Motion Picture Patents Co. v. Universal Film Manufacturing Co.

Background

A company that owned patents on motion-picture projectors licensed a maker to sell the machines under a label saying each sold machine could be used only with films containing a separate reissued patent while the owner held it. One fully paid machine was bought by a theater operator and later used with films supplied by a film company after the reissued patent expired. The patent owner sued, claiming the attached notice could limit use and force buyers to take specific films or pay future charges.

Reasoning

The Court framed the key question as whether a patent gives the owner the right to attach a notice to a sold machine that restricts its use to unpatented supplies or lets the owner set new terms later. The majority explained that the patent grant covers the invention described in the patent claims — the machine mechanism itself — not the unpatented films or other supplies. The Court held that the patent law does not authorize post-sale notices that extend a patent monopoly to separate, unpatented materials or reserve the right to impose conditions or royalties after sale.

Real world impact

The decision means machines that are sold and paid for cannot be kept subject to patent-based notices forcing buyers to use only the seller’s films or to accept later-imposed terms. Theater operators, equipment purchasers, and competing film suppliers gain freedom to use competing supplies with such machines. The Court also indicated that earlier cases endorsing these notices would not control future results.

Dissents or concurrances

Justice Holmes (joined by two other Justices) dissented, arguing that property rights and prior decisions allowed a patentee to withhold use or impose conditions and that the older rule should be retained.