line material argued decided march line material frederick bernays wiener providence appellant john lord washington appellees albert connelly new york city appellee westinghouse electric corporation appeal district eastern district wisconsin justice reed delivered opinion sought injunction sherman district continuance violations act allegedly unlawful combination conspiracy appellees contracts restrain interstate trade certain patented electrical devices restraint alleged arose license arrangement patent owners line material company southern equipment corporation fix sale price devices arrangement appellees licensees make vend adhered supplemental contracts district dismissed complaint defendants upon conclusion rule general electric controlling case approved lawful patentee license make vend required licensee sales patented devices conform licensor sale price schedule appeal taken directly stat probable jurisdiction noted jurisdiction facts challenged arrangements enter ound three product patents useful protecting electric circuit dangers incident short circuit overload two dropout fuse cutouts third housing suitable use cutout dropout fuse cutouts may used without housing district found cutouts manufactured sold defendants produced patents substantially dropout fuse cutouts made competitive devices perform functions manufactured appellees others different patents involved dominant patent field dropout fuse cutouts double jointed hinge construction issued march southern equipment corporation assignee application george lemmon patent reads upon patent reissued december issued october line material company assignee application schultz steinmayer housing patent reissued march february issued november line assignee application kyle kyle patent covers porcelain box great dielectric strength may economically constructed commercially successful give weight presence kyle patent licenses applications lemmon schultz patents pending simultaneously declared interference contest resulted decision patent office awarding dominant claims southern subservient claims line lemmon schultz applications made impossible manufacturer use patents later issued without arrangement cf temco electric motor apco mfg patents lawfully used single maker public patentees obtain full benefit efficiency economy inventions negotiations started line eventuated challenged arrangements first definitive document bilateral license agreement may southern line patent office award patents issued far pertinent license southern line make vend prospective schultz patented appart us exclusive right grant licenses sublicenses others line also granted southern right make vend sublicense kyle patent southern licensed line make vend sublicense prospective lemmon patent defined equipment included schultz apparatus sublicense royalties expenses divided line southern although memorandum agreement january parties requirement line agreed sell equipment covered southern patent prices less fixed southern southern made agreement equipment covered solely line patent requirement price limitation upon sales manufacturers license included six involved advised line letter dated june southern authority grant licenses schultz prospective patent october kearney took southern license practice lemmon schultz patents license price term condition sale clause governed southern prices bound kearney maintain prices sales devices covered patents october five manufacturers mentioned offered southern contract standard licensor agreement kearney contract discussed chicago october manufacturers except railway pacific also participated never enforced first patent involved case issue march manufacturers making double jointed open enclosed dropout cutouts wanted explore validity patents failed find satisfactory basis attack faced infringement suits reasons developed refusal six manufacturers accept kearney form contracts unnecessary detail one reason prospective sublicensees preferred line southern licensor fact line owner manufacturer license kyle patent new arrangements proposed licensees mutual discussion licensees patentees new agreements submitted finding objection made october general electric westinghouse kearney matthews schweitzer conrad railway met line chicago jointly discussed drafts proposed license agreements lemmon schultz kyle patents thereafter identical sets revised licenses sent line general electric westinghouse matthews schweitzer conrad attorneys railway kearney form proposed licensing agreement contained essential elements price provision ultimately included licenses circulated among prospective licensees line letters date october meet various objections future licensees agreement may southern line revised january except substitution line southern licensor manufacturers follows generally form earlier agreement royalty free schultz lemmon patents substantially line given exclusive right grant sublicenses others lemmon southern retained privilege royalty free making vending kyle patent also southern bound maintain prices long line required licensees even assumed proper interpretation agreement permitted southern manufacture lemmon patent without price control practical result southern price products fixed commercially successful fabrication combination lemmon schultz patents findings fact price maintenance feature reflected licenses make vend granted line contract appellees variations price provisions significant issues case fair example appears execution sublicenses appellees except johnson followed within year licenses executed two june march respectively august since number appellees executed license contracts two consultations licensees patentees held classify products various licensees comparison licensor devices trial judge found prices discussed fixed line without discussion advice appellee doubt however licensee knew proposed price provisions licenses licensees circulation proposed license october subsequent consultations among licensees escrow agreement fulfilled july agreement entered general electric took license required fulfillmet acceptance identical licenses matthews kearney railway licenses subject escrow contained price provisions general electric license awareness signer price provisions prior contracts conceded appellees brief price schedule became effective january thereafter appellees tried maintain prices accidental variation line wrote licensee calling attention failure licenses result arm length bargaining instance price limitation actively opposed toto restriction scope sought several licensees including general electric largest producer patented appliances number tried energetically find substitutes devices licensees however forced accept terms cease manufacture accepting secured release claims past infringement provision effect license patentees licenses sought system thei royalty collections pecuniary reward patent monopoly undoubtedly one purpose arrangements make possible use manufacturer lemmon schultz patents patents separate hands produced deadlock lemmon basic patent schultz improvement es furnished appellees solution consideration agreements circumstances surrounding negotiation execution district found arrangements whole made good faith make possible manufacture appellees patented devices gain mate return patentees inventions apart written agreements undertaking appellees fix prices convinced indicated first opinion general electric case controlled permitted price arrangements disclosed contracts district dismissed complaint government attacks rationale general electric case urges overruled limited explained differentiated ii general electric case case decided unanimous chief justice taft writing involved bill equity enjoin violations sherman act violations act agreements fixing resale price patented articles incandescent light bulbs sold dealers also alleged bill far material pertinent alleged violation agreement general electric westinghouse company westinghouse licensed manufacture lamps number general electric patents including patent tungsten filament bulb condition sell prices fixed licensor considering objection fixing prices bulbs tungsten filament price agreement upheld valid exercise patent rights licensor speaking arrangement said patentee licenses selling articles licensee make may limit selling limiting method sale price think may provided conditions sale normally reasonably adapted secure pecuniary reward patentee monopoly page page proviso must read directed agreements patentee licensee make vend original context words quoted makes clear carry implication approval patentee contracts tend increase earnings patents opinion recognizes fixed rule sale patented article puts control purchaser resale price beyond power patentee page page compare univis lens anything found general electric case serve basis argue otherwise precise terms grant define limits patentee monopoly area patentee freed competition price service quality otherwise compare mercoid corporation inv masonite corporation motion picture patents universal film mfg general electric case provoked criticism approval bare recognition ethyl gasoline corporation case emphasized rule extension patent monopoly page page resale prices avoid competition among buyers pages pages found unnecessary reconsider rule masonite corporation although arrangement sale patented articles fixed prices dealers patentee claimed del credere agents concluded patent privilege exhausted transfer articles certain agents part sales organization competitors discussion price fixing limitation required edward katzinger chicago metallic mfg suit brought recover royalties license price limitations refused examine general electric rule claimed illegality katzinger patent patent invalid price fixing agreement unlawful affirmed action circuit appeals remanding case district determine validity patent general electric case cited approval carbice corporation america american patents development corporation courts explained distinguished general electric rule reason asking reexamine rule general electric case government price maintenance patents various types agreements involved certain pending cases furthermore point made difficult unsettled questions ai sing general electric holding simplest solution overrule dent power patentee establish sale prices licensee make vend patented article liquidation doctrine patentee power determine licensee sale price patented article solve problems arising adoption since however bement sons national harrow decided patentee able control licensee sale price within limits patent monopoly litigation rule engendered proves business arrangements repeatedly even though hesitatingly made reliance upon contractors interpretation meaning appellees urge congress taken steps modify rule legislative attitude weighed counter balancing fact rule general electric case grew judicial determination writer accepts rule general electric case interpreted third subdivision opinion majority agree position case reaffirmed basis neither majority overrule general electric circumstances must proceed determine issues assumption general electric continues precedent furthermore think wise undertake explain facts case require views applicability patent price limitation various situations listed government assumption conspiracy restrain trade effort monopolize involved patentee may license another make vend patented device provision licensee sale price shall fixed patentee assumption stated leave aside many variables general electric rule may arise example may aggregation patents obtain dominance patent field broad narrow patent may used peg upon attach contracts former prospective competitors