Argument for Petitioner.

Elliman v. Carrington (1901), 2 Ch. 275; 84 L. T. (N. S.) 858; Walsh v. Dwight, 58 N. Y. Supp. 91; Rakemann v. Riverbank Imp. Co., 167 Massachusetts, 1; Weiboldt v. Standard Fashion Co., 80 Ill. App. 67.

Trade secrets and articles embodying them are property monopolies and contracts relating thereto not within the restraint of trade rule.

This absolute dominion over and monopoly in inventions, discoveries and writings is the foundation of the patent and copyright laws and has been so declared in a long series of cases. Press Publishing Co. v. Monroe, 73 Fed. Rep. 196; Holmes v. Hurst, 174 U. S. 82; Millar v. Taylor, 4 Burr. 2303; Jeffreys v. Boosey, 4 H. L. C. 920; Duke of Queensbury v. Shebbare, 2 Eden, 329; Prince Albert v. Strange, 1 MacN. & G. 25; S. C., 18 L. J. Ch. 120; Bartlette v. Crittenden, 4 McLean, 300; Abernethy v. Hutchinson, 3 L. J. (O. S.) 209; Donaldson v. Beckett, 2 Br. Par. Cas. 129; Pope v. Curl, 2 Atk. 342; Caird v. Sime, L. R. 12 App. C. 326; Palmer v. DeWitt, 47 N. Y. 532; Thompkins v. Halleck, 133 Massachusetts, 32.

To control the sale and prices of his own product by a manufacturer is valid and lawful when the article is made and sold under letters patent or copyright. Patent cases: Bement v. National Harrow Co., 186 U. S. 70; National Phonograph Co., Ltd., v. Edison Bell Co. (1907), L. R. 1 Ch. 335; 98 L. T. R. 291; Consolidated Seeded Raisin Co. v. Griffin, 126 Fed. Rep. 364; Button Co. v. Eureka Specialty Co., 77 Fed Rep. 288; Phonograph Co. v. Kaufmann, 105 Fed. Rep. 960; Phonograph Co. v. Pike, 116 Fed. Rep. 863; Cortelyou v. Lowe, 111 Fed. Rep. 1005; Dickerson v. Matheson, 57 Fed. Rep. 524; Bonsack Machine Co. v. Smith. 70 Fed. Rep. 383; Bowling v. Taylor, 40 [388] Fed. Rep 404; Dickerson v. Tinling, 84 Fed. Rep. 192; Butterick Co. v. Rose, 141 Wisconsin, 533; Shade Roller Co. v. Cushman, 143 Massachusetts, 353; 9 N. E. Rep. 629; Glue Co. v. Russia Cement Co., 154 Massachusetts, 92; Good v. Cordage Co., 121 N. Y. 1; Machine Co. v. Morse, 103 Massachusetts, 73; Cortelyou v. Johnson, 138 Fed. Rep. 110; Bancroft v. Union Embossing Co., 72 N. H. 402; Hulse v. Bonsack Machine Co.,

Argument for Petitioner.

65 Fed. Rep. 864; Victor Co. v. The Fair, 123 Fed. Rep. 424; Phonograph Co. v. Schlegel, 128 Fed. Rep. 733; Whitson v. Columbia Co., 18 App. D. C. 525; Rubber Tire Co. v. Rubber Works, 142 Fed. Rep. 531; 154 Fed. Rep. 358; Indiana Mfg. Co. v. Case Co., 154 Fed. Rep. 365. Copyright cases: Straus v. Am. Pub. Assn., 177 N. Y. 473; Murphy v. Press Assn., 56 N. Y. Supp. 597; Newspaper Assn. v. O'Gorman Co., 147 Fed. Rep. 616; Straus v. Am. Pub. Assn., 194 N. Y. 538.

