Brulotte v. Thys Company

PETITIONER: Brulotte
RESPONDENT: Thys Company
LOCATION: The Realtor Building, formerly McCrory’s Five and Ten Cent Store

DOCKET NO.: 20
DECIDED BY: Warren Court (1962-1965)
LOWER COURT:

CITATION: 379 US 29 (1964)
ARGUED: Oct 20, 1964
DECIDED: Nov 16, 1964

Facts of the case

Question

Media for Brulotte v. Thys Company

Audio Transcription for Oral Argument - October 20, 1964 in Brulotte v. Thys Company

Earl Warren:

Number 20, Walter C. Brulotte et al., Petitioners, versus Thys Company.

Mr. Irons.

Edward S. Irons:

May it please the Court.

This is an action for an accounting for royalties due under a patent license agreement.

The license agreement was not for a single patent but rather for a package or group of patents many of which expired during the license term.

The action was brought to collect the royalties for the continuing right to use machines covered by the expired patents, none of the other patents in the package being incorporated into the machines.

The Supreme Court of the State of Washington held as a matter of law that parties might contract to pay post-expiration royalties and that there was no legal or equitable reason why they should not do so.

The issue basically for consideration therefore is whether that holding by the Supreme Court of the State of Washington was correct.

The position of the petitioners is that it is incorrect for two basic reasons.

The first reason is that the primary premise upon which the patents laws are based is the constitutional one that the patent shall be for a limited term.

Underlying this concept is the further consideration that the patent is granted on condition that when it expires the invention shall be available to the free use of the public and that the patentee is foreclosed from compromising in any way the dedication which was the condition on which he got the grant in the first place.

It therefore follows that any attempt to compromise that dedication by the collection of royalties by private contract after expiration is of course contrary and in violation of the primary bargain with the people which the patents represents.

And it is that primary bargain with the people requiring the dedication as a matter of law and as a matter of constitutional principle which must control over any private contract which seeks a different result.

The second and I believe equally important reason why the decision of the Supreme Court of Washington was wrong is because as has been repeatedly recognized, the subject matter, the invention of a patent which has expired is indeed dedicated, it is unpatented.

And so therefore, a private contract which extends the right to collect royalties to that unpatented subject matter is on its face an extension of the monopoly to unpatented materials and derogation not only of the principles of the patent laws but of the principles in antitrust laws as they had been applied in analogous situations.

Now, these concepts actually it seems --

(Inaudible)

Edward S. Irons:

Well, the facts Your Honor is this, as I said these licenses are for package of patents.

On the face of the license, Your Honor, there are 12 patents.

(Inaudible) for other patents?

Edward S. Irons:

Other patents pending, that's right.

Now the Court --

(Inaudible)

Edward S. Irons:

Yes, that is true.

That isn't used in the machine?

Edward S. Irons:

It isn't used in the machine.

It never was used in the machine and all the patents that are used in the machine have expired.

(Inaudible)

Edward S. Irons:

None of them are used.

They have ever been used in the machines.