US SUPREME COURT DECISIONS

A patent licensing agreement authorized the licensee to make, use and sell brazing solder containing copper and phosphorus and required him to pay royalties and not to sell the product at prices lower than those charged by the licensor. After paying royalties on this product and also on solders containing tin or silver in addition to copper and phosphorus, the licensee obtained patents on the solders containing tin and silver and refused to pay royalties on them. The licensor sued in a state court for royalties. In his answer, the licensee challenged the validity and coverage of the licensor's patent, the validity of the price-fixing agreement, and the validity of the licensor's exercise of its monopoly. He counterclaimed for refund of the royalties paid and for damages on account of the restraint imposed on him by the agreement.

Held:

1. In these circumstances, the licensee was not estopped to challenge the validity of the licensor's patent. Sola Electric Co. v. Jefferson Electric Co., 317 U. S. 173; Scott Paper Co. v. Marcalu Mfg. Co., 326 U. S. 249; Katzinger Co. v. Chicago Metallic Co., ante p. 329 U. S. 394. P. 329 U. S. 407.

2. The covenant to pay royalties was not severable from the price-fixing covenant. Katzinger Co. v. Chicago Metallic Co., ante, p. 329 U. S. 394. P. 329 U. S. 407. chanrobles.com-red

Page 329 U. S. 403

3. The licensee's challenge to the validity of the patent, its alleged misuse, and the price-fixing covenant raised federal questions not governed by state rules as to estoppel or contract severability. P. 329 U. S. 407.

4. If the patent is invalid, the price-fixing agreement violates the antitrust laws. P. 329 U. S. 407.

5. Since the case is remanded for a new trial, this Court all not now pass on the validity of the patent, the licensing agreement, or the licensor's alleged misuse of its patent. Pp. 329 U. S. 407-408.

352 Pa. 443, 43 A.2d 332, reversed.

In a suit brought by a licensor of a patent in a state court for royalties under a licensing agreement, the licensee challenged the validity of the patent, a price-fixing covenant in the agreement, and the licensor's exercise of its monopoly, and counterclaimed for refund of royalties already paid and for damages resulting from the restraint imposed on him by the licensing agreement. The trial court gave judgment for the licensor. The Supreme Court of Pennsylvania affirmed. 352 Pa. 443, 43 A.2d 332. This Court granted certiorari, 326 U.S. 708, affirmed the judgment below in a per curiam decision by an equally divided Court, 327 U.S. 758, and later granted a rehearing. 327 U.S. 812. Reversed and remanded, p. 329 U. S. 408.