Transparent-Wrap Machine Corp. v. Stokes & Smith Co., 329 U.S. 637 (1947)

Transparent-Wrap Machine Corp. v. Stokes & Smith Co.

No. 208

Argued January 7, 8, 1947
Decided February 3, 1947
329 U.S. 637

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SECOND CIRCUIT

Syllabus

A patent licensing agreement granted an exclusive license to manufacture and sell in the United States, Canada and Mexico a patented machine under the patents then owned or later acquired by the licensor, subject to a condition that the licensee assign to the licensor any improvement patents applicable to the machine and suitable for use in connection with it.

Held: the inclusion in the license of the condition requiring the licensee to assign improvement patents is not per se illegal and unenforceable. Pp. 642-648.

156 F.2d 19 reversed.

In a suit for a declaratory judgment and an injunction instituted by a licensee under a patent licensing agreement, the District Court sustained the validity of a condition requiring the licensee to assign improvement patents to the licensor. The Circuit Court of Appeals reversed. 156 F.2d 198. This Court granted certiorari. 329 U.S. 695. Reversed, p. 648.