Bauer v. O'Donnell
Bauer v. O'Donnell, 229 U.S. 1 (1913), involved the right of a seller to impose a restraint on the price of future sales.
It arose on a certificate from the Court of Appeals of the District of Columbia asking whether the right asserted was within the monopoly conferred by the patent law and whether, therefore, the duty to enforce it under that law obtained, and the power to give the remedy sought as a means of preventing an infringement of the patent existed.
Although pointing out that the restriction on future price which the certificate stated was indisputably void and unenforcible under the general law as the result of the ruling in Dr. Miles Medical Co. v. Park & Sons Co., 220 U.S. 373 (1911), it was held that that ruling was not necessarily apposite, because the certificate and the question presented restricted the case to determining whether the right to limit the price existed because within the monopoly granted by the patent law, and whether the relief asked was within the remedy which that law afforded.
Considering the case in that limited aspect, it was decided: (a) That the exclusive right to vend given by the patent law had the same significance which had been affixed to that word in the copyright law in Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908). (b) That hence, when the holder of a patented article had sold it, the article so sold passed out of the monopoly, and the right to make future sales by one who bought it was not embraced by the patent law and, consequently, that law could not be extended so as to perpetuate its control beyond the limits to which by the operation of law it reached. I
n other words, the decision was that a patentee could not use and exhaust the right to sell, as to which a monopoly was given him by the patent law, and yet by conditions and stipulations continue that law in effect so as to make it govern things which by his voluntary act were beyond its scope.
And (c) that, as a result, where an article had been sold and passed beyond the monopoly given by the patent law, remedies on the theory of infringement were not applicable to acts done which could not have that character.
It was hence answered that the controversy and the remedies invoked were not within the patent law. As the case dealt with the right to vend under the patent law, the court reserved any express statement concerning the scope of the right to use conferred by that law.