Document: 379 U.S. 29 85 S.Ct. 176 13 L.Ed.2d 99 Walter C. BRULOTTE et al., Petitioners,v.THYS COMPANY. No. 20. Argued Oct. 20, 1964. Decided Nov. 16, Rehearing Denied Jan. 18, 1965. Edward S. Irons, Washington, D.C., for petitioners. Elwood Hutcheson, Yakima, Wash., respondent. Mr. Justice DOUGLAS delivered the opinion of Court. 1 Respondent, owner various patents hop-picking, sold a machine to each petitioners flat sum1 and issued license its use. Under that there is payable minimum royalty $500 hop-picking season or $3.33 1/3 per 200 pounds dried hops harvested by machine, whichever greater. The licenses their terms may not be assigned nor machines removed from Yakima County. listed 12 relating machines;2 but only seven were incorporated into licensed use Of those all expired on before 1957. But respondent them3 continued beyond date. 2 Petitioners refused make payments accruing both after expiration patents. This suit followed. One defense was misuse through extension agreements date trial court rendered judgment Supreme Court Washington affirmed. 62 Wash.2d 284, 382 P.2d 271. case here writ certiorari. 376 905, 84 666, 11 L.ed.2d 605. 3 We conclude below must reversed insofar as it allows royalties collected which accrued last had expired. 4 Constitution Art. I, § 8 authorizes Congress secure 'for limited times' inventors 'the exclusive right' discoveries. exercised power 35 U.S.C. 154 provides in part follows: 5 'Every patent shall contain short title invention grant patentee, his heirs assigns, term seventeen years, right exclude others making, using, selling throughout United States, referring specification particulars thereof. * *' make, sell, 'may granted conferred separately patentee.' Adams v. Burke, 17 Wall. 453, 456, 21 L.Ed. 700. these rights become public property once 17-year period expires. See Singer Mfg. Co. June Co., 163 169, 185, 16 1002, 1008, 41 118; Kellogg National Biscuit 305 111, 118, 59 109, 113, 83 73. As stated Chief Stone, speaking Scott Paper Marcalus 326 249, 256, 66 101, 104, 90 47: 6 '* any attempted reservation continuation patentee claiming under him monopoly, expires, whatever legal device employed, runs counter policy purpose laws.' 7 held present during required 'a reasonable amount time over spread patent.' Wash.2d, at 291, P.2d, 275. intrinsic evidence designed with view. we have seen,4 purchase price sum, annual being year. due post-expiration are period, deferred pre-expiration period. Nor like hypothetical ones put us where non- patented articles marketed prices based issue exacted same they patent. That peculiarly significant this view other provisions agreements. prevent assignment removal County after, well before, Those restrictions apt pertinent protection monopoly; applicability telltale sign licensor using project monopoly They forcefully negate suggestion bare arrangement sale lease an undetermined unpatented long-term would wholly different considerations. arrangements seldom rise level federal question. domain; 'whatever employed' (Scott supra, U.S., S.Ct., 104) projection expires enforceable. draw no line between respects applicable each. contracts are, therefore, face bald attempt exact conditions do unable conjecture what bargaining position parties might been resultant emerged provision divorced nowise subject leverage. 9 In light considerations, patentee's agreement projects unlawful se. If available patentees, free market visualized influences proper place there. 10 Automatic Radio Hazeltine, 339 827, 70 894, 94 1312, point. While some apparently expired, claimed when them expired.5 covered several hundred licensee's sales, even used. computation formula convenient device. decline invitation extend so A empowers high he can negotiate leverage monopoly. life analogous effort enlarge tieing article ones. Ethyl Gasoline Corp. 309 436, 60 618; Mercoid Mid-Continent Inv. 320 661, 664—665, 64 268, 270 271, 88 376, cases cited. exaction has assertion when, seen, entered domain. share views Appeals Ar-Tik Systems, Inc. Dairy Queen, Inc., Cir., 302 F.2d 496, 510, spent' another licensing unenforceable. Reversed. HARLAN, dissenting. 14 holds Thys Company unlawfully misused contracting purchasers term. I think more discriminating analysis than seen fit give produces result. 15 laws prohibit ideas; bearing upon nonpatented, tangible machines. mixed involving incorporates intangible, idea. My follows separate out two notions, show substantial restriction idea, demonstrate slight less objectionable clearly acceptable. I. It surely cannot questioned could lawfully set fixed extended credit equally unquestionable, take it, if flexible, use; example, phonograph record manufacturer sell recording song domain juke-box consideration number times played. Conversely should clear produce incorporating patents, Such restrict manufacturer's exploitation idea falls domain, such valid. To example unconnected writer charge every song—his idea—was sung profit copyright. member sing it. 18 fact sells company first examples given above. fallen Whether done point inquiry. 19 Consider situation day ends. Any completely Thys-type hop-pickers. farmer who previously purchased buy kind whether one himself able. course, entitled against machine. Court's therefore ultimately rest proposition purchasing restricted particular embodying does application tied directly 20 test again hypothetical. Assume contract called neither initial flat-sum payment royalties; Thys' sole recompense giving up ownership extending use, without requirement either competitor's. moment's thought reveals that, despite term, involve leverage.1 Unless rests technicalities draftsmanship economic substance transaction, distinction actual lies cumulative investment consisting independent purchaser obligated Thys. fail see why distinguishing feature critical. anything will encourage order amortize machine's cost large production base possible. Yet gravamen majority restriction, encouragement, II. essence lie notion 'patent leverage' used somehow extract onerous farmers otherwise obtainable. case, way distinguish installment price. For danger seems fear appear inhere both, read opinion, latter type lawful failure pay conditional sales permit seller recapture thus terminating—not merely restricting—the farmer's Furthermore, since judgments almost entirely defaults paying minimums failures aboveminimum use,2 installments, accepted, justify eradicating petitioners' obligations above minimums; themselves, used, precisely identical substantive effect installments. 22 accepted assumption Thys, exploits rather manufacture them, gearing instead charging sum. Four possible situations considered. overestimate, exactly estimate, underestimate, firm estimate requirements overestimates estimates, fully aware long run, unrealistic suppose circumstances willing straight terms. underestimates, advantage him; better anyone else own hardly need respect. good business reasons wanting indeed run obtain arrangement. On final illustrate my point: 23 At still few years picking hand comes retail outlet inquire about mechanical pickers. salesman concludes description advantages tag—$20,000. Value depends derive machine; obligate $10,000, unless substantially outpick old hand-picking methods, worth him. He offers $2,000 down, $400 annually additional pick hand. accepts, doing so, according majority, commits se believe law.3 III. 24 possibility remains basing decision technical framing treated differently declared pass termination outset verbally disassociated described means spreading impact redraft achieve results, wrong, conspicuously ineffectual. 25 affirm. petitioner paid $3,125 'title' petitioner, $3,300. All prior exception whose mechanism transfer party. Note 1, supra. petition certiorari did questions presented raise question agreement. Also, Hazeltine license, many never aspect likewise apposite licensees machines, manufacturers buying incorporate manufactured products. Installment patented, coin-operated washing basement apartment building except landlord tenants deposit cents constitute misuse. Petitioner Charvet indebted Thysonly extent Brulotte default approximately $4,500 $3,120 attributable minimums. also adverts prohibiting 'assignment County' (ante, p. 32) provisions, however, appropriate performance advance argument overlooked dealing patent, antitrust, basis concluding afoul antitrust laws.

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