Summary
Case note on the Federal Circuit’s ruling in the dispute over Philips’ licences for the CD standard. Acting on a complaint by Philips against imports of CDs, the US International Trade Commission held its patents unenforceable for misuse, finding that Philips illegally tied licences of non-essential patents to those essential to the standard. The Federal Circuit reversed: package licensing that does not require use of the non-essential technology is not illegal per se, and the Commission had overlooked its benefits, such as lower transaction costs. The court added that the presumption of market power does not apply to a patent tying defence, a point the note links to Independent Ink v Illinois Tool Works.
Reference
H. Haouideg, "No Patent Misuse Defense Against Tying of Essential and Non-Essential Patents Licenses", C.I.S. Packet, Stanford Center for Internet and Society, 2005, vol. 3, no. 1.