Monday, October 18, 2004
Even though Verizon v. Trinko narrowly focuses on telecommunications law, the Supreme Court decision has implications for antitrust more broadly and for the intersection between antitrust and intellectual property specifically. Since the decision was handed down in January 2004, it has been cited almost 40 times by courts and administrative bodies. I am writing an article on one of these decisions, Morris v. PGA, decided by the 11th Circuit in April 2004.
At issue in the case is access to real time golf scores at PGA golf tournaments. The Eleventh Circuit dismissed the Section 2 claim, finding a valid business justification in the PGA's need to protect its investment in the creation of a real time scoring system. In its analysis, the court cited the following sentence from Justice Scalia's decision in Trinko:
“the Sherman Act...does not give judges carte blanche to insist that a monopolist alter its way of doing business whenever some other approach might yield greater competition.”
I comment as follows:
"What this statement means has been a source of controversy among commentators. On its face, the Court seems to be saying that the Sherman Act requires judges to defer to a monopolist's decision on how to structure a market, an interpretation at odds with the pro-competition purpose of the Act. A more limited reading of Trinko, one consistent with the antitrust laws, would deny judges carte blanche to second guess Congress’ decision on how to structure certain industries, such as telecommunications, as monopolies. The problem is that the Eleventh Circuit does second guess Congress’ judgments on the scope of the monopoly protection granted under intellectual property laws. By allowing PGA to protect real-time scores using a business justification analogous to that used for intellectual property, the Eleventh Circuit expands the scope of the intellectual property grant to include what Congress exempted: data."
In other words, the Eleventh Circuit's reliance on Trinko is inapposite. In Trinko, the Court was deferring to how Congress defined a monopoly market. In Morris, however, the court is expanding the boundaries of the IP monopoly in the name of deference.