touching business relations making vending patented devices compare gypsum decided today masonite corporation may helpful specify certain points either contested decided case agre ments illegal restrain interstate commerce contrary sherman act issue monopoly involved cf american tobacco say complaint charges restraint trade charge sherman act need deal problems consolidation merger purchase competitors size business tending toward attaining monopoly see shoe machinery aluminum america american tobacco steel corporation dealing charge monopoly restraint aggregation patents pooling purchase owner owners single industry field see shoe machinery within limits patentee rights patent monopoly process product authorized patent statutes stipulated validity patents issue points laid aside proceed issues presented record iii determination issue assumption general electric ultimate question decision appeal may stated succinctly abstractly whether light prohibition sherman act note supra two patentees patent field may legally combine valid patent monopolies secure mutual benefits contractual agreements licensees control sale price patented devices appellees urge findings district quoted note supra stand barriers clusion sherman act violated licenses since material evidence support district finding evidentiary facts necessarily weighed credibility witnesses probative value testimony establish appellees contentions appellees insist inferences conclusions violations sherman act drawn district must accepted us evidentiary facts heretofore stated dispute district made findings fact nos inclusive hereinbefore set note even though accept findings preliminary facts correct last sentence findings crumbles asserted bar examination us whether agreements violative sherman act sentences effect agreement fix prices parties language contracts set notes supra patent rights empower patentees fix sale prices others agreements violate act previous summary opinion agreements compose arrangements demonstrates agreements intended fix prices patented devices compare interstate circuit line sublicenses others general electric note gave line power exercised fix prices devices embodying schultz patent sublicense agreements licensed use dominant lemmon patent schultz patent practiced without lemmon result agreement southern line line sublicensing lemmon patent combine line hands authority fix prices commercially successful devices embodying schultz lemmon patents thus though sublicenses terms followed pattern general electric fixing prices line patents additional right given line license agreement january southern line exclusive licensor dominant lemmon patent made price fixing schultz devices effective devices embodying also necessary lemmon patent see note patentees agreement dominant lemmon subservient schultz patents combined fix prices absence patent authorization contract fix maintain prices interstate commerce long recognized illegal per se sherman act true whether fixed price reasonable unreasonable also true whether price agreement producers sale producer distributor resale equally well settled possession valid patent patents give patentee exemption provisions sherman act beyond limits patent monopoly aggregating patents one control holder patents escape prohibitions sherman act see standard sanitary mfg gypsum decided today term valid patent excludes except owner use protected process product shoe machinery special equipment coe monopoly mayb enjoyed exclusively patentee may assign patent interest therein others amended stat pointed patentee may license others make vend invention collect royalty therefor thus statutory monoply patent sherman act prohibition monopoly attempt monopolize every agreement restraint trade public policy condemned monopolies centuries case monopolies darcy allein see aluminum america see employment act stat constitution allows patents art cl progress economy often said owe much stimulus invention given rewards allowed patent legislation sherman act enacted prevent restraints commerce interpreted recognizing patent grants exception bement national harrow supra page page public service organizations governmental private aside economy built largely upon competition quality prices associated press validation congress agreements exclude competition unusual monopoly protean threat fair prices tantalizing objective business compelled meet efforts competitors supply market perhaps single fact manifests power monopolize price control article monopolized clearer evidence restraint trade whatever may evil social effect cutthroat competition producers consumers lowering labor standards quality produce obliteration marginal benefit surviving producers advantages competition opening rewards management encouraging initiative giving labor industry opportunity choose employment conditions consumers selection product price considered overbalance disadvantages strength size alone disappearance small business ever present dangers competition despite possible advantages stable economy efficient cartels firm fixed prices products crystal clear legislative history accepted judicial tions sherman act competition prices rule congressional purpose exceptions made congress make monopoly granted patent laws statutory exception freedom competition consistently construed limited patent grant ethyl gasoline corporation univis lens monopoly patent invalid use monopoly improperly development patents separate corporations cooperating units industry organized research group well known phenomenon however far advanced lone inventor experimentation method seeking improvement practices arts sciences may objection score illegality either mere size group thoroughness research may true carlyle said infinite capacity taking pains certainly doctrine control prices outside limits patent monopoly violates sherman act well understood congress interested parties thus called make adjustment lawful restraint trade patent monopoly illegal restraint prohibited broadly sherman act adjustment already reached point precedents stand patentee may validly license competitor make vend price limitation general electric case grant patent rights limit freedom competition cases first cited note postulates mind price limitations patented devices beyond limits patent monopoly violate sherman act patent grants construed strictly question legal effect price limitations agreements may readily answered nothing patent statute specifically gives right fix price licensee may vend patented article general electric case holds patentee may certain conditions lawfully control price licensee several patents may charge patented device case construed patent statutes permit separate owners separate patents arrangements fix prices charged licensees respective products two patentees competitive patents combine fix prices devices produced patents competition impeded greater degree single patentee fixes prices licensees struggle profit less acute even devices commercially competitive subservient patent practiced without consent dominant statement holds good stimulus seek competitive inventions reduced mutually advantageous price fixing arrangement compare acts single entity done combination others swift reading eastern lumber dealers binderup pathe merging benefits price fixing patents restrains trade violation sherman act way fixing prices producers nonpatentable goods objection made price agreement patentee licensee equally restrains trade answer restraint arrangement validity general electric case assumed reasonable restraint accords patent monopoly granted patent law patentee undertakes exploit patent price fixing agreements onyone must give consideration limitations sherman act action patent statutes give exclusive right patentee make use vend assign interest monopoly others gn eral electric case construes giving right patentee license another make vend fixed price suggestion patent statutes authority combine patent owners fix prices articles covered respective patents sherman act prohibits agreements fix prices arrangement patentees runs afoul prohibition outside patent monopoly turn situation presented agreement one patentees authorized fix prices patents argument respondents patentee may contract licensee fix prices logical permit number patentees combine patents authorize one patentee fix prices number licensees present agreement southern line entered arrangement line authorized fixed prices devices produced lemmon schultz patents seems us however argument fails take account cumulative effect multiple agreements establishing intention restrain obvious purpose effect agreement enable line fix prices patented devices even agreements fix prices limited small number patentees opinion crosses barrier erected sherman act restraint trade though restraint patentees licensees early standard sanitary mfg unanimously condemned price limitation patent licenses arrangement coupled agreement limitation jobbers resale prices case may said indecisive patent license agreements price control product without jobber resale provision distinction appears opinion departed condemnation price fixing even standard oil indiana arrangement patentees pooled oil cracking patents divided among royalties licensees fixed pooling contracts upheld theory reiterated price limitation product unlawful per se page pages course purpose plan monopolize restrain trade found arrangement unlawful page page government contention case limitation royalties violated sherman act fixing element price dismissed view controlled royalties effective price regulators patentees dominated industry page page domination thought proven plan patentee fix sale prices patented synthetic hardboard sales made formerly competing manufacturers distributors designated del credere came allegations plan violation sherman act invalidated scheme said patentee use competitor sales organization agents control prices patent monopoly circumstances said exhausted disposition product distributor reasoned arrangement restriction free economy powerful inducement abandon competition derogated general law price limitation beyond necessary requirements patent statute masonite corporation think general rule price limitation clearly applies circumstances case even patentee right absence purpose restrain monopolize trade fix prices licensee sale patented product order exploit properly invention inventions patentees join agreement maintain prices several products agreement however advantageous may stimulate broader use patents unlawful per se sherman act exploitation patents vice patentees combined fix prices patented products licensing promote efficient production unlawful nothing unlawful requirement licensee pay royalty compensate patentee invention use patent unlawful element use control gives fix prices mere fact patentee uses patent whole part consideration contract another patentees patent field arrange practice patent involved way royalties earnings benefits patent patents shared among patentees parties agreement subjects contract prohibitions sherman act whenever selling price things produced patent involved fixed contract license authorized contract licensees contract enter license arrangements price fixing provisions knowledge contract equally subject prohibitions decree district reversed case remanded entry appropriate decree accordance opinion justice jackson took part consideration decision case reversed remanded justice douglas justice black justice murphy justice rutledge join concurring joined opinion discussion problem adequate full understanding basic issue presented view comes part practical wisdom good law permit general electric govern