(Slip Opinion) OCTOBER TERM, 2005 1
Syllabus
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been
prepared by the Reporter of Decisions for the convenience of the reader.
See United States v. Detroit Timber & Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
ILLINOIS TOOL WORKS INC. ET AL. v. INDEPENDENT
INK, INC.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FEDERAL CIRCUIT
No. 04–1329. Argued November 29, 2005—Decided March 1, 2006
Petitioners manufacture and market printing systems that include a
patented printhead and ink container and unpatented ink, which
they sell to original equipment manufacturers who agree that they
will purchase ink exclusively from petitioners and that neither they
nor their customers will refill the patented containers with ink of any
kind. Respondent developed ink with the same chemical composition
as petitioners’ ink. After petitioner Trident’s infringement action
was dismissed, respondent filed suit seeking a judgment of nonin-
fringement and invalidity of Trident’s patents on the ground that pe-
titioners are engaged in illegal “tying” and monopolization in viola-
tion of §§1 and 2 of the Sherman Act. Granting petitioners summary
judgment, the District Court rejected respondent’s argument that pe-
titioners necessarily have market power as a matter of law by virtue
of the patent on their printhead system, thereby rendering the tying
arrangements per se violations of the antitrust laws. After carefully
reviewing this Court’s tying-arrangements decisions, the Federal Cir-
cuit reversed as to the §1 claim, concluding that it had to follow this
Court’s precedents until overruled by this Court.
Held: Because a patent does not necessarily confer market power upon
the patentee, in all cases involving a tying arrangement, the plaintiff
must prove that the defendant has market power in the tying prod-
uct. Pp. 3–17.
(a) Over the years, this Court’s strong disapproval of tying ar-
rangements has substantially diminished, as the Court has moved
from relying on assumptions to requiring a showing of market power
in the tying product. The assumption in earlier decisions that such
“arrangements serve hardly any purpose beyond the suppression of
2 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Syllabus
competition,” Standard Oil Co. of Cal. v. United States, 337 U. S. 293,
305–306, was rejected in United States Steel Corp. v. Fortner Enter-
prises, Inc., 429 U. S. 610, 622 (Fortner II), and again in Jefferson
Parish Hospital Dist. No. 2 v. Hyde, 466 U. S. 2, both of which in-
volved unpatented tying products. Nothing in Jefferson Parish sug-
gested a rebuttable presumption of market power applicable to tying
arrangements involving a patent on the tying good. Pp. 3–8.
(b) The presumption that a patent confers market power arose out-
side the antitrust context as part of the patent misuse doctrine, and
migrated to antitrust law in International Salt Co. v. United States,
332 U. S. 392. See also Morton Salt Co. v. G. S. Suppiger Co., 314
U. S. 488; United States v. Loew’s Inc., 371 U. S. 38. Pp. 8–10.
(c) When Congress codified the patent laws for the first time, it ini-
tiated the untwining of the patent misuse doctrine and antitrust ju-
risprudence. At the same time that this Court’s antitrust jurispru-
dence continued to rely on the assumption that tying arrangements
generally serve no legitimate business purpose, Congress began chip-
ping away at that assumption in the patent misuse context from
whence it came. Then, four years after Jefferson Parish repeated the
presumption that patents confer market power, Congress amended
the Patent Code to eliminate it in the patent misuse context. While
that amendment does not expressly refer to the antitrust laws, it in-
vites reappraisal of International Salt’s per se rule. After considering
the congressional judgment reflected in the amendment, this Court
concludes that tying arrangements involving patented products
should be evaluated under the standards of cases like Fortner II and
Jefferson Parish rather than the per se rule in Morton Salt and
Loew’s. Any conclusion that an arrangement is unlawful must be
supported by proof of power in the relevant market rather than by a
mere presumption thereof. Pp. 11–13.
(d) Respondent’s alternatives to retention of the per se rule—that
the Court endorse a rebuttable presumption that patentees possess
market power when they condition the purchase of the patented
product on an agreement to buy unpatented goods exclusively from
the patentee, or differentiate between tying arrangements involving
requirements ties and other types of tying arrangements—are re-
jected. Pp. 14–16.
