Leitch Manufacturing Co. v. Barber Co.

Background

The dispute was between a company that owned a process patent for a method of treating cement roads to slow evaporation (the patent owner) and a competing manufacturer that sold bituminous emulsion (the competitor). The emulsion is an unpatented, commonly sold material long used by road builders for various purposes. The patent owner sued the competitor for contributory infringement after the competitor sold emulsion to a road builder who used it in the patented method. The patent owner itself did not do road building, did not grant written licenses, and did not charge road builders a royalty; instead it sold emulsion and relied on the effect of those sales to control who could practice the method.

Reasoning

The Court examined whether a holder of a process patent may use contributory-infringement suits to shut out rivals in the market for an unpatented staple used in the patented method. Relying on an earlier ruling about a similar situation involving dry ice, the Court said a patent cannot be used to obtain a limited monopoly over unpatented material. That rule applies whether the patentee uses contracts, notices, or business methods to try to extend the patent and it applies to patents on machines, products, or processes. Because the patent owner sought to suppress competition in sales of the unpatented emulsion, the Court reversed the lower court’s judgment that had upheld the patent.

Real world impact

The ruling protects makers and sellers of ordinary, unpatented materials from being shut out by process-patent owners who try to control the market for those materials. Road builders and other buyers remain free to purchase staple materials without being blocked by a patent holder's business arrangements. The principle applies broadly to similar attempts to extend patent monopolies.