The Fair v. Kohler Die & Specialty Co.

Background

An Illinois corporation that owned a patent for gas-heating devices sued another Illinois company called The Fair. The patent owner said it had the sole right to make and sell the devices and required buyers not to resell them for less than $1.50, with a notice attached. The Fair bought a stock of the devices (through a jobber) and sold them for $1.25 each. The Fair appeared only to argue that, because both companies were in the same State and the devices had been bought from the patentee by a jobber, the federal court had no power to hear the case.

Reasoning

The core question was whether the suit presented a real claim under federal patent law so that a federal court could decide it, even though both parties were citizens of the same State. The Court explained that the plaintiff’s clear claim of patent infringement, its request for an injunction and statutory triple damages, and the allegation about the resale condition made the case a substantial claim under federal law. A defensive plea denying the patent right could not defeat the plaintiff’s choice to bring a federal patent claim. The Court therefore upheld the lower court’s authority to decide the controversy and affirmed the decree for the patent owner.

Real world impact

The decision confirms that patent owners can bring federal lawsuits to enforce patent rights and resale conditions against local sellers, and that federal courts may rule on those disputes. The Court noted that frivolous claims could be dismissed, but this complaint was found to be a genuine federal patent claim.