Besser Manufacturing Co. v. United States

Besser Manufacturing Co. v. United States, 343 U.S. 444 (1951), is a 1951 patent–antitrust decision of the United States Supreme Court in which the Court upheld a ruling that the dominant U.S. manufacturer of concrete block–making machines violated the antitrust laws when it acquired its two principal competitors (attaining a 65% market share), bought important patents, made bad–faith threats of patent infringement suits, and entered into patent licensing agreements in which the parties were given veto powers over any prospective additional licensees.

An exclusive license to one company would be permissible, but: [H]ere the patentees have joined hands with the two largest competitors in the industry and by terms of their agreement have virtually made it impossible for others to obtain rights under those patents.

The contract even gives Stearns and Besser the power to restrict competition present and future by requiring their joint consent before licensing others.

We believe it clear that the parties intended this contract to be a means whereby control of the industry could be acquired and competition eliminated.

[8] Besser opposed the reasonable royalty, compulsory licensing order as "punitive, confiscatory and inappropriate."

[10] The facts of the Krasnov case were not completely identical to those of the Besser case, but the court said, "I think the evil which the court there struck down exists here, namely, (1) the veto power over licensing rights granted to a licensee and (2) the contractual arrangement which created the power to restrict competition by requiring joint consent before others could be licensed.

Besser's patented concrete block making machine
Justice Jackson delivered the unanimous opinion of the Supreme Court, affirming the district court's judgment