Intellectual Property

Christina Bohannan and Herbert Hovenkamp

The Federal Circuit recently issued a patent misuse decision that has implications for both innovation policy and antitrust law. Unilateral refusals to license intellectual property rights are virtually never antitrust violations, as is true of most unilateral refusals to deal. The Patent Act provides that a unilateral refusal to license cannot constitute patent “misuse,” which is a defense to an infringement suit based on the patentee’s anticompetitive acts, restraints on innovation, or improper sequestering of the public domain. Concerted refusals to deal are treated much more harshly under the antitrust laws because they can facilitate collusion or, in the case of technology, keep superior products or processes off the market.