An early patent case involved the invention of a machine that automatically added salt tablets to cans of vegetables during the packaging process. The patent holder was leasing out its machines and licensing them for use to canneries. However, the patent owner would only license the invention to canneries that agreed to buy salt tablets from one specific supplier, one in which the patent holder had an interest. Another salt company filed a lawsuit claiming misuse of patent.
Was this a case of misuse of patent? If yes, what was the penalty most likely suffered by the patent owner?
The scenario that you are describing here is the basis of the Supreme Court case Morton Salt Co. v. G.S. Suppiger Co. which was decided in 1942. In that case, the Suppiger company had a patent on a machine for dispensing salt tablets. Suppiger required those using its machine to buy its salt tablets. The Morton Salt company was charged with patent infringement for making its own machine. In the course of this trial, the issue of Suppiger’s salt tablet requirement arose. The Supreme Court ruled that this requirement was indeed a misuse of patent. It was a misuse because it used one patent to try to stifle competition faced by another of its (unpatented) products.
What the Supreme Court ruled in this case was that Suppiger would lose the ability to enforce its patent for the machine. As long as Suppiger was misusing its patent, it would no longer have the right to enforce that patent.
So, this situation was judged to be a case of misuse of a patent. The penalty was that the owner of the patent lost the ability to enforce it.