In the Bauer & Cie v. O'Donnell case of 1912, the U.S. Supreme Court ruled on a patent dispute involving a price-fixing agreement. The plaintiff, Bauer & Cie, held a patent for an invention and sold it under certain conditions that included maintaining its resale price at or above a specified level. The defendant, O’Donnell violated this condition by selling below the stipulated price and was sued by Bauer & Cie for infringement of their patent rights. The key issue before the court was whether such agreements were enforceable under federal law or constituted illegal restraints on trade in violation of antitrust laws. The Supreme Court upheld that such restrictions did not violate antitrust laws as they fell within the scope of legitimate use of patents granted to inventors to control sales and distribution during their term. This decision affirmed that holders could legally impose post-sale restrictions on patented items without violating anti-trust legislation; however, this precedent has since been overturned in later cases like Quanta Computer Inc v LG Electronics Inc (2008).

In the dissenting opinion for Bauer & Cie v. O'Donnell, Justice Holmes disagreed with the majority's interpretation of patent law and its application to this case. He argued that a patentee who sells an article under conditions should not be able to claim infringement if those conditions are violated by subsequent purchasers because such restrictions limit trade and competition. In his view, once a patented item is sold, it becomes private property beyond the control of the patent owner. The majority’s ruling would allow patents to serve as vehicles for price-fixing agreements which he believed was contrary to public policy and outside of what Congress intended when creating patent laws.