Carbice Corp. v. American Patents Development Corp.
Carbice Corp. v. American Patents Development Corp., 283 U.S. 27 (1931), is a decision of the United States Supreme Court extending the patent misuse doctrine against tie-ins to cases in which patents were used to tie the purchase of unpatented elements of patented combinations. The Court had previously held that it was unlawful to require the purchase of supplies as a condition of a patent license, where the supplies were not claimed as part of the patented combination. Background. American Patents Development Corp. (APDC) held a patent for a dry ice transport  enclosure (shipping container), in which a smaller container of dry ice was surrounded by a freezable material (such as ice cream) being refrigerated; this arrangement was contrary to the usual packaging practice of surrounding the material being refrigerated with regular ice. The patent was not on dry ice itself, which was well known as a refrigerant, nor on the container itself, but on the combination of the container and dry ice and the freezable material. A typical claim of the patent provided: 6. A transportation package consisting of a protective casing of insulating material having packed therein a quantity of  frozen carbon dioxide in an insulating container and a quantity of freezable product in freezing proximity to said frozen carbon dioxide and the gas evaporated therefrom, arranged so that said frozen carbon dioxide is less accessible for exterior heat than said freezable products. APDC licensed the patent exclusively to Dry Ice Corp. (DIC). DIC made and sold only dry ice. It designated other firms to make and sell the patented transportation devices (see diagram of box within a box). Each invoice for the dry ice that DIC sold had this notice: Carbice manufactured and sold dry ice to a Mr.  Marchiony (and other persons) who combined the dry ice with containers he originally bought from a supplier approved by DIC, but then he reused the containers without the consent of DIC. APDC then sued Carbice, but that court dismissed the suit on the grounds that no infringement occurred because the dry ice was a perishable supply used in practicing the patent. APDC appealed to the Second Circuit, which reversed the judgment of the district court. The Second Circuit said that the doctrine of the "Motion Picture Patents" case did not apply, because the tied product (the dry ice) was a  claimed element of the patented combination. That made the case different from prior tie-in cases in which the tied product was an unpatented supply (such as ink or film) used together with the patented device. The Second Circuit said: Carbice then appealed to the Supreme Court. Ruling of Supreme Court. Justice Brandeis wrote for a unanimous Court, reversing the Second Circuit and reinstating the judgment of the district court. After explaining the factual setting, the Court said: "Whether the transportation package described is a patentable invention we need not determine. For even if it is, no relief can be  granted." The Court cited "Motion Picture Patents Co. v. Universal Film Mfg. Co." for the proposition that a patentee "may not exact as the condition of a license that unpatented materials used in connection with the invention shall be purchased only from the licensor, and if it does so, relief against one who supplies such unpatented materials will be denied. The limited monopoly to make, use, and vend an article may not be 'expanded by limitations as to materials and supplies necessary to the operation of it.' " The Court added, "The relief here sought is indistinguishable from that denied in  the "Motion Picture Case."" The Court rejected the patentee's attempt to distinguish "Motion Picture Patents" on the theory that the dry ice was a claimed element of the patented combination while earlier tie-in cases involved supplies that were not part of the patented invention. That was "without legal significance," because: The Dry Ice Corporation has no right to be free from competition in the sale of solid carbon dioxide. Control over the supply of such unpatented material is beyond the scope of the patentee's monopoly, and this limitation, inherent in the patent grant, is not dependent upon  the peculiar function or character of the unpatented material or on the way in which it is used. Further developments. Dry Ice Corporation (DIC) remained defiant despite the ruling of the Supreme Court. and it inaugurated "a campaign of intimidation against customers of the Carbice Corporation." DIC released to the public press a statement that the validity of the patent as sustained by the Court of Appeals had not been disturbed; that the true patent monopoly had in no way been limited by this Court; that we had indicated that the proper way to enforce the patent monopoly is by  directly suing those who use solid carbon dioxide in the patent combination without a license; and that the Dry Ice Corporation would immediately bring such a suit. The Supreme Court ordered a re-argument and rehearing, limited to the question of the validity of the patent. U.S. Patent No. 1,595,426, claims a refrigerating transportation package, consisting of an outer, insulating container, with the food substance to be refrigerated (e.g., ice cream) so packed therein as to surround a quantity of solid carbon dioxide in its separate insulating container, and thus to act, with the evolved gaseous dioxide, as a protection  for the solid dioxide against exterior heat, the gas also serving to displace air from the food and refrigerate it. The alleged invention is thus "for the locational arrangement of materials within a container." The Court said that it did not need to determine whether "a locational arrangement within a structure can ever be patented," because this patent "lacks patentable invention and novelty": Moreover, the structural device of surrounding the refrigerant by the article to be refrigerated had been shown in the Mosler and Ladewig refrigerating butter-box . . . and in Rumpel's portable lunch box. The invalidation of the patent  thus terminated the "campaign of intimidation against customers" by threats of patent infringement suits. Commentary. Patent lawyers have been critical of the "Carbice" decision. For example, George Sirilla called it a pioneer example of the "Supreme Court's conspicuous anti-patent bent."