United States v. Krasnov
| Decision Date | 30 July 1956 |
| Docket Number | Civ. A. No. 11024. |
| Citation | 143 F. Supp. 184 |
| Parties | UNITED STATES of America, Plaintiff, v. Joseph A. KRASNOV, Samuel Krasnov, Seymour Krasnov, The Comfy Manufacturing Company, Fred E. Katzner and Arthur Oppenheimer, Jr., Defendants. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
COPYRIGHT MATERIAL OMITTED
COPYRIGHT MATERIAL OMITTED
William L. Maher, Joseph F. Tubridy, Morton M. Fine, Sp. Assts. to Atty. Gen., for plaintiff.
C. Brewster Rhoads, Joseph W. Swain, Jr., Leonard L. Kalish, Philadelphia, Pa., for defendants Joseph A. Krasnov, Samuel Krasnov, Seymour Krasnov.
Nochem S. Winnet, Milton M. Gottesman, Daniel Lowenthal, Philadelphia, Pa., for defendants The Comfy Mfg. Co., Fred E. Katzner.
Fred A. Klein, New York City, for defendant Arthur Oppenheimer, Jr.
This is an action under Section 4 of the Sherman Anti-Trust Act, 15 U.S.C.A. § 4, brought by the United States against the above six defendants for alleged violations of Sections 1 and 2 of the Act of Congress of July 2, 1890, c. 647, 26 Stat. 209, as amended 15 U.S.C.A. § 1 and § 2. The complaint charges the defendants to be engaged in a combination and conspiracy in unreasonable restraint of interstate trade and commerce in the manufacture and sale of ready-made furniture slip covers among the several states of the United States; a combination and conspiracy to monopolize the aforesaid trade and commerce; an attempt to monopolize and a monopoly. The United States seeks an injunction to restrain the said six defendants from a continuance or revival of the alleged illegal practices and activities. The matter before the Court is plaintiff's motion for summary judgment.
Three of the defendants, Joseph A. Krasnov, Samuel Krasnov and Seymour Krasnov, are copartners in the business of manufacturing and selling ready-made furniture slip covers, doing business under the trade name of Sure-Fit Products Co., with their principal place of business at Bethlehem, Pennsylvania. Hereinafter these defendants shall be referred to collectively as "Sure-Fit". The fourth defendant, The Comfy Manufacturing Company, hereinafter referred to as "Comfy", also in the business of manufacturing and selling ready-made slip covers, is a Maryland corporation, with its principal place of business in Baltimore, Maryland. The fifth defendant, Fred E. Katzner, is a resident of New York City and at the time covered by the complaint was President of Comfy and as such was actively engaged in the management, direction and control of the affairs and policies of said corporation. The sixth defendant, Arthur Oppenheimer, Jr., is a resident of Boise, Idaho, and is the patentee of U. S. Letters Patent No. 2,100,868, which patent pertains to the manufacture of ready-made furniture slip covers from knitted fabrics.
The subject matter of this action is ready-made slip covers. There are generally four types of ready-made furniture slip covers: woven fabric, woven fabric containing rubber thread, knitted fabric, and knitted fabric containing rubber thread. Such slip covers are completely manufactured at the factory in a number of basic styles adjustable for use on most sizes and shapes of upholstered chairs and sofas in common usage throughout the United States. They are so designed that they may be installed by the user following simple directions without professional guidance. They are distinguished from so-called "custom made" slip covers which are tailored for individual items of upholstered furniture by skilled professional workers who in many cases measure, cut, fit and install such covers in the home of the purchaser. When used hereinafter, the term "slip cover" shall refer to ready-made furniture slip covers.
The Government alleges that since at least 1937 defendants Sure-Fit and Comfy have been the two largest manufacturers of slip covers in the United States; that in 1949 said defendants manufactured approximately 62 per cent of all slip covers manufactured in the United States; and that thirteen other manufacturers accounted for the remaining 38 per cent, of which the defendants' largest competitor accounted for only 9 per cent of the total slip covers manufactured; that during 1949 more than twenty-three million dollars worth of ready-made furniture slip covers of all types were produced in the United States; and that Sure-Fit and Comfy manufactured this pro rata percentage share of said slip covers in their factories in Baltimore, Maryland, and Bethlehem, Pennsylvania, respectively, and sold said slip covers in interstate commerce. Further, that some time in 1938, Oppenheimer transferred his title to U. S. Letters Patent No. 2,100,868 to Comfy but retained a reversionary interest therein as well as rights to royalties on slip covers manufactured thereunder.
