DAWSON CHEM. CO. V. ROHM & HAAS CO., 448 U. S. 176 (1980)

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U.S. Supreme Court

Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176 (1980)

Dawson Chemical Co. v. Rohm & Haas Co.

No. 79-669

Argued April 21, 1980

Decided June 27, 1980

448 U.S. 176


Title 3 U.S.C. §271(c) provides that

"[w]hoever sells a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer."

Section 271(d) provides that

"[n]o patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent; (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory infringement."

Respondent chemical manufacturer obtained a patent on the method or process for applying propanil, a chemical compound herbicide, to inhibit the growth of undesirable plants in rice crops. Propanil is a nonstaple commodity that has no use except through practice of the patented method. Petitioners manufactured and sold propanil for application to rice crops, with directions to purchasers to apply the propanil in accordance with respondent's patented method. Respondent filed suit in Federal District Court, seeking injunctive relief and alleging that petitioners contributed to infringement of its patent rights by farmers who purchased and used petitioners' propanil, and that petitioners induced such infringement by instructing the farmers how to apply the herbicide. Petitioners responded by requesting licenses for the patented method, but, when respondent refused to grant licenses, petitioners raised a defense of patent misuse, claiming that there had been misuse because respondent had "tied" the sale of patent rights to the purchase of propanil, an unpatented and unpatentable article, and because it refused to grant licenses to other propanil producers. The District Court granted summary judgment for petitioners on the ground that respondent was barred from obtaining relief against infringers because

Page 448 U. S. 177

it had attempted illegally to extend its patent monopoly. The court ruled that the language of § 271(d) specifying conduct that is deemed not to be patent abuse did not encompass the totality of respondent's conduct. The Court of Appeals reversed, holding that, by specifying in § 271(d) conduct that is not to be deemed patent misuse, Congress conferred upon a patentee the right to exclude others and reserve to itself, if it chooses, the right to sell nonstaples used substantially only in its invention, and that, since respondent's conduct was designed to accomplish only what the statute contemplated, petitioners' misuse defense was of no avail.

Held: Respondent has not engaged in patent misuse, either by its method of selling propanil or by its refusal to license others to sell that commodity. Pp. 448 U. S. 187-223.

(a) Viewed against the backdrop of judicial precedent involving the doctrines of contributory infringement and patent misuse, the language and structure of § 271 support respondent's contention that, because § 271(d) immunizes its conduct from the charge of patent misuse, it should not be barred from seeking relief against contributory infringement. Section 271(c) identifies the basic dividing line between contributory infringement and patent misuse, and adopts a restrictive definition of contributory infringement that distinguishes between staple and nonstaple articles of commerce. Section 271(c)'s limitations on contributory infringement are counterbalanced by the limitations on patent misuse in § 271(d), which effectively confer upon the patentee, as a lawful adjunct of his patent rights, a limited power to exclude others from competition in nonstaple goods. Respondent's conduct is not dissimilar in either nature or effect from the three species of conduct that are expressly excluded by § 271(d) from characterization as misuse. It sells propanil, authorizes others to use it, and sues contributory infringers, all protected activities. While respondent does not license others to sell propanil, nothing on the face of the statute requires it to do so. And, although respondent's linkage of two protected activities -- sale of propanil and authorization to practice the patented process -- together in a single transaction is not expressly covered by § 271(d), petitioners have failed to identify any way in which such "tying" of two expressly protected activities results in any extension of control over unpatented materials beyond what § 271(d) already allows. Pp. 448 U. S. 200-202

(b) The relevant legislative materials, especially the extensive congressional hearings that led up to the final enactment of § 271 in 1952, reinforce the conclusion that § 271(d) was designed to immunize from the charge of patent misuse behavior similar to that in which respondent has

Page 448 U. S. 178

engaged, and that, by enacting §§271(c) and(d), Congress granted to patent holders a statutory right to control nonstaple goods that are capable only of infringing use in a patented invention and are essential to that invention's advance over prior art. There is nothing in the legislative history to show that respondent's behavior falls outside § 271(d)'s scope. Pp. 448 U. S. 202-215.

(c) The above interpretation of § 271(d) is not foreclosed by decisions in this Court following passage of the 1952 Patent Act. Contrary to petitioners' assertion, this Court in those decisions did not continue to apply the holdings of Mercoid Corp. v. Mid-Continent Investment Co., 320 U. S. 661, and Mercoid Corp. v. Minneapolis-Honeywell Regulator Co., 320 U. S. 680 -- that even an attempt to control the market for unpatented goods having no use outside a patented invention would constitute patent misuse -- and did not effectively construe § 271(d) to codify the result of the Mercoid decisions. The staple-nonstaple distinction supplies the controlling benchmark, and ensures that the patentee's right to prevent others from contributorily infringing his patent affects only the market for the invention itself. Aro Mfg. Co. v. Convertible Top Co., 365 U. S. 336, and Aro Mfg. Co. v. Convertible Top Co., 377 U. S. 476, distinguished. Pp. 448 U. S. 215-220.

599 F.2d 685, affirmed.

BLACKMUN, J., delivered the opinion of the Court, in which BURGER, C.J.,and STEWART, POWELL, and REHNQUIST, JJ., joined. WHITE, J., filed a dissenting opinion, in which BRENNAN, MARSHALL, and STEVENS, JJ., joined, post, p. 448 U. S. 223. STEVENS, J., filed a dissenting opinion, post, p. 448 U. S. 240.

Page 448 U. S. 179

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