The methods of manufacture and the articles made under trade secrets, when the article, as here, is itself a secret article with its ingredients and their proportions unknown and undisclosed by the article as sold and inspection thereof, are both property and legal monopolies. Until either voluntary disclosure to, or lawful discovery by, the public of the secret or process they are and continue to be protected as monopolies. Powell v. Vinegar Co., 13 R. P. C. 235; 66 L. J., Ch. Div. 763; (1896) 2 Ch. 69; 14 R. P. C. 720, 728; (1897) A. C. 710; Peabody v. Norfolk, 98 Massachusetts, 452; Stewart v. Hook, 118 Georgia, 445; Tabor v. Hoffman, 118 N. Y. 30; Eastman Co. v. Reichenbach, 20 N. Y. Supp. 110; Simmons Co. v. Waibel, 1 So. Dak. 488; National Tube Co. v. Eastern Tube Co., 13 O. Cir. Dec. 469, 471; Board of Trade v. Christie Co., 198 U. S. 236; Board of Trade v. Cella, 145 Fed. Rep. 28; Stone v. Goss (N. J.), 55 Atl. Rep. 736; Thum v. Tloczynski, 114 Michigan, 149; Westervelt v. National Paper Co., 154 Indiana, 673; Salomon v. [389] Hertz, 40 N. J. Eq. 400; S. C., 2 Atl. Rep. 379; Grand Rapids Wood Co. v. Hatt, 152 Michigan, 132; Extracting Co. v. Keystone Co., 176 Fed. Rep. 830; Sanitas Nut Food Co. v. Cemer, 134 Michigan, 370; Detinning Co. v. Am. Can Co., 67 N. J. Eq. 243; Taylor Iron & Steel Co. v. Nichols, 70 N. J. Eq. 541; National Gum Co. v. Braendly, 51 N. Y. Supp. 93; Harvey Co. v. Drug Co., 77 N. Y. Supp. 674; Pressed Steel Car Co. v. Standard Steel Car Co., 210 Pa. St. 464; Eastern Extracting Co. v. Greater N. Y. Ex. Co.. 110 N. Y. Supp. 738; Union Switch & Signal Co. v. Sperry, 169 Fed. Rep. 926; Wiggins Sons Co. v. Cott-A-Lap Co., 169 Fed. Rep. 150.

Argument for Respondent.

Mr. Alton B. Parker, with whom Mr. William J. Shroder was on the brief, for respondent:

The legal effect of the contracts between petitioner and wholesale drug dealers and jobbers is that of a contract of sale. The Peoria Mfg. Co. v. Lyons, 153 Illinois, 427; Howell Son & Co. v. Boudor Tr. et al., 95 Virginia, 815; Conn v. Chambers, 123 App. Div. (N. Y.) 298, aff'd, 195 N. Y. 538; Yoder v. Howarth, 57 Nebraska, 150; Mack v. Tobacco Co., 48 Nebraska, 397; Powder Co. v. Hilderbrand, 137 Indiana, 462; Gendre & Co. v. Kean, 28 N. Y. Supp. 7; Arbuckle Bros. v. Kirkpatrick & Co., 98 Tennessee, 221; Arbuckle Bros. v. Gates & Brown, 95 Virginia, 802; Williams v. Tobacco Co., 21 Tex. Civ. App. 635; Snelling v. Arbuckle Bros., 104 Georgia, 362; Norwegian Plow Co. v. Clark, 102 Iowa, 31; De Kruif v. Flieman, 130 Michigan, 12.

The contract is not one of agency. The petitioner has no peculiar, special or exclusive right in the articles manufactured by it, warranting it to carry out, with reference to their sale, a plan or scheme which would otherwise be invalid and illegal. Mercantile Agency v. Jewelers' Pub. Co., 155 N. Y. 241; Larrowe v. O'Loughlin, 88 Fed. Rep. 896.

[390] The attempt of the petitioner in this case is manifestly not only to acquire, without taking out a patent, rights which are only given under the patent and copyright laws, but to do that without complying with the condition on which alone such right can be obtained under such laws, to-wit: the abandonment of the right after a fixed period of time. It is an attempt to maintain a scheme to give it for an unlimited period of time, or for all time to come, a right which the courts have uniformly held can only be obtained for a limited period of time under the patent and copyright laws. Such a scheme is, in the absence of special right, illegal and unlawful. Wheaton v. Peters, 8 Pet. 591; Bement v. Harrow Company, 186 U. S. 70; Edison v. Kaufman, 105 Fed. Rep. 960; Edison v. Pike, 116 Fed. Rep. 863; Victor Talking Machine Co. v. The Fair, 123 Fed. Rep. 424; Park v. N. W. D. A., 175 N. Y. 1; Strauss v. Am. Publishers' Assn., 177 N. Y. 473; Gamewell v. Crane, 160 Massachusetts, 50; Vulcan Powder Co. v. Hercules Powder Co., 96 California, 510; Tecktonius v. Scott, 110 Wisconsin, 441; Pasteur Vaccine Co.

Argument for Respondent.

v. Burkey, 22 Tex. Civ. Apps. 231; Fox Pressed Steel Co. v. Schoen, 77 Fed. Rep. 29; Walsh v. Dwight, 40 App. Div. 513; Elliman v. Carrington (1901), 2 Chan. 275; Heaton &c. Co. v. Eureka Specialty Co., 77 Fed. Rep. 288.

That a patentee may make a contract which is lawful at common law does not warrant the converse of the proposition, i. e., that persons having only common-law rights can make a contract warrantable only under the patent and copyright laws.

