United States v. Line Material Co.

333 U.S. 287, 76 U.S.P.Q. 399 (1948)

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United States v. Line Material Co.

United States Supreme Court
333 U.S. 287, 76 U.S.P.Q. 399 (1948)

Facts

Southern States Equipment Corporation (Southern) (defendant) held a patent, known as the Lemmon patent, for a dropout fuse cutout used to protect electrical circuits. Line Material Company (Line) (defendant) held a patent, known as the Schultz patent, for an improved version of the same product. During the application process, the Lemmon and Schultz patents were subject to interference proceedings, and the US Patent Office found both patents to contain valid claims. This resulted in a deadlock under which neither patent could be lawfully used without the other. To resolve the dispute, Southern licensed the Lemmon patent to Line, and Line licensed the Schultz patent to Southern. Line and Southern then undertook a cross-licensing agreement under which other manufacturers could make use of both patents according to a common pricing schedule fixed by Line. The United States government (plaintiff) sought an injunction under the Sherman Act. The district court upheld the validity of the pricing arrangement and dismissed the complaint. The case was then appealed directly to the United States Supreme Court.

Rule of Law

Issue

Holding and Reasoning (Reed, J.)

Concurrence (Douglas, J.)

Dissent (Burton, J.)

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