Illinois Tool Works, Inc. v. Independent Ink, Inc.

OPINION OF THE COURT ILLINOIS TOOL WORKS INC. V. INDEPENDENT INK, INC. 547 U. S. ____ (2006) SUPREME COURT OF THE UNITED STATES NO. 04-1329 ILLINOIS TOOL WORKS INC., et al., PETITIONERS v. INDEPENDENT INK, INC.

															on writ of certiorari to the united states court of
appeals for the federal circuit

															[March 1, 2006]

															   Justice Stevens delivered the
opinion of the Court.

															   In Jefferson Parish Hospital
Dist. No. 2 v. Hyde , 466 U. S. 2 (1984), we repeated the
well-settled proposition that “if the Government has granted the
seller a patent or similar monopoly over a product, it is fair to
presume that the inability to buy the product elsewhere gives the
seller market power.” Id ., at 16. This presumption of
market power, applicable in the antitrust context when a seller
conditions its sale of a patented product (the “tying” product) on
the purchase of a second product (the “tied” product), has its
foundation in the judicially created patent misuse doctrine. See United States v. Loew’s Inc. , 371 U.
S. 38 , 46 (1962). In 1988, Congress substantially undermined
that foundation, amending the Patent Act to eliminate the market
power presumption in patent misuse cases. See 102 Stat. 4674,
codified at 35 U. S. C. §271(d). The question presented to us
today is whether the presumption of market power in a patented
product should survive as a matter of antitrust law despite its
demise in patent law. We conclude that the mere fact that a tying
product is patented does not support such a presumption.

															I

															   Petitioners, Trident, Inc., and
its parent, Illinois Tool Works Inc., manufacture and market
printing systems that include three relevant components: (1) a
patented piezoelectric impulse ink jet printhead; (2) a patented
ink container, consisting of a bottle and valved cap, which
attaches to the printhead; and (3) specially designed, but
unpatented, ink. Petitioners sell their systems to original
equipment manufacturers (OEMs) who are licensed to incorporate the
printheads and containers into printers that are in turn sold to
companies for use in printing barcodes on cartons and packaging
materials. The OEMs agree that they will purchase their ink
exclusively from petitioners, and that neither they nor their
customers will refill the patented containers with ink of any
kind.

															   Respondent, Independent Ink,
Inc., has developed an ink with the same chemical composition as
the ink sold by petitioners. After an infringement action brought
by Trident against Independent was dismissed for lack of personal
jurisdiction, Independent filed suit against Trident seeking a
judgment of noninfringement and invalidity of Trident’s
patents.[ Footnote 1 ] In an
amended complaint, it alleged that petitioners are engaged in
illegal tying and monopolization in violation of §§1 and 2 of the
Sherman Act. 15 U. S. C. §§1, 2.

															   After discovery, the District Court granted
petitioners’ motion for summary judgment on the Sherman Act claims. Independent Ink, Inc. v. Trident, Inc. , 210
F. Supp. 2d 1155, 1177 (CD Cal. 2002). It rejected
respondent’s submission that petitioners “necessarily have market
power in the market for the tying product as a matter of law solely
by virtue of the patent on their printhead system, thereby
rendering [the] tying arrangements per se violations of
the antitrust laws.” Id ., at 1159. Finding that respondent
had submitted no affirmative evidence defining the relevant market
or establishing petitioners’ power within it, the court concluded
that respondent could not prevail on either antitrust claim. Id ., at 1167, 1173, 1177. The parties settled their other
claims, and respondent appealed.

															   After a careful review of the “long history of
Supreme Court consideration of the legality of tying arrangements,”
396 F. 3d 1342, 1346 (2005), the Court of Appeals for the Federal
Circuit reversed the District Court’s decision as to respondent’s
§1 claim, id ., at 1354. Placing special reliance on our
decisions in International Salt Co. v. United
States , 332
U. S. 392 (1947), and Loew’s , 371 U.
S. 38 , as well as our Jefferson Parish dictum, and
after taking note of the academic criticism of those cases, it
concluded that the “fundamental error” in petitioners’ submission
was its disregard of “the duty of a court of appeals to follow the
precedents of the Supreme Court until the Court itself chooses to
expressly overrule them.” 396 F. 3d, at 1351. We granted
certiorari to undertake a fresh examination of the history of both
the judicial and legislative appraisals of tying arrangements. 545
U. S. __ (2005). Our review is informed by extensive scholarly
comment and a change in position by the administrative agencies
charged with enforcement of the antitrust laws.