The control which the petitioner is attempting to maintain over the subsequent trade, by its vendees, in the goods manufactured by it, is in general restraint of trade and is therefore unlawful at common law.

A restraint of trade may affect the public directly, or the interests of the parties to the contract or agreement directly, and the public only indirectly. 2 Parsons on [391] Contracts, 7th ed., 887; Alger v. Thatcher, 19 Pick. 51; Fowle v. Park, 131 U. S. 88; Central Transp. Co. v. Pullman Car Co., 139 U. S. 24, 53; Vickery v. Welch, 19 Pick. 523; United States v. Addyston &c. Co., 85 Fed. Rep. 271.

The system established and maintained by the petitioner controls the entire trade in the articles manufactured by it and is necessarily a general restraint of the trade in the articles in question.

In Oliver v. Gilmore, 52 Fed. Rep. 562; Dolph v. Troy, 28 Fed. Rep. 523; In re Greene, 52 Fed. Rep. 104; United States v. Nelson, 52 Fed. Rep. 646; Dueber Watch Co. v. Howard, 55 Fed. Rep. 851; Olmstead v. Distilling Co., 77 Fed. Rep. 265; Phillips v. Iola Cement Co., 125 Fed. Rep. 593; Knapp v. Jarvis, 135 Fed. Rep. 1008; Grogan v. Chaffee, 156 California, 611; Walsh v. Dwight, 40 App. Div. 513; Garst v. Harris, 177 Massachusetts, 72; and Garst v. Charles, 187 Massachusetts, 144, the courts held the contracts not unlawful because the arrangement did not affect the entire commodity or the right of others to engage in the same business and hence affected in no way the general trade in the articles; and see also Whitwell v. Tobacco Co., 125 Fed. Rep. 454; Commonwealth v. Strauss, 188 Massachusetts, 229; United States v. Jellico &c. Co., 46 Fed. Rep. 432; United States v. Coal Dealers' Assn. of Cal., 85 Fed. Rep. 252; Chesa

Argument for Respondent.

peake & Ohio Fuel Co. v. United States, 115 Fed. Rep. 610; United States v. Addyston &c. Co., 85 Fed. Rep. 271; aff'd 175 U. S. 211.

For contracts held illegal as constituting or tending to create a monopoly, because their effect was to control and regulate all or such a large proportion of the entire trade in an article of commerce as to affect injuriously the public interests, see Cravens v. Carter, 92 Fed. Rep. 479; Montague v. Lowry, 115 Fed. Rep. 27; S. C., 193 U. S. 38; Gibbs v. McNeeley, 118 Fed. Rep. 120; Swift & Co. v. United States, 196 U. S. 375; Getz v. Federal Salt Co., 147 California, 115; Hunt v. Riverside Club, 12 Det. Leg. N. 264; Owen [392] v. Bryan, 77 N. E. Rep. 302; Clancy v. Onondaga &c. Co., 62 Barb. 395; Dewitt Wire Cloth Co. v. N. J. Wire Cloth Co., 16 Daly, 529; People v. Duke, 19 Misc. (N. Y.) 292; Tuscaloosa Ice Co. v. Williams, 127 Alabama, 110; Finch v. Granite Co., 187 Missouri, 244; Charleston Co. v. Kanawha Co., 50 S. Car. 876; Lowry v. Tile, Mantel & Grate Assn., 106 Fed. Rep. 38; Ellis v. Inman, 131 Fed. Rep. 182; Cummings v. Union Blue Stone Co., 164 N. Y. 401, 404; Cohen v. Envelope Co., 166 N. Y. 292; Salt Co. v. Guthrie, 35 Oh. St. 666; Distilling Co. v. Moloney, 156 Illinois, 448; State v. Standard Oil Co., 49 Oh. St. 137; People v. North River Sugar Co., 54 Hun, 345; aff'd 123 N. Y. 587; Bishop v. Preservers' Co., 157 Illinois, 284; Harding v. Glucose Co., 182 Illinois, 551; Chicago &c. Coal Co. v. People, 214 Illinois. 421; Texas Standard Oil Co. v. Adone, 83 Texas, 650; State v. Armour Co., 173 Missouri, 356; Santa Clara v. Hayes, 76 California, 287; Pacific Factor Co. v. Adler, 90 California, 110; Cleland v. Anderson, 66 Nebraska, 252; Brown v. Jacobs, 115 Georgia, 429.

The restraint petitioner is attempting to maintain is, even if partial, unreasonable and therefore unlawful. Parks & Sons v. Hartman, 153 Fed. Rep. 24, 41.

The control the petitioner is attempting to maintain over the entire trade, in the goods manufactured by it, and the system of contracts by which it is attempting to carry out that purpose, are illegal, under the provisions of the Sherman Anti-trust Act.