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Automatic Radio Mfg. Co. v. Hazeltine Research, Inc.

Supreme Court of the United States

April 5, 1950, Argued ; June 5, 1950, Decided

No. 455

Opinion

 [378]   [*829]  [**895]  [***1316]    MR. JUSTICE MINTON delivered the opinion of the Court.

This is a suit by respondent Hazeltine Research, Inc., as assignee of the licensor's interest in a nonexclusive patent license agreement covering a group of 570 patents and 200 applications, against petitioner Automatic Radio Manufacturing Company, Inc., the licensee, to recover royalties. The patents and applications  [379]  are related to the manufacture of radio broadcasting apparatus. Respondent and its corporate affiliate and predecessor have for some twenty years been engaged in research, development, engineering design and testing and consulting services in the radio field. Respondent [****5]  derives income from the licensing of its patents, its policy being to license any and all responsible manufacturers of radio apparatus at a royalty rate which for many years has been approximately one percent. Petitioner manufactures radio apparatus, particularly radio broadcasting receivers.

The license agreement in issue, which appears to be a standard Hazeltine license, was entered into by the parties in September 1942, for a term of ten years. By its terms petitioner acquired permission to use, in the manufacture of its "home" products, any or all of the patents which respondent held or to which it might acquire rights. Petitioner was not, however, obligated to use respondent's patents in the manufacture of its products. For this license, petitioner agreed to pay respondent's assignor royalties based upon a small percentage of petitioner's selling price of complete radio broadcasting receivers, and in any event a minimum of $ 10,000 per year. It further agreed to keep a record of its sales and to make monthly reports thereof.

This suit was brought to recover the minimum royalty due for the year ending August 31, 1946, for an accounting of other sums due, and for other relief.  [****6]  Petitioner answered and both parties filed motions for summary  [*830]  judgment and affidavits in support of the motions.  The District Court found the case to be one appropriate for summary procedure under Rule 56 of the Federal Rules of Civil Procedure, and sustained the motion of respondent for judgment. The validity of the license agreement was upheld against various charges of misuse of the patents, and judgment was entered for the recovery of royalties and an accounting, and for a permanent injunction restraining petitioner from failing to pay royalties, to keep records, and to render  [**896]  reports during the life of the agreement. 77 F.Supp. 493.  [***1317]  The Court of Appeals affirmed, one judge dissenting (176 F.2d 799), and we granted certiorari (338 U.S. 942) in order to consider important questions concerning patent misuse and estoppel to challenge the validity of licensed patents.

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339 U.S. 827 *; 70 S. Ct. 894 **; 94 L. Ed. 1312 ***; 1950 U.S. LEXIS 2622 ****; 85 U.S.P.Q. (BNA) 378; 1950 Trade Cas. (CCH) P62,632

AUTOMATIC RADIO MANUFACTURING CO., INC. v. HAZELTINE RESEARCH, INC.

Prior History:  [****1]  CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIRST CIRCUIT.

In a suit by the licensor of certain patents, the District Court sustained the validity of a patent licensing agreement, entered judgment for an accounting and recovery of royalties, and enjoined petitioner from failing to pay royalties, to keep records and to render reports during the life of the agreement. 77 F.Supp. 493. The Court of Appeals affirmed. 176 F.2d 799. This Court granted certiorari. 338 U.S. 942. Affirmed, p. 836.

Disposition:  176 F.2d 799, affirmed.

CORE TERMS

patents, license, royalties, licensee, monopoly, unpatented, manufacture, products, radio, license agreement, apparatus, Gypsum, sales, misuse, cases, public interest, patentee, invalid

Civil Procedure, Summary Judgment, Supporting Materials, Affidavits, General Overview, Evidence, Types of Evidence, Documentary Evidence, Opposing Materials, Antitrust & Trade Law, Intellectual Property, Ownership & Transfer of Rights, Patent Law, Ownership, Patents as Property, Business & Corporate Compliance, Conveyances, Royalties, Misuse of Rights, Utility Patents, Product Patents, Machines, Licenses, Justiciability, Standing