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tection provisions of the cross-licenses involved in the case at bar." United States v. Line Material Co., 64 F. Supp. 970, 975.

The opinion in the General Electric case makes no distinction between cross-licenses and direct licenses. That case, therefore, is itself a precedent for upholding a crosslicensing agreement under facts characterized below as being "even more restrictive" than those here presented.

The acquisition by a single party of patents on noncompeting machines has been held not to be, per se, a violation of the Sherman Act. In United States v. Winslow, 227 U. S. 202, 217, Mr. Justice Holmes, in a unanimous opinion of the Court, said:

"The machines are patented, making them is a monopoly in any case, the exclusion of competitors from the use of them is of the very essence of the right conferred by the patents, Paper Bag Patent Case, 210 U. S. 405, 429, and it may be assumed that the success of the several groups was due to their patents having been the best. As, .. they did not compete with one another, it is hard to see why the collective business should be any worse than its component parts. we can see no greater objection to one corporation manufacturing seventy per cent. of three noncompeting groups of patented machines collectively used for making a single product than to three corporations making the same proportion of one group each. The disintegration aimed at by the statute does not extend to reducing all manufacture to isolated units of the lowest degree."

See also, United States v. United Shoe Mach. Co., 247 U. S. 32, 45, 51, et seq.; United Shoe Mach. Co. v. United States, 258 U. S. 451, 463-464.

In Standard Oil Co. v. United States, 283 U. S. 163, 170-171, 175, Mr. Justice Brandeis spoke as follows for

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a unanimous Court (except for Mr. Justice Stone who took no part in the case):

"The Government concedes that it is not illegal for the primary defendants to cross-license each other and the respective licensees; and that adequate consideration can legally be demanded for such grants. But it contends that the insertion of certain additional provisions in these agreements renders them illegal. It urges, first, that the mere inclusion of the provisions for the division of royalties, constitutes an unlawful combination under the Sherman Act because it evidences an intent to obtain a monopoly. This contention is unsound. Such provisions for the division of royalties are not in themselves conclusive evidence of illegality. Where there are legitimately conflicting claims or threatened interferences, a settlement by agreement, rather than litigation, is not precluded by the Act. . . . An interchange of patent rights and a division of royalties according to the value attributed by the parties to their respective patent claims is frequently necessary if technical advancement is not to be blocked by threatened litigation.28. . .

"But an agreement for cross-licensing and division of royalties violates the Act only when used to effect a

28 In that Standard Oil case the footnote at this point stated (p. 171):

"This is often the case where patents covering improvements of a basic process, owned by one manufacturer, are granted to another. A patent may be rendered quite useless, or 'blocked,' by another unexpired patent which covers a vitally related feature of the manufacturing process. Unless some agreement can be reached, the parties are hampered and exposed to litigation. And, frequently, the cost of litigation to a patentee is greater than the value of a patent for a minor improvement."

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monopoly, or to fix prices, or to impose otherwise an unreasonable restraint upon interstate commerce." In the above context, and for the reasons previously presented, it is evident that the agreements effecting a price fixation which thus may violate the Sherman Act are only those which "impose . . . an unreasonable restraint upon interstate commerce," within the meaning of the Sherman Act read in the light of the patent laws.29 The agreements which remain within the ambits of the patents to which they relate still are lawful agreements by virtue of the patent laws, just as they have been throughout the life of our patent system.

JUDICIAL AND LEGISLATIVE HISTORY SINCE THE GENERAL ELECTRIC CASE.

Neither the Bement nor the General Electric case, supra, has been overruled and the reasoning upon which they are based has not been directly or indirectly rejected by this Court. On the other hand, this Court repeatedly has recognized the existence of the principles announced in them. See, for example, Carbice Corp. v. American Patents Development Corp., 283 U. S. 27, 31; General Talking Pictures Corp. v. Western Electric Corp., 305 U. S. 124, 127:

"Appellants argue that the distributors were free to license the films for exhibition subject to the restrictions, just as a patentee in a license to manufacture and sell the patented article may fix the price at which the licensee may sell it." (Citing the Bement and General Electric cases.) Interstate Circuit, Inc. v. United States, 306 U. S. 208, 228.

29 Before making this statement, Mr. Justice Brandeis already had joined in the opinion of the Court in the General Electric case, supra, and written the opinion in Carbice Corp. v. American Patents Dcvelopment Corp., 283 U. S. 27.

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And see United States v. Univis Lens Co., 316 U. S. 241, 252; United States v. Masonite Corp., 316 U. S. 265, 277.

The rule of stare decisis applies to the interpretation given to the patent statutes and to the Sherman Act by the Bement and General Electric cases. There is no occasion here for such a relaxation of that rule as was suggested by Mr. Justice Brandeis in cases interpreting broad constitutional phrases. See his dissent in Burnet v. Coronado Oil & Gas Co., 285 U. S. 393, 410. To the extent that the present holdings are based upon opinions of this Court, that element is inherent in the rule of stare decisis.

The exceptional recent activity in seeking, by statutory amendment, a change in the patent laws as interpreted in the Bement and General Electric cases indicates a widespread understanding that, if such interpretation is to be changed, the remedy calls for congressional action. The resistance to such a change which has been shown by Congress is impressive. It indicates no dissatisfac

30

30 Many bills relating to these issues have been introduced in Congress and referred to appropriate committees. Not one has been reported back to either House of Congress.

As early as 1912, H. R. 22345, 62d Cong., 2d Sess., proposed that a patentee be not permitted to fix the price of articles to be sold by others under his patent.

During the hearings held by the Temporary National Economic Committee, the Department of Justice recommended many fundamental as well as minor changes in the patent law. These included the prohibition of price-limiting patent licenses comparable to those here at issue. Preliminary Report, Temporary National Economic Committee, Sen. Doc. No. 95, 76th Cong., 1st Sess. 16-17 (1939). The Department of Commerce took an opposite position. It submitted recommendations for retaining but improving the patent system substantially in accordance with its traditional underlying policies. The Final Report of the Temporary National Economic Committee incorporated the substance of the proposals of the De

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tion with the interpretation of existing law as expressed in the Bement and General Electric cases.

There appears, therefore, to be neither adequate reason nor authority for overruling the Bement and General Electric cases or for distinguishing this case from them.

partment of Justice. It included a recommendation that patentees be not permitted to limit the price at which a licensee might sell a product made under the license. Final Report, Temporary National Economic Committee, Sen. Doc. No. 35, 77th Cong., 1st Sess. 36-37 (1941).

In 1941, the President appointed the National Patent Planning Commission to submit recommendations on questions dealt with in the report. (See note 12, supra.) In 1943, among the examples of the proposed reforms which it concluded "would not be a beneficial innovation in our patent system," it listed "outlawing certain limitations in patent licenses, This evidently referred to the above-mentioned proposals of the Temporary National Economic Committee to outlaw price restrictions and other limitations in patent licenses. Report of the National Patent Planning Commission, H. R. Doc. 239, 78th Cong., 1st Sess. 9 (1943).

Bills to the same general effect as the proposals of the Temporary National Economic Committee have been introduced and referred to Committees of Congress but have advanced no further. Among them have been the following:

S. 2491 (§ 4), S. 2730 (§ 3), H. R. 7713 (§ 3), 77th Cong., 2d Sess. (1942); H. R. 109 (§ 3), H. R. 1371 (§ 29), H. R. 3874 (§ 29), 78th Cong., 1st Sess. (1943); H. R. 97 (§ 29), H. R. 3462 (§ 29), 79th Cong., 1st Sess. (1945); S. 2482, 79th Cong., 2d Sess. (1946); S. 72, 80th Cong., 1st Sess. (1947). Section 3 of S. 2730, supra, proposed that

"Every sale, assignment, or conveyance of a patent and every grant of a license thereunder, in connection with any condition, agreement, or understanding which restricts the price at which the purchaser, assignee, grantee, or license [licensee] may sell any article producible under the patent and customarily marketed in interstate commerce, is hereby declared to be illegal."