In the United States v. United States Gypsum Co. et al., 1947, the Supreme Court examined whether a patent licensing agreement that set prices for products using patented technology constituted price-fixing and thus violated antitrust laws. The defendants were manufacturers of gypsum board who held patents on certain manufacturing processes and had entered into cross-licensing agreements with each other which included minimum pricing stipulations for their products. The government argued this was an illegal restraint of trade under the Sherman Act. The court ruled in favor of the government, finding that these agreements did indeed constitute unlawful price fixing as they eliminated competition among companies holding licenses to use patented technologies by setting uniform prices across all licensees regardless of individual costs or market conditions. This decision established important precedent regarding how patent law interacts with antitrust regulations, emphasizing that while patents grant exclusive rights to inventors, they do not permit actions which unduly restrict competition.

In the dissenting opinion for United States v. United States Gypsum Co., Justice Wiley Rutledge argued that the majority's decision to apply a rule of reason analysis to patent license agreements was inappropriate and inconsistent with precedent. He contended that such agreements should be considered per se violations of antitrust law, as they inherently restrict competition by limiting who can use patented technology and under what conditions. Furthermore, he disagreed with the majority's view that these restrictions could potentially have pro-competitive effects, arguing instead that they were more likely to stifle innovation and harm consumers by maintaining artificially high prices. In his view, allowing companies to set their own terms for licensing patents would lead inevitably towards monopolization in violation of Sherman Act principles.