395 U.S. 653 (1969)
Adkins’ 1960 patent issued.1 The California court held that the license agreement had not been terminated in accordance with its terms, that the doctrine of licensee estoppel prevented Lear from challenging the patent and that Lear was utilizing the teaching of Adkins’ patent.2
Adkins brought suit against Lear in California state court seeking royalties under the license agreement.3 Lear raised defenses including that there had been a failure of consideration because of the absence of bargained-for patentability in Adkins’ ideas.4
The District Court of Appeal noted Lear's concession that it would be estopped to contest the validity of any patent issued to Adkins on the claims of his application described in the license agreement so long as it continued to operate under that agreement.5 This concession appears in Lear’s Opening Brief in the District Court of Appeal 109.6
Lear then sought review in the United States Supreme Court of the California Supreme Court's holding on the licensee estoppel issue.7 The case also presented questions about whether royalties could be collected under the contract if the patent were invalidated.8
Whether a patent licensee is estopped to challenge the validity of the patent?9
Federal patent law does not estop a licensee from challenging the validity of the licensed patent.10
No. The California court held that the license agreement had not been terminated in accordance with its terms.11 The doctrine of licensee estoppel prevented Lear from challenging the patent. The court held that Lear was utilizing the teaching of Adkins’ patent. The Supreme Court determines that jurisdiction exists under 28 U.S.C. § 1257 to review that holding because the issue was specially set up or claimed.12
Applying the rule to the established facts, Lear raised defenses of termination under the contract terms and failure of consideration due to absence of bargained-for patentability.13
A patent licensee is not estopped to challenge the validity of the patent.14
Related opinions on this issue
Justice White concurs that jurisdiction exists to consider whether a patent licensee is estopped to challenge the validity of the patent.15 The Court has correctly decided the issue against estoppel.16 The provision of 28 U.S.C. § 1257 empowers review by certiorari of final judgments from the highest state court where any title, right, privilege or immunity is specially set up or claimed under the Constitution or statutes of the United States.17 Although Adkins disputes jurisdiction, the California court held that the licensee is estopped and therefore would not entertain attacks on the patent as a defense to the suit for royalties.18
In his view, not only is the issue properly here but the Court has correctly decided it against the estoppel doctrine.19 This ruling makes the federal question properly presented for review by the Supreme Court.20
Justice Black concurs in the judgment and opinion of the Court on the licensee estoppel issue.21 He agrees that a patent licensee is not estopped from challenging the validity of the licensed patent.22 His concurrence on this point aligns with the majority's rejection of licensee estoppel, while he separately dissents from the reservation of questions concerning royalties on unpatentable discoveries in Part III C of the opinion.23
Black maintains that the national policy expressed in the patent laws cannot be frustrated by private agreements, but he joins the holding that estoppel does not bar the validity challenge in this case.24
Whether federal law forbids the collection of royalties under a license agreement if the patent is held invalid?25
Federal patent policy precludes enforcement of royalty payments under a license agreement for periods after the patent issues once the patent is held invalid.26
Yes. The Court holds that the licensor may not recover royalties accruing after the 1960 patent issued if the licensee proves invalidity.27 Applying the rule to the established facts, Adkins’ patent issued in 1960 and the suit seeks royalties under the license agreement that the California court found had not been terminated, so federal law therefore overrides state contract enforcement for post-issuance periods.28
Federal law forbids the collection of royalties accruing after the patent issues if the patent is held invalid.29
Related opinions on this issue
Justice White states that the Court should not decide whether federal law forbids collection of royalties if the patent is invalidated.30 Lear never specially set up or claimed that federal law barred royalties in the state courts.31 There is no indication that Lear urged in the California courts that if the patent were invalid, federal law overrode state contract law and precluded collection of the royalties.32
Even if jurisdiction exists, the Court should follow its practice and refuse to issue pronouncements on questions not urged or decided in the state courts.33 The issue would arise only after further proceedings on validity, and the parties did not brief it here.34
Justice Black concurs in the judgment except for the reservation in Part III C.35 He maintains that no State has a right to authorize any kind of monopoly on what is claimed to be a new invention.36 This is allowed only when a patent has been obtained from the Patent Office under the exacting standards of the patent laws.37 One who makes a discovery may keep it secret if he wishes, but private arrangements under which self-styled inventors disclose discoveries in return for contractual payments run counter to the plan of the patent laws.38
The national policy expressed in the patent laws, favoring free competition and narrowly limiting monopoly, cannot be frustrated by private agreements among individuals, with or without the approval of the State, as previously held in Sears, Roebuck v. Stiffel Co. and Compco Corp. v. Day-Brite Lighting, Inc.39