situation though premise accepted logic might make application case wholly defensible rid general electric reasons overruling start constitution constitution grants congress power promote progress science useful arts securing limited times authors iv entors exclusive right respective writings discoveries art cl noted first secured inventors exclusive right inventions second reward inventors wholly secondary aim purpose patent statutes limited constitution promotion progress science useful arts masonite corporation cases cited congress faithful standard granted patentees right make use vend invention discovery rev stat early speaking chief justice taney defined narrow limited monopoly granted statutes follows franchise patent grants consists altogether right exclude every one making using vending thing patented without permission patentee bloomer mcquewan ingenuity man conceived many ways graft attractive private perquisites onto patents effort years expand narrow monopoly patent however generally faithful standard constitution recognized public interest comes first reward inventors second refused let patentees come ascendency stated chemical ellis patent monopoly enlarged reason fact convenient patentee avail benefits within limits grant motion picture patents universal film mfg ann overruled henry dick international salt decided day quite consistently refused allow patentee exclude expanded right license patent conditions patentee might choose power attach conditions enable patentee enlarge monopoly contract evade requirements general law applicable property philosophy decisions summed mercoid corporation inv said necessities convenience patentee justify use monopoly patent create another monopoly fact patentee power refuse license enable enlarge monopoly patent expedient attaching conditions use patent privilege privilege conditioned public purpose results invention limited invention defines patentee ties something else invention acts virtue right owner property make contracts concerning otherwise subject limitations upon right general law imposes upon contracts however allowed exception long line cases general electric supra decided followed bement national harrow decided sustained provision license make vend patented invention decision combinations outlawed sherman act socony vacuum oil held lawful property involved patent authority ths done patent statutes sanction combinations indeed wholly silent combinations far relevant grant already noted right make use vend invention discovery grant power combine others fix price patented products since patent statutes silent subject seem validity combinations field governed general law since sherman act outlaws combinations seem logical keeping public policy expressed legislation apply prohibitions patents well property made exception case combinations order make patent monopoly valuable one patentee concerned giving high reward possible reasoned patentee control price licensees sold patented article might undersell combination give protection contingency therefore reasonable device secure pecuniary reward invention thus general electric case inverted cl art constitution made inventor reward prime rather incidental object patent system manner saddled economy vicious monopoly first place form price fixing underwrites producer protecting competition lowcost producers strengthens enlarges monopoly said reply patentee monopoly exclusive right make use vend give right exclude others manufacture invention market price chose true gets agreement competitors much gets benefit inherent right exclusion benefit flows suppression competition combination competitors gets benefits production marketing facilities competitors without risks price competition cf masonite corporation supra short associates get benefits conspiracy combination restraint competition right invention right form combination competitors fix prices products invention patentee creates method powerful inducement abandonment competition cessation litigation concerning validity patents acceptance patents matter dubious abandonment research development competing patents get stabilized markets assured margins freedom price cutting find license attractive alternative arduous methods maintaining competitive positions competition tends become impaired reason public preference patented article preference competitors price fixing increased profits method business promises price fixing form perhaps powerful inducements abandonment competition offers security stability eliminates much uncertainty competitive practices promises high profits therefore one effective devices regiment whole industries exact monopoly price public benefits competition disappear prices charged regimented industry determined representatives public case electric water gas rates private parties incline charge traffi bear type combination case power inflict precisely type public injury sherman act condemns scheme far secure inventors exclusive right discoveries within meaning cl art constitution gives leverage market combination patent create yet combination restraint trade sherman act condemns combinations dealing patents excluded congress much say pattern economic organization clear congress expand exclusive right specified constitution right inventors utilize combination production marketing facilities competitors protect high costs production eliminate suppress competition apparent restriction condition promotes progress science useful arts however may constitution places rewards inventors secondary role makes public interest primary concern patent system allow schemes reverse order place rewards inventors first public second way patentee receive pecuniary reward invention charge royalty relation price fixing manufacture sell price may choose certainly read patent statutes harmonize closely possible policy laws strike combination necessary effectuate purpose patent statutes case overrule general electric case congress author doctrine followed case rule sanctions another private perquisites written patent laws see special equipment coe since created take initiative eliminating hard square standards constitution set patent system plainly violence competitive standards congress written sherman act justice burton chief justice justice frankfurter concur dissenting dissent impelled regard soundness authority applicability case unanimous decisions bement national harrow general electric complaint charges violation sherman defendant patent owners line material company southern equipment corporation called respectively line southern also ten defendants hold licenses two complementary patents owned respectively line southern patents dropout fuse cutouts southern patent dominant patent product made alone commercially successful line patent improvement product made commercially successful twelve defendants received exercised authority patents make sell improved product government charges engaged unlawful combination conspiracy restraint trade fix maintain control prices sold interstate commerce respective products patents disputed sales made interstate commerce trial findings fact demonstrate however agreements defendants wih respect prices products provisions contained respective licenses findings fact show also unless government sustains contention provisions constitute per se unlawful restraint trade complaint dismissed question thus presented provisions licenses line southern patents constitute restraint trade violation sherman act agree provisions case comparable bement general electric cases supra held violate sherman act sustained agreement bement case sherman refer kind restraint interstate commerce may arise reasonable legal conditions imposed upon assignee licensee patent owner thereof restricting terms upon article may used price demanded therefor construction act doubt never contemplated framers page page license case issued several patents limited prices licensee authorized sell articles produced licensee license general electric case speaking patent holder right limit selling prices licensee products said think patent holder may provided conditions sale normally reasonably adapted secure pecuniary reward patentee monopoly one valuable elements exclusive right patentee acquire profit price article sold page page present case two types license agreements provisions first type agreement line southern line granted southern nonexclusive license make sell products question line also prescribed southern prices terms conditions sale favorable customer established time time followed line company making sales difference license agreement line agreements defendants southern return license instead paying cash royalties line issued line limited southern complementary patent dropout fuse cutout southern also granted line exclusive right issue sublicenses patent southern inserted price limitation line line made commitmen insert price limitations sublicense might issue southern patent far price limitations concerned contained nonexclusive license line southern applicable products made sold latter line patent assuming limitations thus placed line price southern products made sold line complementary patent reasonable limitations especially relation line operations patent represented lawful protection line patent interests evidenced normal exercise manufacturing patentee exclusive right patentee acquire profit price article sold ways even natural reasonable provisions insertion line bare provision royalties line evidently needed price limitations enable continue make sell product improvement converted commercial failure commercial success demonstrated later line receipt unconditional southern complementary patent consideration line license southern per se convert otherwise lawfully limited license invalid license violating sherman act type license used line direct license issued separately ten licenses closely resembled nonexclusive license calling payment modest royalty line product made sold licensee line patent included price limitations comparable line license southern licenses line entirely comparable bement general electric cases license however also included sublicense issued line southern complementary patent royalties products made sold two complementary patents divided equally line southern demonstrated later sublicense southern complementary patent agreement line divide southern royalties received upon products made sold two patents per se convert otherwise lawfully limited licenses invalid licenses violating sherman act line also granted certain desiring license line patent enclosed fuse boxes licenses carried price limitations products made sold licensee kyle patent licenses entirely comparable bement general electric cases well within scope precedents carry suggested basis distinction claimed vert invalid licenses violating sherman act government asks overrule bement general electric cases opinion justice reed rejects request seeks justify reversal judgment distinguishing case precedents dissent undertakes emphasize soundness bement general electric decisions demonstrate basic principles sustain decisions apply case least equal force initial discussion omit consideration southern line grant southern line exclusive right issue sublicenses southern patent agreement division royalties southern line bement general electric decisions authority upholding remaining portions agreements te light previously mentioned findings fact show agreements reasonable legal conditions imposed upon assignee licensee patent owner thereof restricting terms upon article may used price demanded therefor conditions sale normally reasonably adapted secure pecuniary