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Independent Ink Lawsuit Reaches Supreme Court
An antitrust lawsuit originally filed in 2002 between Independent Ink, a distributor of printer ink products, and Illinois Tool Works Inc. and its wholly-owned subsidiary, Trident Inc., has reached the U.S. Supreme Court. The case, based on patent tying, is scheduled for hearing in November 2005.Patent tying, which is the practice of conditioning the use of a patented product (in this case a piezoelectric inkjet print head) on the customer’s purchase of a second non-patented product (ink). In the case, Trident and ITW are the patent holders of a print-head technology. Trident and ITW require their print-head customers to use only ink they supply. Independent Ink has alleged that this practice is illegal when the patent holders have market power in the patented product.
On June 18, 2002, a federal district judge in the southern district of California ruled Trident and ITW were not guilty of patent tying and dismissed Independent Ink’s case. Independent Ink appealed the decision, and on Jan. 25, 2005, an appellate court overturned the 2002 decision. The Court of Appeals for the Federal Circuit (CAFC) concluded that the existence of the patent in the print heads ITW was selling created a presumption of market power. Market power in the patented print heads makes the ink purchase requirement a violation of the Sherman Antitrust Act.
As explained by the court, “The essential characteristic of an invalid tying agreement lies in the seller’s exploitation of its control over the tying product to force the buyer into the purchase of a tied product that the buyer either did not want at all, or might have preferred to purchase elsewhere on different terms. When such ‘forcing’ is present, competition on the merits in the market for the tied item is restrained and the Sherman Act is violated.”
Trident and ITW also made claims that Independent Ink infringed their patent by selling ink that competed with Trident and ITW. The court previously ruled in favor of Independent Ink with regard to these claims. As a result, Trident and ITW could not assert that purchasers of Independent’s ink infringed their ink formula patents.
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