(e) Because respondent reasonably relied on this Court’s prior opin-
ions in moving for summary judgment without offering evidence of
the relevant market or proving petitioners’ power within that mar-
ket, respondent should be given a fair opportunity to develop and in-
troduce evidence on that issue, as well as other relevant issues, when
the case returns to the District Court. P. 17.
396 F. 3d 1342, vacated and remanded.
Cite as: 547 U. S. ____ (2006) 3
Syllabus
STEVENS, J., delivered the opinion of the Court, in which all other
Members joined, except ALITO, J., who took no part in the consideration
or decision of the case.
Cite as: 547 U. S. ____ (2006) 1
Opinion of the Court
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
_________________
No. 04–1329
_________________
ILLINOIS TOOL WORKS INC., ET AL., PETITIONERS v.
INDEPENDENT INK, INC.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[March 1, 2006]
JUSTICE STEVENS delivered the opinion of the Court.
In Jefferson Parish Hospital Dist. No. 2 v. Hyde, 466
U. S. 2 (1984), we repeated the well-settled proposition
that “if the Government has granted the seller a patent or
similar monopoly over a product, it is fair to presume that
the inability to buy the product elsewhere gives the seller
market power.” Id., at 16. This presumption of market
power, applicable in the antitrust context when a seller
conditions its sale of a patented product (the “tying” prod-
uct) on the purchase of a second product (the “tied” prod-
uct), has its foundation in the judicially created patent
misuse doctrine. See United States v. Loew’s Inc., 371
U. S. 38, 46 (1962). In 1988, Congress substantially un-
dermined that foundation, amending the Patent Act to
eliminate the market power presumption in patent misuse
cases. See 102 Stat. 4674, codified at 35 U. S. C. §271(d).
The question presented to us today is whether the pre-
sumption of market power in a patented product should
survive as a matter of antitrust law despite its demise in
patent law. We conclude that the mere fact that a tying
product is patented does not support such a presumption.
2 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
I
Petitioners, Trident, Inc., and its parent, Illinois Tool
Works Inc., manufacture and market printing systems
that include three relevant components: (1) a patented
piezoelectric impulse ink jet printhead; (2) a patented ink
container, consisting of a bottle and valved cap, which
attaches to the printhead; and (3) specially designed, but
unpatented, ink. Petitioners sell their systems to original
equipment manufacturers (OEMs) who are licensed to
incorporate the printheads and containers into printers
that are in turn sold to companies for use in printing
barcodes on cartons and packaging materials. The OEMs
agree that they will purchase their ink exclusively from
petitioners, and that neither they nor their customers will
refill the patented containers with ink of any kind.
Respondent, Independent Ink, Inc., has developed an
ink with the same chemical composition as the ink sold by
petitioners. After an infringement action brought by
Trident against Independent was dismissed for lack of
personal jurisdiction, Independent filed suit against Tri-
dent seeking a judgment of noninfringement and invalid-
ity of Trident’s patents.1 In an amended complaint, it
alleged that petitioners are engaged in illegal tying and
monopolization in violation of §§1 and 2 of the Sherman
Act. 15 U. S. C. §§1, 2.
After discovery, the District Court granted petitioners’
motion for summary judgment on the Sherman Act claims.
Independent Ink, Inc. v. Trident, Inc., 210 F. Supp. 2d
1155, 1177 (CD Cal. 2002). It rejected respondent’s sub-
mission that petitioners “necessarily have market power
in the market for the tying product as a matter of law
solely by virtue of the patent on their printhead system,
thereby rendering [the] tying arrangements per se viola-
——————
1 Illinois Tool did not acquire Trident until February 19, 1999, ap-
proximately six months after this action commenced.
Cite as: 547 U. S. ____ (2006) 3
Opinion of the Court
tions of the antitrust laws.” Id., at 1159. Finding that
respondent had submitted no affirmative evidence defin-
ing the relevant market or establishing petitioners’ power
within it, the court concluded that respondent could not
prevail on either antitrust claim. Id., at 1167, 1173, 1177.
The parties settled their other claims, and respondent
appealed.
