Professional Documents
Culture Documents
RUPERT
I. INTRODUCTION
The antitrust laws have been described as "a comprehensive charter of
economic liberty aimed at preserving free and unfettered competition as
the rule of trade."' From this description it can be safely stated that these
laws have evolved to assure freedom from grievous injury to both corporate and individual economic prosperity. However, the "free and unfettered competition" theory underlying the antitrust laws appears, on the
surface at least, to contradict Article 1, Section 8, clause 8 of the United
States Constitution, which gives Congress the power to "promote the
progress of science and useful arts, by securing for limited times to
authors and inventors the exclusive right to their respective writings and
discoveries." (emphasis added). In the patent context the question may,
therefore, be simply posed: Are the fundamental precepts of the antitrust laws at odds with the constitutionally mandated exclusive right given
to inventors to protect their discoveries?
In answering this question, it should be first understood that the "patent laws", 35 U.S.C. 101, et seq., enacted by Congress pursuant to its
constitutional authority, do not give an inventor a monopoly in anything,
notwithstanding the liberal use by numerous courts and commentators of
the term "monopoly" in patent related matters. Indeed, a patent gives the
inventor only the right to exclude others from manufacturing, using, or
selling the patented article for a finite period of time. This exclusivity
should not be construed as a "monopoly" in the antitrust sense. Rather,
"the term 'monopoly' connotes the giving of an exclusive privilege for
buying, selling, working, or using a thing which the public freely enjoyed
prior to the grant. Thus, a 'monopoly' takes something from the people.
An inventor deprives the public of nothing which is qnjoyed before his
*This paper, in large measure, explores the antitrust implications of patent licensing and
technology transfer under United States law. The reader is cautioned, however, that
licensing practices which have been held valid by courts in the United States may not be
appropriate, or legal, in certain foreign countries. The author recommends that before any
license or transfer agreement drafted to comport with United States law is utilized in foreign
countries, the applicable laws of these countries be investigated.
'Northern Pac. Ry. Co. v. United States, 356 U.S. 1, 4 (1958).
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Patent rights may be acquired in the same manner that tangible property is acquired, for example, by "personal" efforts (i.e., invention, followed by patenting), purchase, gift, exclusive or non-exclusive license,
assignment, etc.
For those individuals or corporations engaged in research and development efforts, the acquisition of a patent by grant as the result of internal
research has without more never been held to violate the antitrust laws.
"The mere accumulation of patents, no matter how many, is not in and of
itself illegal."" However, this statement may not reflect the current state
7
See, e.g., Transitron Electronic Corp. v. Hughes Aircraft Co., 487 F. Supp. 885 (D. Mass.
1980).
8
Citing, among others, Morton Salt Company v. Suppiger, 314 U.S. 448 (1942); and
REPORT OF THE ATTORNEY GENERAL'S NATIONAL COMMITTEE TO STUDY THE ANTITRUST LAWS
254 (1955).
9
Bendix Corp. v. Balax, Inc., 471 F.2d 149, (7th Cir. 1972), cert. denied, 414 U.S. 819
(1973).
'"See, e.g., McCullough Tool Co. v. Well Survey, Inc., 343 F.2d 381 (10th Cir. 1965), cert.
denied, 385 U.S. 990 (1966).
"Automatic Radio Manufacturing Co. v. Hazeltine Research, Inc., 339 U.S. 827, 834
(1950). Accord, United States v. United Shoe Machinery Corp., 110 F. Supp. 295, 333 (D.
Mass. 1953), affd per curiam, 347 U.S. 521 (1954); United States v. Aluminum Co. of
America, 148 F.2d 416, 431 (2d Cir. 1945).
"2 United States v. International Business Machines Corp., 1956 Trade Cas. 68,245
(S.D.N.Y. 1956); United States v. Radio Corp. of America, 1958 Trade Cas.
69,164
(S.D.N.Y. 1958)
3
Walker Process and Equipment, Inc., v. Food Machinery and Chemical Corp., 382 U.S.
