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United States v. General Electric Co., 272 U.S. 476 (1926)

United States v. General Electric Company

No. 113

Argued October 13, 1926

Decided November 23, 1926

272 U.S. 476


1. Through a system of contracts between a company which owned the patents for electric lamps with tungsten filaments and manufactured most of those sold and a large number of wholesale and retail dealers in electrical supplies, the dealers were appointed agents of the company to sell, on commission, the lamps, which were to be consigned to them by the company, transportation prepaid; the sales were to be at prices fixed by the company, the dealers to pay all expenses except the original transportation and to account to the company periodically for the amount, less commission, of all sales, cash or credit, and all the stock entrusted to the dealers was to remain the property of the company until sold, and to be accounted for by the dealers.

Page 272 U. S. 477

Held, that the dealers were genuine agents, not purchasers in disguise, and that the plan was not a device to fix prices after sale and to restrain trade and exercise monopoly in the lamps in violation of the Anti-Trust Act. P. 272 U. S. 484.

2. The circumstance that the agents were in their regular business merchants, and, under a prior arrangement, had bought the lamps and sold them as their own did not prevent this change in their relation to the company. P. 272 U. S. 484.

3. Nor did the size and comprehensiveness of the scheme bring it within the Anti-Trust Law. P. 272 U. S. 485.

4. As a patentee has a statutory monopoly of the right to make, use, and sell the patented article, the comprehensiveness of his control of the business of selling is not necessarily an evidence of illegality in method. P. 272 U. S. 485.

5. As long as a patentee makes no effort to fasten upon ownership of the articles he sells control of the prices at which his purchaser shall sell, it makes no difference how widespread his monopoly. P. 272 U. S. 485.

6. The owner of articles, patented or otherwise, is not violating the common law or the Anti-Trust law by seeking to dispose of his articles directly to the consumer and fixing the price by which his agents transfer the title from him directly to such consumer. P. 272 U. S. 488.

7. A patentee, in licensing another person to make, use, and vend, may lawfully impose the condition that sales by the licensee shall be at prices fixed by the licensor and subject to change at his discretion. P. 272 U. S. 488.

15 F.2d 715 affirmed.

Appeal from a decree of the district court dismissing, for want of equity, a bill brought by the United States to enjoin the General Electric Company, Westinghouse Electric and Manufacturing Company, and Westinghouse Lamp Company, appellees herein, from prosecuting a plan for the distribution and sale of patented electric lamps, which was alleged to be a restraint and monopoly of interstate commerce.

Page 272 U. S. 478

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