Supreme Court rules in printer ink dispute

The U.S. Supreme Court on Wednesday voted 8 to 0 to send a case involving a printhead and ink manufacturer accused of monopoly practices back to a lower court for further scrutiny. It also effectively set a new standard for certain antitrust cases involving patents.

The company that petitioned the high court, Illinois Toolworks Inc., runs a subsidiary called Trident that makes a patented printhead and ink container, along with a nonpatented specialty ink. Trident requires its clients to buy that ink if they buy the rest of the printer system--a practice known in antitrust legalese as a "tying arrangement."

That practice drew a lawsuit several years ago from California-based Independent Ink, which makes an ink with an identical chemical composition. Independent argued that because of Trident's patent on its printer system, it had unfair "market power"--that is, muscle in the industry.

But in his majority opinion (click for PDF) for the court, Justice John Paul Stevens wrote that "a patent does not necessarily confer market power upon the patentee."

The court came to a slightly different conclusion when it last handled a case involving the matter back in 1947. The backing for its latest decision rests on newer congressional and federal agency conclusions and views expressed in "the vast majority of academic literature" by economists, Stevens said.

Now, in all cases involving tying arrangements, it's up to the company that alleges wrongdoing to prove its opponent has market power, the court ruled. Independent Ink will have another chance to present such an argument at the lower court level.