172 (1965). See also American Cyanamid Co. v. FTC, 363 F.2d 757 (6th Cir. 1966), which
discusses a violation of section 5 of the Federal Trade Commission Act. Significant Developments: Blonder-Tongue Laboratories, Inc. v. Univ. of Ill. Foundation, 422 F.2d 769 (7th
Cir. 1970) remanded on other grounds, 402 U.S. 313 (1971); Chemtronics, Inc. v. Beckman
Instruments, Inc., 428 F.2d 555 (5th Cir. 1970), cert. denied, 439 F.2d 1369 (1970); CarterWallace Inc. v. Riverton Laboratories, Inc., 304 F.Supp. 357 (S.D.N.Y. 1969), affd, 433 F.2d
1034 (2d Cir. 1970); Brown v. Myberg, 314 F. Supp. 939 (S.D.N.Y. 1970); Bendix Corp. v.
Balax, Inc., 421 F.2d 809 (7th Cir.), cert. denied, 166 U.S.P.Q. 65 (1970); Acme Precision
Products, Inc. v. American Alloys Corp., 347 F. Supp. 376 (W.D. Mo. 1972), rev'd on issue of
damages, 484 F.2d 1237 (8th Cir. 1973); SCM Corp, v. Radio Corp. of America, 318 F. Supp.
433 (S.D.N.Y. 1970); Kolene Corp. v. Motor City Metal Treating, Inc., 440 F.2d 77 (6th
Cir.), cert. denied, 404 U.S. 886 (1971).
4
Cf. Walker Process and Equipment, Inc. v. Food Machinery and Chemical Corp., supra
note 13.
5
Cf. United States v. Union Camp Corp., Crim, Act. No. 4558 (E.D. Va., filed November
30, 1967) (indictment charged fraud on the court in maintaining a patent infringement suit
on a patent known to be invalid).
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0See United States v. Minnesota Mining & Mfg. Co., 1969 Trade Gas. 72,865 (N.D. I11.
1969) (Consent Decree para. VI(g)) and United States v. International Bus. Mach. Corp.,
B.
It is a general proposition that a patent owner has the right not to use
the patented invention and simply rely on his patent rights. However, a
distinction should be made between a reasonable nonuse and outright
suppression.2 Thus, if a patent owner makes a business decision based
upon reasonable considerations that it is not economically feasible for him
to practice the patented invention, such nonuse would be permissible and
the patent should be fully enforceable against others. However, if the
nonuse is based upon other considerations (for example, a collusive
agreement to suppress patented inventions either to "fence in" the technology or to "block in" a competing technology), antitrust violations may
exist.
22
Likewise, the nonuse issue may arise where a single company in a given
technological field acquires substantial market power in that field
through an aggregation of patents owned by others (e.g., acquisition by
exclusive licenses). A decision to suppress patents, in this context, may be
evidence of monopolization. 3
III. ANTITRUST CONSIDERATIONS IN
PATENT LICENSING
Patent licensing is an area in which perhaps most attorneys practicing
business-related law would feel comfortable because it seems to be nothing more than contract drafting. Lest there be a misunderstanding,
however, patent licenses must be drafted with studied care because serious antitrust considerations are pervasive. Patent licenses may include,
among others, provisions related to royalties, territorial and marketing
restrictions, price restrictions, and patent use restrictions. Failure to consider adequately these issues from an antitrust standpoint may contribute
to an antitrust violation, and failure to consider them from a patent point
of view may contribute to patent misuse. The following discussion will
outline in some detail what can be accomplished and what should be
avoided in the typical patent license.
A.
ROYALTY PROVISIONS
Once the patent owner decides to license a patent, the first business
question usually addressed is how much royalty can be obtained. In
1956 Trade Cas.
68,245 (S.D.N.Y. 1956) (Consent Decree, para XI(g)); but see United
States v. General Elec. Co., 82 F. Supp. 753, 815, (D.N.J. 1949), modified, 115 F. Supp. 835
(D.N.J. 1953).
"Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405 (1908).
22
See Hartford-Empire Co. v. United States, 323 U.S. 386, 431 (1945).
23
Cf. United States v. Aluminum Co. of America, 91 F. Supp. 333, 386 (S.D.N.Y. 1950).
