B. B. Chemical Co. v. Ellis
Headline: Court upholds dismissal and blocks a patentee from stopping suppliers after it tied a method patent to sales of unpatented materials, protecting competition in materials used to reinforce shoe insoles.
Holding: The Court ruled that an owner of a method patent who uses the patent to force buyers to purchase the patentee’s unpatented materials cannot sue to stop suppliers who sell or help supply those materials, and the suit was dismissed.
- Stops patentees from using method patents to force buyers to purchase the patentee’s unpatented supplies.
- Allows suppliers to sell materials and assist manufacturers without being stopped by such a patent owner.
- Patent owner can get relief only after fully abandoning the tying practice and undoing its effects.
Summary
Background
The dispute involves the owner of a method patent for reinforcing shoe insoles and other companies that supplied materials and helped manufacturers use that method. The patentee sold pre-coated fabric strips, adhesive, and machines and charged manufacturers per web yard, without giving written licenses. The courts below found the patent valid but concluded the patentee used the patent to limit competition in the sale of the unpatented materials and therefore could not enjoin others who sold or aided the use of those materials.
Reasoning
The central question was whether a patent owner who restricts use of a patented method so it can sell only its unpatented materials may still sue suppliers who sell or assist in supplying those materials. The Court assumed the suppliers did more than mere sale but held that because the patentee used the patent to establish a limited monopoly in unpatented supplies, maintaining the suit was contrary to public policy. The Court relied on its reasoning in a companion case and earlier decisions that disallow using patents to restrain competition in unpatented products, and affirmed dismissal of the suit.
Real world impact
The ruling protects suppliers and manufacturers from being cut off by a patentee who ties a method patent to the sale of unpatented materials. Patentees cannot enlarge their patent monopoly simply because it would be more convenient; a patentee seeking relief must first abandon the tying practice and show its effects have been undone before a court will consider enforcement.
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