Justices Take Up Rule Against 'Tying' Products
WASHINGTON — The Supreme Court took up the case of a small Southern California ink maker Tuesday to reconsider a nearly 60-year-old rule of antitrust law that affects industries including pharmaceuticals, auto parts and movies.
In the past, Congress and the high court have frowned upon companies that force buyers to purchase extra items as a condition of getting their product, a practice known as "tying." Since shortly after World War II, the justices have said tying is usually illegal when it involves patented or copyrighted products.
In the movie industry, for example, theater owners won rulings after complaining that they were forced to run studios' second-rate films as a condition of getting their copyrighted blockbusters.
That rule stands in jeopardy after Tuesday's argument. Most of the justices said they were inclined to make it harder for challengers to sue big companies that imposed tying requirements on their customers.
If so, the outcome could affect the giant aftermarket in replacement parts for products such as autos, computers and printers. If the court makes it much harder to win antitrust suits, some legal experts say it will encourage the makers of popular products to impose tying requirements on their customers.
The future of the drug industry could be affected as well. Pfizer, the pharmaceutical giant, has proposed marketing a new anti-cholesterol drug by combining it in one pill with its best-selling Lipitor, which is facing the loss of its patent protection. The legality of that arrangement may depend on the court's ruling.
The case that came before the high court began when Independent Ink Inc., based in Gardena, Calif, sued Trident Inc., the leading maker of printers for industrial uses, such as putting bar codes on products. Trident, a division of Illinois Tool Works, requires buyers of its patented printers to also buy its replacement ink.
Independent Ink says it sells the same ink for one-third as much, but cannot compete in the market because of Trident's tying deal.
"Their customers said to us, 'We would love to buy from you, but we can't,' " said Barry Brucker, chief executive of Independent Ink. "We're a $5-million-a-year company going up against a company that has $11 billion in sales per year. This is David versus Goliath."