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general, a patent owner can charge whatever royalty rate that can be
agreed to with a prospective licensee. "A patent empowers the owner to
exact royalties as high as he can negotiate with the leverage of that
monopoly." 4 The negotiated royalty may be grounded upon any reasonable basis so long as no unlawful purpose or intent is involved. Licenses
which provide, for the convenience of the parties, that a licensee will pay
royalties based upon its total production or total sales regardless of
whether any patents are actually being used by the licensee (a "total-sales"
royalty) are valid absent coercion on the part of the licensor. 5 Likewise,
varying or "sliding scale" royalties which increase or decrease with the
volume of a licensee's sales or production have also been upheld by the
courts.26
It should, thus, be apparent that the royalty provision of the patent
license can be as simple or as complex as the parties desire. For example,
assuming Company A has a patent on the proverbial "widget" and Company B has a license to manufacture and sell widgets under the patent, the
royalty could be based upon one cent per widget manufactured; one cent
per widget sold; five percent of the gross sales of widgets; five percent of
the net sales of widgets; five percent of the first $500,000 of net sales of
widgets, four percent of the next $250,000 of net sales, etc.; two cents for
each widget manufactured in excess of 10,000, with no royalty for the first
10,000 widgets manufactured, and so on. Thus, the exact royalty base
depends in large measure on the intent of the parties and the imagination
of the attorneys.
As previously noted, a patent owner can generally charge whatever
royalty rate can be negotiated with a prospective licensee. However,
patent owners who license competing licensees must be wary of the effect
that the royalty base or rate may have. If the royalty base or rate creates
discriminatory royalty obligations among competing licensees such that
competition among the licensees is injured, an unfair method of competi24
Brulotte v. Thys Co., 379 U.S. 29, 33 (1964); see also American Photocopying Equip. Co.
v. Rovico, Inc., 384 F.2d 813 (7th Cir. 1967), cert. denied, 390 U.S. 945 (1968).
2
1Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100 (1969); Automatic Radio
Mfg. Co., Inc. v. Hazeltine Research, Inc., 339 U.S. 827 (1950); Glen Mfg. Co. v. Perfect Fit
Indus., Inc., 420 F.2d 319 (2d Cir. 1970); Beckman Instruments, Inc. v. Technical Development Corp., 433 F.2d 55 (7th Cir. 1970), cert. denied, 401 U.S. 976 (1971); Plastic Coating
Lens Co. v. W.R.S. Contact Lens Labs, Inc., 330 F. Supp. 441 (S.D.N.Y. 1970). But see Note,
Total-Sales Royalties Under the Patent-Misuse Doctrine: A Critique of Zenith, 76 MICH. L. REV.
1144 (1978), suggesting that total-sales royalties should be condemned as patent misuse.
6
United States v. E. I. duPont de Nemours & Co., 118 F. Supp. 41 (D. Del. 1953), affd on
other grounds, 351 U.S. 377 (1956); United States v. General Elec. Co., 82 F. Supp. 753 (D.N.J.
1949), modified, 115 F. Supp. 835 (D.N.J. 1953).
tion in violation of Section 5 of the FTC Act, and patent misuse, may
exist." This is not, however, to say that different royalty rates may not be
charged. The test is whether the rate charged the first licensee is discriminatory when measured against that charged the second licensee, taking
into consideration such things as the market serviced by the licensees,
their business and manufacturing capabilities, etc.
However easy it is to articulate such considerations, their application in
practice is difficult. Thus, in Laitram Corp. v. King Crab,Inc., 244 F. Supp. 9
(D. Alaska 1965), the Court held that where one licensee had to pay
royalties at a rate twice that of a second licensee, the rates were discriminatory and patent misuse occurred. There the royalty rates were based on
the number ("yield") of shrimp cleaned by the patented machine. One
licensee was cleaning twice as many shrimp as a second licensee and was
charged a "double" royalty. The Court concluded that because the higher
paying licensee's shrimp were, on average, half the size of those cleaned
by the lower paying licensee, the royalties being charged were discriminatory when measured against the processed yield of shrimp.