															II

															   American courts first encountered
tying arrangements in the course of patent infringement litigation.
See, e.g. , Heaton-Peninsular Button-Fastening Co. v. Eureka Specialty Co. , 77 F. 288 (CA6 1896). Such a case
came before this Court in Henry v. A. B. Dick
Co., 224 U. S.
1 (1912), in which, as in the case we decide today, unpatented
ink was the product that was “tied” to the use of a patented
product through the use of a licensing agreement. Without
commenting on the tying arrangement, the Court held that use of a
competitor’s ink in violation of a condition of the agreement—that
the rotary mimeograph “ ‘may be used only with the stencil,
paper, ink and other supplies made by A. B. Dick
Co.’ ”—constituted infringement of the patent on the machine. Id ., at 25–26. Chief Justice White dissented, explaining
his disagreement with the Court’s approval of a practice that he
regarded as an “attempt to increase the scope of the monopoly
granted by a patent . . . which tend[s] to increase monopoly and to
burden the public in the exercise of their common rights.” Id ., at 70. Two years later, Congress endorsed Chief
Justice White’s disapproval of tying arrangements, enacting §3 of
the Clayton Act. See 38 Stat. 731 (applying to “patented or
unpatented” products); see also Motion Picture Patents Co. v. Universal Film Mfg. Co. , 243
U. S. 502 , 517–518 (1917) (explaining that, in light of §3 of
the Clayton Act, A. B. Dick “must be regarded as
overruled”). And in this Court’s subsequent cases reviewing the
legality of tying arrangements we, too, embraced Chief Justice
White’s disapproval of those arrangements. See, e.g. , Standard Oil Co. of Cal. v. United States , 337 U. S. 293 ,
305–306 (1949); Mercoid Corp. v. Mid-Continent
Investment Co. , 320 U. S. 661 , 664–665
(1944).

															   In the years since A. B.
Dick , four different rules of law have supported challenges to
tying arrangements. They have been condemned as improper extensions
of the patent monopoly under the patent misuse doctrine, as unfair
methods of competition under §5 of the Federal Trade Commission
Act, 15 U. S. C. §45, as contracts tending to create a
monopoly under §3 of the Clayton Act, 15 U. S. C. §13a, and as
contracts in restraint of trade under §1 of the Sherman
Act.[ Footnote 2 ] In all of
those instances, the justification for the challenge rested on
either an assumption or a showing that the defendant’s position of
power in the market for the tying product was being used to
restrain competition in the market for the tied product. As we
explained in Jefferson Parish , 466 U. S., at 12, “[o]ur
cases have concluded that the essential characteristic of an
invalid tying arrangement lies in the seller’s exploitation of its
control over the tying product to force the buyer into the purchase
of a tied product that the buyer either did not want at all, or
might have preferred to purchase elsewhere on different terms.”

															   Over the years, however, this Court’s strong
disapproval of tying arrangements has substantially diminished.
Rather than relying on assumptions, in its more recent opinions the
Court has required a showing of market power in the tying product.
Our early opinions consistently assumed that “[t]ying arrangements
serve hardly any purpose beyond the suppression of competition.” Standard Oil Co. , 337 U. S., at 305–306. In 1962, in Loew’s , 371 U. S., at 47–48, the Court relied on this
assumption despite evidence of significant competition in the
market for the tying product. And as recently as 1969, Justice
Black, writing for the majority, relied on the assumption as
support for the proposition “that, at least when certain
prerequisites are met, arrangements of this kind are illegal in and
of themselves, and no specific showing of unreasonable competitive
effect is required.” Fortner Enterprises, Inc. v. United States Steel Corp. , 394 U. S. 495 , 498–499 (Fortner I) . Explaining the Court’s decision to allow the
suit to proceed to trial, he stated that “decisions rejecting the
need for proof of truly dominant power over the tying product have
all been based on a recognition that because tying arrangements
generally serve no legitimate business purpose that cannot be
achieved in some less restrictive way, the presence of any
appreciable restraint on competition provides a sufficient reason
for invalidating the tie.” Id ., at 503.

