United States Supreme Court Cases & Opinions

U.S. Supreme Court

International Business Machines Corp. v. United States, 298 U.S. 131 (1936)

International Business Machines Corp. v. United States

No. 758

Argued April 8, 1936

Decided April 27, 1936

298 U.S. 131

Syllabus

Section 3 of the Clayton Act declares it unlawful for any person engaged in commerce to lease machinery "whether patented or unpatented" on the condition that the lessee shall not use supplies or other commodities of the lessor's competitor, where the effect of the condition "may be" to lessen competition substantially or tend to create a monopoly.

Held:

1. The prohibition is violated by a condition requiring a lessee to operate the leased machine only with supplies from the lessor, since this, in effect, precludes the use of supplies of a competitor. P. 298 U. S. 134.

2. While the section does not purport to curtail the patent monopoly of the lessor, the prohibition of tying clauses is not limited to unpatented supplies but includes also supplies which have been patented to the lessor either separately or in combination with the patented machine. P. 298 U. S. 136.

3. Assuming that, by implied exception, a tying clause would not violate the provision, though it tended to create a monopoly, if its purpose and effect were to protect the goodwill of the lessor in the leased machines, there is no basis for the exception where the substantial benefit of the clause to the lessor is in the elimination

Page 298 U. S. 132

of competition and where it does not appear that protection of his goodwill cannot be achieved by method that do not tend to monopoly and are not otherwise unlawful. P. 298 U. S. 138.

13 F.Supp. 11 affirmed.

Appeal from a decree enjoining, as contrary to the Clayton Act, certain clauses which the appellant had been placing in its leases of tabulating machines, requiring the use of tabulating cards of its own manufacture.