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Aro Mfg. Co. v. Convertible Top Replacement Co. - 377 U.S. 476, 84 S. Ct. 1526 (1964)

Rule:

35 U.S.C.S. § 271(c) defines contributory infringement in terms of direct infringement -- namely the sale of a component of a patented combination or machine for use "in an infringement of such patent."

Facts:

Plaintiff Convertible Top Replacement Co., Inc., (CTR) was the assignee of certain territorial rights in a combination patent for a top-structure for convertible automobiles. The patent covered only the combination of several unpatented components and made no claim to invention based on the fabric used in the top-structure. Top-structures using the patented combination were included in 1952-1954 cars made by General Motors Corp., pursuant to a patent license, and by Ford Motor Co., which had no license during that period. CTR filed an infringement suit against Defendant Aro Manufacturing Co., Inc. (Aro), which, without a license, made and sold replacement fabrics to fit cars using the patented top-structures. The patent owner, CTR’s assignor, Automobile Body Research Corporation (AB) notified Aro that its sale of fabrics to fit Ford tops would be contributory infringement. On Ford paid AB $73,000, and it was agreed that Ford, its dealers, customers and users, were released from all claims of infringement of the patent, other than with respect to "replacement top fabrics." AB reserved the right to license the manufacture, use and sale of such replacement fabrics under the patent.

CTR’s claim of contributory infringement was upheld both in the District Court and the Court of Appeals for the First Circuit. In a prior appeal to the United States Supreme Court, that holding was reversed here on the ground that the fabric replacement was permissible "repair" and not an infringing "reconstruction," so that there was no direct infringement to which Aro could contribute. On remand, the District Court dismissed the complaint as to both General Motors and Ford cars. The Court of Appeals reinstated the judgment for plaintiff CTR with respect to Ford cars, holding that, since Ford had not been licensed to produce the top-structures on those cars, Aro’s sale of replacement fabrics for them constituted contributory infringement even though the replacement was merely "repair." The Court of Appeals thus concluded that its "previous decision in this case was not reversed insofar as unlicensed Ford cars are concerned." Defendant Aro petitioned for certiorari review.

Issue:

Did the sale of a component of a patented combination or machine for use in an infringement of such patent make Aro liable as contributory infringer?

Answer:

Yes

Conclusion:

The United States Supreme Court found the agreement was invalid insofar as it sought to restrict future sales, since the patentee had by the agreement explicitly authorized purchasers to use the articles. The judgment was affirmed insofar as it held Aro liable with respect to sales made before that date as Aro was properly found liable as a contributory infringer, but subject to a reservation based on a knowledge requirement with respect to certain sales made before CTR informed Aro that it held the patent. The case was remanded for a determination of the damages to be recovered from Aro in respect of the infringing pre-agreement sales.

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