In the 1938 case, General Talking Pictures Corporation v. Western Electric Co., the U.S. Supreme Court ruled in favor of Western Electric and its subsidiary, Bell Telephone Laboratories. The issue at hand was whether or not General Talking Pictures had infringed upon a patent held by Western Electric when it used patented amplifiers outside of their licensed use for radio broadcasting to instead amplify sound in movie theaters. The court found that since General Talking Pictures knowingly violated the terms of their license agreement with Western Electric by using these amplifiers for an unlicensed purpose, they were indeed guilty of patent infringement.

In the dissenting opinion for General Talking Pictures Corporation v. Western Electric Co., Justice Black argued that patent rights should not be used to restrict competition and limit the use of a product once it has been sold. He believed that such restrictions were contrary to public policy, which encourages free trade and open competition in markets. The majority's decision, according to him, allowed patent holders too much control over their products after sale, effectively allowing them to dictate how consumers could use those products. This level of control was seen as detrimental by Justice Black because it stifled innovation and prevented others from improving upon or adapting patented technologies for new uses.