Document: 329 U.S. 394 67 S.Ct. 416 91 L.Ed. 374 EDWARD KATZINGER CO.v.CHICAGO METALLIC MFG. CO. (two cases). Nos. 70 and 71. Argued Nov. 14, 15, 1946. Decided Jan. 6, 1947. Rehearing Denied Feb. 17, See 330 853, 768. Mr.Charles J. Merriam, of Chicago, Ill., for petitioner. Mr. Max Zabel, respondent. Justice BLACK delivered the opinion Court. 1 The question here is whether defendant, in a suit to recover royalties only under terminated patent license agreement containing price-fixing provisions, can challenge validity despite covenant contract that he would not do so. 2 petitioner, Edward Katzinger Company, respondent, Chicago Metallic Mfg. make sell tin baking pans. undenied testimony was sold its pans over large part United States, probably every state country. became owner Jackson No. 2,077,757 on certain type pan.1 Metallic, accused infringing, entered into licensing which, upon payment stipulated royalties, it authorized manufacture made accordance with claimed invention. Section 3 11 contract, set out below,2 provided like all other licensees, should these at prices fixed by Katzinger. Royalties were be computed basis 'net sales' articles 'made any patents or applications this license.' 14 if elected terminate without ceasing 'be estopped from denying said * deemed an infringer thereof.' maintained patentee-fixed paid covered patent.3 A controversy later arose as types manufactured covered. Declining pay pan, gave notice terminatio initiated action declaratory judgment praying court declare invalid want invention controversial by, did infringe, Katzinger's patents. answer counterclaim alleged, so far material here, pans, § either owed liable infringement. It prayed, among things, accounting unpaid which 2.5% 5% sales price governed minimum list attached license.4 In alternative prayed required account profits damages infringer. District Court held patents, and, treating them valid, found claims cover Accordingly, ordered determine due period prior termination infringement thereafter. 4 Relying our decision Sola Electric Co. v. Jefferson Co., 317 173, 63 172, 87 165, Circuit Appeals reversed. fix inseparably connected royalties; invalid, provision violated federal anti-trust laws; conflict laws unenforceable; had erred barring challenging patent's predicate establishing illegality consequent unenforceability royalty covenant. cause remanded pass patent. 7 Cir., 139 F.2d 291. That then rendered Metallic. affirmed. 153 149. We granted certiorari because conflicting Westinghouse & MacGregor, 350 Pa. 333, 38 A.2d 244. Pennsylvania Supreme MacGregor case ruled provisions such one before us severable read though holding licensee except cases where licensor sought affirmative relief enforce license. 5 need consider ruling Bement Son National Harrow 186 70, 87, 91, 22 747, 753, 755, 46 1058, lawful valid. entirely different. Nor we, has been suggested, discuss Court's opinions Kinsman Parkhurst, 18 How. 289, 15 385, States Harvey Steel 196 310, 25 240, 49 492, concerned particular circumstances there involved. (317 173) we declined examine decision, neither relevant 'No stipulation involved contract' issue those cases. So inappropriate reexamine decisions now. Under what rule estoppel might applied met when facts present it. 6 reaffirmed past agreements are unenforceable violations Sherman Act, U.S.C.A. §§ 1—7, note, save they may within protection p tent. further local rules cannot screen scrutiny, courts must, public interest, keep way open utilized interstate goods. true recovery but generally injunction require observance agreement, price-fixing. But chief object indicated fact that, while breaches covenants alleged petition, specific prayers their included, no charge breached prayer indicate have immune sued only. This permitted protected illegal merely chose remedy rather than another same substantive issue. If intended draw fine line, hard believe careful writer late Chief failed mandate remand trial court, permitting defeat injunction, must treat severable, forbid purpose defeating claim royalties.5 instead resting narrow procedural base, firmly grounded broad interest freeing competitive economy trade restraints imposed stemming supra, page 177, 174, 165. Scott Paper Marcalue 326 249, 66 101, even assignor who issued itself free thereby showing described expired thus emphasizing necessity protecting keeping interested persons shown stating often expressed policy 'It dominant system,' Mercoid Corp. Mid-Continent Investment 320 661, 665, 64 268, 271, 88 376, right 'is private individual, founded policy, promoted his making defense, contravened refusal it.' Pope Gormully, 144 224, 235, 12 632, 636, 36 14.6 8 severability, urged petitioner new one, again arrive conclusion reached case. Metallic's obligation constituted integrated consideration grant. Consequently, violation law, companion go Hazelton Sheckels, 202 71, 78, 26 567, 50 939, Ann.Cas. 217. Moreover, solicitude fostered freedom trade, manifest line two latest examples, requires departure guiding principles announced. 9 accrued, accrued all, time terminated. subsequent does promise taint provision. fact, suggested provision, bar validity. For still illegal, whoever it, less reason leaving service Finally, more override congressional implied estoppel. Marcalus 257, 105, cited. 10 Affirmed. Other originally suit, '3. Licensor agrees remains force effect, permits others devices embodying hereinbefore described, terms favorable Licensee hereunder, shall immediately notify hereunder grant Licensee. '11. reserves establish products licensed modify change during life agreement. Licensor, well person, corporation not, consent offer sale, otherwise dispose below price, sale forth scale established contemporaneously execution delivery received schedule prices, effective date hereof, none sold. right, thirty (30) days' writing given Licensee, hereof. On neglected likewise net customers. duly representatives access books ordinary business hours determining complied paragraph.' Of course unlawful executed violates laws. Socony-Vacuum Oil 310 150, 60 811, 84 1129; American Tobacco 328 781, 809, 1125, 1139. parties 'in pursuance did, years, less, exercise therein tinware products, maintaining paying therefor applicable royalties.' While findings effect attempt carry fixing willing removed expressly vacated remand. incorporated reference exhibit counterclaim. cited rejected contentions offending considered rest therefore enforceable. e.g., E. 88, 754, 1058; Continental Wall Louis Voight Sons 212 227, 230, 266, 29 280, 294, 53 486. attention called examination brief filed support contention inseparable denied illegal. Morton Salt G.S. Suppiger 314 488, 788, 62 402, 86 363; Loud Pomona Land Water 564, 576, 928, 931, 822; Williams Bank Pet. 96, 360. 405, 363.

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