Automatic Radio Mfg. Co. v. Hazeltine Research, Inc - 339 U.S. 827, 70 S. Ct. 894 (1950)

Rule:

The mere accumulation of patents, no matter how many, is not in and of itself illegal.

Facts:

Respondent licensor was the assignee of an interest in hundreds of patents and patent applications. The petitioner licensee, a manufacturer, entered into a license agreement with the licensor in which the licensor was to be paid a small percentage of the licensee's selling price of broadcast receivers even if a patent was not used. The licensor filed suit to recover the minimum royalty due under the license agreement and sought an accounting. The licensee asserted that the license agreement was unenforceable as a misuse of patents. The lower courts sustained the licensor's motion for summary judgment.

Issue:

Was the license agreement unenforceable as a misuse of patents? 

Answer:

No.

Conclusion:

The court affirmed the decision of the lower courts, holding that the royalty provision did not create a monopoly and did not illegitimately restrain competition. The mere accumulation of patents, no matter how many, was not in and of itself illegal. The right to a patent included the right to market the use of the patent at a reasonable return.