323 U.S. 386 (2016), Hartford-Empire Co. v. United States
|Citation:||323 U.S. 386, 65 S.Ct. 373, 89 L.Ed. 322|
|Party Name:||Hartford-Empire Co. v. United States|
|Case Date:||January 08, 1945|
|Court:||United States Supreme Court|
APPEAL FROM THE DISTRICT COURT OF THE UNITED STATES
FOR THE NORTHERN DISTRICT OF OHIO
1. The conclusion that the corporate appellants and certain individual appellants agreed, conspired, and combined to monopolize, and did restrain and monopolize, interstate and foreign commerce by acquiring patents covering the manufacture of glassmaking machinery and by excluding others from a fair opportunity to engage in commerce in such machinery and in the manufacture and distribution of glass products, in violation of the antitrust laws, is supported by the findings and the evidence. Sherman Act, §§ 1 and 2; Clayton Act, § 3. Pp. 401-403.
(a) The conclusion that one of the corporate appellants had not abandoned the unlawful conspiracy -- in view of its subsequent conduct and its continuing to share in the fruits of the conspiracy -- is supported by the evidence. P. 407.
(b) The decree against four of the individual appellants, who were directors and officers of a corporation as to which the complaint was dismissed, must be reversed because the allegations of the bill are insufficient to support a decree against them; the findings do not support the decree as to them; the refusal of findings requested by the Government exculpates them of participation in the conspiracy, and the proofs fail to connect them with the conspiracy. P. 403.
(c) Use by the corporate appellants of their joint patent position to allocate fields of manufacture and to maintain prices of unpatented glassware violated the antitrust laws. P. 406.
2. Upon consideration of objections to provisions of the decree of the District Court enjoining violations of the antitrust laws, the decree is vacated and the cause is remanded for further proceeding's in conformity with the opinion of this Court. Pp. 408, 435.
(a) A decree enjoining violations of the antitrust laws may not impose penalties in the guise of preventing future violations. P. 409.
(b) A decree of injunction against violations of the antitrust laws must not be so vague as to put the whole conduct of the defendants' business at the peril of a summons for contempt, must not enjoin all possible breaches of the law, and must not withdraw from the defendants the protection of the law of the land. P. 410.
(c) The acts restrained by a decree of injunction must be described specifically therein, and not by reference to the bill of complaint. P. 410.
(d) Though useful pendente lite, the receivership and the impounding of funds, ordered in the case of one of the corporate appellants, were not necessary to the prescription of appropriate relief. The receivership should be terminated, and the impounded funds disposed of as herein directed. P. 411.
(e) Out of the royalties paid in by lessees of one of the corporate appellants, the latter should receive compensation on a quantum meruit basis for services which it rendered to the lessees. P. 411.
(f) Provisions of the decree requiring each of the appellants to abstain forever from leasing patented glassmaking machinery and compelling each of them, if he desires to distribute patented machinery, to sell the machine which embodies the patent to everyone who applies at a price to be fixed by the court are confiscatory in effect, and are unwarranted. P. 412.
(g) Provisions of the decree enjoining each of the appellants from engaging in the distribution of glassmaking machinery or in the distribution of glassware in interstate commerce unless he agrees (1) to grant royalty-free licenses under patents now owned; (2) to grant licenses at reasonable royalties under after-acquired patents, and (3) to make available to any licensee, at cost plus a reasonable profit, all drawings and patterns relating to the machinery or methods used in the manufacture of glassware embodied in the licensed inventions are confiscatory in effect, and are unwarranted. P. 413.
(h) For violations of the Sherman Act arising from the use of patent licenses, agreements, and leases, the decisions of this Court in Morton Salt Co. v. Suppiger Co., 314 U.S. 488, and B. B. Chemical
Co. v. Ellis, 314 U.S. 495, do not authorize forfeiture of the patents. P. 415.
