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UNITED STATES v. GYPSUM CO.
(a) The previous decision of this Court, 333 U.S. 364 , justified a summary judgment for the United States on the issue of the violation of the Sherman Act, when the record was considered in the light of this Court's opinion and defendants' offer of proof on the remand. P. 82.
(b) To establish a violation of the Sherman Act, it was sufficient to show that the defendants, constituting all former competitors in an entire industry, had acted in concert to restrain commerce in an entire industry under patent licenses in order to organize the industry and stabilize prices. It was not necessary then or now to decide whether a mere plurality of licenses, each containing a price-fixing provision, violates the Sherman Act. Pp. 84-85.
(c) On the remand, the defendants were entitled to introduce any evidence from which all or any of them might be found not to have violated the Sherman Act, and they had a right to lay before the court facts that were pertinent to the court's decision on the terms of the decree; but the trial court was not required to admit evidence that would not affect the outcome of the proceedings. P. 85.
(d) A summary judgment, under Rule 56 of the Federal Rules of Civil Procedure, was permissible on the remand. P. 86.
(f) The District Court's preliminary statement and summary decree are construed as an adjudication of violation of the Sherman Act by the action in concert of the defendants through the fixed-price licenses, accepting as true the underlying facts in the defendants' proffer of proof; and that conclusion entitled the Government only to relief based on that finding and the proffered facts. Pp. 87-88.
2. Upon a finding of conspiracy in restraint of trade and a monopoly in a civil proceeding under the Sherman Act, the trial court has the duty to compel action by the conspirators that will, so far as practicable, cure the ill effects of the illegal conduct, and assure the public freedom from its continuance. P. 88.
3. The relief which the trial court may afford from violations of the Sherman Act is not limited to prohibition of the proven means by which the evil was accomplished, but may range broadly through practices connected with acts actually found to be illegal; even acts which may be entirely proper when viewed alone may be prohibited. Pp. 88-89.
4. Participants in a conspiracy in violation of the Sherman Act should, so far as practicable, be denied future benefits from their forbidden conduct. P. 89.
5. While the determination of the scope of a decree in a Sherman Act case is peculiarly the responsibility of the trial court, this Court may intervene when there are inappropriate provisions in the decree. P. 89.
6. In resolving doubts as to the desirability of including in an antitrust decree provisions designed to restore future freedom of trade, the courts should give weight to the fact of conviction as well as to the circumstances under which the illegal acts occur. Acts in disregard of law call for repression by sterner measures than where the conduct could reasonably have been thought permissible. Pp. 89-90.
(a) The decree's definition of gypsum board is too restrictive, and the words "and embodying any of the inventions or improvements set forth and claimed in any of the Patents" should be stricken, if the definition is used. P. 90.
(b) Although the complaint of Sherman Act violation was restricted to the eastern territory of the United States and the evidence applied only to that area, the close similarity between interstate commerce violations of the Sherman Act in eastern territory [340 U.S. 76, 78] and western territory justifies the enlargement of the geographical scope of the decree to include all interstate commerce. P. 90.
(c) The decree should be extended to include all gypsum products instead of patented gypsum board alone. Pp. 90-91.
(d) The decree should forbid standardization of trade practices through concerted agreement. P. 91.
(e) The decree should forbid concerted use of delivered price systems; but, in order to avoid any possibility that an individual's meeting of competitors' prices may be construed as a contempt of the decree, the proposed provision relative to delivered price systems should read as follows: "5. Agreeing upon any plan of selling or quoting gypsum products at prices calculated or determined pursuant to a delivered price plan which results in identical prices or price quotations at given points of sales or quotation by defendants using such plan;". Pp. 91-92.
(f) In this case there should be no requirement of reciprocal grants under patents; but the United States Gypsum Company should be required to license all its patents in the gypsum products field to all applicants on equal terms. Pp. 93-94.
