## Facts

- A process patent covered a method for rehabilitating pipelines by inserting a resin-impregnated liner and curing it in place.
- The patent owner granted Insituform of North America, Inc. (INA) an exclusive U.S. license to practice the process (except California).
- INA issued exclusive territorial sublicenses to others, including Miller Insituform, Inc. (MII) for Tennessee, Kentucky, and parts of Ohio.
- The sublicense imposed contractual conditions, including a minimum net-worth requirement and royalty obligations.
- INA terminated MII’s sublicense after an alleged breach.
- MII sued, alleging INA used the licensing structure and termination to monopolize the relevant market and that territorial restrictions and other conditions were unlawful under federal antitrust theories, including monopolization/attempted monopolization and tying/patent-misuse theories.

## Issues

1. Whether INA’s patent-based territorial sublicensing and termination of MII for alleged breach constituted monopolization or attempted monopolization under Sherman Act § 2.
2. Whether exclusive territorial sublicenses in a patent licensing scheme are *per se* unlawful as territorial market division, or instead assessed under non-*per se* antitrust analysis consistent with patent licensing.
3. Whether the challenged licensing conditions and enforcement amounted to unlawful tying or patent misuse sufficient to support antitrust liability.

## Decision

- The Sixth Circuit affirmed summary judgment for INA.
- The court rejected MII’s § 2 monopolization-based theories on the record presented.
- The court declined to treat the patent-based territorial sublicensing structure as *per se* unlawful.
- The court found the evidence insufficient to establish unlawful tying or misuse based on the licensing terms and termination.

## Legal Principles

- A patentee or exclusive licensee may generally select licensees and impose territorial limits and other contractual conditions as a method of exploiting the patent, so long as conduct remains within the patent’s lawful scope.
- Sherman Act § 2 requires more than concentrated control resulting from patent exclusivity; liability turns on proof of exclusionary conduct beyond legitimate patent and contract enforcement.
- Terminating a sublicensee for breach under contractually specified conditions, without additional anticompetitive acts, does not by itself establish the “willful acquisition or maintenance” element of monopolization.
- Territorial allocations arising from a single patent licensing program are not automatically condemned as *per se* unlawful market division; analysis depends on context and whether the arrangement exceeds the patent grant.
- Tying or misuse theories require proof that patent control was used to coerce transactions in a separate product or market and that the practice materially restrained competition; absent such proof, antitrust relief is unavailable.

## Conclusion

The Sixth Circuit upheld summary judgment for the exclusive patent licensee, holding that exclusive territorial sublicensing and termination for alleged breach, without proof of exclusionary conduct extending beyond legitimate patent and contract rights, did not support Sherman Act § 2, tying, or misuse-based antitrust liability.


Miller Insituform, Inc. v. Insituform of N. Am., Inc., 830 F.2d 606 (6th Cir. 1987)