An owner of a combination patent may not so use it as to control
competition in the sale of an unpatented device, even though the
unpatented device may be the distinguishing part of the invention,
and a court of equity will grant or withhold relief accordingly.
Mercoid Corp. v. Mid-Continent Investment Co., ante, p.
320 U. S. 661. P.
320 U. S.
684.
133 F.2d 811 reversed.
Certiorari, 319 U.S. 739, to review a decree which reversed in
part and affirmed in part a decree of the District Court, 43 F.
Supp. 878, in a patent infringement suit.
Page 320 U. S. 681
MR. JUSTICE DOUGLAS delivered the opinion of the Court.
These are companion cases to
Mercoid Corp. v. Mid-Continent
Investment Co., ante, p.
320 U. S. 661. One
suit was instituted by petitioner, the other by respondent.
Petitioner sought a declaratory judgment to the effect that the
Freeman patent No. 1,813,732 was invalid and that petitioner did
not infringe it, that respondent had used the Freeman patent in
violation of the antitrust laws, that respondent be restrained from
threatening petitioner and its customers with infringement suits,
that an accounting be had, and treble damages awarded. Respondent,
in its bill, sought a decree sustaining the validity of the Freeman
patent and declaring that petitioner had infringed and contributed
to the infringement of its claims. In the latter action, petitioner
filed a counterclaim praying for substantially the same relief as
in its earlier bill. After issues were joined, the causes were
consolidated and tried together. The District Court said that the
Freeman patent was valid and that Mercoid was guilty of
contributory infringement. But it held that Minneapolis-Honeywell
was using the patent as a means of controlling an unpatented device
contrary to the rule of
Morton Salt Co. v. G. S. Suppiger
Co., 314 U. S. 488.
Accordingly, it dismissed both complaints. 43 F. Supp. 878. On
appeal, the Circuit Court of Appeals held that the patent claims in
issue were valid and that Mercoid had infringed them. But it
disagreed with the District Court that respondent had sought to
extend the scope of the patent in violation of the antitrust Laws.
Accordingly, it reversed the judgment of the District Court,
dismissing respondent's bill
Page 320 U. S. 682
and affirmed it as respects the relief claimed by petitioner.
133 F.2d 811.
The Freeman patent, as found below, covers a system of hot air
furnace control which requires three thermostats for its operation.
A room thermostat starts the stoker. Another thermostat (or limit
switch) breaks the stoker circuit when the air in the furnace
reaches a predetermined temperature, irrespective of the fact that
the room thermostat may still call for heat. This second thermostat
operates to prevent unsafe conditions due to overheating. The third
thermostat is also in the furnace. It controls a fan which forces
hot air from the furnace to the rooms. It does not permit the fan
to start until the air in the furnace reaches a specified degree of
heat. But, at that point, it starts the fan, which continues to
run, even though the limit switch has stopped the stoker, so long
as the furnace is hot and the room thermostat calls for heat. The
District Court found that the Freeman patent was a combination
patent on a system of furnace control which requires those three
thermostats for its operation, and that it was not a patent on
"either the fan switch or the limit switch or both of them." That
finding was not disturbed by the Circuit Court of Appeals, which
held that Freeman's "advance in the art" was the arrangement of
thermostatic switches, subject to furnace heat to secure in
connection with other parts the "sequence of operations" which we
have described.
Minneapolis-Honeywell has licensed five of its manufacturing
competitors under the Freeman patent. The licensees are granted a
nonexclusive right under the patent to make, use, and sell a
"combination furnace control" which is defined as a thermostatic
switch usable for a Freeman installation and designed in one unit
to control the fan and limit circuits. Royalty payments to
Minneapolis-Honeywell are based on the sales of the combination
furnace controls, although the Circuit Court of Appeals found that
the only Minneapolis-Honeywell control
Page 320 U. S. 683
"which gets protection as a result of the licenses is the
control usable only for a Freeman type installation." Each licensee
is required to insert in its catalogues or other sales literature
and to attach to each combination furnace control sold a notice to
the effect that the control includes a license for one installation
of the Freeman heating system. The licenses establish minimum
prices for the sale of the controls, and those prices must not be
cut by the licensees through the inclusion of "extras" or through
the reduction of charges for services. Price lists are attached
governing sales to manufacturers, jobbers, wholesalers, and
dealers. Equal terms to all licensees are provided.
Minneapolis-Honeywell tried on several occasions to induce Mercoid
to take a license. Being unsuccessful, it brought its present
suit.
Neither the petitioner nor the respondent sells or installs the
Freeman system in furnaces; that is to say, they do not practice
the invention. They are competitors in supplying the switch to
control the fan and limit circuits employed in such systems. That
switch or combustion furnace control is unpatented,
* and respondent
concedes that it is "less than the complete claimed invention."
But, as we have said, the Circuit Court of Appeals took the view
that that control provides "the sequence of operations which is the
precise essence of Freeman's advance in the art." And the accused
device has, according to the Circuit Court of Appeals, "no other
use than for accomplishing the sequence of operations of the
Freeman patent." The Circuit Court of Appeals concluded that,
although the combustion furnace control was unpatented, it served
"to distinguish the invention" and to mark the "advance in the art"
achieved by the Freeman patent. It accordingly
Page 320 U. S. 684
held that the patent laws permit, and the antitrust laws do not
forbid, the control over the sale and use of the unpatented device
which Minneapolis-Honeywell sought to achieve through its licensing
agreements. We do not agree, even though we assume the patent to be
valid.
The fact that an unpatented part of a combination patent may
distinguish the invention does not draw to it the privileges of a
patent. That may be done only in the manner provided by law.
However worthy it may be, however essential to the patent, an
unpatented part of a combination patent is no more entitled to
monopolistic protection than any other unpatented device. For, as
we pointed out in
Mercoid v. Mid-Continent Investment Co.,
supra, a patent on a combination is a patent on the assembled
or functioning whole, not on the separate parts. The legality of
any attempt to bring unpatented goods within the protection of the
patent is measured by the antitrust laws, not by the patent law.
For the reasons stated in
Mercoid v. Mid-Continent Investment
Co., supra, the effort here made to control competition in
this unpatented device plainly violates the antitrust laws, even
apart from the price-fixing provisions of the license agreements.
It follows that petitioner is entitled to be relieved against the
consequences of those acts. It likewise follows that respondent may
not obtain from a court of equity any decree which directly or
indirectly helps it to subvert the public policy which underlies
the grant of its patent.
Morton Salt Co. v. G. S. Suppiger
Co., 314 U. S. 488,
314 U. S. 494;
B.B. Chemical Co. v. Ellis, 314 U.
S. 495.
The judgment is reversed, and the causes are remanded to the
District Court for proceedings in conformity with this opinion.
Reversed.
MR. JUSTICE ROBERTS, MR. JUSTICE REED, MR. JUSTICE FRANKFURTER,
and MR. JUSTICE JACKSON concur in the result on the authority of
Morton Salt Co. v. G. S. Suppiger Co., 314 U.
S. 488.
* There is some suggestion that this device is patented. But,
according to the District Court, any such patent
"is owned by some person other than Minneapolis-Honeywell and
Mercoid, so that, as to them and so far as this case is concerned,
it is an unpatented device."