Revere Camera Co. v. Eastman Kodak Co., 48C50.

• Decision Date: 05 October 1948
• Docket Number: No. 48C50.,48C50.
• Citation: 81 F. Supp. 325
• Parties: REVERE CAMERA CO. v. EASTMAN KODAK CO. et al.
• Court: U.S. District Court — Northern District of Illinois

81 F. Supp. 325

REVERE CAMERA CO. v. EASTMAN KODAK CO. et al.

No. 48C50.

United States District Court N. D. Illinois, E. D.

October 5, 1948.

Zebel & Gritzbaugh, of Chicago, Ill., for plaintiff.

Charles O. Parker, of Chicago, Ill., Donovan, Leisure, Newton, Lumbard & Irvine, by James R. Withrow, Jr., all of New York City, Nixon, Hargrave, Middleton & Devans, by Arthur L. Stern, all of Rochester, N. Y., and Ira C. Werle, of New York City, for defendants.

SULLIVAN, District Judge.

This action is brought under Sec. 15 of Title 15 U.S.C.A., known as the Sherman Act, and Sec. 26, Title 15, known as the Clayton Act, for treble damages and injunctive relief based upon alleged violations by Eastman Kodak and Eastman Stores of Sections 1, 2 and 3, Title 15, Sherman Law, and Sections 13 and 14, Title 15, Clayton Act.

The complaint was filed on January 14, 1948. Paragraph 1 thereof sets out the facts which confer jurisdiction on this court.

Paragraph 2 alleges that Revere is engaged in the manufacture and sale of amateur motion picture cameras, projectors and film splicers, and in the sale of certain accessories and equipment therefor manufactured by others.

Paragraph 3 alleges that "Revere brings this suit on its own behalf and in the public interest in that the acts complained of are injurious to the interests and welfare of the public, and the equitable relief sought, if granted, will inure to the benefit of the public generally."

Paragraph 4 alleges that Eastman Kodak is also engaged in the manufacture and sale of like items, and in addition manufactures and sells amateur motion picture film and maintains stations at which photographers may have exposed film processed or developed.

Paragraph 5 alleges that Eastman Stores is a wholly owned subsidiary of Eastman Kodak, and is engaged in transacting business as a retail outlet for Eastman Kodak products.

Paragraphs 6 and 7 set out the interstate and foreign commerce carried on by both Revere and Eastman Kodak.

Paragraph 8 outlines the growth and importance of the photographic industry.

Paragraphs 9, 10, 11, 12 and 13 outline the history, scope and character of the business and operations of Eastman Kodak.

Paragraphs 14, 15, 16, 17 and 18 describe the photographic goods involved in this suit.

Paragraphs 19 and 20 describe the sources of supply of motion picture film.

Paragraph 21 outlines Revere's history in the business, alleging "that prior to September 1939, Revere had manufactured amateur motion picture cameras of the single 8 mm. spool type and that it was able to offer to purchasers of its cameras an adequate supply of black and white film for use therein. This film was manufactured and packaged by Agfa-Ansco Corporation, a film manufacturer, and sold by Revere under its own name."

Paragraph 22 alleges the offenses complained of as follows:

Eastman individually, and as parent of the corporate structure hereinbefore mentioned, and in concert with one or more of its said subsidiaries including Stores (Ill.) and with others, has

"(a) Acted, confederated, conspired and combined, with said subsidiaries and said others, to do the unlawful acts and things set forth in this complaint, and continues so to do.

"(b) Contracted, combined and conspired with one or more of its said subsidiaries, including Stores (Ill.), and with others to restrain trade or commerce in motion picture film, cameras and projectors, for amateur use, and accessories and supplies therefor, in violation of the provisions of Sections 1 and 3 of the Sherman Act.

"(c) Monopolized and attempted to monoplize, combined and conspired to monopolize and to attempt to monopolize, a part of the trade or commerce among the several states of the United States, and with foreign nations, in motion picture film, cameras, and projectors, for amateur use, and accessories and supplies therefor, in violation of the provisions of Section 2 of the Sherman Act.

"(d) Combined, and conspired, with the intent of using the monopoly established by them in the manufacture, distribution and sale of color film to attempt to establish a monopoly, and to restrain trade and commerce, in the production, distribution and sale of motion picture cameras, and accessories, equipment and supplies therefor.

