opinion: WALKER PROCESS EQUIPMENT, INC. v. FOOD MACHINERY & CHEMICAL CORP.
  No. 13.
  Argued October 12-13, 1965.
  Decided December 6, 1965.
  Charles J. Merriam argued the cause for petitioner. With him on the briefs were Edward A. Haight and Louis Robertson.
  Sheldon 0. Collen argued the cause for respondent. With him on the brief were R. Howard Goldsmith, Charles W. Ryan and Lloyd C. Hartman.
  Daniel M. Friedman argued the cause for the United States, as amicus curiae, urging reversal. On the brief were Assistant Attorney General Orrick and Robert B. Hummel.
  Mr. Justice Clark
  delivered the opinion of the Court.
  The question before us is whether the maintenance and enforcement of a patent obtained by fraud on the Patent Office may be the basis of an action under § 2 of the Sherman Act, and therefore subject to a treble damage claim by an injured party under § 4 of the Clayton Act. The respondent, Food Machinery & Chemical Corp. (hereafter Food Machinery), filed this suit for infringement of its patent No. 2,328,655 covering knee-action swing diffusers used in aeration equipment for sewage treatment systems. Petitioner, Walker Process Equipment, Inc. (hereafter Walker), denied the infringement and counterclaimed for a declaratory judgment that the patent was invalid. After discovery, Food Machinery moved to dismiss its complaint with prejudice because the patent had expired. Walker then amended its counterclaim to charge that Food Machinery had “illegally monopolized interstate and foreign commerce by fraudulently and in bad faith obtaining and maintaining ... its patent . . . well knowing that it had no basis for ... a patent.” It alleged fraud on the basis that Food Machinery had sworn before the Patent Office that it neither knew nor believed that its invention had been in public use in the United States for more than one year prior to filing its patent application when, in fact, Food Machinery was a party to prior use within such time. The counterclaim further asserted that the existence of the patent had deprived Walker of business that it would have otherwise enjoyed. Walker prayed that Food Machinery’s conduct be declared a violation of the antitrust laws and sought recovery of treble damages.
  The District Court granted Food Machinery’s motion and dismissed its infringement complaint along with Walker’s amended counterclaim, without leave to amend and with prejudice. The Court of Appeals for the Seventh Circuit affirmed, 335 F. 2d 315. We granted cer-tiorari, 379 U. S. 957. We have concluded that the enforcement of a patent procured by fraud on the Patent Office may be violative of § 2 of the Sherman Act provided the other elements necessary to a § 2 case are present. In such event the treble damage provisions of § 4 of the Clayton Act would be available to an injured party.
  I.
  As the case reaches us, the allegations of the counterclaim, as to the fraud practiced upon the Government by Food Machinery as well as the resulting damage suffered by Walker, are taken as true. We, therefore, move immediately to a consideration of the legal issues presented.
  Both Walker and the United States, which appears as amicus cunde, argue that if Food Machinery obtained its patent by fraud and thereafter used the patent to exclude Walker from the market through “threats of suit” and prosecution of this infringement suit, such proof would establish a prima facie violation of § 2 of the Sherman Act. On the other hand, Food Machinery says that a patent monopoly and a Sherman Act monopolization cannot be equated; the removal of the protection of a patent grant because of fraudulent procurement does not automatically result in a § 2 offense. Both lower courts seem to have concluded that proof of fraudulent procurement may be used to bar recovery for infringement, Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U. S. 806 (1945), but not to establish invalidity. As the Court of Appeals expressed the proposition, “only the government may ‘annul or set aside’ a patent,” citing Mowry v. Whitney, 14 Wall. 434 (1872). It went on to state that no case had “decided, or hinted that fraud on the Patent Office may be turned to use in an original affirmative action, instead of as an equitable defense. . . . Since Walker admits that its anti-trust theory depends on its ability to prove fraud on the Patent Office, it follows that . . . Walker’s second amended counterclaim failed to state a claim upon which relief could be granted.” 335 F. 2d, at 316.