															   Reflecting a changing view of tying
arrangements, four Justices dissented in Fortner I ,
arguing that the challenged “tie”—the extension of a $2 million
line of credit on condition that the borrower purchase
prefabricated houses from the defendant—might well have served a
legitimate purpose. Id ., at 510 (opinion of White, J.); id. , at 520 (opinion of Fortas, J.). In his opinion,
Justice White noted that promotional tie-ins may provide “uniquely
advantageous deals” to purchasers. Id ., at 519. And
Justice Fortas concluded that the arrangement was best
characterized as “a sale of a single product with the incidental
provision of financing.” Id ., at 522.

															   The dissenters’ view that tying arrangements
may well be procompetitive ultimately prevailed; indeed, it did so
in the very same lawsuit. After the Court remanded the suit in Fortner I , a bench trial resulted in judgment for the
plaintiff, and the case eventually made its way back to this Court.
Upon return, we unanimously held that the plaintiff’s failure of
proof on the issue of market power was fatal to its case—the
plaintiff had proved “nothing more than a willingness to provide
cheap financing in order to sell expensive houses.” United
States Steel Corp. v. Fortner Enterprises, Inc. , 429 U. S. 610 ,
622 (1977) (Fortner II) .

															   The assumption that “[t]ying arrangements
serve hardly any purpose beyond the suppression of competition,”
rejected in Fortner II , has not been endorsed in any
opinion since. Instead, it was again rejected just seven years
later in Jefferson Parish , where, as in Fortner
II , we unanimously reversed a Court of Appeals judgment
holding that an alleged tying arrangement constituted a per
se violation of §1 of the Sherman Act. 466 U. S., at 5. Like
the product at issue in the Fortner cases, the tying
product in Jefferson Parish —hospital services—was
unpatented, and our holding again rested on the conclusion that the
plaintiff had failed to prove sufficient power in the tying product
market to restrain competition in the market for the tied
product—services of anesthesiologists. 466 U. S., at 28–29.

															   In rejecting the application of a per
se rule that all tying arrangements constitute antitrust
violations, we explained:

															“[W]e have condemned tying arrangements when the
seller has some special ability—usually called ‘market power’—to
force a purchaser to do something that he would not do in a
competitive market. . . .

															.     .     .     .     .

															   “ Per se condemnation—condemnation
without inquiry into actual market conditions—is only appropriate
if the existence of forcing is probable. Thus, application of the per se rule focuses on the probability of anticompetitive
consequences. . . .

															“For example, if the Government has granted the seller a patent
or similar monopoly over a product, it is fair to presume that the
inability to buy the product elsewhere gives the seller market
power. United States v. Loew’s Inc. , 371 U. S.,
at 45–47. Any effort to enlarge the scope of the patent monopoly by
using the market power it confers to restrain competition in the
market for a second product will undermine competition on the
merits in that second market. Thus, the sale or lease of a patented
item on condition that the buyer make all his purchases of a
separate tied product from the patentee is unlawful.” Id .,
at 13–16 (footnote omitted).

															Notably, nothing in our opinion suggested a
rebuttable presumption of market power applicable to tying
arrangements involving a patent on the tying good. See infra , at 14; cf. 396 F. 3d, at 1352. Instead, it
described the rule that a contract to sell a patented product on
condition that the purchaser buy unpatented goods exclusively from
the patentee is a per se violation of §1 of the Sherman
Act.

															   Justice O’Connor wrote separately in Jefferson Parish , concurring in the judgment on the ground
that the case did not involve a true tying arrangement because, in
her view, surgical services and anesthesia were not separate
products. 466 U. S., at 43. In her opinion, she questioned not only
the propriety of treating any tying arrangement as a per
se violation of the Sherman Act, id ., at 35, but also
the validity of the presumption that a patent always gives the
patentee significant market power, observing that the presumption
was actually a product of our patent misuse cases rather than our
antitrust jurisprudence, id ., at 37–38, n. 7. It is
that presumption, a vestige of the Court’s historical distrust of
tying arrangements, that we address squarely today.

