## Facts

- Food Machinery & Chemical Corp. owned a patent covering “knee-action swing diffusers” used in sewage-treatment aeration equipment.
- Food Machinery sued Walker Process Equipment, Inc. for patent infringement.
- Walker denied infringement and counterclaimed for a declaration that the patent was invalid.
- After discovery, Food Machinery moved to dismiss its infringement complaint with prejudice because the patent had expired.
- Walker amended its counterclaim to assert antitrust violations, alleging Food Machinery intentionally and in bad faith procured and maintained the patent to monopolize commerce.
- The alleged fraud was a sworn representation to the Patent Office denying prior public use for more than one year before filing, despite alleged knowledge and participation in such use.
- Walker alleged it lost business due to the existence and enforcement of the fraudulently obtained patent.

## Issues

1. Whether enforcement of a patent procured by intentional fraud on the Patent Office can support a monopolization claim under Sherman Act § 2 and treble damages under Clayton Act § 4, if other § 2 elements are shown.
2. Whether such an antitrust suit is barred because only the United States may sue to annul or cancel a patent.
3. Whether recognizing such claims would improperly subject patentees to vexatious litigation.

## Decision

- The Supreme Court unanimously reversed the Seventh Circuit and remanded.
- The Court held that enforcing a patent procured by fraud on the Patent Office may violate Sherman Act § 2, provided the plaintiff proves all other elements of a § 2 claim.
- If § 2 is proven, Clayton Act § 4 permits an injured party to seek treble damages.
- The Court rejected the argument that the suit was an impermissible private attempt to annul a patent, characterizing it as an antitrust damages claim based on misuse of patent rights.
- The Court concluded that requiring proof of intentional fraud and the full set of § 2 elements limits exposure to abusive suits, and that antitrust enforcement interests prevail in these circumstances.

## Legal Principles

- A patent holder’s enforcement of a patent obtained by intentional fraud on the Patent Office can trigger liability for monopolization or attempted monopolization under Sherman Act § 2 if traditional antitrust requirements (e.g., relevant market, monopoly power or dangerous probability, anticompetitive effects, causation, and injury) are established.
- Proof of intentional fraud in procurement can remove the patent-based protection from antitrust scrutiny; good faith in procurement is a complete defense to this theory.
- An antitrust damages action based on fraudulent procurement and enforcement is not treated as a direct action to cancel or annul the patent.
- Fraud in patent procurement, standing alone, does not establish antitrust liability without proof of the remaining § 2 elements.

## Conclusion

The Court recognized that a private plaintiff may pursue treble damages for monopolization based on enforcement of a patent procured through intentional fraud, so long as the plaintiff also proves the full set of Sherman Act § 2 elements and resulting injury.


Walker Process Equip., Inc. v. Food Mach. & Chem. Corp., 382 U.S. 172 (1965)