United States v. Glaxo Group Ltd.

United States v. Glaxo Group Ltd., 410 U.S. 52 (1973), is a 1973 decision of the United States Supreme Court in which the Court held that (1) when a patent is directly involved in an antitrust violation, the Government may challenge the validity of the patent; and (2) ordinarily, in patent-antitrust cases, "[m]andatory selling on specified terms and compulsory patent licensing at reasonable charges are recognized antitrust remedies."

Background

Imperial Chemical Industries (ICI) and Glaxo Group Ltd. (Glaxo) each owned patents covering various aspects of the antifungal drug griseofulvin. They "pooled" the patents (that is, cross-licensed one another), subject to express licensing restrictions that the chemical from which the "finished" form of the drug (tablets and capsules) was made must not be resold in bulk form. ICI and Glaxo licensed three "brand name" drug companies to make and sell the drug in finished form only. The purpose of this restriction was to keep the drug chemical out of the hands of small companies that might act as price-cutters, and the effect was to maintain stable, uniform prices.

The Department of Justice Antitrust Division sued, alleging violations of § 1 of the Sherman Act and also alleging that the patents were invalid. The district court granted summary judgment against the defendants on the antitrust charges, but dismissed the invalidity claims on the ground that the Government lacked standing to challenge patent validity. The district court also denied the Government’s request for mandatory selling of the bulk chemical and compulsory licensing, on reasonable terms. The Government then appealed to the Supreme Court.