Source: https://supreme.justia.com/cases/federal/us/320/680/
Timestamp: 2019-04-19 03:08:28+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 320 › Mercoid Corp. v. Minneapolis-Honeywell Regulator Co.
Mercoid Corporation v. Minneapolis-Honeywell Regulator Co.
An owner of a combination patent may not so use it as to control competition in the sale of an unpatented device, even though the unpatented device may be the distinguishing part of the invention, and a court of equity will grant or withhold relief accordingly. Mercoid Corp. v. Mid-Continent Investment Co., ante, p. 320 U. S. 661. P. 320 U. S. 684.
Certiorari, 319 U.S. 739, to review a decree which reversed in part and affirmed in part a decree of the District Court, 43 F.Supp. 878, in a patent infringement suit.
and affirmed it as respects the relief claimed by petitioner. 133 F.2d 811.
The Freeman patent, as found below, covers a system of hot air furnace control which requires three thermostats for its operation. A room thermostat starts the stoker. Another thermostat (or limit switch) breaks the stoker circuit when the air in the furnace reaches a predetermined temperature, irrespective of the fact that the room thermostat may still call for heat. This second thermostat operates to prevent unsafe conditions due to overheating. The third thermostat is also in the furnace. It controls a fan which forces hot air from the furnace to the rooms. It does not permit the fan to start until the air in the furnace reaches a specified degree of heat. But, at that point, it starts the fan, which continues to run, even though the limit switch has stopped the stoker, so long as the furnace is hot and the room thermostat calls for heat. The District Court found that the Freeman patent was a combination patent on a system of furnace control which requires those three thermostats for its operation, and that it was not a patent on "either the fan switch or the limit switch or both of them." That finding was not disturbed by the Circuit Court of Appeals, which held that Freeman's "advance in the art" was the arrangement of thermostatic switches, subject to furnace heat to secure in connection with other parts the "sequence of operations" which we have described.
"which gets protection as a result of the licenses is the control usable only for a Freeman type installation." Each licensee is required to insert in its catalogues or other sales literature and to attach to each combination furnace control sold a notice to the effect that the control includes a license for one installation of the Freeman heating system. The licenses establish minimum prices for the sale of the controls, and those prices must not be cut by the licensees through the inclusion of "extras" or through the reduction of charges for services. Price lists are attached governing sales to manufacturers, jobbers, wholesalers, and dealers. Equal terms to all licensees are provided. Minneapolis-Honeywell tried on several occasions to induce Mercoid to take a license. Being unsuccessful, it brought its present suit.
held that the patent laws permit, and the antitrust laws do not forbid, the control over the sale and use of the unpatented device which Minneapolis-Honeywell sought to achieve through its licensing agreements. We do not agree, even though we assume the patent to be valid.
The fact that an unpatented part of a combination patent may distinguish the invention does not draw to it the privileges of a patent. That may be done only in the manner provided by law. However worthy it may be, however essential to the patent, an unpatented part of a combination patent is no more entitled to monopolistic protection than any other unpatented device. For, as we pointed out in Mercoid v. Mid-Continent Investment Co., supra, a patent on a combination is a patent on the assembled or functioning whole, not on the separate parts. The legality of any attempt to bring unpatented goods within the protection of the patent is measured by the antitrust laws, not by the patent law. For the reasons stated in Mercoid v. Mid-Continent Investment Co., supra, the effort here made to control competition in this unpatented device plainly violates the antitrust laws, even apart from the price-fixing provisions of the license agreements. It follows that petitioner is entitled to be relieved against the consequences of those acts. It likewise follows that respondent may not obtain from a court of equity any decree which directly or indirectly helps it to subvert the public policy which underlies the grant of its patent. Morton Salt Co. v. G. S. Suppiger Co., 314 U. S. 488, 314 U. S. 494; B.B. Chemical Co. v. Ellis, 314 U. S. 495.
The judgment is reversed, and the causes are remanded to the District Court for proceedings in conformity with this opinion.
MR. JUSTICE ROBERTS, MR. JUSTICE REED, MR. JUSTICE FRANKFURTER, and MR. JUSTICE JACKSON concur in the result on the authority of Morton Salt Co. v. G. S. Suppiger Co., 314 U. S. 488.
"is owned by some person other than Minneapolis-Honeywell and Mercoid, so that, as to them and so far as this case is concerned, it is an unpatented device."

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