(g) Whether the term for compulsory licensing of new patents should be five years, or a longer period with a privilege to the appellees to move for a limitation, is in the discretion of the District Court, which should provide for its determination of a reasonable royalty either in each instance of failure to agree or by an approved form or by any other plan in its discretion. P. 94.
(h) The decree should not place upon the United States Gypsum Company the burden of establishing the reasonableness of the requested royalty; and this Court does not now decide where the burden of proof of value lies or who has the duty to go forward with the evidence in any particular instance. P. 94.
(i) The Government's proposed provision that the decree shall not be taken as preventing an "applicant" (here construed as meaning licensee) attacking the patent or as importing value to it should be omitted, leaving the parties to existing rules of law. P. 94.
(j) The Government's suggested provisions for inspection of licensees' books and reports to licensor are approved. P. 95.
(l) The provisions of Article V of the decree are adequate to bar the individual defendants, who signed the questioned agreements in their capacities as officials of the companies, from engaging in similar conspiracies. P. 95.
(m) This Court sees no reason to interfere with the discretion of the District Court in assessing the defendant companies 50%, rather than 100%, of the costs to be taxed in the proceeding. P. 95.
From a decree of a three-judge District Court enjoining violations of the Sherman Act, the United States appealed directly to this Court. Article III of the decree, finding that the defendants had violated the Sherman Act, was affirmed by this Court. 339 U.S. 960 . The issues left for determination were those raised by the United States upon objections to provisions of the decree. Reversed and remanded, p. 95.
Charles H. Weston argued the cause for the United States. With him on the brief were Solicitor General Perlman, Assistant Attorney General Bergson, Edward Knuff and Robert L. Stern.
Bruce Bromley argued the cause for the United States Gypsum Co. et al., appellees. With him on the brief were Cranston Spray, Albert R. Connelly and Hugh Lynch, Jr.
Norman A. Miller argued the cause for Certain-Teed Products Corporation, appellee. With him on the brief were Donald N. Clausen, Herbert W. Hirsh and Charlton Ogburn.
Andrew J. Dallstream, Walter G. Moyle, Ralph P. Wanlass and Albert E. Hallett submitted on brief for the Celotex Corporation, appellee.
This proceeding was filed in 1940 in the District Court of the United States for the District of Columbia by the United States under the authority of the Attorney General. 15 U.S.C. 4. The complaint charged, § 44, a long-continued conspiracy by defendants in restraint of trade in gypsum products among the several states and in the District of Columbia, and a similar monopoly, all in violation of 1, 2 and 3 of the Sherman Antitrust Act, 26 Stat. 209, as amended, 15 U.S.C. 1, 2, 3. The defendants, appellees here, were United States Gypsum Co., patentee, and various other gypsum board manufacturers, its licensees, and certain of their officers. It was alleged that the combination carried out its unlawful purposes as indicated in the excerpt from the complaint quoted below. 1 Civil relief, through prohibitory and mandatory orders, was prayed in various appropriate forms. After the United States concluded its evidence in chief at the trial, a three-judge District Court, 15 U.S.C. 28, granted appellees' motion to dismiss under Rule 41 (b) of the Federal Rules of Civil Procedure [340 U.S. 76, 81] on the ground that no right to relief had been shown. On direct appeal, 15 U.S.C. 29, we reversed the judgment of dismissal, March 8, 1948, United States v. United States Gypsum Co., 333 U.S. 364 , and remanded the case to the District Court for further proceedings in conformity with our opinion.
On remand a conference took place at the Government's suggestion. The Court acted under procedure similar to pretrial, Rule 16, and its inherent power to direct a case so as to aid in its disposition. As a result of that conference, without objection from any party, the Government filed a motion for a summary judgment under Rule 56 on the ground that there was no genuine issue as to any material fact, and the appellees filed an offer of proof, directed at matters as to which appellees were of the opinion a genuine issue existed. A summary judgment, without other findings than those contained in the decree, was entered November 7, 1949, on appellant's motion. 2 Both [340 U.S. 76, 82] plaintiff and defendants took direct appeals from the decree to this Court. 15 U.S.C. 29. Defendants' appeal objected to summary judgment on the ground of their right to introduce material evidence. That appeal was dismissed by this Court. 339 U.S. 959 . The reasons for our action lay in the fact that our holding in our first opinion, 333 U.S. 364 , justified a summary judgment for plaintiff on the issue of the violation of the Sherman Act when the record was considered in the light of our opinion and defendants' offer of proof on the remand. This point is discussed later in this opinion under subdivision I.
