Document: 339 U.S. 827 70 S.Ct. 894 94 L.Ed. 1312 AUTOMATIC RADIO MFG. CO., Inc.,v.HAZELTINE RESEARCH, Inc. No. 455. Argued April 5, 1950. Decided June Rehearing Denied Oct. 9, See 71 13. Mr. Floyd H. Crews, New York City, for petitioner. Messrs. Laurence B. Dodds, Philip F. LaFollette, Madison, Wis., respondent. [Argument of Counsel from page 828 intentionally omitted] Justice MINTON delivered the opinion Court. 1 This is a suit by respondent Hazeltine Research, Inc., as assignee licensor's interest in nonexclusive patent license agreement covering group 570 patents and 200 applications, against petitioner Automatic Radio Manufacturing Company, licensee, to recover royalties. The applications are related manufacture radio broadcasting apparatus. Respondent its corporate affiliate predecessor have some twenty years been engaged research, development, engineering design testing consulting services field. derives income licensing patents, policy being any all responsible manufacturers apparatus at royalty rate which many has approximately one percent. Petitioner manufactures apparatus, particularly receivers. 2 issue, appears be standard license, was entered into parties September 1942, term ten years. By terms acquired permission use, 'home' products, or held it might acquire rights. not, however, obligated use respondent's products. For this agreed pay assignor royalties based upon small percentage petitioner's selling price complete receivers, event minimum $10,000 per year. It further keep record sales make monthly reports thereof. 3 brought due year ending August 31, 1946, an accounting other sums due, relief. answered both filed motions summary judgment affidavits support motions. District Court found case appropriate procedure under Rule 56 Federal Rules Civil Procedure, 28 U.S.C.A., sustained motion judgment. validity upheld various charges misuse recovery accounting, permanent injunction restraining failing royalties, records, render during life agreement. D.C., 77 F.Supp. 493. Appeals affirmed, judge dissenting, Cir., 176 F.2d 799 (and we granted certiorari, 338 942, 428, order consider important questions concerning estoppel challenge licensed patents. 4 determination whether shown, may contest avoid obligation 5 First. insisted that cannot enforced because require licensee on sales, even though none used. directs our attention 'Tie-in' cases. These cases condemned schemes requiring purchase unpatented goods with patented processes,1 prohibiting production sale competing goods,2 conditioning granting acceptance another different license.3 apparently concedes these do their facts, control instant situation. obvious they not. There present here no requirement goods. does not sell goods; solely research activities. Nor there prohibition licensee's type fact covers only mean prohibited manufacturing And finally, grant license. We aware asserted countermotion refused more anyone who take all. averment elaborated affidavit attorney motion. point pressed here. In nothing available averment, since thereof made information belief relevant portion, least, comply 56(e) Procedure.4 6 But urges 'is identical principle' contended provision payments products constitutes ties payment Particular reliance placed language United States v. Gypsum, 333 364, 389, 400, 68 525, 539, 544, 92 746.5 That prosecution Sherman Act, 15 U.S.C.A. § et seq., alleged conspiracy Gypsum licensees extend monopoly certain eliminate competition fixing prices gypsum board. provisions board, unpatented. provisions, together evidence understanding board would sold, showed restrict invalid extension area monopoly. 397, 543. indication effectuate monopoly, thus aid public create restraint competition—a countenanced grant. See, e.g., Mercoid Corp. Mid-Continent Investment Co., 320 661, 665—666, 64 268, 271, 88 376; Morton Salt Co. Suppiger 314 488, 778, 62 402, 86 363; Ethyl Gasoline States, 309 436, 456, 60 618, 625, 84 852. principle those contorted circumscribe monopoly; creates beyond legitimate patent. right includes market reasonable return. 46 Stat. 376, 35 U.S.C. 40, 40; Hartford-Empire 323 386, 417, 65 373, 388, 89 322; Id., 324 570, 574, 815, 818, 1198. 7 issue characterized essentially privilege future development consideration Payment required regardless patents.6 theory convenient mode operation designed necessity determining each product embodies numerous 496. reasoned unlawful agree fixed sum provide variable measured same privilege. 804. Numerous Courts had occasion pass question reached result similar grounds,7 like opinion. 8 mere accumulation matter how many, itself illegal. Transparent-Wrap Machine Stokes & Smith 329 637, 67 610, 91 563. simply incendiary, yet vague, uses 'for exaction tribute' collects 'by means overpowering threat disastrous litigation.' say according unreasonable. Sound business could indicate such represents most method value privileges unmindful convenience justify 666, B.B. Chemical Ellis, 495, 498, 406, 408, 367. already indicated, inherent complain must What developments desired them. If chooses them, nevertheless contracted using existing plus resulting continuous research. hold enterprise, se measure sales. 9 Second. next unenforceable contained following restrictive notice attached manufactured agreement: "Licensed Corporation homes, educational purposes, private, non-commercial pending applications:' followed word 'Patent' numbers are, Licensor, involved types hereunder Licensor.' 