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Boston College Law Review 1969 The patent Misuse Doctrine: Balance of Rights and Public Interest

ANTITRUST: Sherman Act of 1890; Clayton Act; FTC Act

 Zenith Radio Corp. v. Hazeltine Research, Inc. Are all patent misuse antitrust violations as well? FACTS: Zenith rejected license renewal for patent held by HRI; HRI brought patent infringement suit against Zenith. Zenith filed counterclaim stating Sherman Anti-trust violation by HRI. HRI was in the practice of bundling patents into packaged 5 year license agreements with 50% discount for 1 patent, 20% discount for 2 and full price for 3 or more patents. Zenith asserted that renewal was unnecessary for their products. HOLDING: Lower court ruled that bundling was patent misuse, Supreme court ruled that "conditioning" royalties on a percentage of sales on products that did not require patent knowledge was patent misuse. The court did not find misuse in this case met criterion for violation of Sherman or Clayton Acts.

Supreme court does not see a patent as a monopoly because the public cannot be deprived of a good that it had no knowledge of prior to said patents creation. United States v. Dubilier Condenser Corp., 289 U.S. 178, 186 (1933).

Patents incentivizes innovation without unduly creating a monopoly, thus the granting of patents strikes a delicate balance between private interest and public good. Encourages disclosure and investment in research that might otherwise not be conducted, while the disclosure based system reduces reducing redundant works and speeds developments.

Patent Misuse is an added protection against the unwarranted overextension of patent protection, and it can be invoked in conjunction with or independent of anti-trust violations.  Mercoid Corp. v. Mid-Continent Co., 320 U.S. 661, 674 (1944). Patent Misues a strict question of "exclusion" conferred by granted patent, in no way contingent upon existence of anti-trust violations. Justice Roberts Consequences of patent abuse may not be so drastic as to evoke anti-trust law

 Morton Salt Co. v. G. S. Suppiger Co Patent misuse, injunctive relief was denied to Morton Salt, discussed anti-trust as well because patent is extended beyond statutory limit and unfairly suppressing competition.

'' Transparent-Wrap Mach. Corp. v. Stokes & Smith Co.'' Patent Misuse apart independent of anti-trust