reward patentee monopoly dissent accordingly foundation decisions emphasizes development nature effect patent rights decisive main issue cases patent rights understanding historical development nature patent rights essential discussion relation restraints trade prohibited sherman act american patent rights find origin great britain nation appears first issue secure inventors limited times exclusive rights respective discoveries called patentes letters sealed exposed view great seal pendant bottom addressed sovereign subjects realm instruments degree still common form used making grants dignities peerages appointments certain offices grants privilege various kinds form therefore similar used grant exclusive rights trade guilds corporations cases individuals permitting exclude competitors conduct certain lines profitable business contrast two kinds exclusive rights relation public reflected later acts british parliament constitution statutes patent inventor took nothing public public inventor competitors already hypothesis dealt new asset available civilization inventor royal patent served encourage inventor disclose invention ing inventor right exclude others making using selling invention limited time felt public well served invention disclosure early availability patent later general availability everyone procedure popular hand royal patents securing exclusive rights private parties conduct profitable enterprises exclusion existing available competitors issued show royal favor secure funds expense public patents became highly unpopular courts early date held invalid early francis bacon house commons supported princil monopoly granted manufacture enacted statute monopolies jac walker patents pp deller declared void monopolies letters patent sole buying selling making working using thing within realm however vi act made express exception favor patents inventions section become foundation patent law securing exclusive rights inventors great britain throughout world result historically principle conflict two legislative mandates rather long standing approval british parliament congress unique value exercise limited periods exclusive rights inventors respective inventions paralleled equally sustained emphatic disapproval certain restraints trade representative exclusive rights inventors inventions long unfaltering development patent law often touched upon decisions however face direct attack made upon underlying principles infinite importance inventions justifies brief review hereof development nature patent rights attacked decision case must turn upon understanding relation licenses patent rights relate sherman act interpreter congressional acts expressed patent policy nation since beginning entrusted protection policy intrusions upon crucial importance development inventions discoveries limited nation population world increased geographical frontiers shrunk however frontiers science expanded civilization depends largely upon discoveries frontiers meet infinite needs future thus far taken leading part making discoveries putting use constitution provides congress shall power promote progress science useful arts securing limited times authors inventors exclusive right respective writings discoveries italics supplied art statutes primarily implementing provision state person invented discovered new useful art machine manufacture composition matter new useful improvements thereof known used others country invention discovery thereof patented described printed publication foreign country invention discovery thereof one year prior application public use sale country one year prior application unless proved abandoned may upon payment fees required law due proceeding obtain patent therefor amended stat stat patent shall contain short title description invention discovery correctly indicating nature design grant patentee heirs assigns term seventeen years exclusive right make use vend invention discovery throughout territories thereof referring specification particulars thereof italics supplied amended stat application patent patent interest therein shall assignable law strument writing applicant patentee assigns legal representatives may like manner grant convey exclusive right application patent patent whole specified part italics supplied amended stat supp conway coe commissioner patents discussed historical significance early establishment american patent system testimony temporary national economic committee said american patent system established time mechanical inventions already begun affect industrial conditions also economic social political status europe new nation erected continent significance inventions put work england confederation realized american statemen era agreed recognition value new economic factors prompted write constitution provision article section empowering congress promote progress science useful arts securing limited times authors inventors exclusive right respective writings discoveries provision way impressive included constitution one major grants power congress equally bestows patentees complete monopoly therefore raises question constitutionality attempt compel owner patent share others title use avail property presume determine point must contemplate issue met hereafter authors patent system judging language article section held exclusiveness rights vested patentee powerful aid progress arts sciences hearings temporary national economic committee sess analyzed rights granted inventor stated reasons concluding vested patentee conflict antitrust laws follows occurs great deal misapprehension results failure distinguish monopoly privilege vested patentee sort monopoly british sovereigns conferred appreciate distinction understand jefferson consistently advocate monopoly patents inventions condemning traditional form monopoly generally detest monopoly true sense term makes possible ruthless exercise power indeed american revolution precipitated popular resentment monopoly tea held east india co therefore exceedingly strange years later delegates sent constitutional convention massachusetts colonies willing sanction equivalent form monopoly new government creating sixteenth seventeenth centuries king queen england reward favorite granting monopoly salt necessary life beneficiary royal favor course discoverer salt came hands creator eons advent man darling majesty received power compel others use salt solely supplying terms dictation patent monopoly reward invention discovery something new something unknown something added sum total human knowledge utility something inventor discoverer despising lure money fame might withheld fellow men monopoly goes patent government recompenses limited time protects inventor discoverer gives world use benefit invention discovery kind degree mutuality negatives monopoly old current concept monopoly latter sense term gave individual group complete dominion something already existent patent awards monopoly producer something original something superadded common store two things bearing name need nature contended sometimes occurs clash antitrust laws patent statutes might suggest since first legislation patent laws laws coexisted without irreconcilable conflicts least one common objective namely retention public right acquired matter fact patents accomplish retention acquired rights influence creative operate multiply expand acquisitions public id pp comparable analysis nature grant inventors exclusive right respective inventions discoveries limited time made often characterized patent accurately speaking monopoly created executive authority expense prejudice community except grantee patent seymour osborne wall term connotes giving exclusive privilege buying selling working using thing public freely enjoyed prior grant thus monopoly takes something people inventor deprives public nothing enjoyed discovery gives something value community adding sum human knowledge american bell telephone paper bag patent case brooks jenkins mclean parker haworth mclean allen hunter mclean attorney general rumford chemical works bann ard may keep invention secret reap fruits indefinitely consideration disclosure consequent benefit munity patent granted exclusive enjoyment guaranteed seventeen years upon expiration period knowledge invention enures people thus enabled without restriction practice profit use kendall winsor american bell telephone supra page page end law requires disclosure made application patent others skilled art may understand invention put use dubilier condenser corporation constitutional legislative policy toward inventions specific contrast generality language sherman act constitutional long standing statutory approval exclusive rights inventor make use sell products invention limited time ample guaranty sherman act directly impliedly repeal approval prohibition unreasonable restraints trade approval exclusive rights inventors inventions limited periods time continued exist together nothing new long inventors kept within statutory exclusive rights engaging unreasonable restraints trade violating sherman act nothing indicate intent general language sherman act change nation traditional specifically stated policy towards inventions policy widely regarded made major contribution nation exceptional economic progress sherman act unquestionably applied abuse patentee exclusive rights exceeded limit rights amounted unreasonable restraint interstate trade hooever nothing indicate sherman act restricted traditional patent rights bement national harrow supra page page limited license agreements primary issue case therefore determine whether line issuance restricted licenses thereby sought exercise right excess exclusive right secured line patent laws done licenses like agreements must scrutinized determine whether create unreasonable restraint trade violation sherman act first consideration relation sherman act provisions license agreement place bement general electric prices may charged licensee products made sold protection license issue corresponds raised westinghouse license general electric case sherman act invalidation agreements restraint trade applies unreasonable restraint trade definition unreasonableness depends largely upon common law meaning restraint trade permits invalidation example license mere subterfuge price fixing otherwise amount unreasonable restraint trade violation sherman act see gypsum co decided concurrently case sherman act prohibition unreasonable restraints trade accordingly invalidate unconditional nonexclusive license agreement served release licensee right patent holder exclude making using selling patented article original exclusive right patent holder secured terms patent violation sherman act accordingly release waiver part exclusive right issuance unconditional license per se decreased rather increased statutory restraint trade entitled next question whether insertion license limitation upon licensee right sell articles made licensee patent per se converts otherwise lawful agreement unreasonable restraint trade violative sherman act answer unlimited license partial lawful relaxation lawful restraint trade imposed patent limited license correspondingly less relaxation restraint fact limitation license limitation price may charged licensee making sales article made licensee protection patent change answer provided price prescribed reasonably adapted secure pecuniary reward patentees monopoly restraint trade imposed patent lawful therefore long license agreement effect reducing lawful restraint imposed patent agreement merely converts original lawful restraint lesser restraint equally lawful argeements carefully scrutinized