"(e) Discriminated in price between different purchasers of motion picture film, cameras, and projectors, for amateur use, and accessories, equipment, and supplies therefor, of like grade and quality, in commerce, and for use, consumption or resale within the United States or a Territory thereof, or the District of Columbia, and where the effect of such discrimination may be substantially to lessen competition or to tend to create a monopoly in the manufacture, sale and distribution of one or more of said items, or to injure, destroy or prevent competition with Eastman, and one or more of its said subsidiaries, including Stores (Ill.), in violation of Section 2 of the Clayton Act.

"(f) It has unlawfully discriminated in favor of one purchaser against another purchaser of amateur picture film, cameras, and other equipment, supplies and accessories bought for resale, by contracting to furnish or furnishing or by contributing to the furnishing of services or facilities connected with the processing, handling, sale or offering for sale of such commodities upon terms not accorded to all purchasers on proportionately equal terms.

"(g) In the course of commerce, leased or made a sale or contract for sale of motion picture film, cameras, projectors, for amateur use, and accessories and supplies therefor, for use, consumption or resale within the United States, or a Territory thereof, or the District of Columbia, or fixed a price charged therefor, or discount from, or rebate upon, such price, on the condition, agreement or understanding that the lessee or purchaser thereof shall not use or deal in the goods, or merchandise, of a competitor or competitors of Eastman, where the effect of such lease, sale, or contract for sale of such condition, agreement or understanding may be, or has been, to substantially lessen competition or tend to create a monopoly in commerce in such items, in violation of Section 3 of the Clayton Act."

Paragraph 23 outlines the relations of the parties and alleges "that in or about August, 1939, Eastman importuned Revere to abandon the manufacture and sale of its single 8 mm. cameras, to cease the sale of single 8 mm. film, and to enter into a patent license agreement with Eastman to make and sell an amateur motion picture camera under certain of Eastman's patents, adopted for use with Eastman's double 8 mm. film wound on patented spools manufactured by Eastman." It is further alleged that Eastman represented to Revere that if Revere would agree to enter into such license agreement, Eastman would supply Revere with patented rewind spools to equip the cameras manufactured by it thereunder and, further, that Eastman would at all times provide purchasers of such cameras from Revere with an adequate supply of double 8 mm. film and suitable facilities for developing or processing the same throughout the United States and abroad.

Paragraph 24 alleges that Revere, relying upon said representations, on or about September 8, 1939, entered into a license agreement with Eastman by the terms of which Eastman granted to Revere a limited non-exclusive royalty-free license to make, use and sell double 8 mm. motion picture cameras under Eastman patents. It is further alleged that while such license agreement provided that "nothing herein shall create any obligation of any kind on the part of Eastman to market or continue to market any particular type or kind of film" it was intended by the parties thereto that Eastman would, and Eastman by said agreement undertook during the life of said agreement to manufacture an adequate supply of film suitable for use in cameras made by Revere thereunder and facilities for processing and developing said film so used, and to refrain from doing anything to hinder Revere in the beneficial enjoyment of such agreement.

Paragraph 25 sets out that immediately upon entering into said license agreement Revere abandoned the manufacture of single 8 mm. film, redesigned its camera and manufacturing equipment, and under its license began to manufacture and sell a new moderately priced double 8 mm. camera for use with film manufactured by Eastman. That in making this change Revere was compelled not only to redesign its product, but also to reorganize its plant at great expense.

Paragraph 26 alleges that pursuant to the terms of the agreement, Revere equipped each of its double 8 mm. cameras with one empty spool purchased from Eastman, so that Eastman thereby had continuous information as to the number of cameras manufactured and sold by Revere.

Paragraph 27 alleges that Revere's double 8 mm. spool type cameras manufactured and sold under the license agreement with Eastman attained great popularity and that Revere's sales of such cameras now exceed those of all other manufacturers combined.

Paragraph 28 sets out that in 1941 Revere designed and built a double 8 mm. magazine camera and exhibited a model thereof to Eastman, and that Eastman charged that it constituted an infringement of certain of Eastman's patents. After extended correspondence Eastman proposed that Revere accept a license under certain Eastman patents, and that Revere manufacture and sell, pursuant to such license, its magazine camera designed to accommodate magazine and film made by Eastman. In order to prevent dealers in its products from being involved in litigation, Revere brought a suit against Eastman in this court, which resulted in a decree in its favor, whereupon Revere enlarged its production of double 8 mm. camera of the magazine type.

Paragraph 29 alleges that due to Eastman's dominant position in the manufacture and sale of motion picture film, purchasers of Revere's cameras are dependent upon Eastman...