Co v. United States 10

Citation323 U.S. 386,65 S.Ct. 373,89 L.Ed. 322
Decision Date08 January 1945
Docket NumberNos. 2,HARTFORD-EMPIRE,s. 2
PartiesCO. et al. v. UNITED STATES and nine other cases. to 10. Re
CourtUnited States Supreme Court

See 324 U.S. 570, 65 S.Ct. 815.

Appeals from the United States District Court for the Northern District of Ohio.

[Syllabus from pages 386-390 intentionally omitted] Mr. John T. Cahill, of New York City, for appellants Hartford Empire Co. and others.

Mr. Robert T. Swaine, of New York City, for appellants Owens-Illinois Glass Co. and others.

Mr. Boykin C. Wright, of New York City, for appellants Corning Glass Works and others.

Mr. Stephen H. Philbin, of New York City, for appellants Hazel-Atlas Glass Co. and others.

Mr. Lehr Fess, of Toledo, Ohio, for appellants Lynch Corporation and others.

Mr. E. W. McCallister, of Pittsburgh, Pa., for appellants Ball Brothers Co. and others.

Mr. Fred E. Fuller, of Toledo, Ohio, for appellants Collins and Fulton, and others.

Mr. Luther Day, of Cleveland, Ohio, for appellants Glass Container Ass'n of America and others.

Mr. Ralph Emery, of Toledo, Ohio, for appellants Thatcher Mfg. Co. and others.

Messrs. Samuel S. Isseks, of New York City and Hugh B. Cox, Asst. Atty. Gen. (Mr. Lawrence C. Kingsland, of St. Louis, Mo., on the brief), for appellee.

Mr. Justice ROBERTS delivered the opinion of the Court.

These are appeals from a decree1 awarding an injunction against violations of §§ 1 and 2 of the Sherman Act, as amended,2 and § 3 of the Clayton Act. 3 Two questions are presented. Were violations proved? If so, are the provisions of the decree right?

The complaint named as defendants 12 corporations and 101 individuals associated with them as officers or directors. It was dismissed as to 3 corporations and 40 individuals. The corporations are the leaders in automatic glass-making machinery and in the glassware industry. The charge is that all the defendants agreed, conspired, and combined to monopolize, and did monopolize and restrain interstate and foreign commerce by acquiring patents covering the manufacture of glass-making machinery, and by excluding others from a fair opportunity freely to engage in commerce in such machinery and in the manufacture and distribution of glass products. The gravamen of the case is that the defendants have cooperated in obtaining and licensing patents covering glass-making machinery, have limited and restricted the use of the patented machinery by a network of agreements, and have maintained prices for unpatented glassware.

The trial lasted 112 days. The court filed an opinion of 160 pages, 628 findings of fact and 89 conclusions of law, and entered a decree covering 46 printed pages and comprising 60 numbered paragraphs. The printed record contains over 16,500 pages. An opinion of reasonable length must deal in summary fashion with the facts disclosed by the proofs and leave much of the detailed his- tory of the transactions to be gleaned from the opinion below.

In 1912 Hartford-Fairmont Company was organized to combine the activities of two existing companies interested in glass manufacture with those of a group of engineers who desired to obtain and exploit patents for automatic glass-making machinery. The defendant Corning Glass Works was, at that time, engaged primarily in the production and distribution of incandescent bulbs, sign and optical ware, heat-resisting ware and other specialty glassware. Its field may be defined roughly as the pressed and blown field, or the noncontainer field. It has not made, and does not now make, containers save a limited amount of tumblers. In 1909 persons interested in Corning organized Empire Machine Company as a patent holding and developing company.

The defendant Owens-Illinois Glass Company (hereafter called Owens) is a large manufacturer of glass. Mr. Owens of that company produced the first fully automatic machine for blowing bottles, which is known as a suction type machine. He was interested in companies engaged in developing and manufacturing this type of machine and exercising the rights represented by the Owens and related patents. From about 1904 the Owens group followed the policy of granting exclusive licenses, in limited fields, for the manufacture of glass-ware by the suction process. Owens itself was, and is, mainly interested in what is known as narrow neck container ware. Prior to the Owens inventions glass making had been largely a hand process. Thereafter, due to Owens' restrictive licensing policy, many glass manufacturers were threatened with extinction unless some other competing machine could be devised. Ultimately a process, called suspended gob feeding, was invented, which was more economical for certain ware than the suction process, and could be applied in the manufacture of diversified glassware. The introduction of the gob feeder machine threatened Owens' domination of the glass machinery field and Owens, in self-protection, obtained patents and patent rights on gob feeders and licensed some companies for their use.