After a careful review of the “long history of Supreme
Court consideration of the legality of tying arrangements,”
396 F. 3d 1342, 1346 (2005), the Court of Appeals for the
Federal Circuit reversed the District Court’s decision as to
respondent’s §1 claim, id., at 1354. Placing special reli-
ance on our decisions in International Salt Co. v. United
States, 332 U. S. 392 (1947), and Loew’s, 371 U. S. 38, as
well as our Jefferson Parish dictum, and after taking note
of the academic criticism of those cases, it concluded that
the “fundamental error” in petitioners’ submission was its
disregard of “the duty of a court of appeals to follow the
precedents of the Supreme Court until the Court itself
chooses to expressly overrule them.” 396 F. 3d, at 1351.
We granted certiorari to undertake a fresh examination of
the history of both the judicial and legislative appraisals of
tying arrangements. 545 U. S. __ (2005). Our review is
informed by extensive scholarly comment and a change in
position by the administrative agencies charged with
enforcement of the antitrust laws.
II
American courts first encountered tying arrangements
in the course of patent infringement litigation. See, e.g.,
Heaton-Peninsular Button-Fastening Co. v. Eureka Spe-
cialty Co., 77 F. 288 (CA6 1896). Such a case came before
this Court in Henry v. A. B. Dick Co., 224 U. S. 1 (1912), in
which, as in the case we decide today, unpatented ink was
the product that was “tied” to the use of a patented product
through the use of a licensing agreement. Without com-
4 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
menting on the tying arrangement, the Court held that use
of a competitor’s ink in violation of a condition of the agree-
ment—that the rotary mimeograph “ ‘may be used only
with the stencil, paper, ink and other supplies made by A.
B. Dick Co.’ ”—constituted infringement of the patent on the
machine. Id., at 25–26. Chief Justice White dissented,
explaining his disagreement with the Court’s approval of a
practice that he regarded as an “attempt to increase the
scope of the monopoly granted by a patent . . . which tend[s]
to increase monopoly and to burden the public in the exer-
cise of their common rights.” Id., at 70. Two years later,
Congress endorsed Chief Justice White’s disapproval of
tying arrangements, enacting §3 of the Clayton Act. See 38
Stat. 731 (applying to “patented or unpatented” products);
see also Motion Picture Patents Co. v. Universal Film Mfg.
Co., 243 U. S. 502, 517–518 (1917) (explaining that, in light
of §3 of the Clayton Act, A. B. Dick “must be regarded as
overruled”). And in this Court’s subsequent cases reviewing
the legality of tying arrangements we, too, embraced Chief
Justice White’s disapproval of those arrangements. See,
e.g., Standard Oil Co. of Cal. v. United States, 337 U. S. 293,
305–306 (1949); Mercoid Corp. v. Mid-Continent Investment
Co., 320 U. S. 661, 664–665 (1944).
In the years since A. B. Dick, four different rules of law
have supported challenges to tying arrangements. They
have been condemned as improper extensions of the pat-
ent monopoly under the patent misuse doctrine, as unfair
methods of competition under §5 of the Federal Trade
Commission Act, 15 U. S. C. §45, as contracts tending to
create a monopoly under §3 of the Clayton Act, 15 U. S. C.
§13a, and as contracts in restraint of trade under §1 of the
Sherman Act.2 In all of those instances, the justification
——————
2 See, e.g., Jefferson Parish Hospital Dist. No. 2 v. Hyde, 466 U. S. 2, 9
(1984) (Sherman Act); Times-Picayune Publishing Co. v. United States,
345 U. S. 594, 609 (1953) (Federal Trade Commission Act); Interna-
Cite as: 547 U. S. ____ (2006) 5
Opinion of the Court
for the challenge rested on either an assumption or a
showing that the defendant’s position of power in the
market for the tying product was being used to restrain
competition in the market for the tied product. As we
explained in Jefferson Parish, 466 U. S., at 12, “[o]ur cases
have concluded that the essential characteristic of an
invalid tying arrangement 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 else-
where on different terms.”
Over the years, however, this Court’s strong disapproval
of tying arrangements has substantially diminished.
Rather than relying on assumptions, in its more recent
opinions the Court has required a showing of market
power in the tying product. Our early opinions consis-
tently assumed that “[t]ying arrangements serve hardly
any purpose beyond the suppression of competition.”