  II.
  We have concluded, first, that Walker’s action is not barred by the rule that only the United States may sue to cancel or annul a patent. It is true that there is no statutory authority for a private annulment suit and the invocation of the equitable powers of the court might often subject a patentee “to innumerable vexatious suits to set aside his patent.” Mo wry, supra, at 441. But neither reason applies here. Walker counterclaimed under the Clayton Act, not the patent laws. While one of its elements is the fraudulent procurement of a patent, the action does not directly seek the patent’s annulment. The gist of Walker’s claim is that since Food Machinery obtained its patent by fraud it cannot enjoy the limited exception to the prohibitions of § 2 of the Sherman Act, but must answer under that section and § 4 of the Clayton Act in treble damages to those injured by any monopolistic action taken under the fraudulent patent claim. Nor can the interest in protecting patentees from “innumerable vexatious suits” be used to frustrate the assertion of rights conferred by the antitrust laws. It must be remembered that we deal only with a special class of patents, i. e., those procured by intentional fraud.
  Under the decisions of this Court a person sued for infringement may challenge the validity of the patent on various grounds, including fraudulent procurement. E. g., Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U. S. 806 (1945); Hazel-Atlas Co. v. Hartford-Empire Co., 322 U. S. 238 (1944); Keystone Driller Co. v. General Excavator Co., 290 U. S. 240 (1933). In fact, one need not await the filing of a threatened suit by the patentee; the validity of the patent may be tested under the Declaratory Judgment Act, 28 U. S. C. § 2201 (1964 ed.). See Kerotest Mfg. Co. v. C-O Two Fire Equipment Co., 342 U. S. 180, 185 (1952). At the same time, we have recognized that an injured party may attack the misuse of patent rights. See, e. g., Mercoid Corp. v. Mid-Continent Investment Co., 320 U. S. 661 (1944). To permit recovery of treble damages for the fraudulent procurement of the patent coupled with violations of § 2 accords with these long-recognized procedures. It would also promote the purposes so well expressed in Precision Instrument, supra, at 816:
  “A patent by its very nature is affected with a public interest. ... [It] is an exception to the general rule against monopolies and to the right to access to a free and open market. The far-reaching social and economic consequences of a patent, therefore, give the public a paramount interest in seeing that patent monopolies spring from backgrounds free from fraud or other inequitable conduct and that such monopolies are kept within their legitimate scope.”
  III.
  Walker’s counterclaim alleged that Food Machinery obtained the patent by knowingly and willfully misrepresenting facts to the Patent Office. Proof of this assertion would be sufficient to strip Food Machinery of its exemption from the antitrust laws. By the same token, Food Machinery’s good faith would furnish a complete defense. This includes an honest mistake as to the effect of prior installation upon patentability — so-called “technical fraud.”
  To establish monopolization or attempt to monopolize a part of trade or commerce under § 2 of the Sherman Act, it would then be necessary to appraise the exclusionary power of the illegal patent claim in terms of the relevant market for the product involved. Without a definition of that market there is no way to measure Food Machinery’s ability to lessen or destroy competition. It may be that the device — knee-action swing diffusers — used in sewage treatment systems does not comprise a relevant market. There may be effective substitutes for the device which do not infringe the patent. This is a matter of proof, as is the amount of damages suffered by Walker.
  As respondent points out, Walker has not clearly articulated its claim. It appears to be based on a concept of per se illegality under § 2 of the Sherman Act. But in these circumstances, the issue is premature. As the Court summarized in White Motor Co. v. United States, 372 U. S. 253 (1963), the area of per se illegality is carefully limited. We are reluctant to extend it on the bare pleadings and absent examination of market effect and economic consequences.