Quite often a company will license a number of patents at the same time
(the "package license"), thus raising the question of whether a package
license must provide for a diminution of royalties where the various
patents in the package expire at different times." The absence of such a
provision in a package license may suggest the existence of coercion which
can constitute patent misuse and a violation of Section 1 of the Sherman
Act. 9
As sometimes happens in either the single or package license situation,
the license agreement provides for the payment of royalties after the
expiration of the patent or patents being licensed. A provision of this type
is improper if it attempts to achieve an unlawful extension of the patent
rights." However, a fixed sum royalty spread over a number of years
which extends beyond the life of the licensed patent is not a patent misuse
"LePeyre v. FTC, 366 F.2d 117 (5th Cir. 1966); Laitram Corp. v. King Crab, Inc., 244 F.
Supp. 9 (D. Alaska 1965); Peelers Co. v. Wendt, 260 F. Supp. 193 (W.D. Wash. 1966). But see
Bela Seating Co., Inc. v. Poloron Prod., Inc., 438 F.2d 733 (7th Cir. 1971), cert. denied, 403
U.S. 922 (1971).
2
1Compare Rocform Corp. v. Acitelli-Standard Concrete Wall, Inc., 367 F.2d 678
(6th Cir.
1966), with Well Surveys, Inc. v. Perfo-log, Inc., 396 F.2d 15 (10th Cir.), cert. denied, 393 U.S.
951 (1968).
"American Security Co. v. Shatterproof Glass Corp., 268 F.2d 769 (3d Cir.), cert. denied,
361 U.S. 902 (1959).
3
Brulotte v. Thys Co., 379 U.S. 29 (1964); Pipkin v. FMC Corp., 427 F.2d 335 (5th Cir.
1970); Shields-Jetco, Inc., v. Torti, 166 U.S.P.Q. 397 (D.R.I. 1970).
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At one time, a patent owner could lawfully restrict the price at which a
patented product could be sold by a manufacturing licensee. 2 However,
in today's "price" conscious environment, one would be well advised to
exclude any type of pricing provision in a patent license agreement. And
while the General Electric doctrine has not been specifically overruled, its
scope has been so modified and narrowed as to be virtually extinct.3
Thus, the grant of multiple licenses, each containing price fixing provisions, is not covered by the General Electric doctrine and, without more,
violates Section 1 of the Sherman Act. 4 It has also been held that the
GeneralElectric doctrine does not permit a patentee to control the price of
possible uses to which the patented product or process could be put (i.e.,
3
"Huyck Corp. v. Albany International Corp., 193 U.S.P.Q. 200 (N.D. Ala. 1977). It would
seem to be unwise to combine, for example, a patent and trademark license without clearly
delineating the royalty rate for the patent and the trademark because the entire royalty
provision may be unenforceable if it is determined that the provision unlawfully extends the
patent right. See Modrey v. American Gage and Machine Co., 339 F. Supp. 1213 (S.D.N.Y.
1972) rev'd on other grounds, 478 F.2d 470 (2d Cir. 1973).
3
United States v. General Elec. Co., 272 U.S. 476 (1926).
"Indeed, the Antitrust Division has twice sought to have the Supreme Court overrule
GeneralElectric, and both times a divided court (4-4) refused to do so. United States v. Line
Material Co., 333 U.S. 287 (1948); United States v. Huck Mfg. Co., 382 U.S. 197 (1965).
'Newburg Moire Co. v. Superior Moire Co., 237 F.2d 283 (3rd Cir. 1956); see also United
States v. U.S. Gypsum Co., 340 U.S. 76, 84 (1950).
3
Cummer-Graham Co. v. Straight Side Basket Corp., 142 F.2d 646 (5th Cir.), cert. denied,
63 U.S.P.Q. 358 (1944); Barber-Colman Co. v. National Tool Co., 136 F.2d 339 (6th Cir.
1943); Cf. American Equip. Co. v. Tuthill Bldg. Material Co., 69 F.2d 406 (7th Cir. 1934).
