Motion Picture Patents Company v. Universal Film Manufacturing Company et al

Brief Fact Summary. Universal Film Manufacturing Company (Defendant) denied the validity of Motion Picture Patents Company’s (Plaintiff) patent, denied infringement, and claimed an implied license to use the patented machine without the restrictions imposed by the terms of the patent owner in a notice he put on the machine.

Synopsis of Rule of Law.The exclusive right granted in every patent must be limited to the invention described in the claims of the patent and it is not competent for the owner to extend the scope of its patent monopoly by restricting the use of it to materials necessary in its operation that are not part of the patented invention.

Facts.When Motion Picture Patents Company (MPPC) (Plaintiff), the assignee of a patent, granted the right and a license to manufacture and sell machines embodying the invention described in the patent at suit, i.e., a mechanism for feeding film through a motion picture projector, MPPC (Plaintiff) attached a notice to each machine limiting the use of the motion picture machines by the purchaser or by the purchaser’s lessee to terms not stated in the notice but which were to be fixed after sale, by MPPC (Plaintiff) at its discretion.  The notice attempted to restrict the use of film supplies and the sale price and was not a restriction on the use of the machine itself.  Universal Film Manufacturing Company (Defendant) claimed that the owner’s rights to control the materials to be used in operating the machine could not be used in operating the machine could not be derived from or protected by the patent law and the notice was invalid.

Issue.The exclusive right granted in every patent must be limited to the invention described in the claims of the patent and it is not competent for the owner to extend the scope of its patent monopoly by restricting the use of it to materials necessary in its operation that are not part of the patented invention.

Held.The exclusive right granted in every patent must be limited to the invention described in the claims of the patent and it is not competent for the owner to extend the scope of its patent monopoly by restricting the use of it to materials necessary in its operation that are not part of the patented invention.  Also, the owner may not send its machines into channels of trade of the country subject to conditions as to use or royalty to be paid to be imposed thereafter at the discretion of the patent owner.  The restriction contained in the notice affixed to the machine sold by MPC (Plaintiff) is invalid because the film is obviously not a part of the invention of the patent in suit and because to enforce it would be to treat a monopoly in the manufacture and use of moving picture films, wholly outside of the patent in suit and out of the patent law as we have interpreted it.  In addition, the owner of a patent is not authorized to fix, by notice, the price at which a patented article must be sold after the first sale of it.

Dissent.(Holmes, J.)  Since a patent owner can keep his patented machine wholly out of use, I cannot understand why he cannot keep it out of use unless the licensee, or for that matter, the buyer, will use some unpatented thing in connection with it.  In general, 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.

Discussion.This enunciation of the doctrine of first sale coincided with antitrust legislation at the turn of the century.  Resale price maintenance was made illegal under antitrust law.  Later amendments to the patent laws clarified issues related to the typing of nonstaple products to patented products.