make sure introduce new restrictions judicially construed unreasonably restrain trade thus violate sherman act instant case findings eliminate possibilities thus reduce issue one comparable issue bement general electric cases brings us discussion nature license present case precise limitations contained requires first consideration nature exclusive right make use sell patented product precise nature right described follows chief justice taft unanimous opinion fact patentee invented discovered something useful thus right make use vend induces government clothe power exclude everyone else making using vending words patent confers right incident exclusive enjoyment right incident patentee assignee must order bring suit infringement implication descriptive words grant exclusive right make use vend invention government granting right make use vend granting incident exclusive ownership right enjoyed save right patent confers monopoly decided paper bag case supra many cases idea monopoly held one making using vending connotes right thing excludes others crown nye tool works analysis key issue us demonstrates common law right make use sell product unpatented invention exists without right exclude others making using selling product additional right right added common law right inventor added authority constitution federal statutes promote progress science useful arts doubt general welfare patent interest therein may assigned amended stat supp assignee exercising right exclude others life patent making using selling articles protection patent practice restraint trade violation sherman act assignor assignment made attempted assignment transfer short indicated statute mere license giving licensee title patent right sue law name infringement legal position holder simple unconditional nonexclusive license important receipt license common law right make use sell patented article well articles except important extent prevented patentee exclusive rights license changed position withdrawing licensee extent license restriction patent placed upon accordingly extent license restraint placed upon trade patent diminished relation sherman act license instead creating added ground asserting violation sherman act thus per se relaxed existing restraint trade previous restraint imposed patent violation sherman act therefore mere lessening restraint violation act important point need see lessening restaint resulting issuance either absolute license limited license fact mere withdrawal lawful restraint imposed patent either directly indirectly imposition new restraint within ambit patent right unconditional nonexclusive license presents per se need special scrutiny sherman act yielding license presents issue suggested language general electric case order violate sherman act royalty must reasonably adapted secure pecuniary reward patentee monopoly however well explained case royalty may satisfy needs patent holder limitations price sales licensee products made license patent may best even condition thus reasonably adapted situation following statements illustrate directness repeatedly decided favor validity limited licenses question general rule absolute freedom use sale rights patent laws object laws monopoly rule exceptions conditions nature illegal regard kind property imposed patentee agreed licensee right manufacture use sell article upheld courts fact conditions contracts keep monopoly fix prices render illegal bement national harrow supra page page said unite general electric patentee may grant license condition performance reasonably within reward patentee grant patent entitled secure striction imposed upon licensee manufacture sell patented article certain uses character practice granting licenses restricted use old one see providence rubber company goodyear wall gamewell telegraph brooklyn far appears legality never questioned general talking pictures corporation western electric normality reasonableness practical necessity inserting condition certain licenses without trespassing upon prohibited area unlawful restraints trade effectively summarized general electric case page page patentee goes licenses selling articles may limit selling limiting method sale price think may provided conditions sale normally reasonably adapted secure pecuniary reward patentee monopoly one valuable elements exclusive right patentee acquire profit price article sold higher price greater profit unless prohibitory patentee licenses another make vend retains right continue make vend account price licensee sell necessarily affect price sell patented goods seem entirely reasonable say licensee may make sell articles patent destroy profit wish obtain making selling thereby sell outright licensee articles latter may make sell vest absolute ownership restricts property interest licensee goods makes proposes sell hearings temporary national economic committee testimony received commissioner patents manufacturers familiar commercial development patented products bearing reasonableness propriety price limitations patent licenses comparable present case effect commercially successful mechanical inventions electrical communications automotive industries usually represent intrinsic merit inventions substantial investment research experimentation promotion disclosure invention others licensed make patented article costs production licensees reflect none investments patentee reimbursed expenditures need therefore secure benefit royalty sufficient accomplish restriction price licensees may sell products patent price one enable patentee manufacture sell article quantities prices produce return commensurate investment might prescribe royalty restriction long royalties prices reasonably adapted secure pecuniary reward patentee monopoly perform much function cases patents owned comparatively small industrial producers licenses issued comparatively large industrial producers field necessity early reimbursement patent owners development costs clear danger large licensee undersell smaller licensor obvious situation present case general electric company westinghouse electric corporation among licensees much smaller patent holders line southern similarly outside capital needed finance development invention iti normal reasonable investors require valid patent also insist licenses issued initial operating period shall contain price limitations allow patent holder amortize original investment within reasonable time case finding fact shows price limitation provisions contained various license agreements evidence insisted upon patent owner intended reasonably adapted protect business secure pecuniary reward patentee monopoly following statement conway coe commissioner patents temporary national nomic committee reinforces conclusions capital must encouraged fall behind new enterprise true whether enterprise wholly new represents merely expansion established organization testimony offered committee representatives large corporations continue invent invent invent research research research whether rewarded patent grant investigate believe find whenever large corporations firmly established undertake new development development likely founded upon patent protection whatever opinions expressed committee may hereafter expressed whether inventor continue invent without patent system think present indisputable evidence speculative capital back new inventions without patent protection final analysis crux important thing whole patent question hearings temporary national economic committee supra pp foregoing supports conclusions reached bement general electric cases supra basis support sufficiently broad lead result present case sublicenses foregoing principles authorities simple limiting patent license price limitations meet test stated general electric case lawful agreement license involve possible restraint trade exclusive right make use sell patented product restraint exist virtue statute constitutional provision long antedating sherman act limitations license reach beyond scope statutory patent rights must tested terms sherman act assuming instant case price limitations reach beyond restraint patent next question additional sublicense issued line southern patent make difference answer sublicense per se diminishes statutory restraint trade imposed patent law adds release om restraint southern patent line authority issue sublicense express grant southern line exclusive right issue per se sublicense certainly amounts another license another patent stant case complementary patent without line license without commercial value reason reasonable necessary part transaction bement general electric cases license question issued merely one many patents held licensor cases apparently thought necessary question relation patents one another authority licensor issue license event hardly existed cases closer relationship patents involved essential normal reason patent nature combining rights existed line southern complementary patents except feature next considered situation relation sherman act though line received assignment southern patent issued licenses well line patent present case ten instead one bement general electric cases view positive finding agreement understanding among licensees amounting unreasonable restraint trade mere multiplication one license ten produces repetition issue rather different issue apparent also record general electric case case addition westinghouse license licenses manufacturers issued licensor although licensees made parties suit suggested also bement general electric rule apply agreement line southern suggestion apparently agreement per se reaches beyond scope exclusive rights parties patents converts price limitations respective licenses unreasonable restraints trade violating sherman act southern carries feature issued line consideration line license southern accompanied grant southern line exclusive license grant sublicenses southern patent provision made also equal division southern line royalties shall received line upon products made sold respective licensees southern line patents sublicenses royalties derived however increase restraints trade beyond restraints inherent respective patents fact original license decreased restraints line patent sublicense southern patent complementary relationship patents sublicenses served substantially remove restraints respective patents held separately put way production two patents together completely covered product price limitations valid line licenses issuance line sublicenses southern patent effect question involved case southern instead granting line exclusive right issue sublicenses southern patent assigned patent line line issued original licenses terms line issued sublicenses next consideration effect southern line oupled grant exclusive right issue mentioned sublicenses southern patent division certain royalties received line agreement course dealing circumstance existence complementary patent holders agreements per se reach beyond scope patent rights patent pools especially including unrelated distantly related patents involving issuance many forms licenses might present different picture case arrangements might screen incident unlawful agreement restraint trade violating sherman act facts findings eliminate bases claim invalidity except terms license agreements per se confronted effect unrelated patents natural situation common patent laws two complementary patents separately owned one improvement commercially essential case one solution combine ownership two purchase complete assignment per se involve unlawful restraint trade solution instant case even natural consolidation patents purchase conduced