Contra, Straight Side Basket Corp. v. Webster Basket Co., 82 F.2d 245 (2d Cir. 1936).
mTwo different district courts took conflicting views with regard to the same patents and
licensees. Compare General Elec. Co. v. Willey's Carbide Tool Co., 33 F. Supp. 969,977 (E.D.
Mich. 1940) with United States v. General Elec. Co., 80 F. Supp. 989, 1004-05 (S.D.N.Y.
1948); see also United States v. General Elec. Co., 82 F. Supp. 753,813 (D.N.J. 1949), modified,
115 F. Supp. 835 (D.N.J. 1953).
field of use restrictions are generally dependent upon the scope of the
licensed patent claims). Thus, a patent claim which covers the widget as an
article of manufacture may be licensed under varying field of use restrictions related to all possible uses of the widget." Accordingly, field of use
restrictions contained in patent licenses may permit a licensee to perform
under one or more of the possible fields of use but not under others. As
stated by the Supreme Court in General Talking Pictures Corp. v. Western
Electric Co., 305 U.S. 124, 126 (1938):
[W]here a patented invention is applicable to different uses, the owner
of the patent may legally restrict a licensee to a particular field and
exclude him from others ... "
It is of interest to note that in 1970 the Antitrust Division announced its
intention to challenge certain field of use restrictions. "Where field of use
licenses divide fields among licensees who could otherwise be expected to
compete, it is likely that we will bring a case challenging the restrictions."39
To date, however, there appear to be no reported cases on this point.
Today, it seems unlikely that field of use restrictions would properly be
characterized as per se violations of Section 1 of the Sherman Act. The
Antitrust Division has recognized that "there may be good reason for a
licensor to reserve to himself a well-defined field of use out of the various
potential applications for his invention."4 Under the rule of reason test,
however, an exclusive license, expressly permitted under 35 U.S.C. 261,
coupled with a field of use limitation, may support an inference of
anti-competitive intent.4
D.
TERRITORIAL PROVISIONS
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presumed that territorial limitations within the United States are legitimized by this provision. 41 As may be expected, however, the territorial
restrictions in a patent license are only enforceable against the licensee; a
provision in the license that purports to impose a territorial restriction on
sales beyond the licensee (a vertical restriction) has been found to be a per
se violation of the antitrust laws. 43 And other territorial restrictions designed to implement broader division of markets between the parties to
the license may also be condemned under the antitrust laws.44
E.
QUANTITY LIMITATIONS
There are only a few cases which deal with a patent owner's right to
restrict the quantity of goods manufactured by the licensee, and in these
cases quantity limitations have been held valid in the absence of some
unlawful purpose. 45 Because quantity limitations are analogous to price
and field of use restrictions it would seem that if such a case arose today
the prevailing law in those areas would be applicable.
F.
REFUSAL TO LICENSE
PACKAGE LICENSING
LICENSEE ESTOPPEL
At one time it was felt that a party who voluntarily obtained a license
under one or more patents would thereafter be estopped from testing the
48
Jones Knitting Corp. v. Morgan, 361 F.2d 451 (3d Cir. 1966); United States v. Parke,
Davis & Co., 362 U.S. 29 (1960).
4
Automatic Radio Mfg. Co. v. Hazeltine Research, 339 U.S. 827 (1950).
50
American Securit Co. v. Shatterproof Glass Corp., 268 F.2d 769 (3d Cir.), cert. denied, 361
U.S. 902 (1959); Rocform Corp. v. Acitelli-Standard Concrete Wall, Inc., 367 F.2d 678,
679-80,681 (6th Cir. 1966); Hazeltine Research, Inc. v. Zenith Corp., 239 F. Supp. 51 (N.D.
I11. 1965), affd on this point, 388 F.2d 25 (7th Cir. 1967), affd, 395 U.S. 100 (1969).
5
nternational Mfg. Co. v. Landon, 336 F.2d 723 (4th Cir. 1964), cert. denied, 379 U.S. 988
(1965). See also notes 28-31 and the accompanying text, supra.