															III

															   Justice O’Connor was, of course,
correct in her assertion that the presumption that a patent confers
market power arose outside the antitrust context as part of the
patent misuse doctrine. That doctrine had its origins in Motion
Picture Patents Co. v. Universal Film Mfg. Co. , 243
U. S. 502 (1917), which found no support in the patent laws for
the proposition that a patentee may “prescribe by notice attached
to a patented machine the conditions of its use and the supplies
which must be used in the operation of it, under pain of
infringement of the patent,” id ., at 509. Although Motion Picture Patents Co. simply narrowed the scope of
possible patent infringement claims, it formed the basis for the
Court’s subsequent decisions creating a patent misuse defense to
infringement claims when a patentee uses its patent “as the
effective means of restraining competition with its sale of an
unpatented article.” Morton Salt Co. v. G. S. Suppiger
Co., 314 U. S. 488 , 490 (1942); see also, e.g. , Carbice Corp. of America v. American
Patents Development Corp. , 283 U. S. 27 , 31
(1931).

															   Without any analysis of actual
market conditions, these patent misuse decisions assumed that, by
tying the purchase of unpatented goods to the sale of the patented
good, the patentee was “restraining competition,” Morton
Salt , 314 U. S., at 490, or “secur[ing] a limited monopoly of
an unpatented material,” Mercoid , 320 U. S., at 664; see
also Carbice , 283 U. S., at 31–32. In other words, these
decisions presumed “[t]he requisite economic power” over the tying
product such that the patentee could “extend [its] economic control
to unpatented products.” Loew’s , 371 U. S., at 45–46.

															   The presumption that a patent confers market
power migrated from patent law to antitrust law in International Salt Co. v. United States, 332
U. S. 392 (1947). In that case, we affirmed a District Court
decision holding that leases of patented machines requiring the
lessees to use the defendant’s unpatented salt products violated §1
of the Sherman Act and §3 of the Clayton Act as a matter of law. Id. , at 396. Although the Court’s opinion does not discuss
market power or the patent misuse doctrine, it assumes that “[t]he
volume of business affected by these contracts cannot be said to be
insignificant or insubstantial and the tendency of the arrangement
to accomplishment of monopoly seems obvious.” Ibid .

															   The assumption that tying contracts “ten[d] …
to accomplishment of monopoly” can be traced to the Government’s
brief in International Salt , which relied heavily on our
earlier patent misuse decision in Morton Salt . The
Government described Morton Salt as “present[ing] a
factual situation almost identical with the instant case,” and it
asserted that “although the Court in that case did not find it
necessary to decide whether the antitrust laws were violated, its
language, its reasoning, and its citations indicate that the policy
underlying the decision was the same as that of the Sherman Act.”
Brief for United States in International Salt Co. v. United States , O. T. 1947, No. 46, p. 19 (United States
Brief). Building on its assertion that International Salt was logically indistinguishable from Morton Salt , the
Government argued that this Court should place tying arrangements
involving patented products in the category of per se violations of the Sherman Act. United States Brief 26–33.

															   Our opinion in International Salt clearly shows that we accepted the Government’s invitation to
import the presumption of market power in a patented product into
our antitrust jurisprudence. While we cited Morton Salt only for the narrower proposition that the defendant’s patents did
not confer any right to restrain competition in unpatented salt or
afford the defendant any immunity from the antitrust laws, International Salt , 332 U. S., at 395–396, given the fact
that the defendant was selling its unpatented salt at competitive
prices, id ., at 396–397, the rule adopted in International Salt necessarily accepted the Government’s
submission that the earlier patent misuse cases supported the
broader proposition “that this type of restraint is unlawful on its
face under the Sherman Act,” United States Brief 12.

