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SUPREME COURT OF THE UNITED STATES

SYLLABUS

INTERNATIONAL BUSINESS MACHINES CORP. v. UNITED STATES

298 U.S. 131

APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK.

No. 758. Argued April 8, 1936 -- Decided April 27, 1936

Appeal from a decree enjoining, as contrary to the Clayton Act, certain clauses which the apppellant had been placing in its leases of tabulating machines, requiring the use of tabulating cards of its own manufacture.

Section 3 of the Clayton Act declares it unlawful for any person engaged in commerce to lease machinery "whether patented or unpatented" on the condition that the lessee shall not use supplies or other commodities of the lessor's competitor, where the effect of the condition "may be" to lessen competition substantially or tend to create a monopoly.

Held: 1. The prohibition is violated by a condition requiring a lessee to operate the leased machine only with supplies from the lessor, since this, in effect, precludes the use of supplies of a competitor. P. 134.

2. While the section does not purport to curtail the patent monopoly of the lessor, the prohibition of tying clauses is not limited to unpatented supplies but includes also supplies which have been patented to the lessor either separately or in combination with the patented machine. P. 136.

3. Assuming that, by implied exception, a tying clause would not violate the provision, though it tended to create a monopoly, if its purpose and effect were to protect the good will of the lessor in the leased machines, there is no basis for the exception where the substantial benefit of the clause to the lessor is in the elimination of competition and where it does not appear that protection of his good will cannot be achieved by methods that do not tend to monopoly and are not otherwise unlawful. P. 138.

13 F.Supp. 11, affirmed.

Mr. Justice Stone delivered the opinion of the Court.


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