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TYING ARRANGEMENTS
public is benefited by the sale of the machine at what is practically its cost
and by the fact that the owner of the patent makes its entire profit from
the sale of supplies with which it is operated. This fact, if it be a fact,
instead of commending, is the clearest possible condemnation of, the
practice adopted, for it proves that under cover of its patent the owner
intends to and does derive its profit, not from the invention on which
the law gives it a monopoly, but from the unpatented supplies with
which it is used, and which are wholly without the scope of the patent
monopoly, thus in effect extending the power to the owner of the patent
to fix the price to the public of the unpatented supplies as effectively as
he may fix the price on the patented machine. 9
presuming sufficient economic power to appreciably restrain competition. See Anderson v.
Home Style Stores, Inc., 58 F.R.D. 125 (E.D. Pa. 1972); Capital Temporaries, Inc. v. Olsten
Corp., 506 F.2d 658 (2d Cir. 1974); Carpa, Inc. v. Ward Foods, Inc., 536 F.2d 39 (5th Cir.
1976). See also Basic Antitrust Problem Areas and Their Significancefor Trademark Owners and
Practitioners,
67
57
TRADEMARK REP.
International Salt Co. v. United States, 322 U.S. 392 (1947); Morton Salt v. Suppiger Co.,
314 U.S. 488 (1942); International Bus. Mach. v. United States, 298 U.S., 131 (1936).
5
Motion Pictures Patent Co. v. Universal Film Mfg. Co., 243 U.S. 502 (1917).
59
1d., 243 U.S. at 513-17. In a dissent, Mr. Justice Holmes, at 519-20, stated:
I suppose that a patentee has no less property in his patented machine than any other
owner, and that, in addition, to keeping the machine to himself, the patent gives him the
further right to forbid the rest of the world from making others like it. In short, for
whatever motive, he may keep his device wholly out of use ....
So much being
undisputed, I cannot understand why he may not keep it out of use unless the licensee,
or, for the matter of that, the buyer, will use some unpatented thing in connection with
it. Generally speaking, the measure of a condition is the consequence of a breach, and if
that consequence is one that the owner may impose unconditionally, he may impose it
conditionally upon a certain event ....
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Rohm & Haas Co. v. Dawson Chemical Co., Inc., 191 U.S.P.Q. 691 (S.D. Tex. 1976).
United States v. Krasnov, 143 F. Supp. 184 (E.D. Pa. 1956), affdper curiam, 355 U.S. 5
(1957); see also United States v. Besser Mfg. Co., 96 F. Supp. 304, 310-11 (E.D. Mich. 1951),
affd, 343 U.S. 444 (1952).
'Moraine Prod. v. ICI America, Inc., 538 F.2d 134, (7th Cir.), cert. denied, 429 U.S. 941
(1976).
6
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RESTRICTIONS ON PURCHASERS
6
1
D.
CRoss-LICENSING ARRANGEMENTS
Congoleum Indus., Inc. v. Armstrong Cork Co., 366 F. Supp. 220 (E.D. Pa. 1973), affd,
510 F.2d 334 (3d Cir.), cert. denied, 421 U.S. 988 (1975).
'United States v. Univis Lens Co., 316 U.S. 241, (1942).
67
Carter Wallace, Inc. v. United States, 449 F.2d 1374, (Ct.C1. 1971).
'United States v. Glaxo Group, Ltd., 328 F. Supp. 709, (D.D.C. 1971), rev'd on other
grounds, 410 U.S. 52 (1973). This case involved a patent pool which was held per se violative of
section 1 of the Sherman Act.
6
The same may be said for the licensed exchange of trade secrets. See Shin Nippon Koki
Co. Ltd. v. Irving Indus., Inc., 186 U.S.P.Q. 296 (N.Y. Sup. Ct. 1975).
7
"See Hartford Empire Co. v. United States, 323 U.S. 386 (1945); United States v. Line
Material, 333 U.S. 287 (1948); United States v. New Wrinkle, 342 U.S. 371 (1952); United
States v. Imperial Chem. Indus., Ltd., 100 F. Supp. 504 (S.D.N.Y. 1951); United States v.
C.
As noted, the patent laws give the patent owner the right to exclude
others from the manufacture, use, or sale of the patented item or process.