Standard Oil Co., 337 U. S., at 305–306. In 1962, in Loew’s,
371 U. S., at 47–48, the Court relied on this assumption
despite evidence of significant competition in the market for
the tying product. And as recently as 1969, Justice Black,
writing for the majority, relied on the assumption as sup-
port for the proposition “that, at least when certain prereq-
uisites are met, arrangements of this kind are illegal in and
of themselves, and no specific showing of unreasonable
competitive effect is required.” Fortner Enterprises, Inc. v.
United States Steel Corp., 394 U. S. 495, 498–499 (Fortner
I). Explaining the Court’s decision to allow the suit to pro-
ceed to trial, he stated that “decisions rejecting the need for
proof of truly dominant power over the tying product have
——————
tional Salt Co. v. United States, 332 U. S. 392, 395–396 (1947) (Clayton
Act and Sherman Act); Morton Salt Co. v. G. S. Suppiger Co., 314 U. S.
488, 494 (1942) (patent misuse); Motion Picture Patents Co. v. Universal
Film Mfg. Co., 243 U. S. 502, 516 (1917) (same).
6 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
all been based on a recognition that because tying arrange-
ments generally serve no legitimate business purpose that
cannot be achieved in some less restrictive way, the pres-
ence of any appreciable restraint on competition provides a
sufficient reason for invalidating the tie.” Id., at 503.
Reflecting a changing view of tying arrangements, four
Justices dissented in Fortner I, arguing that the chal-
lenged “tie”—the extension of a $2 million line of credit on
condition that the borrower purchase prefabricated houses
from the defendant—might well have served a legitimate
purpose. Id., at 510 (opinion of White, J.); id., at 520
(opinion of Fortas, J.). In his opinion, Justice White noted
that promotional tie-ins may provide “uniquely advanta-
geous deals” to purchasers. Id., at 519. And Justice For-
tas concluded that the arrangement was best character-
ized as “a sale of a single product with the incidental
provision of financing.” Id., at 522.
The dissenters’ view that tying arrangements may well
be procompetitive ultimately prevailed; indeed, it did so in
the very same lawsuit. After the Court remanded the suit
in Fortner I, a bench trial resulted in judgment for the
plaintiff, and the case eventually made its way back to
this Court. Upon return, we unanimously held that the
plaintiff’s failure of proof on the issue of market power was
fatal to its case—the plaintiff had proved “nothing more
than a willingness to provide cheap financing in order to
sell expensive houses.” United States Steel Corp. v.
Fortner Enterprises, Inc., 429 U. S. 610, 622 (1977)
(Fortner II).
The assumption that “[t]ying arrangements serve hardly
any purpose beyond the suppression of competition,”
rejected in Fortner II, has not been endorsed in any opin-
ion since. Instead, it was again rejected just seven years
later in Jefferson Parish, where, as in Fortner II, we
unanimously reversed a Court of Appeals judgment hold-
ing that an alleged tying arrangement constituted a per se
Cite as: 547 U. S. ____ (2006) 7
Opinion of the Court
violation of §1 of the Sherman Act. 466 U. S., at 5. Like the
product at issue in the Fortner cases, the tying product in
Jefferson Parish—hospital services—was unpatented, and
our holding again rested on the conclusion that the plaintiff
had failed to prove sufficient power in the tying product
market to restrain competition in the market for the tied
product—services of anesthesiologists. 466 U. S., at 28–29.
In rejecting the application of a per se rule that all tying
arrangements constitute antitrust violations, we
explained:
“[W]e have condemned tying arrangements when the
seller has some special ability—usually called ‘market
power’—to force a purchaser to do something that he
would not do in a competitive market. . . .
. . . . .
“Per se condemnation—condemnation without in-
quiry into actual market conditions—is only appropri-
ate if the existence of forcing is probable. Thus, appli-
cation of the per se rule focuses on the probability of
anticompetitive consequences. . . .
“For example, if the Government has granted the
seller a patent or similar monopoly over a product, it
is fair to presume that the inability to buy the product
elsewhere gives the seller market power. United
States v. Loew’s Inc., 371 U. S., at 45–47. Any effort
to enlarge the scope of the patent monopoly by using
the market power it confers to restrain competition in
the market for a second product will undermine com-
petition on the merits in that second market. Thus,
the sale or lease of a patented item on condition that
the buyer make all his purchases of a separate tied
product from the patentee is unlawful.” Id., at 13–16
(footnote omitted).