Probable jurisdiction was noted on the appeal of the United States. This is the case we are now discussing. For the same reasons that we dismissed defendants' appeal this Court affirmed Article III of the District Court decree. Our order also carried the sanction of an injunction against violation of the decree, "pending further order of this Court." 339 U.S. 960 .
"the industry-wide license agreements, entered into with knowledge on the part of licensor and licensees of the adherence of others, with the control over prices and methods of distribution through the agreements and the bulletins, were sufficient to establish a prima facie case of conspiracy."
We said that the intention of United States Gypsum and its licensees to act in concert to attain the purpose of the conspiracy, restraint of trade and monopoly, was apparent from the face of the license agreements. Pp. 389, 400.
"The licensor was to fix minimum prices binding both on itself and its licensees; the royalty was to be measured by a percentage of the value of all gypsum products, patented or unpatented; the license could not be transferred without the licensor's consent; the licensee opened its books of accounts to the licensor; the licensee was protected against competition with more favorable licenses and there was a cancellation clause for failure to live up to the arrangements."
"We are thus called upon to make an adjustment between the lawful restraint on trade of the patent monopoly and the illegal restraint prohibited broadly by the Sherman Act. That adjustment has already reached the point, as the precedents now stand, that a patentee may validly license a competitor to make and vend with a price limitation under the General Electric case and that the grant of patent rights is the limit of freedom from competition . . . ." P. 310.
As appears from the preliminary statement of its decree, the trial court acted on that understanding of our holding. [340 U.S. 76, 85] See Appendix, post, p. 96. It was not necessary to reach the issue as to whether a mere plurality of licenses, each containing a price-fixing provision, violates the Sherman Act. It is not necessary now.
The reference, 333 U.S. at 389, to the establishment of a prima facie case of conspiracy by conscious industry concert in price fixing was directed at the basis for the admission of the separate declarations of alleged conspirators. Section V, pp. 399-402, of the opinion, however, contains our determination that an industry's concerted price fixing by license violates the Sherman Act per se. United States v. Paramount Pictures, 334 U.S. 131, 143 .
A summary judgment, under Rule 56, was permissible on remand. It was allowed, as the last paragraph of the preliminary statement of the decree shows, on the court's understanding that our opinion "held that the defendants acted in concert to restrain trade and commerce in the gypsum board industry and monopolized said trade and commerce among the several states in that section hereinafter referred to as the eastern territory of the United States . . . ." As heretofore explained, that conclusion followed from our decision, if no evidence that controverted our ruling was offered. It is therefore necessary to examine briefly the offer of evidence.
We agree with a statement made by counsel for the Government in argument below that as a "matter of [340 U.S. 76, 88] formulating the decree" many facts offered to be proven would have effect upon the conclusion of a court as to the decree's terms. However, we read the preliminary statement of the District Court to the decree and the summary decree itself as an adjudication of violation of the Sherman Act by the action in concert of the defendants through the fixed-price licenses, accepting as true the underlying facts in defendants' proof by proffer. The trial judges understood the summary judgment to be, as Judge Stephens said, "limited to that one undisputed question." Judge Garrett and Judge Jackson agreed. 8 That conclusion entitled the Government only to relief based on that finding and the proffered facts. On that basis we dismissed United States Gypsum's appeal from the decree, and on that basis we examine the Government's objection to the decree.
