It requires no argument to make the point that price-fixing agreements, when based on invalid patents, are illegal. The proposition is almost self-evident. Mere paper patents, surely, afford no sanctuary for the otherwise illegal combination in restraint of trade. But, of course, when the Government is plaintiff, the question is not brought up quite so bluntly; there is first a sort of preliminary question: whether the Government, having itself issued the patents, may properly be heard to question their validity. The question thus becomes a mixed one of law and morals: law, in that the courts will not interfere in certain cases with the determinations of administrative tribunals ; morals, in that it is said the Government may not, in good faith, take away with its left hand that which it has given with its right.
Of course, he who runs will note that, by this shift, it is possible largely to obscure what the uninitiated might think was the first question, that is, whether anti-monopoly legislation is to be fully enforced in the public interest. Unfortunately, that question simply cannot be reached at once, it would seem, if at all. And anyone can see that if the Government may not contest the validity or scope of the patents used by the members of industry to support their various price-fixing schemes, the result will be that a considerable area of the public domain has been set aside in which such combinations, although "illegal," may operate with impunity.
Date of Authorship for this Version
Steffen, Roscoe T., "Invalid Patents And Price Control" (1946). Faculty Scholarship Series. Paper 3882.