															   Indeed, later in the same Term we cited International Salt for the proposition that the license of
“a patented device on condition that unpatented materials be
employed in conjunction with the patented device” is an example of
a restraint that is “illegal per se .” United
States v. Columbia Steel Co. , 334 U. S. 495 , 522–523,
and n. 22 (1948). And in subsequent cases we have repeatedly
grounded the presumption of market power over a patented device in International Salt . See, e.g. , Loew ’ s , 371 U. S., at 45–46; Times-Picayune
Publishing Co. v. United States , 345 U. S. 594 , 608 (1953); Standard Oil Co. , 337 U. S., at 304.

															IV

															   Although the patent misuse
doctrine and our antitrust jurisprudence became intertwined in International Salt , subsequent events initiated their
untwining. This process has ultimately led to today’s reexamination
of the presumption of per se illegality of a tying
arrangement involving a patented product, the first case since 1947
in which we have granted review to consider the presumption’s
continuing validity.

															   Three years before we decided International Salt , this Court had expanded the scope of
the patent misuse doctrine to include not only supplies or
materials used by a patented device, but also tying arrangements
involving a combination patent and “unpatented material or [a]
device [that] is itself an integral part of the structure embodying
the patent.” Mercoid , 320 U. S., at 665; see also Dawson Chemical Co. v. Rohm & Haas Co. , 448 U. S. 176 ,
188–198 (1980) (describing in detail Mercoid and the cases
leading up to it). In reaching this conclusion, the Court explained
that it could see “no difference in principle” between cases
involving elements essential to the inventive character of the
patent and elements peripheral to it; both, in the Court’s view,
were attempts to “expan[d] the patent beyond the legitimate scope
of its monopoly.” Mercoid , 320 U. S., at 665.

															   Shortly thereafter, Congress codified the
patent laws for the first time. See 66 Stat. 792, codified as 35 U.
S. C. §1 et seq . (2000 ed. and Supp. III). At least
partly in response to our Mercoid decision, Congress
included a provision in its codification that excluded some
conduct, such as a tying arrangement involving the sale of a
patented product tied to an “essential” or “nonstaple” product that
has no use except as part of the patented product or method, from
the scope of the patent misuse doctrine. §271(d); see also Dawson , 448 U. S., at 214. Thus, at the same time that our
antitrust jurisprudence continued to rely on the assumption that
“tying arrangements generally serve no legitimate business
purpose,” Fortner I , 394 U. S., at 503, Congress began
chipping away at the assumption in the patent misuse context from
whence it came.

															   It is Congress’ most recent narrowing of the
patent misuse defense, however, that is directly relevant to this
case. Four years after our decision in Jefferson Parish repeated the patent–equals–market–power presumption, 466 U. S., at
16, Congress amended the Patent Code to eliminate that presumption
in the patent misuse context, 102 Stat. 4674. The relevant
provision reads:

															“(d) No patent owner otherwise entitled to relief
for infringement or contributory infringement of a patent shall be
denied relief or deemed guilty of misuse or illegal extension of
the patent right by reason of his having done one or more of the
following: … (5) conditioned the license of any rights to the
patent or the sale of the patented product on the acquisition of a
license to rights in another patent or purchase of a separate
product, unless, in view of the circumstances, the patent owner
has market power in the relevant market for the patent or patented
product on which the license or sale is conditioned .” 35 U.
S. C. §271(d)(5) (emphasis added).

															The italicized clause makes it clear that Congress
did not intend the mere existence of a patent to constitute the
requisite “market power.” Indeed, fairly read, it provides that
without proof that Trident had market power in the relevant market,
its conduct at issue in this case was neither “misuse” nor an
“illegal extension of the patent right.”

															   While the 1988 amendment does not expressly
refer to the antitrust laws, it certainly invites a reappraisal of
the per se rule announced in International
Salt .[ Footnote 3 ] A rule
denying a patentee the right to enjoin an infringer is
significantly less severe than a rule that makes the conduct at
issue a federal crime punishable by up to 10 years in prison. See
15 U. S. C. §1. It would be absurd to assume that Congress
intended to provide that the use of a patent that merited
punishment as a felony would not constitute “misuse.” Moreover,
given the fact that the patent misuse doctrine provided the basis
for the market power presumption, it would be anomalous to preserve
the presumption in antitrust after Congress has eliminated its
foundation. Cf. 10 P. Areeda, H. Hovenkamp, & E. Elhauge,
Antitrust Law ¶1737c (2d ed. 2004) (hereinafter Areeda).