even maintenance competition patentee granted nonexclusive license amounted waiver patent holder right exclude making using selling patented product resulted diminution restraint created patent statute per se therefore well within scope patent violation sherman act patentees became producers unless terms reach beyond normally reasonably adapted patent relationships parties outside protection patent law direct licenses reasonable provision least one two normal reasonable patent provision direct license present case validity price limitation line license southern entitled judicial support reasons license issued exchange present case need provisions license southern licenses ten defendants rest upon need patent holder protect opportunity continue manufacture patented product substance situation patent holder needs protect precisely much way case direct license standing alone sherman act traditionally tests violation form substance transaction distinction patent pools holders competing even noncompeting unrelated patents case division royalties holders patents complementary vitally dependent upon complementary patents alone commercially little value together spell commercial success product holders terms within needs patent monopolies essential realization benefits contemplated patent statutes far unlawful agreements violative sherman act agreements vide fact reasonable means releasing public benefits intended public te patent laws mutually deadlocked complementary patents per se desirable procedure standard oil et validity must depend upon terms substance surrounding circumstances record general electric case discloses license agreement general electric company westinghouse upheld agreement fact opinion lower instant case commented license follows agreement existed general electric westinghouse contained agreements even restrictive price tection provisions involved case bar line material opinion general electric case makes distinction direct licenses case therefore precedent upholding agreement facts characterized restrictive presented acquisition single party patents noncompeting machines held per se violation sherman act winslow justice holmes unanimous opinion said machines patented making monopoly case exclusion competitors use essence right conferred patents paper bag patent case continental paper bag eastern paper bag may assumed success several groups due patents best compete one another hard see collective business worse component parts see greater objection one corporation manufacturing per cent three noncompeting groups patented machines collectively used making single product three corporations making proportion one group disintegration aimed statute extend reducing manufacture isolated units lowest degree see also shoe machinery et shoe machinery corporation standard oil justice brandeis spoke follows unanimous except jut ice stone took part case government concedes illegal primary defendants respective licensees adequate consideration legally demanded grants contends insertion certain additional provisions agreements renders illegal urges first mere inclusion provisions division royalties constitutes unlawful combination sherman act et seq evidences intent obtain monopoly contention unsound provisions division royalties conclusive evidence illegality legitimately conflicting claims threatened interferences settlement agreement rather litigation precluded act interchange patent rights division royalties according value attributed parties respective patent claims frequently necessary technical advancement blocked threatened litigation agreement division royalties violates act used effect monopoly fix prices impose otherwise unreasonable restraint upon interstate commerce context reasons previously presented evident agreements effecting price fixation thus may violate sherman act unreasonable restraint upon interstate commerce within meaning sherman act read light patent laws agreements remain within ambits patents relate still lawful agreements virtue patent laws throughout life patent system judicial legislative history since general electric case neither bement general electric cases supra overruled reasoning upon based directly indirectly rejected hand repeatedly recognized existence principles announced see example carbice corporation american patents development corporation general talking pictures corporation western electric argue distributors free license films exhibition subject restrictions patentee license manufacture sell patented article may fix price licensee may sell citing bement general electric cases interstate circuit see univis lens masonite corporation rule stare decisis applies interpe tation given patent statutes sherman act bement general electric cases occasion relaxation rule suggested justice brandeis cases interpreting broad constitutional phrases see dissent burnet coronado oil gas co extent present holdings based upon opinions element inherent rule stare decisis exceptional recent activity seeking statutory amendment change patent laws interpreted bement general electric cases indicates widespread understanding interpretation changed remedy calls congressional action resistance change shown congress impressive indicates tion interpretation existing law expressed bement general electric cases appears therefore neither adequate reason authority overruling bement general electric cases distinguishing case fromt hem footnotes stat amended stat every contract combination form trust otherwise conspiracy restraint trade commerce among several foreign nations hereby declared illegal several district courts invested jurisdiction prevent restrain violations act shall duty several district attorneys respective districts direction attorney general institute proceedings equity prevent restrain violations names appellees abbreviations hereinafter used well percentage production dropout fuse devices manufactured patents listed appellee abbreviated title percent general electric general electric line material line james kearney kearney southern equipment corp southern westinghouse electric westinghouse schweitzer conrad schweitzer conrad railway industrial engineering railway matthews matthews porcelain products porcelain royal electric mfg royal pacific electric mfg pacific johnson johnson corporations various except johnson business johnson manufacturing company atlanta georgia case argued april request reargued november gypsum decided today considers related phases sherman act legislation lemmon device consists essentially expulsion tube supported double jointed hinge lower end tube moves closed circuit position hinge locked latch engages terminal top tube hold tube place hinge released relatively complicated expensive solenoid mechanism current becomes excessive short circuit overload thereupon circuit broken tube tube drops downwardly upper end disengaging latch permits tube swing reason claims covering double jointed hinge construction cutouts patent dominates manufacture dropout fuse cutouts involved suit findings fact schultz patent covers dropout fuse cutout improvement device disclosed lemmon patent dominated lemmon patent schultz structure expulsion tube supported double jointed hinge held rigid fuse link overload fuse melts breaking circuit tube hinge released automatically permits tube drop swing outwardly schultz dropout fuse much simpler manufactured considerably less cost comparable solenoid operated cutout met widespread commercial demand use findings fact schweitzer conrad general electric westinghouse railway kearney matthews southern corporation grants line company fully paid license make use sell exclusive right grant licenses others make use sell expulsion tube electric circuit interrupting equipment circuit interruption caused thermally initiated rupturing current carrying element expulsion tube coming claims inclusive inclusive patent lemmon dated march entitled breaker division continuation substitute renewal reissue thereof licenses hereby granted agreed granted express condition prices terms conditions sale southern corporation electric fuse equipment made sold licenses herein granted shall long electric fuse equipment continues covered letters patent line company license granted agreement favorable customer established time time followed line company making sales purpose intent agreement shall directly indirectly modification prices set line company exist time time instance including transaction material parts labor services less regular price party making time selling material parts furnishing labor services making allowances freight terms payment employed line company terms conditions sale may changed line company time time reasonable notice writing southern corporation less ten days written notice shall given change shall go effect agreed line company shall grant license third party patents agreement excepting provisions paragraph license granted general electric company schenectady new york said kyle reissue patent without provision maintenance said third partyof prices maintenance said third party prices first paragraph section southern corporation shall relieved obligation said section electric license agreement march first revised contract price maintenance provision follows license hereby granted licensor subject express limitations dropout fuse cutouts manufactured sold licensee comparable respect general type purpose ampere voltage rating rupturing capacity dropout fuse cutouts manufactured sold licensor licensee prices terms conditions sale dropout fuse cutouts use made license herein granted licensee aforesaid letters patent lemmon schultz steinmayer long dropout fuse cutouts continue covered letters patent shall favorable customer licensee established time time followed licensor sales prices terms conditions sale present established force set forth schedule annexed hereto forming part hereof schedule prices may changed time time licensor upon ten days notice writing licensee spirit intent license agreement contemplates transaction shall modification licensee prices either directly indirectly instance inclusion transaction material parts services labor less regular prevailing prices party making sale time accustomed sell material parts furnish services labor serve effect reduce licensee prices named schedule exists time time repeated electric revised agreement november variable appears westinghouse licenses price provisions lemmon patent mentioned lemmon patent included grant license subsidiary schultz patent practiced without right use dominant lemmon two produced aggregate less one percent devices appellees except royal pacific johnson attended one another conferences find necessary determine whether selling prices also licensees conference agreements adequately show intention fix prices licenses contained provisions records sale inspection thereof cancellation license breach findings fact price limitation provisions contained various license agreements evidence insisted upon patent owner intended reasonably adapted protect business secure pecuniary reward patentee monopoly licenses granted taken granted good faith parties licenses believing license patents necessary order licensee continue lawfully manufacture sell dropout fuse cutouts apart written license agreements evidence agreement express implied licensor licensee two licensees respect prices licensed dropout fuse cutouts devices minimum prices established line comparable competitive devices line manufactured sold regularly ready manufacture sell customers special order agreements line southern limited commercially practicable device covered subservient schultz patent create