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UNITED STATES v. GENERAL ELECTRIC COMPANY ET AL.

272 U.S. 476

No. 113. Argued October 13, 1926 -- Decided November 23, 1926

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF OHIO.

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.

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. 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. 484.

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

4. As a patentee has a statutory monopoly of the right to make, use, and sell the patented articles, the comprehensiveness of his control of the business of selling is not necessarily an evidence of illegality in method. P. 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. 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. 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. 488.

15 F.2d 715, affirmed.

MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.


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