Document: 329 U.S. 402 67 S.Ct. 421 91 L.Ed. 380 MacGREGORv.WESTINGHOUSE ELECTRIC & MFG. CO. No. 28. Reargued Nov. 14, 15, 1946. Decided Jan. 6, 1947. Rehearing Denied Feb. 17, See 330 853, 768. On Rehearing. Mr.William B. Jaspert, of Pittsburgh, Pa., for petitioner. Mr. Jo. Baily Brown, respondent. Justice BLACK delivered the opinion Court. 1 This case, like that Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 394, 416, this day decided, involves right a patent licensee to defend suit royalties only under licensing agreement which contains price-fixing provision. Certain subsidiary questions are also raised. 2 Westinghouse Electric Manufacturing Company owned Jones' Patent 1,651,709. The invention claimed was brazing 'solder comprising copper and phosphorous as main essential constituents.' sued MacGregor infringement. litigation settled, took license from authorizing make, use, sell solder containing constituents described in Westinghouse's claim. agreed pay 10% on net selling price solder. Sections 5 6 agreement. Set out below,1 required no less than charged its own customers. paid he made sold contained copper. Later began make solders composed phosphorous, copper, tin, or silver. For time these. But applied obtained patents these two latter added tin silver respectively phosphorous-copper combination.2 then declined ground they were not covered by patent. brought an accounting payment unpaid Pennsylvania State court. filed answer denying liability counterclaim. His asserted his He alleged effort him constituted unlawful exercise monopoly should be allowed recover courts reason. In counterclaim, maintained inadvertence mistake had patents. if construed cover solders, it invalid. further contended provision violation Sherman Act, 15 U.S.C.A. §§ 1—7, note, Clayton § 12 et seq., use rendered whole illegal.3 counterclaim asked, judgment refund have been inadvertently paid, but damages account illegal restraint imposed upon 3 trial court consider validity patent, holding presumed valid, challenge it. Assuming all claims valid theory, found broad enough scope manufactured MacGregor. did give presumption issued MacGregor, held those infringed presumptively Westinghouse.4 supreme affirmed. 350 Pa. 333, 38 A.2d 244. It with estopped attack recognized there could estoppel present case our decision Sola Jefferson 317 173, 63 172, 87 165, interpretation applying suits sought affirmative relief enforce compliance Since such asked felt existing controversy involved provision—that their effect 'moot.' Thus assumed, petitioner E. supra, royalty severable covenants. reasons stated today's we hold covenant at fixed prices. invoked federal law sustain misuse covenant, contentions raised governed state contract severability rules. pages 176, 177, 174, 165; Scott Paper Marcalus 326 249, 66 101. Accordingly, matter wrong affirming cause licensee, offer proof allegation invalidity. error will require, anticipated, remanded new determine do think record justifies acceptance MacGregor's contention now pass If determined remand is invalid, question that, contends, violates anti-trust laws. supra; page 175, supra. 4 alternative here might turn even though valid. pleaded so effectively wiped competition manufacture sale Acts. unenforceable attempted extend patent's beyond lawful coverage. since must again tried shall either time. reversed r manded Supreme Court proceedings inconsistent opinion. Reversed remanded. 7 FRANKFURTER, whom concur REED, JACKSON BURTON, dissenting. 8 deems issues cases controlled 165. Such my understanding decision. These cannot property I believe, without consideration one oldest doctrines law, namely, everyone else may. 9 (1) Ninety years ago unanimously announced doctrine challenging Kinsman Parkhurst, 18 How. 289, 385. may perhaps explained, explained away. rule expressed become much part fifty later deemed unnecessary discuss against United States licensee. Harvey Steel 196 310, 25 240, 49 492. significant while vigorously contesting particular facts, conceded 'as general proposition'. 10 (2) Before since, English-speaking jurisdictions, England, Dominions various States, well lower courts, where most originates stops, weighty body affirmed rare unanimity.1 has never questioned rule.2 principle withstood judicial scrutiny nearly century. 11 (3) Nor operation revealed inroads public interest stir efforts abrogation restriction Congress. policy frequently reconsidered, some rules formulated eliminated modified. yet none four major statutes nor any other numerous amendatory enactments attempt abolish limit favor licensor.3 Office, Congress supervision system source many suggestion enacted into included among proposals recommendation alter doctrine. (4) Not until 1942, apparently, legislative correction invoked, partially. Several bills introduced permit contest suits. S. 2730, ug. 20, 1942; H.R. 7713, Oct. 109, 1943; 1371, 1943. Only latest proposed 'In proceeding involving laws therein, party entitled show invalidity limited rights involved.' 3874, Dec. 18, 97, 3, 1945; 3462, June 13, 2482, July 26, reached floor 13 (5) ever established itself respected judiciary changed, change Perhaps see fit reexamine ramifications light history experience it, due regard factors relevant system. We that. can adhere overrule Until does undo embedded leave find 14 (6) event, wipe settled phase done explicitly, cryptically. adequate support Court's before us necessarily involve disposed appearing course (7) No doubt two, arose claim license. hardly mentioned case. sole issue attention directed prayer enjoined breach promise abide prices licensor articles Ever Dr. Miles Medical John D. Park Sons 220 373, 31 376, 55 502, Court, reflected legislation, denied enforcement agreements goods below price. And alert allow exception what Congressional unless basis clean clear. 