Hartford-Fairmont was interested in the development of the gob feeder. It applied for some patents and acquired others. In the meantime, it licensed gob feeder machinery, as Owens had done with the suction machine, by restricting its use to the manufacture of specified ware. Empire owned certain patent applications which were in interference with Hartford-Fairmont gob feeder applications.

June 30, 1916, Hartford-Fairmont and Empire made an agreement whereby Empire was given an exclusive license to use Hartford-Fairmont's patents for pressed and blown glassware and Hartford-Fairmont was given an exclusive license to use Empire's patents for production of containers. Thus Corning obtained exclusive rights, under the patents, for Corning's line of ware, pressed and blown glass,—and Hartford obtained the patent rights of both companies in respect of other glassware. Negotiations led to agreements, October 6, 1922, whereby Hartford-Empire (hereinafter called Hartford) was formed and took over all assets of Hartford-Fairmont and of Empire relating to glass machinery. Empire received 43% of the stock of the company and Corning retained approximately the same exclusive interest that Empire had enjoyed under the 1916 agreement. Hartford retained approximately the same rights it had obtained from Empire in 1916 subject to a shop right in Corning which has not been exercised. Empire was dissolved in 1941.

After 1916 Hartford-Fairmont (and its successor Hartford) and Owens were competitors in the gob feeding field; their applications were in interference in the Patent Office with each other and with those of other applicants; and they were in litigation. As a result of negotiations for a settlement of their disputes, they entered into an agreement April 9, 1924, whereby Owens granted Hartford an exclusive license under Owens' patents for gob feeder and forming machines and Hartford granted Owens a nonexclusive, nonassignable, and nondivisible license to make and use machines and methods embodying patents then or thereafter owned or acquired by Hartford for the manufacture of glassware, but Owens was not to sell or license gob feeding machinery and was excluded from the pressed and blown field previously reserved to Corning. Owens was to receive one-half of Hartford's divisible income from licenses over and above $600,000 per annum. Owens retained a veto power on Hartford's granting new licenses on machines embodying Owens' inventions. This provision was eliminated in 1931. The agreement left Owens in full control of its patented suctiomn process.

As soon as the agreement had been made, Hartford and Owens combined to get control of all other feeder patents. In this endeavor they pooled the efforts of their legal staffs and contributed equally to the purchase of patents and the expenses of litigation.

While patent claims upon applications controlled by Hartford and Owens were pending in the Patent Office, Hartford purchased, under the joint arrangement, certain feeder patents and applications belonging to outsiders, and persons to whom feeders had been sold or licensed by such outsiders were persuaded to take licenses from Hartford. As a result of Hartford's and Owens' joint efforts in connection with patent applications and purchases of applications and patents of others, Hartford obtained what it considered controlling patents on gob feeders in 1926.

Hazel-Atlas Glass Company (hereinafter called Hazel) was second to Owens in the manufacture and sale of glass containers. It had been using feeders of its own design and manufacture. To build up further patent control, to discourage use of machinery not covered by their patents, and to influence glass makers to take licenses under Hartford's inventions, Hartford and Owens desired that Hazel should become a partner-licensee. In 1924 they negotiated with Hazel to this end and offered to return to Hazel a substantial portion of any royalties it would have to pay as a licensee. No agreement was reached and Hartford brought infringement suits against Hazel and its subsidiaries. One Circuit Court of Appeals decided favorably to Hazel, Shawkee Mfg. Co. v. Hartford-Empire Co., 68 F.2d 726; another favorably to Hartford. Hartford-Empire Co. v. Hazel-Atlas Glass Co., 59 F.2d 399. Shortly after the latter decision, Hartford and Owens, in order to buttress the patent situation, persuaded Hazel to make a settlement.