  However, even though the per se claim fails at this stage of litigation, we believe that the case should be remanded for Walker to clarify the asserted violations of § 2 and to offer proof thereon. The trial court dismissed its suit not because Walker failed to allege the relevant market, the dominance of the patented device therein, and the injurious consequences to Walker of the patent’s enforcement, but rather on the ground that the United States alone may “annul or set aside” a patent for fraud in procurement. The trial court has not analyzed any economic data. Indeed, no such proof has yet been offered because of the disposition below. In view of these considerations, as well as the novelty of the claim asserted and the paucity of guidelines available in the decided cases, this deficiency cannot be deemed crucial. Fairness requires that on remand Walker have the opportunity to make its § 2 claims more specific, to prove the alleged fraud, and to establish the necessary elements of the asserted § 2 violation.
  Reversed and remanded.
  26 Stat. 209, 15 U. S. C. § 2 (1964 ed.):
  “Every person who shall monopolize, or attempt to monopolize, or combine or conspire with any other person or persons, to monopolize any part of the trade or commerce among the several States, or with foreign nations, shall be deemed guilty of a misdemeanor . . . .”
  38 Stat. 731, 15 U. S. C. § 15 (1964 ed.):
  “Any person who shall be injured in his business or property by reason of anything forbidden in the antitrust laws may sue therefor in any district court of the United States in the district in which the defendant resides or is found or has an agent, without respect to the amount in controversy, and shall recover threefold the damages by him sustained, and the cost of suit, including a reasonable attorney’s fee.”
  The patent in question was issued in the name of the inventor, Lannert. But he had previously assigned the patent rights to his employer, Chicago Pump Company, a division of Food Machinery.
  See, e. g., United States v. New Wrinkle, Inc., 342 U. S. 371, 376 (1952).
  This conclusion applies with equal force to an assignee who maintains and enforces the patent with knowledge of the patent’s infirmity.
choices: antitrust (except in the context of mergers and union antitrust) mergers bankruptcy (except in the context of priority of federal fiscal claims) sufficiency of evidence: typically in the context of a jury's determination of compensation for injury or death election of remedies: legal remedies available to injured persons or things liability, governmental: tort or contract actions by or against government or governmental officials other than defense of criminal actions brought under a civil rights action. liability, other than as in sufficiency of evidence, election of remedies, punitive damages liability, punitive damages Employee Retirement Income Security Act (cf. union trust funds) state or local government tax state and territorial land claims state or local government regulation, especially of business (cf. federal pre-emption of state court jurisdiction, federal pre-emption of state legislation or regulation) federal or state regulation of securities natural resources - environmental protection (cf. national supremacy: natural resources, national supremacy: pollution) corruption, governmental or governmental regulation of other than as in campaign spending zoning: constitutionality of such ordinances, or restrictions on owners' or lessors' use of real property arbitration (other than as pertains to labor-management or employer-employee relations (cf. union arbitration) federal or state consumer protection: typically under the Truth in Lending; Food, Drug and Cosmetic; and Consumer Protection Credit Acts patents and copyrights: patent patents and copyrights: copyright patents and copyrights: trademark patents and copyrights: patentability of computer processes federal or state regulation of transportation regulation: railroad federal and some few state regulations of transportation regulation: boat federal and some few state regulation of transportation regulation:truck, or motor carrier federal and some few state regulation of transportation regulation: pipeline (cf. federal public utilities regulation: gas pipeline) federal and some few state regulation of transportation regulation: airline federal and some few state regulation of public utilities regulation: electric power federal and some few state regulation of public utilities regulation: nuclear power federal and some few state regulation of public utilities regulation: oil producer federal and some few state regulation of public utilities regulation: gas producer federal and some few state regulation of public utilities regulation: gas pipeline (cf. federal transportation regulation: pipeline) federal and some few state regulation of public utilities regulation: radio and television (cf. cable television) federal and some few state regulation of public utilities regulation: cable television (cf. radio and television) federal and some few state regulations of public utilities regulation: telephone or telegraph company miscellaneous economic regulation