															   After considering the congressional judgment
reflected in the 1988 amendment, we conclude that tying
arrangements involving patented products should be evaluated under
the standards applied in cases like Fortner II and Jefferson Parish rather than under the per se rule applied in Morton Salt and Loew’s . While
some such arrangements are still unlawful, such as those that are
the product of a true monopoly or a marketwide conspiracy, see, e.g. , United States v. Paramount Pictures,
Inc. , 334 U. S.
131 , 145–146 (1948), that conclusion must be supported by proof
of power in the relevant market rather than by a mere presumption
thereof.[ Footnote 4 ]

															V

															   Rather than arguing that we
should retain the rule of per se illegality, respondent
contends that we should endorse a rebuttable presumption that
patentees possess market power when they condition the purchase of
the patented product on an agreement to buy unpatented goods
exclusively from the patentee. Cf. supra , at 7–8.
Respondent recognizes that a large number of valid patents have
little, if any, commercial significance, but submits that those
that are used to impose tying arrangements on unwilling purchasers
likely do exert significant market power. Hence, in respondent’s
view, the presumption would have no impact on patents of only
slight value and would be justified, subject to being rebutted by
evidence offered by the patentee, in cases in which the patent has
sufficient value to enable the patentee to insist on acceptance of
the tie.

															   Respondent also offers a narrower alternative,
suggesting that we differentiate between tying arrangements
involving the simultaneous purchase of two products that are
arguably two components of a single product—such as the provision
of surgical services and anesthesiology in the same operation, Jefferson Parish , 466 U. S., at 43 (O’Connor, J.,
concurring in judgment), or the licensing of one copyrighted film
on condition that the licensee take a package of several films in
the same transaction, Loew’s , 371 U.
S. 38 —and a tying arrangement involving the purchase of
unpatented goods over a period of time, a so-called “requirements
tie.” See also Brief for Barry Nalebuff et al. as Amici
Curiae . According to respondent, we should recognize a
presumption of market power when faced with the latter type of
arrangements because they provide a means for charging large volume
purchasers a higher royalty for use of the patent than small
purchasers must pay, a form of discrimination that “is strong
evidence of market power.” Brief for Respondent 27; see generally Jefferson Parish , 466 U. S., at 15, n. 23 (discussing
price discrimination of this sort and citing sources).

															   The opinion that imported the “patent equals
market power” presumption into our antitrust jurisprudence,
however, provides no support for respondent’s proposed alternative.
In International Salt , it was the existence of the patent
on the tying product, rather than the use of a requirements tie,
that led the Court to presume market power. 332 U. S., at 395 (“The
appellant’s patents confer a limited monopoly of the invention they
reward”). Moreover, the requirements tie in that case did not
involve any price discrimination between large volume and small
volume purchasers or evidence of noncompetitive pricing. Instead,
the leases at issue provided that if any competitor offered salt,
the tied product, at a lower price, “the lessee should be free to
buy in the open market, unless appellant would furnish the salt at
an equal price.” Id., at 396.

															   As we have already noted, the vast majority of
academic literature recognizes that a patent does not necessarily
confer market power. See n. 4, supra. Similarly,
while price discrimination may provide evidence of market power,
particularly if buttressed by evidence that the patentee has
charged an above-market price for the tied package, see, e.g. , 10 Areeda ¶1769c, it is generally recognized that it
also occurs in fully competitive markets, see, e.g. ,
Baumol & Swanson, The New Economy and Ubiquitous Competitive
Price Discrimination: Identifying Defensible Criteria of Market
Power, 70 Antitrust L. J. 661, 666 (2003); 9 Areeda ¶1711;
Landes & Posner 374–375. We are not persuaded that the
combination of these two factors should give rise to a presumption
of market power when neither is sufficient to do so standing alone.
Rather, the lesson to be learned from International Salt and the academic commentary is the same: Many tying arrangements,
even those involving patents and requirements ties, are fully
consistent with a free, competitive market. For this reason, we
reject both respondent’s proposed rebuttable presumption and their
narrower alternative.

