United States v. Glaxo Group Ltd.
Supreme Court of the United States
United States v. Glaxo Group Ltd. et al.
Appeal from the United States District Court for the District of Columbia
No. 71-666. Argued: November 9, 1972 --- Decided: January 22, 1973
Appellees, Imperial Chemical Industries Ltd. and Glaxo Group Ltd., British drug companies engaged in the manufacture and sale of the fungicide griseofulvin, pooled their bulk- and dosage-form patents and sublicensed certain firms in the United States to practice the patents. The pooling agreement contained a covenant to restrict bulk sales and resales, and sublicensing agreements prohibited bulk resales to third parties without the licensors' prior consent. The United States filed a civil antitrust suit against appellees to restrain alleged violations of § 1 of the Sherman Act, and the Government also attacked the validity of the dosage-form patents, and sought the relief of mandatory, nondiscriminatory bulk-form sales and reasonable-royalty licensing of the patents. The District Court held that bulk-sales restrictions were per se violations of § 1 and enjoined their future use, but refused the Government's request to order mandatory, nondiscriminatory sales of the bulk form of the drug and reasonable-royalty licensing of appellees' patents as part of the relief. The court also refused to entertain the Government's claim of patent invalidity, since appellees did not rely on their patents in defense of the antitrust claims.
Held:
- 1. Where patents are directly involved in antitrust violations and the Government presents a substantial case for relief in the form of restrictions on the patents, the Government may challenge the validity of the patents regardless of whether the owner relies on the patents in defending the antitrust action. Pp. 57-60.
- 2. In order to "pry open to competition" the market closed by the antitrust violations, an order for mandatory, nondiscriminatory sales to all bona fide applicants is appropriate relief, and where, as in this case, the manufacturer may choose not to make bulk-form sales, and the licensees are not bound by the court's order for mandatory sales, further relief in the form of reasonable-royalty licensing of the patents is also proper. Pp. 60-64.
328 F.Supp. 709, reversed; see also 302 F.Supp. 1.
WHITE, J., delivered the opinion of the Court, in which BURGER, C.J., and DOUGLAS, BRENAN, MARSHALL, and POWELL, JJ., joined. REHNQUIST, J., filed a dissenting opinion in which STEWART and BLACKMUN, JJ., joined, post, p. 64.
Deputy Solicitor General Friedman argued the cause for the United States. With him on the briefs were Solicitor General Griswold, Assistant Attorney General Kauper, Acting Assistant Attorney General Comegys, Wm. Terry Bray, Howard E. Shapiro, and Richard H. Stern.
Henry P. Sailer argued the cause for appellee Glaxo Group Ltd. With him on the brief was Francis D. Thomas, Jr. Sigmund Timberg argued the cause for appellee Imperial Chemical Industries, Ltd. With him on the brief were PaulN. Kokulis and Lawrence A. Hymo.