As of June 1, 1932, Hartford, Owens, and Hazel executed a series of agreements Hartford licensed Hazel under Hartford's patents, excluding from the license the pressed and blown field reserved to Corning and with restrictions against sale or license by Hazel to anyone else. Hazel licensed Hartford under all its glass machinery patents, present and future, to January 3, 1945. Hazel paid Hartford $1,000,000 and agreed to pay Hartford royalties, and Hartford agreed that Hazel and Owens...

To continue reading

Request your trial
188 cases
  • United States v. American Tel. and Tel. Co.
    • United States
    • U.S. District Court — District of Columbia
    • February 28, 1983
    ...the recurrence of monopolization. United States v. United Shoe Machinery Corp., supra; see also Hartford-Empire Co. v. United States, 323 U.S. 386, 409, 65 S.Ct. 373, 385, 89 L.Ed. 322 (1945). In addition, restraints may be imposed upon the defendant which are designed to allow the developm......
  • United States v. Line Materials Co
    • United States
    • U.S. Supreme Court
    • March 8, 1948
    ...623, 624, 84 L.Ed. 852; United States v. Univis Lens Co., 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408; Hartford Empire Co. v. United States, 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322. It is not the monopoly of the patent that is invalid. It is the use of that monopoly, The development of pate......
  • U.S. v. Telluride Co., 97-1236
    • United States
    • U.S. Court of Appeals — Tenth Circuit
    • June 25, 1998
    ...We agree that actions for equitable relief typically are not actions for penalties or fines. See Hartford-Empire Co. v. United States, 323 U.S. 386, 435, 65 S.Ct. 373, 89 L.Ed. 322 (1945) ("relief in equity is remedial, not penal"). We also do not ignore that, historically, "statutes of lim......
  • Standard Oil Co of California and Standard Stations v. United States
    • United States
    • U.S. Supreme Court
    • June 13, 1949
    ...334 U.S. 131, 172, 68 S.Ct. 915, 936, 92 L.Ed. 1260. Those cases have largely expended the force of Hartford Empire Co. v. United States, 323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322—an indefensible decision whereby the Court allowed those who had built one of the tightest monopolies in America......
  • Request a trial to view additional results
26 books & journal articles
  • Antitrust Analysis Of Intellectual Property Agreements
    • United States
    • ABA Antitrust Library Intellectual Property and Antitrust Handbook. Second Edition
    • December 6, 2015
    ...Holding v. FTC, 416 F.3d 29 (D.C. Cir. 2005). 126. 547 U.S. 1 (2006). 127. Id. at 5-7. 128. 130 S. Ct. 2201 (2010). 129. Id. at 2207. 130. 323 U.S. 386, 435 (1945). 131. See Atari Games Corp. v. Nintendo of Am., Inc., 897 F.2d 1572, 1578 (Fed. Cir. 1990) (citing United States v. E.I. Du Pon......
  • Horizontal Restraints
    • United States
    • ABA Antitrust Library Handbook on Antitrust in Technology Industries
    • December 5, 2017
    ...and members refused to certify burners based on objective testing procedures stated per se claim); Hartford-Empire Co. v. United States, 323 U.S. 386, 427-28 (1945) (statistical committee assigned production quotas to members constituting per se illegal conspiracy). 105. See, e.g. , Califor......
  • United States Law and the Proposed Code of Conduct on the Transfer of Technology
    • United States
    • Antitrust Bulletin No. 23-4, December 1978
    • December 1, 1978
    ...anunlawful purpose or havetheeffect of restraining trade orcompetition,antitrustproblems arise. E.g., Hartford-EmpireCo.v. United States, 323 U.S. 386 (1945). Thus, agreementsnotto exploit items outsidethescope of apatentare unlawfulwherethepurpose is to suppress trade in non-patented goods......
  • Table Of Cases
    • United States
    • ABA Antitrust Library Antitrust Counterattack in Intellectual Property Litigation Handbook
    • January 1, 2010
    ...471 U.S. 539 (1985), 68, 73. Harris Corp. v. Ericsson, Inc., 417 F.3d 1241 (Fed. Cir. 2005), 37. Hartford Empire v. United States, 323 U.S. 386 (1945), 127. Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), 94. Hazeltine Research, Inc. v. Zenith Radio Corp., 388 F.2d 25 (7t......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT