Regulation of Business – Sherman Act – Patent Pool Agreements Which Restricts Fields of Use

DeVlieg, the owner of three major patents in the machine tool field, licensed his inventions to several machine tool manufacturers. Subsequently, he and the licensees formed a new corporation, Associated Patents, Inc., a patent holding company, to which he assigned his patents. Each party to the agreement owned an equal share of API. The agreement contained provisions for the granting back to API of any improvement patents acquired by the parties and it also restricted the use of the patents by each party to carefully circumscribed fields of use. Held, a patent pool agreement restricting fields of use is a combination in restraint of trade in violation of section 1 of the Sherman Act. United States v. Associated Patents, Inc., (D.C. Mich. 1955) 134 F. Supp. 74.