additional power price control licensed cutouts entering agreements inflexible intention insist upon price limitation existed independently patent owners prior discussions arrangements agreements entered good faith purpose fixing prices industry permit manufacture sale cheaper device covered subservient patent facilitate negotiation licenses provide royalty income agreement express implied line southern respect prices cutouts written agreements license agreements evidence restrain trade promoted making available several sources patented devices obtained thus increasing competition devices particularly respect design quality service competition among defendants business devices continued vigorous making license agreements combination conspiracy among defendants fix maintain control prices dropout fuse cutouts parts thereof restrain trade commerce therein illustration without implication position issues call attention following barberäcolman national tool suit licensor licensee injunctive relief compel compliance price fixing provision patent license denied general electric case held permit patentee fix prices unpatented hobs produced process patent patented machine cummerägraham straight side basket licensee denied relief action licensor failing require licensees comply price fixing provisions licensor patent attachment basket making machine may fix prices baskets produced machine vehicular parking antitrust proceeding patent holding company manufacturing licensees parking meter industry patent licenses fixed prices parking meters sold contained restrictive provisions marketing practices ordering compulsory licensing reasonable royalty distinguished general electric case principally ground patentee case manufacture parking meters distinctions noted number active concert licensees weakness patents fixing prices unpatented articles existence marketing restrictions example price arrangements type agreement indicated litigation follows allegheny ludlum steel stainless steel company owning patents particular type stainless steel allegedly issued licenses fixing prices types stainless steel american optical optical patents owned patent holding company gave exclusive licenses exclusive licensee sublicensed manufacturers agreed maintain prices comply marketing restrictions bausch lomb optical civil patent holding company issued licenses two licensees manufacture bifocal lenses licenses fixing prices bifocal lenses sold selection wholesalers retailers lenses catalin corporation america manufacturer phenolic resins licensed manufacturers process patents licensees agreeing sell prices established licensor general cable cross licenses among holders patents fluid filled cable licensees agreeing adhere uniform prices observe territorial marketing limitations general electric cross licensing agreements manufacturers electrical bulbs providing price quantitative restrictions general electric cross licensing tungsten carbide patents price territorial restrictions general instrument civil owners variable condenser patents assigned patents holding company took back licenses price fixing provisions explicit price fixing provisions subsequently removed allegedly continued tacit agreement phillips screw holder patents cross recessed head screws granted exclusive license leading screw manufacturer sublicensed manufacturers patent holder exclusive licensee sublicensees agreed price terms screws produced case dismissed march lists uncertainty nature patent process product justifies price control extent patent domination device may patent pooling corporation control licensees sale prices extent price control industry et seq earlier cases involving national harrow company lower courts held industry wide combination fix prices illegal national harrow hench national harrow quick affirmed grounds compare rubber tire wheel milwaukee rubber works indiana mfg case threshing mach upholding industry wide price fixing blount mfg yale towne mfg holding price fixing illegal bills introduced outlaw price limitation patent licenses sess sess sess hearings thereon sess sess sess sess sess sess sess sess see final report temporary national economic committee sess report national patent planning commission sess rules civil procedure rule following section findings effect actions tried upon facts without jury shall find facts specially state separately conclusions law thereon direct entry appropriate judgment granting refusing interlocutory injunctions shall similarly set forth findings fact conclusions law constitute grounds action requests findings necessary purposes review findings fact shall set aside unless clearly erroneous due regard shall given opportunity trial judge credibility witnesses findings master extent adopts shall considered findings stat dr miles medical john park sons boston store chicago american graphophone shoe machinery trenton potteries seconyävacuum oil univis lens sola electric jefferson electric katzinger chicago mfg appalachian coals cited support contrary view case held plan said either contemplate involve fixing market prices page page see case supra page page et seq perhaps arbitrary monopoly prices mind appalachian pages pages national lead standard oil indiana cases cited standard sanitary mfg see transparentäwrap mach corporation stokes smith cases cited interstate commerce act authorizes carriers pool revenues authorizes mergers carriers provided approval interstate commerce commission obtained antitrust laws ia pplicable agreements words pool words art expression used opinion convey idea linking right use patents issued one patentee page page agreements clearly therefore transcended necessary protect use patent monopoly law conferred upon passed purpose accomplished restraint trade condemned sherman law therefore purpose accomplished result shown bement case contention case contract national harrow company bement sons part contract combination many companies constituted violation sherman law fact established case treated one particular parties one granting receiving right use patet ed article conditions suitable protect use secure benefits nothing henry dick contravenes views herein expressed cf general electric supra stat amended stat apart written license agreements evidence agreement express implied licensor licensee two licensees respect prices licensed dropout fuse cutouts agreement express implied line southern respect prices cutouts written agreements combination conspiracy among defendants fix maintain control prices dropout fuse cutouts parts thereof restrain trade commerce therein findings fact addition findings quoted note supra trial found validity letters patent involved licenses defendants contested plaintiff action therefore issue none license agreements aforesaid restrains trade article moving interstate commerce none entered result conspiracy restrain trade prices listed schedule line selling prices determined solely line without discussion advice defendant southern licenses others line established minimum prices structures within ambit claims patents classification schedules attached license agreements reasonably necessary protect business licensor implement license agreement prevent evasion licensee lawful price limitation provisions line establish minimum selling prices devise covered claim schultz patent kyle patent charge monopoly defendants fixing resale prices licensed dropout fuse cutouts defendants price limitation provisions contained various license agreements evidence insisted upon patent owner intended reasonably adapted protect business secure pecuniary reward patentee monopoly licenses granted taken granted good faith parties licenses believing license patents necessary order licensee continue lawfully manufacture sell dropout fuse cutouts agreements line southern limited commercially practicable device covered subservient schultz line patent create additional power price control licensed cutouts entering agreements agreement entered good faith purpose fixing prices industry permit manufacture sale cheaper device covered subservient patent facilitate negotiation licenses provide royalty income license agreements evidence restrain trade promoted making available several sources patented devices obtained thus increasing competition devices particularly respect design quality service competition among defendants business devices continued vigorous making license agreements patents represent control appears follw ing finding defendants manufacturers electrical devices various kinds dropout fuse cutouts manufactured defendants patent licenses open competition many devices perform functions manufactured patent licenses open single hinge dropout fuse cutouts open fuse cutouts fuse cutouts enclosed materials cast wetprocess porcelain prestite automatic circuit breaker cutouts others listed defendants exhibit average aggregate annual sales licensed dropout fuse cutouts manufactured defendants constituted average aggregate annual sales licensed competitive cutouts manufactured sold defendants distributed among defendants follows general electric line kearney southern westinghouse schweitzer conrad railway matthews procelain royal pacific johnson license agreements entered various defendants set forth preceding findings fact lawful agreements conclusions law general electric supra page page bement case supra page page general electric case supra page page early patent establishment new industry granted flemish weaver records merchant monopoly exporting cornish tea individual monopoly sell sweet wines city london first patent new invention found records dates covers manufacture saltpetre meinhardt inventions patents monopoly pp london case monopolies darcy allein part royal grant exclusive right manufacture playing cards within realm held void violating common law several acts parliament see walker patents pp deller ed provided also declared enacted declaration shall extend letters patents grants privilege term fourteen years hereafter made sole working making manner new manufactures within realm true first inventor inventors manufactures others time making letters patents grants shall use also contrary law mischievous state raising prices commodities home hurt trade generally inconvenient said fourteen years accounted date first letters patents grant privilege hereafter made shall force act never made none jac statute monopolies created new right either crown people simply declaratory common law enacted statute law bound sovereign doctrines courts repeatedly affirmed reiterated principles magna charta henry iii ch xxxvii declared liberties subjects shall infringed broken royal usurpation limited royal prerogative certain definite terms conditions might lawfully exercised noted reservation letters patent grants privilege sole working making new manufactures within realm true first inventor conferring upon exclusive privilege term fourteen years walker patents supra first act implement constitutional provision approved april provided upon petition person persons secretary state secretary department war attorney general setting forth hath invented discovered useful art manufacture engine machine device improvement therein knowm used praying patent may granted therefor shall may lawful said secretary state secretary department war attorney general two shall deem invention discovery sufficiently useful important cause letters patent made name bear teste president reciting allegations suggestions said petition describing said invention discovery clearly truly fully thereupon granting petitioner petitioners heirs administrators assigns term exceeding fourteen years sole exclusive right liberty