Berlenbach v. Anderson and Thompson Ski Co., 18740.

Decision Date01 May 1964
Docket NumberNo. 18740.,18740.
Citation329 F.2d 782
PartiesBernard E. BERLENBACH, also called Barney Berlenbach, and doing business under the fictitious name of Ski-Free Company, Appellant, v. ANDERSON AND THOMPSON SKI CO., Inc., a corporation, Appellee.
CourtU.S. Court of Appeals — Ninth Circuit

Edward B. Gregg and Melvin R. Stidham, San Francisco, Cal., for appellant.

Richard W. Seed, Seattle, Wash., for appellee.

Before ORR, JERTBERG and BROWNING, Circuit Judges.

JERTBERG, Circuit Judge.

This action was commenced in November of 1957 by the filing of a complaint, by appellant against appellee, charging infringement of appellant's patent No. 2,698,757 for safety binding for ski runners, and unfair competition.

Appellant's application for patent was filed July 5, 1949, and the patent was issued on January 4, 1955.

On June 12, 1959 the District Court entered a consent decree dismissing the unfair competition action and holding that appellant's patent was valid and infringed by appellee, and permanently enjoining appellee from further infringement. Consent to said decree was given by the parties pursuant to an agreement dated April 28, 1959, between them whereby appellant gave appellee a "nonexclusive license to manufacture, use and sell safety bindings for ski runners under said patent for the full term of said patent," and agreed to accept from appellee a sum certain and royalties.

Subsequently, in 1961, appellant gave notice to appellee of an asserted breach of the license agreement (failure to pay royalties; failure to account; and unconsented to manufacture and sale of infringing devices) and of revocation of the license. Thereafter, appellant filed a motion to hold appellee in contempt of the consent decree. In response to this motion, appellee filed a motion for summary judgment, a motion to vacate the consent decree, and a motion to file an answer and counterclaims to the original complaint. After a hearing the district court granted all of appellee's motions.

The district court found that on April 7, 1952, while appellant's patent application was pending, appellant entered into a sales agreement with Northland Ski Manufacturing Company;1 that as of the time of the hearing on the motions, the Northland agreement had not been modified and was still in effect; that no part of the Northland agreement was viewed by appellee prior to August 4, 1961; and that appellee entered into the settlement and license agreement with appellant in good faith believing that appellant had the right to grant appellee a non-exclusive license under the patent. The court concluded that the Northland agreement constituted a license under appellant's patent; that since the Northland agreement was still in effect on April 28, 1959, appellant did not and does not have the right to license appellee under the patent to manufacture, use and sell ski bindings; that paragraph 4 of the Northland agreement constitutes misuse of appellant's patent and because of said misuse the original complaint on file in the action should be dismissed.

Appellant here contends that the Northland agreement on its face does not constitute an exclusive license; that it is at least ambiguous so that resort must be had to facts and circumstances outside the four corners of the instrument and that therefore summary judgment was improperly granted; that appellee is estopped to deny the validity of its license agreement with appellant; that the district court erred in granting summary judgment on the ground of patent misuse in the absence of proof of certain indicia of restraint, such as the position of the parties in the industry, the connection between the offending contract provision and the patent in suit, and whether the patentee ever enforced the offending clause; and that in any event patent misuse does not bar an infringement suit unless the patentee's conduct is such as would constitute a violation of section 3 of the Clayton Act, and therefore the court erred in granting summary judgment without proof that the effect of the Northland agreement may be to "substantially lessen competition or tend to create a monopoly in any line of commerce." We will discuss these contentions in reverse order for convenience.

In a series of cases involving the licensing of patents, the Supreme Court held that clauses which tie-in the exclusive sales of non-patented items with patented items are contrary to public policy for the reason that such tie-in agreements extend the patent monopoly beyond the scope permitted by the Constitution and the Congress. In United States v. Univis Lens Co., Inc., 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408 (1942) the court said, the "method by which the monopoly is sought to be extended is immaterial."

On the strength of these cases, and the language last quoted, the court in National Lockwasher Co. v. George K. Garrett Co., 137 F.2d 255 (3rd Cir. 1943), held that a clause prohibiting a licensee from selling articles in competition with the patented articles likewise constitutes patent misuse which bars the patentee from maintaining a patent suit. This circuit approved and followed the Lockwasher case in McCullough v. Kammerer Corp., 166 F.2d 759 (9th Cir. 1948). The case of Morton Salt Co. v. Suppiger Co., 314 U.S. 488, 62 S.Ct. 402, 86 L.Ed. 363 (1942) specifically rejected the argument that patent misuse must be of such gravity as to violate the Clayton Act in order to bar relief. The court said 314 U.S. at 490, 62 S.Ct. at 404, 86 L.Ed. 363.

"The Clayton Act authorizes those injured by violations tending to monopoly to maintain suit for treble damages and for an injunction in appropriate cases. 15 U.S.C. §§ 1, 2, 14, 15, 26. But the present suit is for infringement of a patent. The question we must decide is not necessarily whether respondent has violated the Clayton Act, but whether a court of equity will lend its aid to protect the patent monopoly when respondent is using it as the effective means of restraining competition with its sale of an unpatented article."

In view of the history and policy of the defense of patent misuse we find no merit in appellant's contentions that the proof of substantial lessening of competition is a prerequisite to finding patent misuse. See Park-In Theatres v. Paramount-Richards Theatres, 90 F. Supp. 730 (D.Del.1950), aff'd 185 F.2d 407 (3rd Cir. 1950); and Waco-Porter Corp. v. Tubular Structures Corp. of America, 222 F.Supp. 332 (S.D.Cal. 1963). Neither do we feel that the cases cited in the margin2 overrule the Morton Salt case, as appellant suggests.

