Risk Management

High Court Seen Easing up on Antitrust

The Illinois Tool Works ruling could reportedly make it tougher for small companies to legally challenge well-known makers of patented products tha...
Stephen TaubMarch 2, 2006

A Supreme Court ruling issued on Wednesday could hurt small companies as well as further erode some of the 60-year old anti-trust rules, experts say.

The case involves the Trident unit of Illinois Tool Works. Although the unit has a patent for printheads—the part of a printer that spreads ink onto paper— it lacks one for the ink that goes in them, according to the Associated Press. The company, however, requires customers to buy its ink.

ITW was sued by Independent Ink Inc., which offers ink refills for Trident printheads. The company was sued on the grounds that it illegally was trying to dominate the ink market, according to the AP.

In an 8-0 decision, The High Court ordered a new round of consideration of the case in lower court, according to AP. Writing for the court, Justice John Paul Stevens, said that Independent Ink must show that ITW has market power, according to the wire service. “Congress, the antitrust enforcement agencies, and most economists have all reached the conclusion that a patent does not necessarily confer market power upon the patentee” he reportedly wrote. “Today, we reach the same conclusion.”

The ruling could make it tougher for small companies to legally challenge well-known makers of patented or copyrighted products that force their customers to also buy extra products from them, according to the Los Angeles Times.

The decision comes on the heels of two related rulings, according to The Wall Street Journal. The three cases are connected in that they underscore the Supreme Court’s movement away from bright-line rules that certain practices violate anti-trust rules, the paper contends.

Rather, the decisions suggest that the marketplace has become so complex that there’s a need for more fact-intensive reviews by lower courts before the courts should interfere in arrangements between sellers and buyers, the Journal noted.

In one of the cases, the High Court earlier this week rejected a lawsuit that claimed that a joint venture between Chevron and Shell Oil illegally inflated gasoline prices. In the second ruling, the court found in January that a truck maker’s practice of offering favorable pricing to selected dealers didn’t violate the Robinson-Patman Price Discrimination Act, according to the newspaper.