The alleged conspiracy to evade the Sherman Act is claimed to have commenced in 1939 when, with the knowledge and consent of Oppenheimer, Comfy and Sure-Fit entered into an agreement whereby:
(a) Comfy would license Sure-Fit to manufacture and sell slip covers under the Oppenheimer patent, and Sure-Fit would cross license Comfy to manufacture and sell, to a limited number of customers, slip covers embodying the invention claimed in U. S. Letters Patent No. 1,984,973, which patent was owned by Sure-Fit;
(b) Comfy would not grant licenses to others under the Oppenheimer patent without Sure-Fit's consent;
(c) Comfy was to set the price to be maintained for slip covers manufactured under the Oppenheimer patent, and
(d) The defendants would share the expense resulting from litigation brought against alleged infringers of the Oppenheimer patent.
Further, that subsequent to said agreement, the defendants embarked on a plan whereby Comfy would threaten to institute, and institute, patent infringement suits against retail dealers selling slip covers of competitors, alleging the sale of merchandise infringing on the Oppenheimer patent. That following the institution of such suits, the defendants would endeavor to settle the suits by requiring the retailer to discontinue the sale of alleged infringing slip covers and substitute therefor slip covers manufactured by the defendants.
Finally, the complaint alleges that the defendants would injure and destroy competition of other manufacturers by:
(a) Purchasing slip covers of competitors from retailers in exchange for "full line orders" of defendants' slip covers;
(b) Reselling the merchandise of the competitors to other retail outlets at a price less than wholesale, thereby disrupting the market for their competitors and creating the impression among retailers and consumers that such slip covers were of inferior quality and workmanship;
(c) Granting special discounts, excessive advertising allowances, and abnormal return privileges to retailers who agreed to carry their merchandise exclusively, and
(d) Making or causing to be made derogatory and disparaging statements concerning their competitors' merchandise and their financial ability to defend the retailer against infringement suits which might be brought against the retailer by the defendants.
The Government alleges that the defendants combined and conspired to do these things and that said combination and conspiracy has directly and substantially been an unreasonable restraint on interstate trade and commerce in slip covers and has assured the defendants a dominant position in the manufacturing and distribution of slip covers.
The defendants have filed separate answers in which each defendant generally denies the charges made by the Government. Whether the denial runs to facts, as contrasted to the denial of inferences drawn by the Government from facts or documents which are otherwise admitted, is a point which will be discussed later in this opinion.
The Government contends that it is entitled to summary judgment because the agreement entered into by Comfy and Sure-Fit was designed to eliminate competition and was inherently illegal for the following reasons:
(1) The parties agreed to pool their patents and to act jointly in prosecuting patent infringement suits which they never intended to allow to be adjudicated;
(2) The parties agreed to relinquish their individual rights to license others and acted jointly in approving or disapproving the applications for licenses;
(3) The parties agreed to price fixing, and
(4) The parties acted together to create market conditions which would eliminate competition.
In support of its allegations the Government has filed, as part of an affidavit in support of its motion, a compilation of documents consisting of 945 pages, containing 504 exhibits. Without exception, these exhibits have come from either the files of one of the defendants, their attorneys, or from the court records of patent infringement suits to which one of the defendants was a party. Except for 14 scattered documents, the authenticity of all of the Government's exhibits has been admitted by at least one of the defendants. Allowing these documents to speak for themselves, the Government contends that these writings establish undisputed facts which prove the essential elements of the complaint and that the legal consequences to be drawn from the facts as established by the documents is the only dispute raised by the defendants' answers or counter-affidavits.
