707,934, on a part of the mechanism used in motion picture Projectors to feed a film through the machine with a regular, uniform, and accurate movement.

[6] MPP sent letters protesting the alleged infringement of its patent, and then sued Universal, Prague, and the owner of the movie house.

It was established at trial that 40,000 of the MPP machines are now in use in the US, and that the patented mechanism is the only one with which motion picture films can be used successfully.

Justice Clarke began his analysis by observing that the patent statute does not provide for and thus authorize notices of the type involved here.

Dick Co.[3] The Court traced the evolution of this idea and explained why a majority of the Court rejected it: The construction of the patent law which justifies as valid the restriction of patented machines, by notice, to use with unpatented supplies necessary in the operation of them, but which are no part of them, is believed to have originated in Heaton-Peninsular Button-Fastener Co. v. Eureka Specialty Co. (which has come to be widely referred to as the Button-Fastener Case), decided by .

This decision [Button-Fastener] proceeds upon the argument that, since the patentee may withhold his patent altogether from public use, he must logically and necessarily be permitted to impose any conditions which he chooses upon any use which he may allow of it.

The defect in this thinking springs from the substituting of inference and argument for the language of the statute, and from failure to distinguish between the rights which are given to the inventor by the patent law and which he may assert against all the world through an infringement proceeding, and rights which he may create for himself by private contract which, however, are subject to the rules of general as distinguished from those of the patent, law.

he is thereby restricted to the use of the invention as it is described in the claims of his patent, and not as it may be expanded by limitations as to materials and supplies necessary to the operation of it, imposed by mere notice to the public.

The perfect instrument of favoritism and oppression which such a system of doing business, if valid, would put into the control of the owner of such a patent should make courts astute, if need be, to defeat its operation.

The patent law furnishes no warrant for such a practice, and the cost, inconvenience, and annoyance to the public which the opposite conclusion would occasion forbid it.

This notice restriction is contrary to public policy: A restriction which would give to the plaintiff such a potential power for evil over an industry which must be recognized as an important element in the amusement life of the nation, under the conclusions we have stated in this opinion, is plainly void because wholly without the scope and purpose of our patent laws, and because, if sustained, it would be gravely injurious to that public interest, which we have seen is more a favorite of the law than is the promotion of private fortunes.

"[15] Holmes did allow, however, "No doubt this principle might be limited or excluded in cases where the condition tends to bring about a state of things that there is a predominant public interest to prevent."

[18] In Carbice Corp. v. American Patents Development Corp.,[19] the Supreme Court considered a case in which a patentee, who had a patent on a "package consisting of a protective casing of insulating material having packed therein a quantity of frozen carbon dioxide ["dry ice"] in an insulating container and a quantity of freezable product in freezing proximity to said frozen carbon dioxide," where the frozen carbon dioxide was placed at the center, surrounded by the freezable product, surrounded on the outside by the packaging material.

If a monopoly could be so expanded, the owner of a patent for a product might conceivably monopolize the commerce in a large part of unpatented materials used in its manufacture.

Accordingly, "the sole purpose to which the patent is put is thereby to suppress competition in the production and sale of staple unpatented material for this use in road building."

The Court held that the doctrine of the Carbice case applied: By the rule there declared every use of a patent as a means of obtaining a limited monopoly of unpatented material is prohibited.

Citing Motion Picture Patents, Carbice, and Leitch, the Court stated, "It is the established rule that a patentee who has granted a license on condition that the patented invention be used by the licensee only with unpatented materials furnished by the licensor may not restrain as a contributory infringer one who sells to the licensee like materials for like use."

Suppiger argued that Motion Picture Patents, Carbice, and Leitch all involved contributory infringement actions where the patentee sought to restrain a defendant from selling unpatented supplies to licensees, but here, Suppiger said: The Court did not accept the attempted distinction: [A]dditional considerations must be taken into account where maintenance of the suit concerns the public interest, as well as the private interests of suitors.

Where the patent is used as a means of restraining competition with the patentee's sale of an unpatented product, the successful prosecution of an infringement suit, even against one who is not a competitor in such sale, is a powerful aid to the maintenance of the attempted monopoly of the unpatented article, and is thus a contributing factor in thwarting the public policy underlying the grant of the patent.The Court explained that equity precedent supported denial of relief that would further wrongdoing by the party seeking the relief and thus harm the public interest: Equity may rightly withhold its assistance from such a use of the patent by declining to entertain a suit for infringement, and should do so at least until it is made to appear that the improper practice has been abandoned and that the consequences of the misuse of the patent have been dissipated.

The reasons for barring the prosecution of such a suit against one who is not a competitor with the patentee in the sale of the unpatented product are fundamentally the same as those which preclude an infringement suit against a licensee who has violated a condition of the license by using with the licensed machine a competing unpatented article [as protection] Motion Picture Patents Co. v. Universal Film Mfg.

It is the adverse effect upon the public interest of a successful infringement suit in conjunction with the patentee's course of conduct which disqualifies him to maintain the suit, regardless of whether the particular defendant has suffered from the misuse of the patent.These considerations made it unnecessary, the Court added, to decide whether Suppiger had committed an antitrust violation "for we conclude that, in any event, the maintenance of the present suit to restrain petitioner's manufacture or sale of the alleged infringing machines is contrary to public policy, and that the district court rightly dismissed the complaint for want of equity."

Dick and the Button-Fastener case stated what the following commentary by Professor Chiapetta explains in greater detail some years later.

"Mr. Justice Holmes, who has been the most consistent defender of the restriction theory since its inception, argues in the latest decision that since the patentee may wholly withdraw his invention from the market, he should be permitted to sell it on any terms or conditions he may wish to impose."

If it is true that because a man may withhold a patented article from the market, he may therefore impose any conditions upon its use when he sells, it should be equally true that because a man owns a horse that he need not sell, he may at the time of sale impose any conditions upon its future use.But that cannot be a valid test, he continues, because it is against the common law.

"[28] ● Professor Chiapetta compares the majority's and Holmes's dissent's respective analyses of the inherency doctrine and concludes that Holmes's analysis ignores the issue of whether the benefits of increased usage of the patented invention under a restrictive license exceed the harms resulting from the restriction.

"If that produces net inefficiencies, the problem lies exclusively" in the way the U.S. patent system has been set up, which is a matter of congressional choice, subject only to constitutional limitations.

"As the Motion Picture majority properly observes, such rights must be examined to determine whether their harms outweigh the benefits.