10 did seek enforced, decree enforce it. well dead letter beginning, indicated that, averred answer, never observed Thus doubtful legality contested, assuming properly raised, disputes. event, clear respect moot. An president corporation advises us letters were sent 1945, licensees, including authorized discontinuance substitution marking 'This rights Corporation.' form 1945. Since benefit respondent, voluntarily waive provision. Westinghouse Electric Bulldog Products 179 139, 145, 146. original before us. Cf. Standard Oil (Indiana) 283 163, 181—182, 51 421, 427, 75 926. 11 Third. Finally, notwithstanding agreement, petitioner-licensee charged using. general rule contract. Harvey Steel 196 310, 25 240, 49 492. invalidity price-fixing agreements invoked what purport valid show invalid. Katzinger Chicago Metallic Mfg. 394, 416, 374; MacGregor Elec. 424, 380. showing practices contrary policy. limited contains neither express nor implied refrain 'commercial' part inapplicable. applies, suit, 12 affirmed. 13 Affirmed. 14 JACKSON took decision case. DOUGLAS, whom BLACK concurs, dissenting. 16 I think, inclined forget power Congress circumscribed Constitution. power, legislative powers, indeed whose purpose defind. Article I, describes 'To promote Progress Science useful Arts, securing Times Authors Inventors exclusive Right respective Writings Discoveries.' statement limits itself. 17 long history times alive than times. During last three decades devoted (if so) time history. think large influence Brandeis Chief Stone. They alert danger business—growing bigger decade fasten tightly economy through cheap spawning beget leverage key early tradition read Constitution comes first, reward inventor second.1 18 Stone fashion but secure curb follows: One holds article A condition B, article, bought.2 Such contract line decisions. Motion Picture Patents Universal Film 243 502, 37 61 871, L.R.A. 1917E, 1187, Ann.Cas.1918A, 959; Carbice America American Corp., 27, 334, 819; G.S. Suppiger, 491—492, 404, 405, Masonite 316 265, 277, 278, 1070, 1077, 1461; 746. sweep unpatentable. Each owner become his own office and, reason patent, obtain larger statutes permit.3 19 done applications. Of used 10. obligated, total lines without regard sold inevitable patentee received 20 therefore bludgeon way partnership collecting articles. 21 plainer hard imagine. 22 wrote Sola Jefferson 317 173, 63 172, 87 165, holding estopped clause see Mfg He also Scott Paper Marcalus 326 249, 66 101, 90 47, bar defending infringement assigned ground infringing device prior-art expired patent.4 23 decisions put protection free enterprise above patentee. limitations doctrine represented almost cycle back salutary teaching Pope Gormully, 144 224, 234, 632, 636, 36 414, 'It should repressed worthless really valuable invention protected monopoly.' To estop attacking dominant system. supra, 665, 271. 24 said if enlarge patent—for example, fixing—then challenging worse enlargement attachment unpatentable article? When constitutional standard, greater harm system? just allowed great pooling made; whole industries knit unholy alliances revealed Line Material 287, 550, 701, wants hundreds. package contain foisted public. No person will interested enough alone apt understand basis illegality. protects exposing freeing toll. beallowed considered one. Ridding stale specious serving end progress science. 26 depart field Graver Tank Linde Air Products, 605, 854), when affirm International 332 392, 12, 20, Minneapolis-Honeywell Regulator 680, 396; 367; 852; Leitch Barber 302 458, 58 288, 82 371; Business Machines 298 131, 80 1085; Development Shoe Machinery 258 451, 42 363, 708; L.R.A.1917E, 959. National Lockwasher Garrett 137 255; Amer. Lord, 257. Paramount Pictures, 334 915, 1260. (Copyright 'Block-booking.') 'Form Affidavits; Further Testimony. Supporting opposing shall personal knowledge, set forth facts admissible evidence, affirmatively affiant competent testify matters stated therein. * *' Fed.Rules Civ.Proc. 56(e). '* *.' 539. 'Patents owners organizing monopolize industry control, drawn patent-free regulation distribution.' 544. view need concern ourselves controversy between counsel transcript shows factual dispute over non-use Research Admiral 72, 79; H-P-M Watson-Stillman 906, 912; Optical Jersey 601, 606; Ohio Citizens Trust Air-Way Appliance 1010, 1012; Pyrene Urquhart, 69 555, 560; Carbonic Engineering Natural 57 248, 251—253, 158 285. At least state court result. DeWald 194 Misc. 81, N.Y.S.2d 597, 603. Story Pennock Dialogue, Pet. 1, 327; Daniel Kendall Winsor, How. 322, 165; Campbell Winans Denmead, 330, 344, 717 (dissenting opinion). Hamilton, Free Enterprice, T.N.E.C. Monograph 76th Cong., 3d Sess., pp. 62—70. speaking 32, 335, said, 'If so expanded, conceivably commerce materials manufacture. machine thereby partial supplies consumed operation. process material employed supplying solid carbon diozide, ice cream foods, cartons shipped. attempt limit purchased licensor comparable fix resold.' emphasized stake allowing 256, 104: 'By force laws dedicated expiration, becomes entitled share good built up enjoyment

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