In the 1916 case of Straus et al., Composing the Firm of R.H. Macy & Company, v. Victor Talking Machine Company, the U.S Supreme Court ruled in favor of R.H. Macy & Co., stating that a manufacturer could not control retail prices after its product had been sold to a distributor or retailer. The Victor Talking Machine Company had patented an internal horn phonograph and attempted to enforce price maintenance agreements with retailers selling their products by threatening patent infringement lawsuits if they did not comply with set pricing guidelines. However, Justice Oliver Wendell Holmes Jr., writing for the majority, stated that such restrictions were beyond what was necessary to protect their patents and violated antitrust laws designed to promote competition and prevent monopolies.

In the dissenting opinion for Straus et al., Composing the Firm of R.H. Macy & Company, v. Victor Talking Machine Company, Justice McKenna expressed concern over the majority's interpretation of patent law and its potential impact on business practices. He argued that a patent owner should have control over their product even after it has been sold if they stipulate certain conditions at point-of-sale, as was done in this case by Victor Talking Machine Company with their phonographs' needles. According to him, such restrictions are not an abuse of monopoly power but rather a legitimate exercise of property rights granted under patent law. He feared that denying these rights could discourage innovation and harm businesses who rely on patents for protection against competition.