In the United States v. United States Gypsum Co. et al., 1950, the Supreme Court ruled that a patent licensing agreement could violate antitrust laws if it resulted in price-fixing among competitors. The case involved several gypsum companies who held patents for various aspects of gypsum board production and had cross-licensed these patents to each other under an agreement which also set prices at which they would sell their products. The government argued this constituted illegal price fixing under the Sherman Antitrust Act, while the companies contended that since they were not direct competitors (due to their separate patents), no competition was being restrained by their agreements. However, the court found that even though there was no explicit agreement to fix prices, such an outcome was a necessary result of their arrangement and thus violated antitrust law.

In the dissenting opinion for United States v. United States Gypsum Co., Justice Jackson disagreed with the majority's ruling that patent licensing agreements were per se violations of antitrust laws. He argued that such a broad interpretation could stifle innovation and competition, as it would discourage companies from entering into any kind of agreement related to patents out of fear they might be accused of violating antitrust laws. Instead, he believed each case should be evaluated individually to determine whether an agreement actually had anti-competitive effects or not. Furthermore, he criticized the majority for failing to provide clear guidelines on what constitutes a permissible use of patents under their new rule, which could lead to confusion and uncertainty in business practices.