The Morton Salt case contains the following language 314 U.S. at page 493, 62 S.Ct. at page 415, 86 L.Ed. 363:

"Maintenance and enlargement of the attempted monopoly of the unpatented article are dependent to some extent upon persuading the public of the validity of the patent, which the infringement suit is intended to establish. Equity may rightly withhold its assistance from such a use of the patent by declining to entertain a suit for infringement, and should do so at least until it is made to appear that the improper practice has been abandoned and that the consequences of the misuse of the patent have been dissipated."

Appellant argues that he will prove, if permitted to, that he never enforced paragraph 4 of the Northland agreement. He contends that non-enforcement of the provision is tantamount to...

To continue reading

Request your trial
25 cases
  • Ansul Company v. Uniroyal, Inc.
    • United States
    • U.S. District Court — Southern District of New York
    • October 31, 1969
    ...provision in a contract, the patentee's cancellation and abandonment of the clause may be sufficient, Berlenbach v. Anderson & Thompson Ski Co., 329 F.2d 782, 785 (9th Cir. 1964); White Cap Co. v. Owens-Illinois Glass Co., 203 F.2d 694 (6th Cir. 1953), particularly where no injury resulted.......
  • Congoleum Industries, Inc. v. Armstrong Cork Company, Civ. A. No. 41762.
    • United States
    • U.S. District Court — Eastern District of Pennsylvania
    • October 5, 1973
    ...Accord, United Shoe Machinery Corp. v. United States, 258 U.S. 451, 458, 42 S.Ct. 363, 66 L.Ed. 708 (1921); Berlenbach v. Anderson & Thompson Ski Co., 329 F.2d 782 (9th Cir. 1964). 25 See, SF-8, 9; DX-10, 11, 35, 36; PX-54; Tr. 111, 112, 145, 146, 150, 26 See, DX-9; SF-5. 27 See, DX-11; SF-......
  • Blohm & Voss AG v. Prudential-Grace Lines, Inc.
    • United States
    • U.S. District Court — District of Maryland
    • June 20, 1972
    ...86 L.Ed. 363 (1942); Rocform Corp. v. Acitelli-Standard Concrete Wall, Inc., 367 F.2d 678 (6 Cir. 1966); Berlenbach v. Anderson and Thompson Ski Co., 329 F.2d 782 (9 Cir. 1964); Baldwin-Lima Hamilton Corp. v. Tatnall Measuring Systems Co., 169 F.Supp. 1 (E.D.Pa.1958), aff'd per curiam, 268 ......
  • Valmont Industries, Inc. v. Yuma Manufacturing Company
    • United States
    • U.S. District Court — District of Colorado
    • March 6, 1969
    ...an actual monopoly. Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 62 S.Ct. 402, 86 L.Ed. 363 (1942); Berlenbach v. Anderson & Thompson Ski Co., 329 F.2d 782 (9th Cir. 1964). It is sufficient to show the existence of restrictive agreements which tend to suppress competition in nonpate......
  • Request a trial to view additional results
11 books & journal articles
  • Application of the Patent Misuse Doctrine
    • United States
    • ABA Antitrust Library Intellectual Property Misuse: Licensing and Litigation. Second Edition
    • December 6, 2020
    ...agreement removing patent pooling provisions), cert denied , 340 U.S. 824 (1950); but see Berlenbach v. Anderson & Thompson Ski Co . , 329 F.2d 782, 785 (9th Cir. 1964) (“non-enforcement and voluntary relinquishment of an illegal clause will overcome the defense of patent misuse” but not “w......
  • Practical Aspects of the Law of Misuse: Misuse in the Litigation Context
    • United States
    • ABA Antitrust Library Intellectual Property Misuse: Licensing and Litigation. Second Edition
    • December 6, 2020
    ...anticompetitive effect. 176. See, e.g. , Compton v. Metal Prods., 453 F.2d 38 (4th Cir. 1971); Berlenbach v. Anderson & Thompson Ski Co., 329 F.2d 782 (9th Cir. 1964); Stewart v. Motrim, Inc., 192 U.S.P.Q. 410 (S.D. Ohio 1975). 168 Intellectual Property Misuse two district courts have held ......
  • Antitrust Issues Involving Intellectual Property
    • United States
    • ABA Antitrust Library Antitrust Law Developments (Ninth Edition) - Volume II
    • February 2, 2022
    ...Boston Scientific Corp., 2002 U.S. Dist. LEXIS 17331, at *11 (N.D. Ill. 2002). 372. See, e.g. , Berlenbach v. Anderson & Thompson Ski Co., 329 F.2d 782 (9th Cir. 1964); McCullough v. Kammerer Corp., 166 F.2d 759 (9th Cir. 1948); Nat’l Lockwasher Co. v. George K. Garrett Co., 137 F.2d 255 (3......
  • Single-Firm Conduct
    • United States
    • ABA Antitrust Library Handbook on Antitrust in Technology Industries
    • December 5, 2017
    ...proceedings—may be deemed patent misuse. But the party alleging the 234. See, e.g. , Berlenbach v. Anderson & Thompson Ski Co., 329 F.2d 782 (9th Cir.); McCullough v. Kammerer Corp., 166 F.2d 759 (9th Cir.); National Lockwasher Co. v. George K. Garrett Co., 137 F.2d 255 (3d Cir. 1943). 235.......
  • 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