Thursday, September 22, 2005
Overruling a finding of patent misuse by an ITC administrative law judge, the Federal Circuit upheld a patent pool arrangement involving Philips' CD-R and CD-RW technologies. More information can be found at Dennis Crouch's blog. The Fed Circuit's opinion discusses the limitations on patent misuse under 271(d), referring specifically to its Independent Ink decision last term (currently under review before the Supreme Court). In citing Independent Ink, the Fed Circuit reasoned that the presumption of market power in antitrust tying arrangement that arose from patent ownership did not extend to patent misuse. The Fed Circuit, furthermore, agreed with Philip's argument that it had not licensed "non-essential technologies" under its licensing scheme and held that the ALJ's reliance on the block booking cases (Loew's and Paramount) was not appropriate. Unlike Loew's and Paramount, Philips was not holding its licensees to an all or nothing offer. This case is one of the most important patent pooling cases in recent years.