Standard Sanitary Manufacturing Co. v. United States

226 U.S. 20, 33 S. Ct. 9, 57 L. Ed. 107, 1912 U.S. LEXIS 2129
CourtSupreme Court of the United States
DecidedNovember 18, 1912
Docket554
StatusPublished
Cited by214 cases

This text of 226 U.S. 20 (Standard Sanitary Manufacturing Co. v. United States) is published on Counsel Stack Legal Research, covering Supreme Court of the United States primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Standard Sanitary Manufacturing Co. v. United States, 226 U.S. 20, 33 S. Ct. 9, 57 L. Ed. 107, 1912 U.S. LEXIS 2129 (1912).

Opinion

Mr. Justice McKenna

delivered the opinion of the court.

Suit by the Government against appellants for a violation by them of-the act of July 2,1890, 26 Stat. 209, c. 647, commonly known as the Sherman Anti-trust Act.

A decree was entered in favor of the Government, from which appellants (designated herein as defendants) 'háve prosecuted this appeal. 191 Fed. Rep. 172.

There are sixteen corporate and' thirty-four individual defendants,- the latter, with the exception of -Edwin L. Waymaii, being the officers, presidents or secretaries, of the companies.

*35 The corporate defendants were alleged, to be the manufacturers of enameled iron ware in various places in .the United States, manufacturing 85% of such ware and engaged in interstate commerce in such ware throughout the United States and with foreign countries in competition with one another.and with certain other manufacturers of such ware, and that in 1909, or early in 1910, they entered into and engaged in- a combination and conspiracy to restrain such trade and commerce.

The defendants denied the charges against them, Way-man doing so in a separate answer. The Colwell Lead Company denied that it was engaged in interstate commerce.

A great deal of testimony was taken and the case quite elaborately argued, but in the view we take of it it is in comparatively narrow compass, depending upon the application of well-settled principles.

The corporate defendants are manufacturers of sanitary enameled iron ware, such as bath tubs, wash bowls, drinking fountains, sinks, closets, etc. The enameling consists in applying opaque white glass to iron utensils, first in the condition óf a liquid and, second, in the form of a powder. The process consists in heating the utensil to a red heat and then sifting upon it the enameling powder. The.powder is fused by the high temperature and forms on the utensil a hard, impenetrable, insoluble, smooth and glossy surface.

Prior to the invention of James W. Arrott, Jr., covered by letters-patent issued September 26,1899, the enameling powder was applied by a sieve attached to a long handle which was held by the workman with one hand and the sieve made to vibrate by the workman striking the handle with his other hand, thereby sifting the powder over the surface of the iron ware. The. implement was an imperfect one, not easily handled, and by its use the workmen were subjected to intense heat and physical strain. The *36 flow of the powder beside was not continuous; it was cast upon the metal in intermittent puffs, causing in many instances an unequal distribution of the powder and producing defective articles which either had to be thrown away or sold as “seconds.” With Arrott’s invention these evil results are lessened or disappear. The sieve is mechanically vibrated very rapidly, causing, instead of an intermittent flow of the powder as in the hand process, a practically continuous flow. Both hands of the workman may be used to guide and direct the sieve. The advantages of the instrument over the hand process are decided. It is more efficient and more economical. It makes a better article and in less time. There is no waste in defects or “seconds.” The workman is relieved to some extent from “fierce heat conditions,” to quote from the answers.

At the time of the contracts which are attacked by the Government the Standard Sanitary Manufacturing Company was the owner of the patent and manufacturer of 50% of the ware, and used in its production the patented device. Some of the other manufacturers were infringing and controversies existed. Some yielded to its validity, others contested it. It was sustained by the courts in several cases.

We have gone through this detail to exhibit the conditions, as asserted by defendants, which confronted them and induced their contracts. In further display of it we quote Wayinan’s answer as follows:

“For the reasons stated, the art was in a very unsatisfactory condition. No means had been discovered of-accomplishing the result produced by the use of the Arrott invention without laying the user of such means open to a suit for infringement by the owner of the Arrott patent. The manufacturers using the process in use prior to Arrott’s invention were unable to successfully compete with those using the Arrott invention, and moreover, produced a *37 disproportionate number of defective, unsightly and substantially unsaleable articles. The consumer was deceived and defrauded and the use of Sanitary Enameled Iron-Ware lessened and its reputation, depreciated by defective articles being palmed off on the consumer as not defective.”

On the situation thus asserted to exist the defendants build their defense, contending that Wayman saw its evils and conceived the way to correct them; and insist that the following facts are established by the evidence: Wayman was familiar, through his connection with another enameling company called the Seamless Steel Bath Tub Company, with the enamel ware trade and had become convinced of the advantages, indeed, necessity, of' the use of the Arrott invention. He tried to secure if, but the Standard Company seemed unwilling at that time to confer its utility upon other companies, and pending the negotiations the Seamless Company failed and Way-man turned to other plans," one of which resulted in the contracts under review.

As early as 1908, impressed with the importance of the Arrott patent, he endeavored to have the Standard Company grant licenses to other companies in order to improve trade conditions, and to this end he tried to interest other gentlemen in the project. The Standard Company was unwilling' to grant, and other manufacturers were equally disinclined to accept them. He then conceived the, idea of a holding company, but this failed also, the Standard still being unyielding, stating by one of its officers that “his company was unwilling either to sell the Arrott patent or to enter into any arrangement which would lessen the advantage which it had by reason of the ownership of the Arrott patent.” The plan was, therefore, abandoned.

In August, 1909. (we are still following the version of the testimony given by counsel for defendants), it was suggested to Wayman' by a person connected with one *38 of the manufacturing companies that he (Wayman) apply for the position of secretary of the Association of Sanitary Enameled Ware Manufacturers which was about to be reorganized. The position, it was said, would give Way-man an excellent opportunity to continue his efforts to buy the Arrott patent and establish such relation with the manufacturéis of enameled ware as would enable him to present in the most favorable manner his ideas in regard to the advantages of patent licenses under the Arrott patent. This association was a pure trade organization and not formed to control or regulate prices. Wayman applied for and obtained the position and commenced again negotiations for the Arrott patent and persisted, against the apparent reluctance of the Standard Company to give up the advantages of the patent.

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Bluebook (online)
226 U.S. 20, 33 S. Ct. 9, 57 L. Ed. 107, 1912 U.S. LEXIS 2129, Counsel Stack Legal Research, https://law.counselstack.com/opinion/standard-sanitary-manufacturing-co-v-united-states-scotus-1912.