The Myth of Market Power: Why Market Power Should Not Be Presumed When Applying Antitrust Principles to the Analysis of Tying Agreements Involving Intellectual Property

Authors

Russell Lombardy

First Page

449

Document Type

Comment

Abstract

This Comment will illustrate one of the many tensions occurring at the fault line of intersection between intellectual property law and antitrust law. This tension derives from the presumption of market power as it has been applied by the courts to the ownership of property protected by intellectual property law. The area where the effects of this presumption are the most apparent is in antitrust litigation involving "tied" products. A policy that recognizes the differences between intellectual property and other forms of property as they pertain to antitrust law and competitiveness is needed. This Comment asserts that this policy should not use the assumption of market power in an antitrust analysis of tied products, but should use an economic market analysis based on the particular facts of the case at hand. Accordingly, this Comment will limit its scope to tying agreements that involve intellectual property as at least one of the products involved. To accomplish this goal, a brief overview of the relevant policy considerations that have shaped both intellectual property law and antitrust law will be discussed first. Since each of these two areas of the law is very mature, the overviews presented in this Comment will cover only the factors that are needed for an accurate understanding of the presumption of market power in an antitrust analysis of the ownership of intellectual property. Once this backdrop has been presented, the presumption of market power will be discussed and analyzed through case analysis. The series of cases that has established the traditional view that market power can be presumed with property protected by intellectual property law will be discussed. Additionally, the line of current cases that take a more modem view of this analysis will be presented and discussed. The differentiating factors in these two lines of cases will then be exposed and investigated. This Comment concludes and sides with the modem view that market power is not automatically conferred on the owner of intellectual property. The argument is made that market power can only be determined by an actual economic analysis of the anti- and pro-competitive aspects of the actual use and ownership of the specific piece of intellectual property. Additionally, it is argued that the exclusionary and protective benefits given by intellectual property law do not actually conflict with the underlying policy considerations of antitrust law since both bodies of the law benefit the public. Finally, this Comment argues that reform is needed in the application of antitrust law to the ownership of intellectual property. This reform would no longer use the outdated analysis of market forces to the ultimate detriment of the owners and developers of intellectual property and the public at large.

Recommended Citation

Russell Lombardy, The Myth of Market Power: Why Market Power Should Not Be Presumed When Applying Antitrust Principles to the Analysis of Tying Agreements Involving Intellectual Property, 8 St. Thomas L. Rev. 449 (1996).
Available at: https://scholarship.stu.edu/stlr/vol8/iss2/7