Radio Corporation of America v. Majestic Distributors

• Decision Date: 01 October 1931
• Docket Number: No. 2076,2077.,2076
• Citation: 53 F.2d 641
• Parties: RADIO CORPORATION OF AMERICA et al. v. MAJESTIC DISTRIBUTORS, Inc. (two cases).
• Court: U.S. District Court — District of Connecticut

53 F.2d 641 (1931)

RADIO CORPORATION OF AMERICA et al. v. MAJESTIC DISTRIBUTORS, Inc. (two cases).

Nos. 2076, 2077.

District Court, D. Connecticut.

October 1, 1931.

Fish, Richardson & Neave and Stephen H. Philbin, all of New York City, for plaintiffs.

Edwards, Bower & Pool and Clifton V. Edwards, all of New York City, for defendant.

THOMAS, District Judge.

Both cases are patent infringement suits. In its answer in both cases the defendant sets forth in paragraph 14 in No. 2076, and in paragraph 18 in No. 2077, the following allegations: "The defendant further answering the said bill of complaint avers that plaintiffs have no standing in a Court of Equity in this case because plaintiffs are parties to agreements which form an unlawful combination in restraint of trade contrary to the statutes of the United States and because plaintiff, Radio Corporation of America, derives its alleged titles and rights from the provisions of said illegal agreements."

The plaintiffs filed motions to strike from the record paragraph 14 in No. 2076 and paragraph 18 in No. 2077, "on the ground that said answer sets up no defense to the bill of complaint, and is irrelevant, immaterial, and superfluous." At the conclusion of the oral argument both motions were denied.

Shortly thereafter the plaintiffs filed a motion for rehearing, which was granted and counsel were requested to file briefs in support of their respective contentions and this they have done.

Subsequently, and on May 31st, defendant moved in each case to amend its answer "by adding thereto the following paragraph"; in No. 2076, paragraph 15, and in No. 2077, paragraph 19. These paragraphs are substantially alike and read as follows: "The defendant further answering the said bill of complaint avers that plaintiffs have no standing in a court of equity in this case and are not entitled to relief; because plaintiffs are employing some or all of the patents in suit to attempt, without sanction of law, to secure a monopoly of unpatented material and are unlawfully employing some or all of the patents in suit as an instrument for restraining commerce; because by the unlawful assertion of an apparent patent monopoly plaintiffs have with much advantage to themselves and much injury to others unlawfully deterred others from legitimate action and seriously prejudiced the rights of the public; because the agreements, the existence of which is alleged in paragraph 14 of the bill of complaint, although purporting to be license agreements under the patents in suit are in fact unlawful agreements and combinations in restraint of trade by which plaintiffs herein have agreed not to compete with each other in specified fields of activity contrary to the statutes of the United States therefor made and provided, and because plaintiffs have used some or all of the patents in suit and said agreements illegally and wrongfully to intimidate, terrorize and frighten others from entering said specified fields of activity."

As asserted by counsel for defendant, the purpose of filing this amendment was to "bring the allegations of paragraphs 14 and 18 respectively, that are already in the answer more closely in conformance with the recent decisions of the Supreme Court * * * in the Ensten and Carbice Cases." Louis H. Ensten & Lion Knitting Mills Company, Petitioners, v. Simon, Ascher & Co., Inc., Respondent, decided February 2, 1931, 282 U. S. 445, 51 S. Ct. 207, 75 L. Ed. 453; Carbice Corporation of America, Petitioner, v. American Patents Development Corporation and Dry Ice Corporation of America, decided March 9, 1931, 283 U. S. 27, 51 S. Ct. 334, 75 L. Ed. 819.

It seems clear that by these allegations pleaded in defense, the defendant denies the plaintiffs' right to equitable relief and desires to show that plaintiffs are using unlawfully the various patents set forth in the bill, and, if so proven, that they are entitled to no relief in a court of equity. To this claim the plaintiffs assert with vehemence that such allegations are no defense in a patent infringement suit, however true the allegations may be, and that their motions to strike must be granted in view of a long line of decisions. They argue that to deny these motions and thus inject wholly immaterial but tremendously important issues of whether the acts and agreements of the General Electric Company, the American Telephone & Telegraph Company, and the Radio Corporation of America have violated the anti-trust laws of the United States (15 USCA §§ 1, 3), would result in many months of trial and in a travesty on justice; that it would enable the defendant to continue appropriating the patent property of the plaintiffs for many years while the case is pending, and that the patent suit would be obscured by the enormous mass of testimony and exhibits relating to the agreements of the plaintiffs, and that it is all wholly irrelevant, as no defense can be based on such evidence to the plaintiffs' charge that the defendant infringes the patents in suit.

All of these claims made by plaintiffs are interesting, but lack legal force because the motions raise questions of law only, and whether the trial be long or short, or whether the patent feature of the case would or would not be obscured, cannot be and must not be considered as of any weight, much less of controlling the decision to be reached on these motions.

It is well settled by a long line of decisions that it is no defense to a bill for alleged infringement of a patent that plaintiffs have entered into a combination or conspiracy among themselves or with third parties to violate the anti-trust laws of the United States. Johns-Pratt Co. v. Sachs Co. (C. C.) 176 F. 738; Lovell-McConnell Mfg. Co. v. Bindrim (C. C. A.) 219 F. 533; Radio Corporation of America v. Lehr Auto Supply Co. (C. C. A.) 29 F.(2d) 162; Western Electric Co. et al. v. Wallerstein (D. C.) 48 F.(2d) 268, decided by Judge Hazel in the Western District of New York on August 21, 1930; Western Electric Co. v. Pacent Reproducer Co. et al. (D. C.) 53 F.(2d) 639, decided by Judge Coleman in the Southern District of New York on December 22, 1930; Brown Saddle Co. v. Troxel (C. C.) 98 F. 620; Cimiotti Unhairing Co. v. American Fur Refining Co. (C. C.) 120 F. 672; Bonsack Machine Co. v. Smith et al. (C. C.) 70 F. 383; Otis Elevator Co. v. Geiger (C. C.) 107 F. 131; American Soda-Fountain Co. v. Green (C. C.) 69 F. 333; Independent Baking Powder Co. v. Boorman (C. C.) 130 F. 726; Motion Picture Patents Co. v. Ullman (C. C.) 186 F. 174; U. S. Fire E. C. Co. v. Joseph Halsted Co. (D. C.) 195 F. 295; Weyman-Bruton Co. v. Old Indian Snuff Mills (D. C.) 197 F. 1015; General Electric Co. v. M. E. L. Co. (D. C.) 10 F.(2d) 851.

Counsel for defendant, cognizant of these decisions, nevertheless asserts that the question here presented is radically different, inasmuch as in those adjudications the answer pleading unlawful restraint was interposed against the owner of the patent and not against the licensees who had obtained their licenses through an illegal contract by virtue of which they became parties plaintiff. And so the question here presented is whether, assuming the truth of...