The Government's proposed amendments to the decree. - A trial court upon a finding of a conspiracy in restraint of trade and a monopoly has the duty to compel action by the conspirators that will, so far as practicable, cure the ill effects of the illegal conduct, and assure the public freedom from its continuance. Such action is not limited to prohibition of the proven means by which the [340 U.S. 76, 89] evil was accomplished, but may range broadly through practices connected with acts actually found to be illegal. 9 Acts entirely proper when viewed alone may be prohibited. 10 The conspirators should, so far as practicable, be denied future benefits from their forbidden conduct.
The determination of the scope of the decree to accomplish its purpose is peculiarly the responsibility of the trial court. Its opportunity to know the record and to appraise the need for prohibitions or affirmative actions normally exceeds that of any reviewing court. This has been repeatedly recognized by us. 11 Notwithstanding our adherence to trial court responsibility in the molding of a decree as the wisest practice and the most productive of good results, we have never treated that power as one of discretion, subject only to reversal for gross abuse. Rather we have felt an obligation to intervene in this most significant phase of the case when we concluded there were inappropriate provisions in the decree. 12 In resolving doubts as to the desirability of including provisions designed to restore future freedom of trade, courts should give weight to the fact of conviction as well as the circumstances under which the illegal acts occur. 13 Acts in disregard of law call for repression by sterner measures than where the steps could reasonably have been thought [340 U.S. 76, 90] permissible. We turn then to the Government's proposals for modification of the decree on the assumption that only a violation through concerted industry license agreements has been proven, but recognizing, as is conceded by defendants, that relief, to be effective, must go beyond the narrow limits of the proven violation.
(a) There is one change acceptable to the Government and United States Gypsum and which we think desirable. Article II, 3, of the decree defines gypsum board as "made from gypsum and embodying any of the inventions or improvements set forth and claimed in any of the Patents." This is too restrictive, and the words "and embodying any of the inventions or improvements set forth and claimed in any of the Patents" should be stricken, if the definition is used.
(c) The Government asks an extension of the decree to include all gypsum products instead of patented gypsum board alone. Compare Appendix, Article V. The license agreements, as indicated above, required royalties on unpatented open edge gypsum board. Board Survey, the organization created to enforce the license agreements, found possibilities of price evasion to exist by a licensee's [340 U.S. 76, 91] cutting prevailing prices on other commodities, sold in conjunction with patented gypsum board. Bulletins, issued to standardize sale practices, criticized rebates as violative of the license agreements. 333 U.S. 364, 386 . Defendants' offer of proof did not deny such effort to systematize sales. Their explanation was that the efforts were to enforce legitimate license agreements and were not calculated steps in conspiracy or monopoly. We think the Government's request that the decree's injunctions reach gypsum products, as defined in its proposed decree, is reasonable and should be allowed. See U.S. proposed decree, Article II, 4, and Article V.
(d) The Government asks that the decree forbid standardization of trade practices through concerted agreement. Our former Gypsum opinion, pp. 382-383, gives a summary of the methods adopted. Another method of regulating sales was by special provision for certain classes of customers, jobbers and manufacturing distributors. See 333 U.S. at 397 and 399, n. 18. We think this would justify the Government's requests. Article V, 3, 4 and 6.
(e) The Government asks the insertion of Article V, 5, directed at an agreement for concerted action in selling or quoting products at prices calculated according to a delivered price system. It points out that such a system was said by this Court, 333 U.S. at 382, to have been employed, and no proffer of contrary proof has been made.
"The only witness at the trial who was interrogated about it said that the pricing system in the gypsum board industry was the very opposite of the basing point system; that the mill base prices were extended to all mills; and that it was really only a freight [340 U.S. 76, 92] equalization method of pricing which resulted in the customer always getting the lowest possible price no matter from whom he bought."
"It was not established by the license bulletins, but licensor, in stating the minimum price, merely used the method of pricing as it then existed."
"If appellee companies are to be questioned as to their method of pricing, they should be afforded a full hearing for the presentation of all pertinent matters bearing upon their pricing practices and should not be called upon to defend themselves in a summary hearing for an alleged contempt of court."