Notably, nothing in our opinion suggested a rebuttable
presumption of market power applicable to tying ar-
8 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
rangements involving a patent on the tying good. See
infra, at 14; cf. 396 F. 3d, at 1352. Instead, it described the
rule that a contract to sell a patented product on condition
that the purchaser buy unpatented goods exclusively from
the patentee is a per se violation of §1 of the Sherman Act.
Justice O’Connor wrote separately in Jefferson Parish,
concurring in the judgment on the ground that the case did
not involve a true tying arrangement because, in her view,
surgical services and anesthesia were not separate prod-
ucts. 466 U. S., at 43. In her opinion, she questioned not
only the propriety of treating any tying arrangement as a
per se violation of the Sherman Act, id., at 35, but also the
validity of the presumption that a patent always gives the
patentee significant market power, observing that the
presumption was actually a product of our patent misuse
cases rather than our antitrust jurisprudence, id., at 37–
38, n. 7. It is that presumption, a vestige of the Court’s
historical distrust of tying arrangements, that we address
squarely today.
III
Justice O’Connor was, of course, correct in her assertion
that the presumption that a patent confers market power
arose outside the antitrust context as part of the patent
misuse doctrine. That doctrine had its origins in Motion
Picture Patents Co. v. Universal Film Mfg. Co., 243 U. S.
502 (1917), which found no support in the patent laws for
the proposition that a patentee may “prescribe by notice
attached to a patented machine the conditions of its use
and the supplies which must be used in the operation of it,
under pain of infringement of the patent,” id., at 509.
Although Motion Picture Patents Co. simply narrowed the
scope of possible patent infringement claims, it formed the
basis for the Court’s subsequent decisions creating a pat-
ent misuse defense to infringement claims when a pat-
entee uses its patent “as the effective means of restraining
Cite as: 547 U. S. ____ (2006) 9
Opinion of the Court
competition with its sale of an unpatented article.” Mor-
ton Salt Co. v. G. S. Suppiger Co., 314 U. S. 488, 490
(1942); see also, e.g., Carbice Corp. of America v. American
Patents Development Corp., 283 U. S. 27, 31 (1931).
Without any analysis of actual market conditions, these
patent misuse decisions assumed that, by tying the pur-
chase of unpatented goods to the sale of the patented good,
the patentee was “restraining competition,” Morton Salt,
314 U. S., at 490, or “secur[ing] a limited monopoly of an
unpatented material,” Mercoid, 320 U. S., at 664; see also
Carbice, 283 U. S., at 31–32. In other words, these deci-
sions presumed “[t]he requisite economic power” over the
tying product such that the patentee could “extend [its]
economic control to unpatented products.” Loew’s, 371
U. S., at 45–46.
The presumption that a patent confers market power
migrated from patent law to antitrust law in International
Salt Co. v. United States, 332 U. S. 392 (1947). In that
case, we affirmed a District Court decision holding that
leases of patented machines requiring the lessees to use
the defendant’s unpatented salt products violated §1 of the
Sherman Act and §3 of the Clayton Act as a matter of law.
Id., at 396. Although the Court’s opinion does not discuss
market power or the patent misuse doctrine, it assumes
that “[t]he volume of business affected by these contracts
cannot be said to be insignificant or insubstantial and the
tendency of the arrangement to accomplishment of mo-
nopoly seems obvious.” Ibid.
The assumption that tying contracts “ten[d] . . . to ac-
complishment of monopoly” can be traced to the Govern-
ment’s brief in International Salt, which relied heavily on
our earlier patent misuse decision in Morton Salt. The
Government described Morton Salt as “present[ing] a
factual situation almost identical with the instant case,”
and it asserted that “although the Court in that case did
not find it necessary to decide whether the antitrust laws
10 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
were violated, its language, its reasoning, and its citations
indicate that the policy underlying the decision was the
same as that of the Sherman Act.” Brief for United States
in International Salt Co. v. United States, O. T. 1947, No.
46, p. 19 (United States Brief). Building on its assertion
that International Salt was logically indistinguishable
from Morton Salt, the Government argued that this Court
should place tying arrangements involving patented prod-
ucts in the category of per se violations of the Sherman
Act. United States Brief 26–33.
