Big Firms Win Supreme Court Antitrust Cases

The Supreme Court made it harder Wednesday for small, independent companies to challenge in court well-known makers of patented products who forced their customers to also buy extra products from them.

The ruling against a Gardena firm could mean higher costs and fewer choices for consumers of products such as car parts, razor blades, generic drugs, printer’s ink and, possibly, movies and music.

Since World War II, the high court has held that it is automatically illegal for owners of a patented product, or a copyrighted work such as a movie, to force their customers to also buy a second product. This was seen as a type of antitrust violation because it allowed the company to extend its monopoly to other products. For example, the rule has barred Hollywood studios from forcing independent theaters to show their second-rate movies as a condition of obtaining their blockbuster hits.

But the justices relaxed that rule Wednesday.

Their 8-0 decision was a setback, but not a final defeat, for Independent Ink Inc., which makes ink for industrial printers. Its owner alleged he was being shut out of the market by Trident Inc., the maker of a patented printing system, which insists that its buyers also use its unpatented ink.

Last year, a U.S. appeals court ruled that Trident and its owner, Illinois Tool Works Inc., were automatically violating the antitrust laws by tying the purchase of ink to the sale of their patented printers.

The high court reversed that decision Wednesday in Illinois Tool Works Inc. vs. Independent Ink Inc. and said the smaller California company had to prove that the bigger firm had enough market clout to force printers to buy both their printing systems and their costly ink. That will be hard to prove if there are comparable printing systems on the market.

The ruling dealt only with patented products, but many legal experts say the same rule will be applied to copyrighted products, such as movies and music.

“I assume this will apply to copyrights and to the entertainment industry, but I don’t think it opens the door to a return of the bad practices from the past,” said Carole E. Handler, a copyright and antitrust lawyer in Los Angeles.

However, in recent years, the Supreme Court has looked more to the market than the courts to ensure product competition.

Bradford P. Lyerla, a Chicago lawyer who specializes in intellectual property, said the court’s decision made sense because it meant “now the law more closely conforms to economic reality.”

“We have understood for a number of years that most patents simply do not confer market power” on the company that holds the patent, he said.

The ruling appears to leave open the possibility that the owners of Independent Ink could still win their suit if they can show that Trident’s printing systems are so dominant in the market that Trident can force customers to pay extraordinarily high prices for replacement ink.

In a separate case, the justices ruled Tuesday that a joint venture between Texaco and Shell to sell gasoline at the same price did not amount to illegal price-fixing under antitrust laws, even though it “may be price-fixing in a literal sense,” said Justice Clarence Thomas. The two oil giants do not have a dominant position in the market, and customers have other options in buying gasoline, he said.

Tuesday’s decision was also 8 to 0.

New Justice Samuel A. Alito Jr. did not participate in either ruling.