The U.S. Supreme Court case Waterman v. Mackenzie (1890) revolved around a dispute over patent rights and royalties for an invention related to fountain pens. The plaintiff, L.E. Waterman, had assigned his patent rights to the defendant, A.A. MacKenzie, under an agreement that entitled him to receive royalty payments from sales of the patented product in certain territories outside of the United States and Canada; however, he later claimed that he was not receiving these payments as agreed upon. MacKenzie argued that since some parts of the pen were made abroad using foreign patents which did not belong to Waterman - specifically in England where there was no corresponding English patent - this exempted him from paying royalties on those sales. However, after reviewing all evidence presented by both parties including their original contract terms and conditions regarding royalty payment obligations based on territorial sales regardless of manufacturing location or process used therein; it was ruled by Justice Samuel Blatchford favoring plaintiff's claim stating clearly: "the fact that part is manufactured abroad does not relieve [MacKenzie] from his obligation." This ruling established important legal precedent concerning international business transactions involving intellectual property rights such as patents – particularly when they are licensed or transferred across national borders.

In the dissenting opinion for Waterman v. Mackenzie, it was argued that the majority's decision to uphold a lower court ruling - which allowed a patent holder to sue an individual who had purchased patented goods from an unauthorized manufacturer - was incorrect. The dissenting justices believed this interpretation of patent law unfairly punished consumers and exceeded the intended scope of patent protections. They contended that once a patented item is sold, regardless of whether or not the seller had authorization from the patent holder, any subsequent purchaser should be free from liability for infringement because they have made a legitimate purchase in good faith. This view emphasizes on protecting innocent purchasers rather than expanding rights of patent holders beyond what is necessary to incentivize innovation.