(f) The Government objects to Article VI of the decree which provides, 1, for compulsory licensing for 90 days to any applicant of all then-owned patents relating to gypsum board at not to exceed the standardized royalties as theretofore charged to defendant licensees. The objection is that the limited time makes the requirement futile except for present licensees. There is a corollary objection to Article VIII because of provisions in the approved license agreements. Particular reference is made by the Government to an approved provision requiring the licensee to report its monthly sales and price with right to Gypsum to have an inspection by a certified public accountant approved by the parties. The Government fears the competitive advantage to Gypsum of knowing its competitors' sales and prices, and the depressive effect of such information on a strenuous sales program by the licensee.
The Government suggests expanding the requirement of licensing to include all United States Gypsum patents, old and new, with a provision by which new patents may be excluded after five years. See proposed decree, Article VI, 6. Other proposed changes require all licensees to receive equal treatment as to royalties, put the burden of establishing royalty values on United States Gypsum and allow a licensee to attack the validity of patents.
In United States v. National Lead Co., 332 U.S. 319, 335 -351, we recently dealt with problems of licenses and royalties after a finding of Sherman Act violation. The arrangements on account of which the companies manufacturing titanium pigments in that combination were adjudged violators were as offensive to the prohibitions of the Sherman Act as those proven in the present case. Depending largely upon the discretion of the trial court, we refused to modify the decree. It ordered the accused patent owners to license all patents controlled by them concerning titanium and titanium manufactures during [340 U.S. 76, 94] the succeeding five years at a reasonable royalty to be fixed by the Court. Paragraphs 4 and 7 of that decree, 332 U.S. at 335-337.
The terms of the National Lead decree are somewhat like those the Government asks here. In the present case there should be no requirement of reciprocal grants. 332 U.S. 336 .
We think that the United States Gypsum Company should be required to license all its patents in the gypsum products field to all applicants on equal terms. Whether the term for compulsory licensing of new patents is to be five years, or for a longer period with the privilege to the appellees to move for a limitation for such new patents, as provided in the suggested decree, Article VI, 6, we leave to the District Court. That court should provide for its determination of a reasonable royalty either in each instance of failure to agree or by an approved form or by any other plan in its discretion.
We approve the Government's suggested provisions for inspection of licensees' books and reports to licensor, substantially as set out in proposed Article VI, 2 (c).
(g) The Government seeks access to the records and personnel of the defendants for the purpose of advising itself as to the defendants' compliance with the judgment. See proposed Article VIII. Construing the article as we did in United States v. Bausch & Lomb Co., 321 U.S. 707, 725 , n. 6, we think the request reasonable. This article, or one of similar import, should be included in the decree.
(h) We have noted the Government's contentions in regard to the individual defendants, Avery, Knode, Baker, Ebsary and Tomkins, and its suggestion that Article III be modified so as to read "defendants" in the first line, instead of "defendant companies." It is true that these individuals signed the questioned agreements, but they were acting as officials and we think the provisions of Article V bar them from engaging in similar conspiracies.
"With these general suggestions, the details and form of the injunction can be more satisfactorily determined by the District Court." 16 Its procedure for the settlement of a decree is more flexible than ours. The decree is reversed and the cause remanded to the District Court for further proceedings in conformity with this opinion.
MR. JUSTICE BLACK believes that all the amendments proposed by the Government to Article VI of the decree [340 U.S. 76, 96] are necessary to protect the public from a continuation of monopolistic practices by United States Gypsum.
This cause came on for trial before this Court on November 15, 1943. At the conclusion of plaintiff's presentation of the case, defendants moved, pursuant to Rule 41 (b) of the Federal Rules of Civil Procedure, for judgment dismissing the complaint on its merits. The motion of defendants was granted August 6, 1946. The judgment so rendered by this Court was reversed by the Supreme Court of the United States, and the case was remanded to this Court for further proceedings in conformity with the opinion of the Supreme Court ( 333 U.S. 364 ).
