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Law School Case Brief

Int'l Salt Co. v. United States - 332 U.S. 392, 68 S. Ct. 12 (1947)

Rule:

Not only is price-fixing unreasonable, per se, but also it is unreasonable, per se, to foreclose competitors from any substantial market.

Facts:

Defendant International Salt Company was the largest producer of industrial salt in the United States and owned patents on two machines that used salt products. International Salt principally distributed the machines under leases that required the lessee to purchase from International Salt all salt consumed in the leased machines. The United States government, filed a civil action alleging that the leases on the patented machines violated § 1 of the Sherman Act, 15 U.S.C.S. § 1, and § 3 of the Clayton Act, 15 U.S.C.S. § 14. The district court granted the United States government summary judgment, and International Salt sought appellate review by the United States Supreme Court.

Issue:

Did the lease agreements on the patented machinery violate the Sherman and Clayton Antitrust Acts?

Answer:

Yes

Conclusion:

The United States Supreme Court affirmed, holding that even though a lessor could impose reasonable restrictions on a lessee if the restrictions were designed in good faith to minimize maintenance burdens and to assure satisfactory operation, it was unreasonable, per se, to foreclose competitors from any substantial market. The Court held that agreements that tended to create a monopoly were forbidden.

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