Our opinion in International Salt clearly shows that we
accepted the Government’s invitation to import the pre-
sumption of market power in a patented product into our
antitrust jurisprudence. While we cited Morton Salt only
for the narrower proposition that the defendant’s patents
did not confer any right to restrain competition in unpat-
ented salt or afford the defendant any immunity from the
antitrust laws, International Salt, 332 U. S., at 395–396,
given the fact that the defendant was selling its unpat-
ented salt at competitive prices, id., at 396–397, the rule
adopted in International Salt necessarily accepted the
Government’s submission that the earlier patent misuse
cases supported the broader proposition “that this type of
restraint is unlawful on its face under the Sherman Act,”
United States Brief 12.
Indeed, later in the same Term we cited International
Salt for the proposition that the license of “a patented
device on condition that unpatented materials be em-
ployed in conjunction with the patented device” is an
example of a restraint that is “illegal per se.” United
States v. Columbia Steel Co., 334 U. S. 495, 522–523, and n.
22 (1948). And in subsequent cases we have repeatedly
grounded the presumption of market power over a patented
device in International Salt. See, e.g., Loew’s, 371 U. S., at
45–46; Times-Picayune Publishing Co. v. United States,
345 U. S. 594, 608 (1953); Standard Oil Co., 337 U. S., at
304.
Cite as: 547 U. S. ____ (2006)
11
Opinion of the Court
IV
Although the patent misuse doctrine and our antitrust
jurisprudence became intertwined in International Salt,
subsequent events initiated their untwining. This process
has ultimately led to today’s reexamination of the pre-
sumption of per se illegality of a tying arrangement involv-
ing a patented product, the first case since 1947 in which
we have granted review to consider the presumption’s
continuing validity.
Three years before we decided International Salt, this
Court had expanded the scope of the patent misuse doc-
trine to include not only supplies or materials used by a
patented device, but also tying arrangements involving a
combination patent and “unpatented material or [a] device
[that] is itself an integral part of the structure embodying
the patent.” Mercoid, 320 U. S., at 665; see also Dawson
Chemical Co. v. Rohm & Haas Co., 448 U. S. 176, 188–198
(1980) (describing in detail Mercoid and the cases leading
up to it). In reaching this conclusion, the Court explained
that it could see “no difference in principle” between cases
involving elements essential to the inventive character of
the patent and elements peripheral to it; both, in the
Court’s view, were attempts to “expan[d] the patent be-
yond the legitimate scope of its monopoly.” Mercoid, 320
U. S., at 665.
Shortly thereafter, Congress codified the patent laws for
the first time. See 66 Stat. 792, codified as 35 U. S. C. §1
et seq. (2000 ed. and Supp. III). At least partly in response
to our Mercoid decision, Congress included a provision in
its codification that excluded some conduct, such as a
tying arrangement involving the sale of a patented prod-
uct tied to an “essential” or “nonstaple” product that has
no use except as part of the patented product or method,
from the scope of the patent misuse doctrine. §271(d); see
also Dawson, 448 U. S., at 214. Thus, at the same time
that our antitrust jurisprudence continued to rely on the
12 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
assumption that “tying arrangements generally serve no
legitimate business purpose,” Fortner I, 394 U. S., at 503,
Congress began chipping away at the assumption in the
patent misuse context from whence it came.
It is Congress’ most recent narrowing of the patent
misuse defense, however, that is directly relevant to this
case. Four years after our decision in Jefferson Parish
repeated the patent–equals–market–power presumption,
466 U. S., at 16, Congress amended the Patent Code to
eliminate that presumption in the patent misuse context,
102 Stat. 4674. The relevant provision reads:
“(d) No patent owner otherwise entitled to relief for in-
fringement or contributory infringement of a patent
shall be denied relief or deemed guilty of misuse or il-
legal extension of the patent right by reason of his
having done one or more of the following: . . . (5) con-
ditioned the license of any rights to the patent or the
sale of the patented product on the acquisition of a li-
cense to rights in another patent or purchase of a
separate product, unless, in view of the circumstances,
the patent owner has market power in the relevant
market for the patent or patented product on which the
license or sale is conditioned.” 35 U. S. C. §271(d)(5)
(emphasis added).
