In the case of Hull v. Dicks in 1914, the US Supreme Court ruled on a dispute involving patent rights and royalties. The plaintiff, Hull, had sold his patent for an invention to Dicks but later claimed that he was owed additional royalties based on sales made by Dicks' company after the sale of the patent. The court held that once a patented article is lawfully sold, all patent rights are exhausted and no further claim can be made by the original owner or inventor against subsequent owners or users for their use of it. Therefore, Hull's claims were dismissed as he had already been compensated through his initial sale of the patented item to Dicks.

In the dissenting opinion for Hull v. Dicks, Justice Holmes disagreed with the majority's decision to uphold a state law that prohibited out-of-state insurance companies from requiring policyholders to pay legal fees in case of disputes. He argued that such laws infringed on the rights of private parties to freely enter into contracts and set their own terms. Furthermore, he contended that states should not be allowed to dictate how businesses based outside their borders operate or conduct transactions with residents within those borders. This, according to him, was an overreach of state power and violated principles of federalism by interfering with interstate commerce.