United States v. United States Gypsum Co.
United States Supreme Court case
United States v. United States Gypsum Co. was a patent–antitrust case in which the United States Supreme Court decided, first, in 1948, that a patent licensing program that fixed prices of many licensees and regimented an entire industry violated the antitrust laws, and then, decided in 1950, after a remand, that appropriate relief in such cases did not extend so far as to permit licensees enjoying a compulsory, reasonable–royalty license to challenge the validity of the licensed patents. The Court also ruled, in obiter dicta, that the United States had standing to challenge the validity of patents when a patentee relied on the patents to justify its fixing prices. It held in this case, however, that the defendants violated the antitrust laws irrespective of whether the patents were valid, which made the validity issue irrelevant.
Background
The corporate defendants are manufacturers of gypsum products, including gypsum plasterboard, gypsum lath, gypsum wallboard, and gypsum plaster. they sold nearly all of the first three products marketed in states east of the Rocky Mountains ("the eastern area"), and a substantial portion of the plaster sold in the same area, with annual sales of approximately $42 million. Since its organization in 1901, United States Gypsum has been the dominant concern in the gypsum industry. In 1939, it sold 55% of all gypsum board in the eastern area.
By internal development and purchase from others, United States Gypsum acquired the most significant patents covering the manufacture of gypsum board.
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