Monday, October 31, 2005

Illinois Tools Works before Roberts court

James Dey says of Illinois Tool Works: The question for the Roberts Court boils down to deciding who has the burden of proof. Do first market manufacturers, like Illinois Tool Works, have to prove that they do not have market power if they want to enter such "tying" agreements even though a non-patent holder would not have to, or do the secondary market players, like those who want to supply ink for ITW printers, have to incur the substantial expense of proving that the manufacturer is likely to monopolize the secondary market? The answer to this narrow legal question will likely have a profound impact on the balance between first market product manufacturers and secondary market rivals.

The money issue is that a patentee (here, Illinois Tool Works) would like to require customers who purchase its patented product (here, printers) to agree to use only its non-patented products (here, ink). Competitive ink sellers contend that this arrangement is an abuse of Illinois Tool Works' printer patents that extends them to dominate the "market" for compatible ink.

Dey did not discuss the issue that the CAFC felt bound to follow precedent, which the CAFC may not have agreed with.

The Oct. 28 article also states:

The Senate has debated and confirmed John Roberts as the new Chief Justice of the United States and is now debating the nomination of Harriet Miers to fill Justice Sandra Day O'Connor's seat.

On Oct. 31, Samuel Alito was nominated to fill Justice O'Connor's seat. Alito noted: I argued my first case before the Supreme Court in 1982, and I still vividly recall that day. I remember the sense of awe that I felt when I stepped up to the lectern, and I also remember the relief that I felt when Justice O'Connor, sensing, I think, that I was a rookie, made sure that first question that I was asked was a kind one. He also said: Federal judges have the duty to interpret the Constitution and the laws faithfully and fairly, to protect the constitutional rights of all Americans, and to do these things with care and with restraint, always keeping in mind the limited role that the courts play in our constitutional system.

Also from James Dey:

For example, the Federal Trade Commission recently filed a petition to have the Supreme Court hear its challenge to a settlement agreement between patented drug maker Schering-Plough and the maker of a generic equivalent that had contested the validity of Schering-Plough's patents. In the agreement, Schering-Plough agreed to pay the generic drug manufacturer, which in turn agreed to stay out of the market for a specified period of time and to drop its effort to have Schering-Plough's patents declared invalid. The FTC argued that Schering-Plough was buying off competition and preserving otherwise invalid patents unlawfully. The Eleventh Circuit Court of Appeal disagreed and overruled the FTC's order invalidating the settlement agreement. Assuming the Court takes up this case, it will not only impact agreements between brand-named and generic drug makers, but will likely add to the body of law that has begun to shape the boundaries of permissible settlement agreements.


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