making constructing using vending others used said invention discovery italics supplied stat commissioner referred special interest president jefferson subject american among contemporaries successors achieved greater reputation opponent monopoly thomas jefferson yet merely sanctioned eloquently advocated form monopoly represented patents cite commentary early act congress presumably administration collaborated henry knox secretary war edmund randolph attorney general act congress authorizing issue patents new discoveries given spring invention beyond conception instrument granting patents acquainted discoveries arts especially mechanical arts many ingenious improvements made consequence giving exclusive use years certainly inventor allowed right benefit invention certain time nobody wishes ingenuity receive liberal encouragement hearings temporary national economic committee supra conception degree present patent system resorted found commissioner coe testimony patents issued apart design patents reissues figure approximately issued since showed also applications filed finally granted id exhibits see also official gazette vol pp final report temporary national economic committee president issued executive order december establishing national patent planning commission conduct comprehensive survey study american patent system among things whether system provides maximum service stimulating inventive genius people evolving inventions furthering prompt utilization public good whether obstructions existing system patent laws eliminated methods plans might developed promote inventions discoveries increase commerce provide employment fully utilize expanded defense industrial facilities normal times president appointed charles kettering chairman chester davis francis gaines edward mcgrady owen young members committee report committee transmitted president congress june sess contained following american patent system established constitution giving congress promote progress science useful arts years old system accomplished framers constitution intended provision government promotion invention discovery basis upon entire industrial civilization rests american people government recognize fundamental rightness fairness protecting creations inventors patent grant basic principles present system preserved system contributed growth greatness nation hasä encouraged rewarded inventiveness creativeness producing new products processes placed far ahead countries field scientific technological endeavor stimulated american inventors originate major portion important industrial basic inventions past years facilitated rapid development general application new discoveries extent exceeding country contributed achievement highest standard living nation ever enjoyed stimulated creation development products processes necessary arm nation wage successful war contributed improvement public health public safety operated protect individual small business concerns formative period new enterprise strongest industrial nations effective patent systems careful study commission reached conclusion american system best world italics supplied summary findings recommendations added patent system foundation american enterprise demonstrated value period coextensive life government principle recognizing property right intellectual creation sound continued contemplated constitution id grant raymond pet chief justice marshall said law declares patent good available grantee grantees force act every intent purpose herein contained amendatory act contains language doubted settled purpose ever continues confer authors useful inventions exclusive right inventions time mentioned patent reward stipulated advantages derived public exertions individual intended stimulus exertions laws passed give effect purpose think construed spirit made execute contract fairly part full benefit actually received done without transcending intention statute countenancing acts fraudulent may prove mischievous public yields nothing agreed yield receives contracted receive full benefit discovery enjoyment discoverer fourteen years preserved exclusive enjoyment time public faith pledged great object intention act secure public advantages derived discoveries individuals means employs compensation made individuals time labour devoted discoveries exclusive right make use sell things discovered limited time issue corresponding issue examined upheld general electric case namely involving validity patentee agency system sales patented article another system making sales patented article held invalid found bona fide agencies masonite corporation case turn reach issue raised westinghouse license general electric case said page page need reach problems presented bement national harrow part general electric case dealt license westinghouse company american tobacco see also standard oil instant case also distinguished sharply parties license sought fix prices resale licensee patented products previously sold licensee patentee others univis lens ethyl gasoline corporation motion picture patents universal film mfg straus victor talking machine bauer see also standard oil shoe machine corporation standard sanitary mfg adams burke wall general electric case supra page page discussing patent monopoly patent laws long ago said monopoly thus granted one entire thing divided parts except authorized laws patentee assigns may instrument writing assign grant convey either whole patent comprising exclusive right make use vend invention throughout undivided part share exclusive right exclusive right patent within throughout specified part assignment transfor short one mere license giving licensee title patent right sue law name infringement gayler wilder moore marsh wall waterman mackenzie quoted approval crown nye tool works enlarged upon general electric case supra page page see note supra license passes interest monopoly described mere waiver right sue patentee quoted approval chief justice taft unanimous opinion de forest general electric case supra page page chief justice taft pages page made following significant references bement case question considered case bement national harrow combination manufacturers owning patent make float spring tool harrows licensed others make sell products patent condition continuance license sell products less price favorable terms payment delivery purchasers set forth schedule made part license held valid use patent rights owners patent objected made monopoly speaking justice peckham said page object laws monopoly rule exceptions conditions nature illegal regard kind property imposed patentee agreed licensee right manufacture use sell article upheld courts fact conditions contracts keep monopoly fix prices render illegal contract said page provision regard price licensee sell article manufactured license also appropriate reasonable condition tended keep price implements manufactured sold recognizeing nature property dealt providing vl ue far possible parties legally entitled owner patented article course charge price may choose owner patent may assign sell right manufacture sell article patented upon condition assignee shall charge certain amount article judge westenhaver whose judgment district affirmed general electric case said licensor licensee making selling quite conceivable owner patent safely grant licenses terms otherwise risk business destroyed hence matter ordinary business prudence feel obliged keep patent monopoly wholly within hands held bement national harrow general electric general electric case supra page page hearings temporary national economic committee supra conway coe commissioner patents pp et et seq joseph farley patent counsel ford motor detroit michigan et seq vannevar bush president carnegie institution washington et seq ralph flanders president jones lamson springfield vermont senator vermont et seq john graham president motor improvements newark new jersey et seq frank jewett president bell telephone laboratories new york city et seq maurice graham independent inventor minneapolis minnesota et seq george baekeland vice president bakelite corporation new york city et seq see note supra commissioner patents testified patents issued exclusive design patents reissues large corporations respectively assets received small corporations respectively less assets foreign corporations individuals subsequent assignments materially affect proportions hearings temporary national economic committee supra clarence carlton president automotive parts equipment manufacturers association testified automotive parts industry valued much small manufacturer large manufacturer anything happened patent system fellow hurt anyone else smaller manufacturer id pp part consideration granting foregoing licenses licensee westinghouse hereby grants agrees grant licensor general electric license patents owns controls may issue pending applications owned controlled patents licensee may control term agreement improvements incandescent lamps specified paragraphs article make use sell throughout territories thereof incandescent lamps kinds specified said paragraphs article hereof license personal indivisible except successors substantially entire good business licensor continue period licenses licensor licensee remain force par agreement general electric company westinghouse electric manufacturing company march exhibit record standard oil case page page point stated often case patents covering improvements basic process owned one manufacturer granted another patent may rendered quite useless another unexpired patent covers vitally related feature manufacturing process unless agreement reached parties hampered exposed litigation frequently cost litigation patentee greater value patent minor improvement making statement justice brandeis already joined opinion general electric case supra written opinion carbice corporation american patents development corporation many bills relating issues introduced congress referred appropriate committees one reported back either house congress early proposed patentee permitted fix price articles sold others patent hearings held temporary national economic committee department justice recommended many fundamental well minor changes patent law included prohibition limiting patent licenses comparable issue preliminary report temporary national economic committee doc cong department commerce took opposite position submitted recommendations retaining improving patent system substantially accordance traditional underlying policies final report temporary national economic committee incorporated substance proposals department justice included recommendation patentees permitted limit price licensee might sell product made license final report temporary national economic committee doc sess president appointed national patent planning commission submit recommendations questions dealt report see note supra among examples proposed reforms concluded beneficial innovation patent system listed certain limitations patent licenses evidently referred proposals temporary national economic committee outlaw price restrictions limitations patent licenses report national patent planning commission house doc sess bills general effect proposals temporary national economic committee introduced referred committees congress advanced among following sess sess sess sess sess section supra proposed sale assignment conveyance patent every grant license thereunder connection condition agreement understanding restricts price purchaser assignee grantee license licensee may sell article producible patent customarily marketed interstate commerce hereby declared illegal