(i) A provision of the decree which is vague and would be difficult of application, and which seems not to be addressed to any practice indulged in or threatened by any of the appellants, should be modified or eliminated. P. 418.
(j) The corporate appellants should be enjoined from further prosecution of infringement suits pending at the time this suit was brought; any alleged infringers who are willing to take nondiscriminatory and nonrestrictive licenses at standard royalties should be released, and the patent owner should be denied damages and profits which it might have claimed for past infringement. But the decree should be without prejudice to future infringement suits against persons refusing to take licenses after the date of the decree. The decree should not forbid any defendant from seeking recovery for infringement, occurring after the date of the final decree, of patents not covering feeders, formers, stackers, lehrs or processes or methods applicable to any of them. P. 419.
(k) License agreements between the corporate appellants which are consistent with the views here expressed should be allowed to stand; those found to be inconsistent should be ordered reformed, and the appellants should be enjoined from altering the agreements, or any hereafter made in like terms, without the approval of the court. P. 420.
(l) The decree should permit any corporate appellant, acting alone, to lease or sell patented machinery or license the use of patents, if it so elects, provided always that no discrimination is practiced and that no restrictive conditions be attached save with the approval of the court. P. 420.
(m) The decree should order dedication to the public of a patent which one of the corporate appellants, to be free from the possible threat of suit for infringement, had acquired by assignment from another. P. 421.
(n) A provision of the decree enjoining certain restrictive provisions in license agreements should be amended to permit any appellant, corporate or individual, to retain and refuse to license, to use and refuse to license, or to license with restrictions, any patent hereafter applied for or acquired, except those applicable to feeders, formers, stackers, and lehrs and processes and methods applicable thereto. P. 424.
(o) A provision of the decree requiring court approval of "any agreement between any of the defendants" and "of any license
agreement made pursuant to this judgment" is too broad. If retained, it should be restricted to lease or license agreements and agreements respecting patents and trade practices, production, and trade relations. P. 424.
(p) A provision of the decree enjoining individual appellants from ownership of securities or evidence of indebtedness of more than one corporation in the industry should be modified to prohibit acquisition of stocks or bonds of any corporate appellant by any other such appellant, and to prohibit any individual appellant from acquiring a measure of control, through ownership of stocks or bonds or otherwise, in a company competing with that with which he is officially connected or in a subsidiary or affiliate of such competing company. P. 425.
(q) As to certain individual appellants who own substantial amounts of stock of two of the corporate appellants, a period longer than two years should be allowed for divestiture of the stock of one or the other of the corporate appellants, and a proviso depriving them of the right to vote the stock of one company or the other, or to trustee the stock of one of the corporations if both stocks are held longer than the term fixed, would be appropriate. P. 426.
(r) A provision of the decree enjoining individual appellants from holding an office or directorship in more than one corporation which manufactures and sells glassware or manufactures or distributes glassmaking machinery should be limited to such relationships in competing companies. P. 426.
(s) Provisions of the decree enjoining acquisition by any of the corporate appellants of the business or assets of any other corporation (other than a subsidiary), and by any individual appellant of the business or assets of corporations other than that of which he is an officer or director, should be limited to acquisition of the business or assets of competing companies. P. 426.
(t) The appellant trade association, which had been an important instrument of restraint and monopoly, should be ordered dissolved, and the corporate defendants restrained for a period of five years from forming or joining any such association. P. 428.
(u) An injunction binding the corporate appellants, their officers, agents, and employees is sufficient to constrain the individual appellants so long as they remain in official relations, and to bind their successors; it is unnecessary to enjoin the individual appellants as individuals. P. 428.
(v) A requirement that all trade information be given to the public is disapproved. P. 429.
(w) The injunction should permit, as here indicated, usual business transactions not related to violations of the antitrust laws. P. 430.
(x) A provision of the decree which, in effect, prohibits the acquisition by any appellant of any patent, or of a restricted license under any patent, is inappropriate. P. 431.
(y) The decree may properly restrain agreements and combinations whereby patents are...
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