16 precise decided inference conjecture. explicitly defined delimited. 'The decision', late Chief wrote, 'is whether virtue agreement, clause showing accordingly because protected monopoly.' That when royalties. undermined special dispensation pertaining holder entitles fix commodity although pricing would generality cases. What active benefit clause. 17 (8) issue.4 practice available To grant not, unlike approve prima facie trade. decide repudiate money arm's length transaction. hundred uniformly answered using legal shorthand estoppel. (9) reduced, apparently been, derelicts, remain obstructions stream law. merely proper administration practical consequences whose concern falls outside interdict acts. Bement National Harrow 186 70, 22 747, 46 1058.5 power patented grant. mode maintaining integrity sanctioned policy. All held, thing indispensable 19 inventor increasing uncertainty. Hitherto, doctrine, patentee assured litigate grants Under decision, assurance freedom if, reasonable belief inserts license, afterwards asks 20 matters choose between safeguards Here stands important difference disregarded, controlling, left fend stray. By silence, reasoning engender natural doubts continuing existed. result future arrangements overhung cloud who believes holds granting licenses 21 insists help maintain business, runs risk losing mere existence (which here) entirely cold sustained. So long unrejected, may, therefore, prefer forgo satisfied bird hand reliance upshot creates unfair uncertainty continued vitality historic doctine. forgoes order certain least collect cost litigation, himself caught optimism unembarrassed given up otherwise assert sure event him. seem fair pronounce survived deem themselves holders suffer assumed preserve intimation purports jettison. (10) problem treated same distinction makes difference. refuse restraining trade fixing positive justification shown form quite another excuse inoperative escape roaylties.6 Nowhere intimate rested importance economy allowing members bargain so. fact, estoppel, flowing Parkhurst harvey noted put side 'Here different presented.' aside Altvater Freeman, 319 359, 364, 1115, 1118, 1450.7 meet met disregard. apply equally vital more ninety deprived life, ought decent burial. '5. express condition prices, terms conditions America, territories possessions embodying said Letters continue favorable customer maintains sales similar competing similarly situated purchasing quantities. notified Westinghouse. changed time, notice being five days' go effect. '6. regarded evasion amounting thereof reduce directly indirectly through organization, agents others device, subterfuge means whatever set forth Westinghouse.' Copper, 2,125,680; 2,162,627. all, executed not. Socony-Vacuum Oil 310 150, 60 811, 84 1129; American Tobacco 328 781, 810, 1125, 1139. token, 11, 1940, called obligation observe user distributor October 23, Westinghouse, attorneys, wrote attorney 'if sells direct conform established, dealer, dealer established.' oral testimony representatives requiring Moreover, shows positively testified copper-phosphorous combination considered bound contract. propriety indulging giving patentable Miller Eagle 151 186, 208, 319, 121. early collected Strong Carver Cotton Gin 197 Mass. 53, 83 N.E. 328, L.R.A.,N.S., 274, Ann.Cas. 1184. Note unanimity authors treatises. Amdur, Law Practice 598; Ellis, Assignments Licenses 692 seq.; Frost, 201; Moulton, Patents 244; Rivise Caesar, Patentability Validity 10; Robinson, 820; Walker, (Deller's ed.) 383. cited, especially Patents, Cf. Eureka Bailey Wall. 488, 492, 209; Eclipse Bicycle Farrow, 199 581, 587, 26 152, 50 317. Act 1790, Stat. 109; 1793, 318; 1836, 117; 1870, 198. subsequent minor enactments, summarized, J.Pat.Off.Soc., 1936, pp. 103—22. Appendix. tant requested require them. issue. defense accrued royalties.' Discussion findings As District 'no respondent proved patitioner. . At carry times willing removed contract.' Further specific finding fact 'Respondent always eliminate provisions terminated ipso facto termination petitioner.' facts Circuit Appeals persence setting however inoperative, precluded Cir., 139 F.2d 291. With thus eliminated, returned Inasmuch erred decree enforcing previous regarding became irrelevant fell decree. findings, however, cease first appeal. based, us. enforced based vacated. appeal review court's provided percentage sales. amount except insofar scheduled minimum made. Plainly schedule according list. royalties, Upon full reaffirmed General 272 476, 47 192, 71 362. cited approval Carbice Corp. America Corp., 283 27, 31, 51 334, 335, 75 819. note Brandeis joined member resourceful y protect undue extension observing seen confer considerations distinct underlie additional price-fixing. They interdependent parties; artificial notion requires interdependent. lesser guided refused treat separate integrated. Philadelphia, Wilmington Baltimore Railroad Howard, 307, 339, 157; Pollak Brush Association, 128 446, 455, 119, 121, 32 474. 101, went earlier expired device domain.

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