Misuse of Misuse: Princo Corp. v. International Trade Commission and the Federal Circuit’s Misguided Patent Misuse Jurisprudence

June 9, 2012

The equitable doctrine of patent misuse is best known for prohibiting patentees from exploiting the rights and benefits that arise from the grant of a patent. Despite a long history of
favorable Supreme Court cases, over the past twenty-five years the U.S. Court of Appeals for the Federal Circuit has substantially narrowed the patent misuse doctrine. Most recently, in Princo Corp. v. International Trade Commission, the Federal Circuit seems to have further curtailed the doctrine by suggesting that additional, burdensome requirements may be necessary for a successful misuse defense. Specifically, the Princo decision seems to impose a stringent evidentiary burden on those asserting misuse, including demonstrating a direct and substantial nexus between the challenged conduct and the asserted anticompetitive effects, and intimating a higher threshold for proving anti-competitive effects. The opinion also further entangles patent misuse jurisprudence with antitrust concepts. The Federal Circuit’s Princo decision is not only inconsistent with Supreme Court precedent, but also substantially hinders the policy goals of preventing inequitable, abusive, and anticompetitive conduct by patent holders. Rather than weakening it, the Federal Circuit should focus on creating a better-defined, vigorous misuse doctrine, independent of antitrust principles, to uphold these worthy goals.