Section 1338 of Title 28, U.S.C., gives the federal district courts exclusive
jurisdiction in the trial of patent infringement matters. Section 284 of
Title 35, U.S.C., provides for treble damages at the discretion of the
Court, and Section 285 of Title 35, U.S.C., permits an award of attorneys
fees in "exceptional cases." There is nothing inherently improper in
bringing lawsuits against those believed, in good faith, to be infringing the
patent claims, and the patentee, in the belief that its patents are valid and
infringed, has the right to protect its rights by notifying the trade of the
alleged infringements.7'
On the other hand, the institution of patent infringement suits in bad
faith can constitute evidence of monopolization or attempted monopolization.72 And, in Handgards, Inc. v. Ethicon, Inc., 601 F.2d 986 (9th
Cir. 1979), cert. denied, 204 U.S.P.Q. 880 (1980), the Ninth Circuit stated
that while the filing of one or more patent infringements suits may be
evidence of an attempt to monopolize under Section 2 of the Sherman
Act, the patent owner should be entitled to a presumption that the
litigation was instituted in good faith, with the presumption being rebuttable only upon clear and convincing evidence.
A patent infringement suit should not be brought until the patentee has
first examined the item thought to be infringing (or has at least requested
permission to inspect the allegedly infringing device) and has in good
faith determined that it actually does infringe."
VI. GOVERNMENTAL ENFORCEMENT OF THE
ANTITRUST LAWS AGAINST PATENT OWNERS
In general, the Antitrust Division of the Department of Justice has
brought few suits over the years involving patents. However, a Patent
Unit has existed within the Antitrust Division for quite some time.
National Lead Co., 63 F. Supp. 513 (S.D.N.Y. 1945), affd, 332 U.S. 319 (1947); United States
v. Singer Mfg. Co., 374 U.S. 174 (1963); United States v. Glaxo Group Ltd., 328 F. Supp. 709
(D.D.C. 1971).
7 8 DELLER'S WALKER ON PATENTS, (2d Ed.), 645, at 211 (1973).
72
Otter Tail Power Co. v. U.S., 410 U.S. 366 (1973); cf Laitram Corp. v. King Crab, Inc.,
244 F. Supp. 9 (D. Alaska 1965); Wahl v. Rexnord, Inc., 481 F. Supp. 573 (D.N.J. 1979).
75
See United States v. Besser Mfg. Co., 96 F. Supp. 304 (E.D. Mich. 1951), affd, 343 U.S.
444, (1952). Those contemplating the filing of patent infringement suits would be well
advised to consult White, PatentLitigation: Procedures & Tactics in 3 PATENT LAW & PRACTICE
(1979), for perhaps the leading work on the intricacies of patent litigation.
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74
Besser Mfg. Co. v. United States, 343 U.S. 444 (1952) (concerted price fixing in patent
licenses); United States v. National Lead Co., 332 U.S. 319 (1947) (concerted pooling of
patents to restrict trade); Hartford-Empire Co. v. United States, 323 U.S. 386 (1945) (same).
75
United States v. United Shoe Mach. Corp., 110 F. Supp. 295 (D. Mass. 1953), affd per
curiam, 374 U.S. 521 (1954).
7
'See United States v. Ward Baking Co., 376 U.S. 327 (1964); United States v. Glaxo
Group, Ltd., 302 F. Supp. I (D.D.C. 1969), rev'd on other grounds, 410 U.S. 52 (1973).
77See United States v. Chas. Pfizer & Co., Civil Action No. 1966-69 (D.D.C. filed July 15,
1969).
78
United States v. Glaxo Group Ltd., 302 F. Supp. 1 (D.D.C. 1969), rev'd, 410 U.S. 52
(1973). See also Lear, Inc. v. Adkins, 395 U.S. 653 (1969).
79
American Cyanamid Co. v. FTC, 363 F.2d 757 (6th Cir. 1966).
8
See American Cyanamid Co., [1963-1965 Transfer Binder] TRADE REG. REP. (CCH)
16,527 (1963).
81
United States v. General Elec. Co., 115 F. Supp. 835 (D.N.J. 1953).