In the case of Savage Arms Corporation v. United States in 1924, the Supreme Court ruled on a dispute over patent rights and royalties between Savage Arms Corporation and the U.S. government. The court held that under an agreement made during World War I, where Savage Arms agreed to manufacture machine guns for the U.S., they were not entitled to receive royalty payments from other manufacturers who produced similar weapons for the government using their patents. The court reasoned that since it was a wartime contract, there was an implied license allowing others to use these patents without paying royalties as part of national defense efforts.

In the dissenting opinion for Savage Arms Corporation v. United States, it was argued that the majority's interpretation of the contract between Savage Arms and Russia was incorrect. The dissent believed that there were two separate contracts: one for production and delivery of rifles to Russia, and another for potential resale by Savage Arms if Russia defaulted on its payments. They disagreed with the majority's view that these were part of a single agreement where default would allow immediate resale without any obligation to first attempt collection from Russia or wait until after war’s end when normal trade could resume. This interpretation meant that upon Russian default due to revolution, all obligations ceased immediately allowing instant resale at high wartime prices instead of lower peacetime ones later on which unfairly benefited Savage Arms at government expense since they had guaranteed payment under Lease-Lend Act provisions.