fixing prices. It held in this case, however, that the defendants violated the antitrust laws irrespective of whether the patents were valid, which made the validity issue irrelevant.
Besser Mfg. Co. v. United States, 343 U.S. 444 (1951), is a 1951 patent–antitrust decision of the United States Supreme Court in which the Court upheld a ruling that the dominant U.S. manufacturer of concrete block–making machines violated the antitrust laws when it acquired its two principal competitors, bought important patents, made bad–faith threats of patent infringement suits, and entered into patent licensing agreements in which the parties were given veto powers over any prospective additional licensees. The Supreme Court approved the district court's grant of compulsory, reasonable–royalty licensing of the patents and compulsory sales of patented machines, holding that such relief "is a well–recognized remedy where patent abuses are proved in antitrust actions, and it is required for effective relief."
United States v. Line Material Co., 333 U.S. 287 (1948), is a decision of the United States Supreme Court limiting the doctrine of the 1926 General Electric decision, excusing price fixing in patent license agreements. The Line Material Court held that cross-licenses between two manufacturer competitors, providing for fixing the prices of the licensed products and providing that one of the manufacturers would license other manufacturers under the patents of each manufacturer, subject to similar price fixing, violated Sherman Act § 1. The Court further held that the licensees who, with knowledge of such arrangements, entered into the price-fixing licenses thereby became party to a hub-and-spoke conspiracy in violation of Sherman Act § 1.
Bulk-sale restrictions — also known as bulk-sale restraints, finished-form limitations and dosage-form limitations — are, as the term is used in United States antitrust case law, clauses in patent licenses that provide that the licensee shall make and sell the licensed product only in "finished pharmaceutical form" or "dosage form", not in bulk. Bulk form is the form in which drug chemicals are manufactured by chemical or other processes. These clauses are found primarily in pharmaceutical product licenses and are used to keep active drug ingredients out of the hands of generic manufacturers and price-cutters.
Hartford-Empire Co. v. United States, 323 U.S. 386 (1945), was a patent-antitrust case that the Government brought against a cartel in the glass container industry. The cartel, among other things, divided the fields of manufacture of glass containers, first, into blown glass and pressed glass, which was subdivided into: products made under the suction process, milk bottles, and fruit jars. The trial court found the cartel violative of the antitrust laws and the Supreme Court agreed that the market division and related conduct were illegal. The trial court required royalty-free licensing of present patents and reasonable royalty licensing of future patents. A divided Supreme Court reversed the requirement for royalty-free licensing as "confiscatory," but sustained the requirement for reasonable royalty licensing of the patents.
