United States v. Associated Patents, Inc.

134 F. Supp. 74, 106 U.S.P.Q. (BNA) 129, 1955 U.S. Dist. LEXIS 2703, 1955 Trade Cas. (CCH) 68,092
CourtDistrict Court, E.D. Michigan
DecidedJune 20, 1955
DocketCiv. A. 10664
StatusPublished
Cited by6 cases

This text of 134 F. Supp. 74 (United States v. Associated Patents, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States v. Associated Patents, Inc., 134 F. Supp. 74, 106 U.S.P.Q. (BNA) 129, 1955 U.S. Dist. LEXIS 2703, 1955 Trade Cas. (CCH) 68,092 (E.D. Mich. 1955).

Opinion

THORNTON, District Judge.

Complaint was filed and action was instituted against the defendants under Section 4 of the Act of Congress of July 2, 1890, c. 647, 26 Stat. 209, as amended, entitled “An act to protect trade and commerce against unlawful restraints and monopolies”, commonly known as the Sherman Act, 15 U.S.C.A. §§ 1-7, 15 note, in order to prevent and restrain alleged continuing violations by the defendants of Section 1 of the Sherman Act, it being the further claim of the plaintiff that beginning in or about the year 1933, and continuing thereafter up to and including the date of the filing of this complaint, the defendants have contracted, combined and conspired to restrain unreasonably the aforesaid interstate trade and commerce in machine tools, in violation of Section 1 as aforesaid; further alleging that the defendants are continuing, and threaten to, and will continue the said offenses unless the relief prayed for in the complaint be granted. It is further alleged that the terms of the contracts, combination and conspiracy have been:

(a) That defendants organize API and pool in API their existing and future patent rights relating to machine tools;

(b) That defendants allocate among themselves the manufacture and sale of machine tools according to specified types thereof, so that each defendant has the exclusive right to manufacture and sell specified types of machine tools, and so that each defendant refrain from the manufacture and sale of types of machine tools reserved for exclusive manufacture and sale by any other defendant;

(c) That API refrain from licensing under the pooled patents others than defendants to manufacture and sell any types of machine tools reserved for exclusive manufacture and sale by any of the defendants.

The “machine tools” referred to include power-driven machines, not portable by hand, which are used to cut or shape metal, and includes machine tools of the following types: lathes, shaving machines, drilling machines, boring machines, milling machines, broaching machines, grinding machines, gear producing machines, and screw machines.

*76 It is further alleged that the contracts, combination and conspiracy, and certain of the acts, agreement, arrangements and understandings of the defendants have had the effect, as intended by the defendants, of eliminating, suppressing and restraining competition among the defendants in the manufacture and sale of machine tools in interstate commerce; of eliminating, suppressing and restraining competition among the defendants in obtaining, utilizing and licensing patent rights relating to machine tools; of eliminating, suppressing and restraining competition by others in the manufacture and sale of machine tools, and of denying a purchaser of machine tools access to a free and competitive market therefor.

From the evidence submitted at a rather extended trial, the Court makes the following

Findings of Fact

1. Associated Patents, Inc., hereinafter referred to as “API”, is a corporation organized under the laws of the State of Ohio, with its principal place of business at Cincinnati, Ohio. API has functioned solely as a patent holding and licensing company. It has never engaged in manufacturing or other activities. The capital stock of API has at all times been evenly divided between the following five companies or their predecessors in interest: Brown & Sharpe Manufacturing Company, The Carlton Machine Tool Company, DeYlieg Engineering Company, The Lodge & Shipley Company, .and The Mac Investment Company.

2. Brown & Sharpe Manufacturing Company, hereinafter referred to as “Brown & Sharpe”, is a corporation organized and existing under the laws of the State of Rhode Island, with its principal place of business at Providence, Rhode Island. It is engaged in the manufacture and sale of milling machines, grinding machines, automatic screw machines, and other types of machine tools.

3. The Carlton Machine Tool Company, hereinafter referred to as “Carlton”, is a corporation organized and existing under the laws of the State of Ohio, with its principal place of business at Cincinnati, Ohio. It is engaged in the manufacture and sale of radial drilling machines.

4. The Lodge & Shipley Company, formerly known as The Lodge & Shipley Machine Tool Company, hereinafter referred to as “Lodge & Shipley”, is a corporation organized and existing under the laws of the State of Ohio, with its principal place of business at Cincinnati, Ohio, it is engaged in the manufacture and sale of lathes.

5. The Lucas Machine Tool Company, hereinafter referred to as “Lucas”, was a corporation organized and existing under the laws of the State of Ohio, with its principal place of business at Cleveland, Ohio. It was engaged in” the manufacture and sale of horizontal boring, drilling and milling machines. In 1945 it merged with McDonald, Coolidge & Company, a corporation organized and existing under the laws of the State of Ohio, with its principal place of business in Cleveland, Ohio. In 1948, the physical assets of Lucas were sold and the name was changed to The Mac Investment Company. The Mac Investment Company retains any interest of Lucas not sold in 1948.

6. The DeVlieg Machine Company is a corporation organized and existing under the laws of the State of Michigan, with its principal place of business at Ferndale, Michigan. It is engaged in the manufacture and sale of a horizontal boring, drilling and milling machine called the “Jigmil”.

7. The DeVlieg Engineering Company is a corporation organized and existing under the laws of the State of Michigan, with its principal place of business at Ferndale, Michigan. It is the successor to a former co-partnership of the same name, and is a party to the API agreements, but is inactive and is not engaged in manufacturing or selling any product.

8. Charles B. DeVlieg, a resident of Farmington, Michigan, and owner, with other members of his family, of the controlling interest in the DeVlieg Engineering Company and the DeVlieg Ma *77 chine Company, is an inventor in the machine tool field. Prior to 1933 he had developed three major inventions of general application in the machine tool field known as a backlash eliminator, an automatic power transmission mechanism, and an automatic positioning device. These inventions shall hereinafter be referred to collectively as the “subject matter inventions” and their patents as the “subject matter patents”.

9. The machine tools manufactured by defendants as aforesaid are sold and shipped in interstate commerce to states other than the states of origin or where they are manufactured.

10. An essential characteristic of the manufacture of machine tools by defendants and other members of the machine tool industry is the development of improvements, securing patents thereon, the issuing of licenses and the obtaining of licenses on patents owned by other machine tool manufacturers.

11. On September 3, 1931, Charles B. DeVlieg .granted Lucas an exclusive license on .two of his inventions, the backlash eliminator and the power transmission mechanism, for use .on horizontal boring, drilling and milling machines. No provision was made in this agreement for the licensing of future improvement patents.'

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134 F. Supp. 74, 106 U.S.P.Q. (BNA) 129, 1955 U.S. Dist. LEXIS 2703, 1955 Trade Cas. (CCH) 68,092, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-v-associated-patents-inc-mied-1955.