															   It is no doubt the virtual consensus among
economists that has persuaded the enforcement agencies to reject
the position that the Government took when it supported the per
se rule that the Court adopted in the 1940’s. See supra , at 8. In antitrust guidelines issued jointly by the
Department of Justice and the Federal Trade Commission in 1995, the
enforcement agencies stated that in the exercise of their
prosecutorial discretion they “will not presume that a patent,
copyright, or trade secret necessarily confers market power upon
its owner.” U. S. Dept. of Justice and FTC, Antitrust Guidelines
for the Licensing of Intellectual Property §2.2 (Apr. 6, 1995),
available at http://www.usdoj.gov/atr/public/guidelines/0558.pdf
(as visited Feb. 24, 2006, and available in Clerk of Court’s case
file). While that choice is not binding on the Court, it would be
unusual for the Judiciary to replace the normal rule of lenity that
is applied in criminal cases with a rule of severity for a special
category of antitrust cases.

															   Congress, the antitrust enforcement agencies,
and most economists have all reached the conclusion that a patent
does not necessarily confer market power upon the patentee. Today,
we reach the same conclusion, and therefore hold that, in all cases
involving a tying arrangement, the plaintiff must prove that the
defendant has market power in the tying product.

															VI

															   In this case, respondent
reasonably relied on our prior opinions in moving for summary
judgment without offering evidence defining the relevant market or
proving that petitioners possess power within it. When the case
returns to the District Court, respondent should therefore be given
a fair opportunity to develop and introduce evidence on that issue,
as well as any other issues that are relevant to its remaining §1
claims. Accordingly, the judgment of the Court of Appeals is
vacated, and the case is remanded for further proceedings
consistent with this opinion.

															It is so ordered.

															   Justice Alito took no part in the
consideration or decision of this case. Footnote 1 Illinois Tool did not acquire Trident until
February 19, 1999, approximately six months after this action
commenced. Footnote 2 See, e.g. , Jefferson Parish
Hospital Dist. No. 2 v. Hyde , 466 U. S. 2 , 9 (1984) (Sherman Act); Times-Picayune Publishing Co. v. United States , 345 U. S. 594 , 609 (1953) (Federal
Trade Commission Act); International Salt Co. v. United States, 332
U. S. 392 , 395–396 (1947) (Clayton Act and Sherman Act); Morton Salt Co. v. G. S. Suppiger Co., 314 U. S. 488 , 494 (1942) (patent
misuse); Motion Picture Patents Co. v. Universal Film Mfg. Co. , 243
U. S. 502 , 516 (1917) (same). Footnote 3 While our opinions have made clear that such
an invitation is not necessary with respect to cases arising under
the Sherman Act, see State Oil Co. v. Khan , 522 U. S. 3 , 20
(1997), it is certainly sufficient to warrant reevaluation of our
precedent, id ., at 21 (“[T]his Court has reconsidered its
decisions construing the Sherman Act when the theoretical
underpinnings of those decisions are called into serious
question”). Footnote 4 Our imposition of this requirement accords
with the vast majority of academic literature on the subject. See, e.g. , 10 Areeda ¶1737a (“[T]here is no economic basis for
inferring any amount of market power from the mere fact that the
defendant holds a valid patent”); Burchfiel, Patent Misuse and
Antitrust Reform: “Blessed be the Tie?” 4 Harv. J. L. &
Tech. 1, 57, and n. 340 (noting that the market power presumption
has been extensively criticized and citing sources); 1 H.
Hovenkamp, M. Janis, & M. Lemley, IP and Antitrust §4.2a (2005
Supp.) (“[C]overage of one’s prodcut with an intellectual property
right does not confer a monopoly”); W. Landes & R. Posner, The
Economic Structure of Intellectual Property Law 374 (2003)
(hereinafter Landes & Posner).