Balancing Acts: Using a Mixed Test to Ensure Better Results in Rule of Reason Patent Misuse Analysis within Section 337

INTRODUCTION I. SECTION 337, THE ITC, AND THE FEDERAL CIRCUIT A. What is Section 337? B. Section 337: The International Trade Commission and Patent Litigation C. Section 337 Appeals and the Federal Circuit II. PATENT MISUSE IN SECTION 337 APPEALS A. Patent Misuse B. Per Se Patent Misuse C. Patent Misuse Under the Rule of Reason III. PRESCRIPTIVE MODEL: PATENT MISUSE UNDER THE RULE OF REASON ANALYSIS CAN KEEP A BETTER BALANCE OF ANTITRUST AND PATENT POLICY WITH A MIXED TEST A. The Problem with the Rule of Reason Analysis B. Resolving the Rule of Reason Problem with a Mixed Analysis CONCLUSION INTRODUCTION "[I]ntellectual property laws and the antitrust laws share [a] common purpose[] of promoting innovation and enhancing consumer welfare." (1) Patent laws grant exclusive rights to inventors in exchange for the disclosure of their creations into mainstream society. (2) on the other hand, antitrust laws allow for reasonable consumer access to such discoveries by preventing inventors from unfairly exploiting their creations. (3) Although patent and antitrust laws promote similar goals, they do so in contention with each other. "Because a patent is a special grant of power to exclude competition, and exclusionary power has historically been scrutinized strictly under the antitrust laws, the patent and antitrust laws have historically coexisted in tension with one another." (4) "[T]here is tension between the patent and the antitrust laws that flows naturally from the need for courts and the antitrust enforcement agencies to determine the circumstances in which the principles underlying one body of law will prevail over those of the other." (5) The balancing act described above is exactly what occurs at the International Trade Commission (ITC) when it reviews [section] 337 claims. The ITC has two functions under [section] 337: (1) to protect domestic industry and (2) to enforce domestic patents. (6) Respondents subject to [section] 337 claims likely will assert that the patent is invalid, turning to patent law, or that the patent is misused, relying on antitrust to justify its behavior. (7) In some cases where the latter is asserted, the ITC is forced to make a choice between protecting domestic industry and enforcing a domestic patent. The assertion of a patent misuse defense also presents interesting issues on appeal, especially those decisions appealed to the Court of Appeals for the Federal Circuit. The Federal Circuit's jurisdiction and expertise is based in patent law, which leads to the question of how antitrust issues are handled within our highest patent court. This Comment, then, addresses the tensions faced by the Federal Circuit in reviewing the ITC's patent misuse decisions that address [section] 337 claims. Patent misuse is the only antitrust-related doctrine that the Federal Circuit court has addressed in a [section] 337 appeal. There are two types of patent misuse: per se misuse and the rule of reason misuse. First, this Comment provides relevant background information by explaining [section] 337 itself, the administrative power and function of the ITC under [section] 337, and the Federal Circuit's jurisdiction and deferential stance to the ITC regarding [section] 337 appeals. Subsequently, this Comment examines both per se and rule of reason patent misuse defenses, within the context of ITC appeals to the Federal Circuit of [section] 337 claims, by laying out their doctrinal frameworks as set out by the Federal Circuit in U.S. Phillips Corp. v. ITC. (8) With the preface that patent misuse jurisprudence is rather limited within the spectrum of ITC cases appealed to the Federal Circuit under [section] 337, this Comment analyzes the Federal Circuit's treatment of patent misuse defenses by considering the court's holdings in U.S. Phillips Corp. This analysis finds that while the Federal Circuit's result in Phillips was well reasoned, the test set out for patent misuse under the rule of reason is problematic under the [section] 337 framework. …