In due course, the Court heard arguments respecting the proposed decrees and the suggested findings of fact, and full consideration has been given thereto and to all prior proceedings - all being considered in the light of the decision of the Supreme Court which, as understood by the majority of this Court, held that the defendants acted in concert to restrain trade and commerce in the gypsum board industry and monopolized said trade and commerce among the several states in that section hereinafter referred to as the eastern territory of the United States, which section embraces all the states of the United States westward from the eastern coast thereof to the Rocky Mountains and including New Mexico, Colorado, Wyoming, and the eastern half of Montana.
PROVISIONS OF PROVISIONS OF UNITED STATES' PROPOSED DISTRICT COURT DECREE. DECREE.
This Court has jurisdiction of This Court has jurisdiction of the subject matter hereof and of the subject matter hereof and the parties hereto. The complaint of the parties hereto. The complaint states a cause of action states a cause of action against defendants under the Act against defendants under the Act of Congress of July 2, 1890, entitled of Congress of July 2, 1890, entitled "An Act to Protect Trade "An Act to Protect Trade and Commerce Against Unlawful and Commerce Against Unlawful Restraints and Monopolies", Restraints and Monopolies," commonly known as the Sherman commonly known as the Sherman [340 U.S. 76, 98] Anti-trust Act, and acts Antitrust Act, and acts amendatory thereof and supplemental amendatory thereof and supplemental thereto, thereto.
1. "Defendant companies" 1. "Defendant companies" shall mean all of the corporate shall mean all of the corporate defendants and Samuel M. defendants and Samuel M. Gloyd, doing business under the Gloyd, doing business under the name of Texas Cement Plaster name of Texas Cement Plaster Company. Company.
The defendant companies have The defendants have acted in acted in concert in restraint of concert in restraint of trade and trade and commerce among the commerce among the several several states in the eastern states in the eastern territory of territory of the United States to the United States to fix, maintain [340 U.S. 76, 99] fix, maintain and control the and control the prices of prices of gypsum board and have gypsum board and have monopolized monopolized trade and commerce trade and commerce in the in the gypsum board industry in gypsum board industry in violation violation of sections 1 and 2 of of Sections 1 and 2 of the the Sherman Antitrust Act. Sherman Antitrust Act.
Each of the license agreements Each of the license agreements listed in Article II hereof is listed in Article II hereof is adjudged unlawful under the antitrust adjudged unlawful under the antitrust laws of the United States laws of the United States and illegal, null and void. and illegal, null and void.
6. Policing, investigating, checking or inquiring into the prices, quantities, terms or conditions of any offer to sell or sale of gypsum products.
Article VIII 2. Defendant United States Gypsum Company is hereby enjoined The forms of license agreement from including any restriction which the Court has this day ordered or condition whatsoever in filed herein are hereby approved; any license or sublicense granted and the tender by defendant by it pursuant to the provisions United States Gypsum of this article except that (a) the Company to each applicant for license may be nontransferable; a license agreement containing (b) a reasonable non-discriminatory the terms and conditions set forth royalty may be charged, in the applicable filed form or which royalty may not be imposed forms shall constitute compliance upon or measured by patent-free by defendant United States products, processes or Gypsum Company with the provisions uses; (c) reasonable provisions of Article VI. may be made for periodic inspection of the books and records of the licensee by an independent auditor or any person acceptable to the licensee, who shall report to the licensor only the amount of the royalty due and payable; (d) reasonable provision may be made for cancellation of the license upon failure of the licensee to pay the royalty or to permit the inspection of its books and records as hereinabove provided; (e) the license must provide that the licensee may cancel the license at any time after one year from the initial date thereof by giving 30 days' notice in writing to the licensor.
