Antitrust fosters innovation better than patents – stronger rule enforcement.

The patent misuse doctrine alone is an inadequate response to anticompetitive tying arrangements. Patent misuse is only a defense, not a cause of action, and the targets and victims of such misuse do not have any affirmative claim for damages under patent law.161 Consequently, patent misuse can neither disgorge ill-gotten gains (and thus deter misuse by making it unprofitable), nor provide compensation to those who suffered from the anticompetitive effect created outside the scope of the patent. Furthermore, the patent misuse doctrine allows a patentee to retain and enforce its patent so long as the anticompetitive conduct is stopped. While courts have not spoken with a single voice on the matter, some have held that ―if the unlawful practice has been abandoned and the consequences of the improper exploitation have been dissipated, the misuse is considered ‗purged,‘ and the owner‘s right to enforce the patent revives.‖162 This imposes a temporary cost, because the patentee cannot recover against infringers during the period in which the misuse occurred. It remains possible that, depending on the amount of infringement damages sacrificed, the amount of money gained by tying may outweigh the expected losses. If so, patent misuse doctrine may insufficiently deter anticompetitive moves that may hurt innovation.

Antitrust takes a different approach in dealing with tying arrangements. Instead of providing a defense and simply removing the patentee‘s ability to collect damages, antitrust allows the targets and victims of tying arrangements to collect damages from the patentee. In this way, consumers and competitors who suffer antitrust injury as a result of the tie-in are compensated. Furthermore, because damages are trebled, the antitrust approach is more likely to disgorge any ill-gotten gains earned through the tie-in. Finally, the successful plaintiff in an antitrust suit will receive its attorneys‘ fees and reasonable costs.163 Even if the infringement defendant prevails on its patent misuse defense, it will ordinarily be responsible for its own litigation costs. Thus, even if the defendant wins on a patent claim, it is worse off than if the misuse had never occurred. On some level, the relationship between patent misuse and antitrust law remains unclear. Some courts describe the patent misuse doctrine as ―a method of limiting abuse of patent rights separate from the antitrust laws.‖164 Others describe them as coextensive.165

Antitrust is what gives teeth to the patent misuse doctrine. In those instances when patent misuse does not rise to the level of an antitrust violation, the patent becomes unenforceable, but no damages attach for any injuries caused by the misuse. But this raises the question: if the patentee has misused in a manner that is unenforceable, why should those firms and individuals who suffered injury caused by the misuse not have a right to compensation? Patent law does not provide one; antitrust law does.

D. Summary

Absent effective antitrust enforcement, several forms of patent abuse might be viewed as cost-beneficial. These include enforcing invalid patents, bringing frivolous litigation against non-infringing competitors, entering into anticompetitive cross- licensing agreements, committing patent fraud, engaging in tying (contractual or technological), and exercising patent rights in a manner beyond the scope of the patent. All of these patent abuses undermine innovation. Patent law, however, cannot respond adequately to these forms of misconduct because it is not fundamentally designed to police and punish patent holders; rather, it focuses primarily on policing and punishing infringers.

Because patent holders may engage in conduct that improperly suppresses innovation, and patent law does not sufficiently constrain such behavior, decision makers who care about innovation should move toward antitrust. All of the above misdeeds inflict traditional antitrust injury—higher prices, reduced output, and the illegitimate exclusion of efficient competitors—as well as harm to innovation, which antitrust cares about as well. Effective antitrust enforcement need not interfere with patent policy; it reinforces the goals of the patent system.