Morton Salt Co. v. G. S. Suppiger Co.

Background

A company owned a patent on a machine that deposits salt tablets into cans for the canning industry. That company and a wholly owned subsidiary sold the salt tablets. The company leased its patented machines to about two hundred commercial canners under licenses that required the canners to use only the subsidiary’s salt tablets. A different company made and leased machines that were accused of infringing the patent, and the patent owner sued for an injunction and an accounting. The district court granted summary judgment dismissing the suit on the ground that the patent was being used to restrain competition in unpatented tablets; the Court of Appeals reversed, and the Supreme Court agreed to review the case.

Reasoning

The Court asked whether a court of equity should help a patent holder who uses the patent to block competition in unpatented products. It explained that a patent gives exclusive rights only to the patented device, not to unpatented materials. Using a patent to force buyers to purchase the patentee’s unpatented salt tablets is contrary to public policy. Because the patent was being used to restrain competition in tablets, the Court held that equity should refuse to enforce the patent against the competing machine maker until the improper licensing practice is ended and its effects are undone. The Court also said it was unnecessary to decide whether the conduct violated the Clayton Act.

Real world impact

The decision means patent owners cannot rely on courts to stop competitors when they use patents to tie sales of unpatented supplies. Makers and sellers of unpatented materials, licensees, and competing machine makers are directly affected. Equitable relief such as injunctions may be withheld until misuse is abandoned and harms dissipate.