3. Upon receipt of written request for a license under the provisions of this article, defendant United States Gypsum Company shall advise the applicant in writing of the royalty which it deems reasonable for the patent or patents to which the request pertains. If the parties are unable to agree upon a reasonable royalty within 60 days from the date such request for a license was received by United States Gypsum Company, the applicant therefor may forthwith apply to this Court for the determination of a reasonable royalty, and United [340 U.S. 76, 102] States Gypsum Company shall, upon receipt of notice of the filing of such application, promptly give notice thereof to the Attorney General, who shall have the right to be heard thereon. In such proceeding, the burden of proof shall be on United States Gypsum Company to establish the reasonableness of the royalty requested by it, and the reasonable royalty rates, if any, determined by the Court shall apply to the applicant and all other licensees under the same patent or patents. Pending the completion of any such proceeding the applicant shall have the right to make, use and vend under the patents to which his application pertains without payment of royalty or other compensation except as provided in paragraph 4 of this article.
4. Where an application has been made to this Court for the determination of a reasonable royalty under paragraph 3 of this article, United States Gypsum Company may apply to the Court to fix an interim royalty rate pending final determination of what constitutes a reasonable royalty. If the Court fixes such interim royalty rate, United States Gypsum Company shall then issue and the applicant shall accept a license, or, as the case may be, a sublicense, providing for the periodic payment of royalties at such interim rate from the date of the filing of such application by the applicant. If the applicant fails to accept such license or fails to pay the interim royalty in accordance therewith, such action shall be grounds for the dismissal of his application. Where an interim license or sublicense has been issued pursuant to this paragraph, reasonable [340 U.S. 76, 103] royalty rates, if any, as finally determined by the Court shall be retroactive for the applicant and for all other licensees under the same patent or patents whose licenses provide for a higher royalty rate to a date to be fixed by the Court.
5. This judgment shall not be construed (a) as preventing any applicant from attacking, in this proceeding or in any other proceeding, the validity or scope of any patent of defendant United States Gypsum Company, or (b) as importing any validity or value to any such patent.
6. At any time after five years from the effective date of this judgment defendant United States Gypsum Company may apply to this Court, after notice to the Attorney General, for an order limiting the application of paragraph 1 of this Article to patents coming under the ownership or control of the United States Gypsum Company prior to the date of such application; and the Court, upon a showing by United States Gypsum Company that the effects of defendants' combination have been dissipated and that competitive conditions in the gypsum board industry have been restored, shall grant said application and enter an order modifying paragraph 1 of Article VI of this judgment.
Nothing contained in this decree Nothing contained in this shall be deemed to have any judgment shall be deemed to have effect upon the operations or any effect upon the operations or activities of said defendants which activities of the defendants which are authorized or permitted by are authorized or permitted by the Act of Congress of April 10, the Act of Congress of April 10, 1918, commonly called the 1918, commonly called the Webb-Pomerene Act, or the Act of Webb-Pomerene Act, or the Act of Congress of August 17, 1937, Congress of August 17, 1937, commonly called the Miller-Tydings commonly called the Miller-Tydings [340 U.S. 76, 104] Act, or by any present or Act, or by any present future act of Congress or amendment or future act of Congress or thereto; provided, however, amendment thereto; provided, nothing contained in this however, nothing contained in article shall in any manner affect this article shall in any manner the provisions of Article VI of affect the provisions of Article this decree. VI of this judgment.
Jurisdiction of this cause, and Jurisdiction of this cause, and of the parties hereto, is retained of the parties hereto, is retained by the Court for the purpose of by the Court for the purpose of enabling any of the parties to enabling any of the parties to this decree, or any other person, this judgment, or any other person, firm or corporation that may firm or corporation that may hereafter become bound thereby hereafter become bound thereby in whole or in part, to apply to in whole or in part, to apply to this Court at any time for such this Court at any time for such orders, modifications, vacations orders, modifications, vacations or directions as may be necessary or directions as may be necessary or appropriate (1) for the or appropriate (1) for the construction or carrying out of this construction or carrying out of this decree, and (2) for the enforcement judgment, and (2) for the enforcement of compliance therewith. of compliance therewith and the punishment of violations thereof.