The italicized clause makes it clear that Congress did not
intend the mere existence of a patent to constitute the
requisite “market power.” Indeed, fairly read, it provides
that without proof that Trident had market power in the
relevant market, its conduct at issue in this case was nei-
ther “misuse” nor an “illegal extension of the patent right.”
While the 1988 amendment does not expressly refer to
the antitrust laws, it certainly invites a reappraisal of the
per se rule announced in International Salt.3 A rule deny-
——————
3 While our opinions have made clear that such an invitation is not
Cite as: 547 U. S. ____ (2006) 13
Opinion of the Court
ing a patentee the right to enjoin an infringer is signifi-
cantly less severe than a rule that makes the conduct at
issue a federal crime punishable by up to 10 years in
prison. See 15 U. S. C. §1. It would be absurd to assume
that Congress intended to provide that the use of a patent
that merited punishment as a felony would not constitute
“misuse.” Moreover, given the fact that the patent misuse
doctrine provided the basis for the market power pre-
sumption, it would be anomalous to preserve the presump-
tion in antitrust after Congress has eliminated its founda-
tion. Cf. 10 P. Areeda, H. Hovenkamp, & E. Elhauge,
Antitrust Law ¶1737c (2d ed. 2004) (hereinafter Areeda).
After considering the congressional judgment reflected
in the 1988 amendment, we conclude that tying arrange-
ments involving patented products should be evaluated
under the standards applied in cases like Fortner II and
Jefferson Parish rather than under the per se rule applied
in Morton Salt and Loew’s. While some such arrange-
ments are still unlawful, such as those that are the prod-
uct of a true monopoly or a marketwide conspiracy, see,
e.g., United States v. Paramount Pictures, Inc., 334 U. S.
131, 145–146 (1948), that conclusion must be supported by
proof of power in the relevant market rather than by a
mere presumption thereof.4
——————
necessary with respect to cases arising under the Sherman Act, see
State Oil Co. v. Khan, 522 U. S. 3, 20 (1997), it is certainly sufficient to
warrant reevaluation of our precedent, id., at 21 (“[T]his Court has
reconsidered its decisions construing the Sherman Act when the
theoretical underpinnings of those decisions are called into serious
question”).
4 Our imposition of this requirement accords with the vast majority of
academic literature on the subject. See, e.g., 10 Areeda ¶1737a
(“[T]here is no economic basis for inferring any amount of market power
from the mere fact that the defendant holds a valid patent”); Burchfiel,
Patent Misuse and Antitrust Reform: “Blessed be the Tie?” 4 Harv. J. L.
& Tech. 1, 57, and n. 340 (noting that the market power presumption
has been extensively criticized and citing sources); 1 H. Hovenkamp, M.
14 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
V
Rather than arguing that we should retain the rule of
per se illegality, respondent contends that we should en-
dorse a rebuttable presumption that patentees possess
market power when they condition the purchase of the
patented product on an agreement to buy unpatented
goods exclusively from the patentee. Cf. supra, at 7–8.
Respondent recognizes that a large number of valid pat-
ents have little, if any, commercial significance, but sub-
mits that those that are used to impose tying arrange-
ments on unwilling purchasers likely do exert significant
market power. Hence, in respondent’s view, the presump-
tion would have no impact on patents of only slight value
and would be justified, subject to being rebutted by evi-
dence offered by the patentee, in cases in which the patent
has sufficient value to enable the patentee to insist on
acceptance of the tie.
Respondent also offers a narrower alternative, suggest-
ing that we differentiate between tying arrangements
involving the simultaneous purchase of two products that
are arguably two components of a single product—such as
the provision of surgical services and anesthesiology in the
same operation, Jefferson Parish, 466 U. S., at 43
(O’Connor, J., concurring in judgment), or the licensing of
one copyrighted film on condition that the licensee take a
package of several films in the same transaction, Loew’s,
371 U. S. 38—and a tying arrangement involving the
purchase of unpatented goods over a period of time, a so-
called “requirements tie.” See also Brief for Barry Nale-
buff et al. as Amici Curiae. According to respondent, we
should recognize a presumption of market power when
——————
Janis, & M. Lemley, IP and Antitrust §4.2a (2005 Supp.) (“[C]overage of
one’s prodcut with an intellectual property right does not confer a
monopoly”); W. Landes & R. Posner, The Economic Structure of Intel-
lectual Property Law 374 (2003) (hereinafter Landes & Posner).