The defendants argue that this Court cannot properly grant summary judgment for the following reasons:
(1) That the Government's motion does not comply with Rule 7(b) (1) of the Federal Rules of Civil Procedure, 28 U.S. C.
(2) That the Government's motion does not comply with Rule 56(c) of the Federal Rules of Civil Procedure, and
(3) That by granting this motion the Court would be depriving the defendants from establishing—by way of defense— the following facts:
(a) "The dollar-rates figure tendered by plaintiff's affidavits shows that there was no monopoly or attempt to monopolize."
To continue reading
Request your trial
-
Ab Iro v. Otex, Inc.
...litigation. See e.g., Automated Building Components, Inc. v. Trueline Truss Co., 318 F.Supp. 1252 (D.Ore.1970); United States v. Krasnov, 143 F.Supp. 184 (E.D.Pa.1956). Further, plaintiffs have never threatened suit against any customer of Roj or Otex, have never otherwise sought to enforce......
-
Boston Scientific Corp. v. Schneider (Europe) Ag
...Elektronik Agie v. Sodick Co., No. 87 C 8974, 1990 WL 174921, at *2-4 (N.D.Ill. Oct.22, 1990) (same); United States v. Krasnov, 143 F.Supp. 184, 199 (E.D.Pa. 1956) (price-fixing arrangement), aff'd, 355 U.S. 5, 78 S.Ct. 34, 2 L.Ed.2d 21 (1957); United States v. General Instrument Corp., 87 ......
-
Congoleum Industries, Inc. v. Armstrong Cork Company, Civ. A. No. 41762.
...Well Surveys, Inc., 343 F.2d 381 (10th Cir. 1965), cert. denied, 383 U.S. 933, 86 S.Ct. 1061, 15 L.Ed.2d 851 (1966); United States v. Krasnov, 143 F.Supp. 184 (E.D.Pa.1956); aff'd per curiam 355 U.S. 5, 78 S.Ct. 34, 2 L.Ed. 2d 21 24 Accord, United Shoe Machinery Corp. v. United States, 258 ......
-
California Dep. of Toxic v. Interstate Non-Ferrous
...stated the motion was made pursuant to Rule 56 authorizing summary judgment." 5 Wright and Miller, § 1192 at 40 citing U.S. v. Krasnov, 143 F.Supp. 184 (D.C.Pa.1956) affirmed per curiam, 34, 355 U.S. 5, 78 S.Ct. 34, 2 L.Ed.2d 21 (1957). "When the grounds for [a] motion [are] extensively dis......
-
Table of cases
...Salt, 332 U.S. 392 (1947) .............................................................................. 48 United States v. Krasnov, 143 F. Supp. 184 (E.D. Pa. 1956) ......................................................... 63 United States v. Lever Bros. Co., 216 F. Supp. 887 (S.D.N.Y. 19......
-
Antitrust Analysis Of Intellectual Property Agreements
...138 U.S. 252, 255 (1891). 204. Mason City Tent & Awning Co. v. Clapper, 144 F. Supp. 754 (W.D. Mo. 1956); United States v. Krasnov, 143 F. Supp. 184 (E.D. Pa. 1956), aff’d per curiam , 355 U.S. 5 (1957); United States v. Besser Mfg., 96 F. Supp. 304 (E.D. Mich. 1951), aff’d , 343 U.S. 444 (......
-
Overview of Antitrust and Misuse Law in the Patent Context
...pool in which participants settled patent dispute by relinquishing their right to license their respective patents unilaterally). 271. 143 F. Supp. 184 (E.D. Pa. 1956), aff’d per curium , 355 U.S. 5 (1957). 136 Antitrust Counterattack in Intellectual Property Litigation Handbook conduct tha......
-
Table of cases
...§§13:5.A, 33:8.C a-809 Table oF Cases United States v. Koyomejian , 970 F.2d 536 (9th Cir. 1992), §28:7.E United States v. Krasnov , 143 F. Supp. 184 (D. Pa. 1956), §37:3.C.3 United States v. La Hacienda Mexican Café , 10 OCAHO no. 1167, 3 (2013), §7:2.F.3 United States v. Louis Padnos Iron......