Joseph McKenna

“ The evil potency ascribed to the leases (we use the word as inclusive of the clauses and we do not think it necessary to distinguish them according to their application to particular machines) by the government is their asserted coercion of shoe makers and machinery makers. They limit the freedom of the first, it is contended, and by that limitation preclude the competition of the second with the defendants. In other words, the use of the machines of the United Company is compelled as against the use of machines of other manufacturers, resulting in the restraint of the trade of the latter. ”

“ Were they anything more than the exercise of the patent monopoly? The word is descriptive and must be used, but it does not imply oppression. The old instrumentalities exist for all who are content with them and who care not for the better ones which inventive genius creates.
The charge of oppression puts out of view many essential things. We must keep in mind the quality of the right we are considering and that the inventor gets nothing from the law that he did not have before and that the only effect of his patent is to restrain others from dealing with or using its device. ”

“ It is not certain that the government denies this or means to assert anything more than that the patent right is exercised in oppression, assisting, indeed consummating, a scheme of monopoly, begun by the formation of the United Company, prosecuted in the various ways to which we have referred, and completed by the leases and their clauses.
It is difficult to represent the contentions of the government without under-coloring them or over-coloring them. There is one that the leases are invalid in and of themselves ”

“ It is to be remembered that a dissolution of the offending companies is prayed and that each of them be 'separated into such parts that no one of them will constitute a monopoly of the shoe machinery business,' or that receivers be appointed to take possession of them and their assets, business and affairs and wind them up and 'bring about conditions in trade and commerce among the states and with foreign countries in harmony with law.' If there be need for this the difficulties of achievement should not deter ”

“ There is denial of the purpose attributed to the defendants or the possession or exercise of baleful power, and the insistence that the United Company is a union of noncompeting businesses conducted under letters patent, effecting through the resources thus acquired greater economies in manufacture and greater efficiency of machinery and 'in other ways perfecting the shoemaker's art' advantages not engrossed by the company but inuring to its patrons and through them to the wearers of their product, a finished shoe. ”

“ To say that the world is not recompensed for the price it pays is to attack the policy of the law, is to defy experience and to declare that the objects of inventive genius all around us have contributed nothing to the advancement of mankind. ”

“ And there are contentions as to the dominance achieved. Indeed, it is asserted somewhat fervidly that the United Company 'is absolute monarch of the industry' and that 'no competitor can exist unless for its own pleasure or policy it withholds its destroying hand.'
There are opposing contentions no less fervidly urged. ”

“ We pass by the charge of the government that the United Company through its president threatened destruction to opponents and the use of his influence in the business world to enforce transfers of competing concerns and the patents they controlled. ”

“ The government sees nothing in any of them but the restraints upon the freedom of business, and regards the independent form as only slightly relaxing what counsel implies is the slavery of the others. The defendants contend that they are the simple exercise of a property right, the mutuality of agreement based on definite and valuable considerations. And it was testified that the machines in the United Company's general department have always been open to sale or lease. ”

“ We cannot accept, therefore, the contention of the government. We see nothing else in the circumstances of the parties than that which moves and may move the transactions of men.
We may say further in answer to the criticism of the leases, that relaxations of them were granted by 'riders' and that forms other than the restrictive were open to the shoe manufacturers, distinguished in the testimony by the term 'independent.' They do not contain the prohibitive clause but do contain the other clauses and require an initial payment. ”

“ The 'additional machines' clause, which provides that in case the lessee has more work than can be performed by the machine leased, he will lease additional machinery to perform the work, and that if the lessee does not do so the lessor may cancel the lease if he so elect, and any other lease of machinery of the same kind then in force between them. ”

“ It will be seen, therefore, that there was no other way out of the deadlock, if the inventions were to be used together-that is, embodied in one machine, without infringement-than by ownership in one hand of all the patents. That plan was adopted and was the inducement of the purchase of the Plant inventions by the United Company. But there was litigation to be composed as well, and was composed. ”

“ As the government says, quoting Circuit Judge Putnam in another case, neither the letter of the law nor its purpose 'distinguishes between strangling of commerce which has been born and preventing the birth of a commerce which does not exist.' But there is another view. No one can tell the strength of the competition that may be in a patent. It may be more than competition ”

“ We should risk misunderstanding and error if we should attempt to pick out that which makes against it and disregard that which makes for it and judge of witnesses from their reported words as against their living presence, the advantage which the trial court had. ”

“ But even if such extreme does not impend, certainly improvement of business and its efficiency can be striven for without offense to the law. United States v. Winslow, supra.
We may say here of the contention of the government as to the acquisitions-and the same comment may be made of most of its contentions-that they cast us into speculation for their estimate and urge us to decide between well-sustained conflicting opinions and adjudge the defendants guilty of a violation of law. ”

“ We must assume they were entered into by the lessees upon a calculation of their value-the efficiency of the machines balanced against the restrictions upon and conditions of their use. The lessees had the alternative of the choice of other machines, for other machines were sold side by side with those the leases covered. This, we think, is put out of view.
Let us guard against confusion and not confound things which must be kept in distinction. A patentee is given rights to his device, but he is given no power to force it on the world. ”

“ The second circumstance cited by the government is that before the union of the companies their machines had a flexibility in use that the testimony of defendants does not now ascribe to them, and that this was declared in advertisements. We are not disposed to give much importance to the circumstance. It may be that there was a certain interchangeability in the described machines, but, in the opinion of the trial court, there was, notwithstanding, no practical competition between them. ”

“ If the world buy it or use it the world will do so upon a voluntary judgment of its utility, demonstrated, it may be, at great cost to the patentee. If its price be too high, whether in dollars or conditions the world will refuse it; if it be worth the price, whether of dollars or conditions, the world will seek it. ”

“ We see no illegality in the contract with Goddu for assignment of other inventions he might make, or in like agreement with others. We content ourselves with this general declaration. An analysis of the contracts is not feasible, nor are the covenants measurable. That they are attempts to subject the inventive genius of the country to the designs of the defendants is too extreme. ”

“ Their ultimate test, however, and the effect of the patents is the testimony delivered in open court.↑ 'Section 1. Every contract, combination in the form of trust or otherwise, or conspiracy, in restraint of trade or commerce, among the several States, or with foreign nations, is hereby declared to be illegal. ”

“ It merely requires that the particular machine that is installed shall be used if the lessee have work for it. Without it defendants say that, as lessors, they would have no assurance of compensation for their machine. (7) A charge upon the return of the machinery leased is required. This needs no comment or further notice. (8) The leases of metallic machinery provide for the purchase from the lessor of certain fastening material. This clause and the next, which provides for the payment of royalties, are mere make-weights and not of special materiality. ”

“ The rights of the lessees.' it is said, 'are not touched except to preserve them.' But a lessee may like his situation, may have deliberately chosen it and may not care for any interposition, benevolent or otherwise. ”

“ And it directly says of the purchase from Plant that it was made at an overvaluation and by it Plant was tempted to the bargain and the United Company satisfied by getting rid of a competitor.
We get no solution of the purpose of the parties by the price the United Company paid. [6] We must consider what it was paid for. It is to be remembered that we are dealing with a transaction which took place eleven years after the formation of that company and is to be judged of by its own circumstances, the incentives of that time. ”