Cite as: 547 U. S. ____ (2006) 15
Opinion of the Court
faced with the latter type of arrangements because they
provide a means for charging large volume purchasers a
higher royalty for use of the patent than small purchasers
must pay, a form of discrimination that “is strong evidence
of market power.” Brief for Respondent 27; see generally
Jefferson Parish, 466 U. S., at 15, n. 23 (discussing price
discrimination of this sort and citing sources).
The opinion that imported the “patent equals market
power” presumption into our antitrust jurisprudence,
however, provides no support for respondent’s proposed
alternative. In International Salt, it was the existence of
the patent on the tying product, rather than the use of a
requirements tie, that led the Court to presume market
power. 332 U. S., at 395 (“The appellant’s patents confer a
limited monopoly of the invention they reward”). More-
over, the requirements tie in that case did not involve any
price discrimination between large volume and small
volume purchasers or evidence of noncompetitive pricing.
Instead, the leases at issue provided that if any competitor
offered salt, the tied product, at a lower price, “the lessee
should be free to buy in the open market, unless appellant
would furnish the salt at an equal price.” Id., at 396.
As we have already noted, the vast majority of academic
literature recognizes that a patent does not necessarily
confer market power. See n. 4, supra. Similarly, while
price discrimination may provide evidence of market
power, particularly if buttressed by evidence that the
patentee has charged an above-market price for the tied
package, see, e.g., 10 Areeda ¶1769c, it is generally recog-
nized that it also occurs in fully competitive markets, see,
e.g., Baumol & Swanson, The New Economy and Ubiqui-
tous Competitive Price Discrimination: Identifying Defen-
sible Criteria of Market Power, 70 Antitrust L. J. 661, 666
(2003); 9 Areeda ¶1711; Landes & Posner 374–375. We
are not persuaded that the combination of these two fac-
tors should give rise to a presumption of market power
16 ILLINOIS TOOL WORKS INC. v. INDEPENDENT INK, INC.
Opinion of the Court
when neither is sufficient to do so standing alone. Rather,
the lesson to be learned from International Salt and the
academic commentary is the same: Many tying arrange-
ments, even those involving patents and requirements
ties, are fully consistent with a free, competitive market.
For this reason, we reject both respondent’s proposed
rebuttable presumption and their narrower alternative.
It is no doubt the virtual consensus among economists
that has persuaded the enforcement agencies to reject the
position that the Government took when it supported the
per se rule that the Court adopted in the 1940’s. See
supra, at 8. In antitrust guidelines issued jointly by the
Department of Justice and the Federal Trade Commission
in 1995, the enforcement agencies stated that in the exer-
cise of their prosecutorial discretion they “will not pre-
sume that a patent, copyright, or trade secret necessarily
confers market power upon its owner.” U. S. Dept. of
Justice and FTC, Antitrust Guidelines for the Licensing of
Intellectual Property §2.2 (Apr. 6, 1995), available at
http://www.usdoj.gov/atr/public/guidelines/0558.pdf (as
visited Feb. 24, 2006, and available in Clerk of Court’s
case file). While that choice is not binding on the Court, it
would be unusual for the Judiciary to replace the normal
rule of lenity that is applied in criminal cases with a rule
of severity for a special category of antitrust cases.
Congress, the antitrust enforcement agencies, and most
economists have all reached the conclusion that a patent
does not necessarily confer market power upon the pat-
entee. Today, we reach the same conclusion, and therefore
hold that, in all cases involving a tying arrangement, the
plaintiff must prove that the defendant has market power
in the tying product.
VI
In this case, respondent reasonably relied on our prior
opinions in moving for summary judgment without offer-
Cite as: 547 U. S. ____ (2006) 17
Opinion of the Court
ing evidence defining the relevant market or proving that
petitioners possess power within it. When the case re-
turns to the District Court, respondent should therefore be
given a fair opportunity to develop and introduce evidence
on that issue, as well as any other issues that are relevant
to its remaining §1 claims. Accordingly, the judgment of
the Court of Appeals is vacated, and the case is remanded
for further proceedings consistent with this opinion.
It is so ordered.
JUSTICE ALITO took no part in the consideration or
decision of this case.