Albuquerque morning journal. [volume] (Albuquerque, N.M.) 1903-1926, 1922-04-18
TYING CLAUSES
ARE INVALID IS
COURT s RULING
United Shoe Machinery Cor
poration and Its ASSoCl-
ated Companies Receive
an Adverse Decision.

Washington, April 17.--The ety.
ing clauses in the leases of the
United Shoe Machinery corpora
ton and its associated companies
challenged by the government un-
der the Clayton act, were today
declared invalid by the supreme
court, in an opinion delivered by
Justice Day. Justice McKenna
dissented and Justice Brandeis did
not participate in the considera-
tion or decision of the case.
"This system of tying restric-
tions is quite as effective as eX-
pressed covenants could be-" the
court declared, "and practically
compels the use of the machinery
of the lessor except upon risks
which manufacturers will not
willingly incur. The power
to enforce them is omnipresent
and their restraining influence
constantly operates upon compet-
itors and lessees. The fact that
the lessor IN many instances fore
bore to enforce these provisions
does not make them any less
agreements with the condemna-
tlOIl VI JilS SletytOli hNls
Referring to the contention of
the corporation that the form of
lease it adopted after the Clayton
act became effective is free from
the restrictive and tying clauses
and is therefore, unobjectionable,
the opinion pointed out that those
leases are terminable upon thirty
days notice and stated they We're
evidently framed in view Of the
Clayton act and litigation likely
to arise over the former leases
in view of that enactment" The
district court expressed the opin-
ion that should the shoe machin-
cry company's contention be sus-
tanned leases containing them
would again be insisted upon,
Justice Day said. declaring that
"the earnestness and zeal with
which the right to use these
clauses has been insisted upon
throughout. confirms the conclu-
sion of the trial judge. The fate
of these substituted forms of
of leases evidently depends upon
the outcome of this suit"
While the clauses of the lease
enjoined by the district court do
not contain specific agreements
not to use the machinery of a
competitor. the supreme court
found that "the practical effect
of these drastic provisions is to
prevent such use."
Considerable space In the opin-
ion is devoted to disposing Of the
claim by the company that the
supreme courts decision in the
sherman act which was against
the government, precluded the
Clayton act case on the ground
that the issues had been fully ad-
Indicated, the court saying that
1.-The Clayton act was intended to
supplement the Sherman act, and
within its limited sphere establish
its own rule"
1.-THE Clayton act" it added,
specifically applies to goods,
wares. machinery, ETC., whether
patented or unpatented.' This
provision was inserted with the
express purpose of preventing
rights granted by letters patent
from securing immunity from the
of the act. Con-
gress has undertaken to deny the
protection of patent rights to such
covenants as come within the
terms of the Clayton act"
Discussing the charge that the
act was an unconstitutional limi-
tation upon the rights secured
to patenee. the opinion stated
that from an carly day it has
been held by this court that the
franchise secured by patent con-
sists only in the right to exclude
others from making. using or
the thing patented with
out the permission of the pat
entee' and added that ''the pat
ent right confers no privilege TO
make contracts in themselves IL
legal"