"(e) concertedly inducing and coercing manufacturing distributors to resell, at the prices raised and fixed by said companies as aforesaid, gypsum board purchased from said companies."
[ Footnote 2 ] The pertinent portions of the decree as entered below are set out in an appendix to this opinion (post, p. 96) in parallel columns with portions of the decree proposed by the Government in its brief here. This proposal is more limited than the Government's proposed decree offered in the District Court.
[ Footnote 3 ] Exhibit A and paragraph 4 referred to on p. 410 contain the licenses involved in this litigation.
[ Footnote 4 ] The dissenters in Line joined in the United States Gypsum opinion, since the concerted action in the United States Gypsum case was thought to violate the Sherman Act, despite their view that the mere multiplication of licenses, as in Line, "produces a repetition of the same issue [as in General Electric] rather than a different issue." 333 U.S. at 354.
[ Footnote 5 ] Gypsum's petition for rehearing sought a modification of this position. It argued that "separate but similar lawful agreements [340 U.S. 76, 85] must still be lawful if the result is lawful and no preliminary agreements or understandings to make them could be unlawful." We denied rehearing. 333 U.S. at 869.
[ Footnote 6 ] E. g., "1. There was no agreement or understanding between the United States Gypsum Company (USG), patentee, and the other defendants or any of them that they would associate themselves in a plan to blanket the industry under patent licenses and stabilize prices or issue or cause to be issued substantially identical licenses to all of the defendants or any number of them."
[ Footnote 7 ] One of the defendants, Celotex Corporation, made a separate proffer of proof, indicating that it was the purchaser of a license from a licensee, American Gypsum Company. In the transfer, Celotex assumed the licensee's obligations to maintain the licensor's price. As Celotex took no other part in the conspiracy, it contends that the decree should not impose upon it any further restriction than a prohibition [340 U.S. 76, 88] against price maintenance. Since Celotex entered into the conspiracy by its purchase of the license with an agreement to operate in accordance with its terms, we think it should be treated in the decree like the other licensees.
[ Footnote 8 ] At the hearing on proper terms for the decree Judge Garrett said, "Judge Jackson and I thought that, within the limits of the decision of the Supreme Court, that decree should of course be granted and that nothing that was given us in the proffer of proof would change the attitude of the Supreme Court within the scope of those matters upon which it had specifically passed.
"Now, that was the summary judgment."
[ Footnote 9 ] Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 461 ; Hartford-Empire Co. v. United States, 323 U.S. 386, 409 ; International Salt Co. v. United States, 332 U.S. 392, 401 .
[ Footnote 10 ] United States v. Bausch & Lomb Co., 321 U.S. 707, 724 .
[ Footnote 11 ] Associated Press v. United States, 326 U.S. 1, 22 ; cf. International Salt Co. v. United States, 332 U.S. 392, 399 -401. And see United States v. Crescent Amusement Co., 323 U.S. 173, 185 .
[ Footnote 12 ] Standard Oil Co. v. United States, 221 U.S. 1, 78 -82; United States v. American Tobacco Co., 221 U.S. 106, 184 -188; United States v. Crescent Amusement Co., 323 U.S. 173, 185 -187; note especially Hartford-Empire Co. v. United States, 323 U.S. 386, 409 -435.
[ Footnote 13 ] Local 167, I. B. T. v. United States, 291 U.S. 293, 299 ; Hartford-Empire Co. v. United States, 323 U.S. 386, 409 .
[ Footnote 14 ] See our discussion in Federal Trade Comm'n v. Cement Institute, 333 U.S. 683, 727 -728.
[ Footnote 15 ] Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173 ; Edward Katzinger Co. v. Chicago Metallic Mfg Co., 329 U.S. 394 ; MacGregor v. Westinghouse Electric & Mfg. Co., 329 U.S. 402 ; and cf. Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249 .

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