Document: 340 U.S. 76 71 S.Ct. 160 95 L.Ed. 89 UNITED STATESv.UNITED STATES GYPSUM CO. et al. No. 30. Argued and Submitted Oct. 19, 1950. Decided Nov. 27, Motion to Amend Denied Jan. 2, 1951. See 909, 289. Where summary decree was an adjudication of violation the Sherman Anti-Trust Act by concerted action defendants through fixed-price patent licenses, accepting as true underlying facts in defendants' proof proffer, government entitled only relief based on that finding proffered facts. Act, §§ 1—4, 15 U.S.C.A. 1—4; Fed.Rules Civ.Proc. rule 56, 28 [Syllabus from Pages 77-79 intentionally omitted] Mr. Charles H. Weston, Washington, D.C., for appellant. Bruce Bromley, New York City, appellees United States Gypsum Co. Norman A. Miller, Chicago, Ill., appellee Certain-Teed Products Corp. Messrs. Andrew J. Dallstream, Walter G. Moyle, Ralph P. Wanlass, Albert E. Hallett, Celotex Elmer Finck, Buffalo, N.Y., Joseph S. Rippey, Rochester, David I. Johnston, Oklahoma Okl., National Justice REED delivered opinion Court. 1 This proceeding filed 1940 District Court Columbia under authority Attorney General. U.S.C. § 4, 4. The complaint charged, 44, a long-continued conspiracy restraint trade gypsum products among several states Columbia, similar monopoly, all 1, 2 3 26 Stat. 209, amended, 3, 1—3. defendants, here, were Co., patentee, various other board manufacturers, its licensees, certain their officers. It alleged combination carried out unlawful purposes indicated excerpt quoted below.1 Civil relief, prohibitory mandatory orders, prayed appropriate forms. After concluded evidence chief at trial, three-judge Court, 28, granted appellees' motion dismiss Rule 41(b) Federal Rules Procedure, U.S.C.A., ground no right had been shown. 67 F.Supp. 397. On direct appeal, 29, we reversed judgment dismissal March 8, 1948, v. 333 364, 68 525, 92 746, remanded case further proceedings conformity with our opinion. remand conference took place Government's suggestion. acted procedure pretrial, 16, inherent power so aid disposition. As result conference, without objection any party, Government 56 there genuine issue material fact, offer proof, directed matters which existed. A judgment, findings than those contained decree, entered November 7, 1949, appellant's motion.2 Both plaintiff appeals this 29. Defendants' appeal objected introduce evidence. That dismissed 339 959, 70 995. reasons lay fact holding first opinion, justified when record considered light remand. point is discussed later subdivision Probable jurisdiction noted States. are now discussing. For same affirmed Article III decree. Our order also sanction injunction against 'pending Court.' 960, 996. 4 issues left determination raised effort have provisions enlarged. seeks extend injunctions violations cover instead being limited defined decree; include clude interstate commerce generally limiting territorial scope eastern portion changes forbid specific practices, addition price fixing, such standardizing products, classifying customers, or adopting systems, pursuant principal conspiracy. compel licensing patents Gypsum; empower Department inspect records; decree's terms individual defendants; require pay costs. 5 Procedure remand.—In determining present issues, it necessary consider trial court's solution procedural problems presented reversal merits completion plaintiff's, States', presentation In 389, 539, said 'the industry-wide license agreements, into knowledge part licensor licensees adherence others, control over prices methods distribution agreements bulletins, sufficient establish prima facie conspiracy.' 6 We intention act concert attain purpose conspiracy, apparent face agreements. pages 400, 544, 'The fix minimum binding both itself licensees; royalty be measured percentage value patented unpatented; could not transferred licensor's consent; licensee opened books accounts licensor; protected competition more favorable licenses cancellation clause failure live up arrangements.' 7 stressed acting differentiating General Electric 272 476, 47 192, 362, 400 401 U.S., 544 545 S.Ct., established favored standard agreement. 410, 548, 746.3 Line Material 287, 550, 701, decided day case, then standing Eelctric follows: 'We thus called upon make adjustment between lawful monopoly illegal prohibited broadly Act. has already reached point, precedents stand, patentee may validly competitor vend limitation grant rights limit freedom * *.' page 310, 562, 701. 8 added, 311 312, 562 563, while permitted charge device, separate owners combine reach agreement themselves licensees. There mere multiple violated Act.4 language placed squarely basis 'it would show constituting former competitors entire industry, restrain industry organize stabilize prices.' 401, 545, 746.5 9 appears preliminary statement court understanding holding. Appendix, 96, 173. whether plurality each containing price-fixing provision, violates now. 10 reference, establishment conscious fixing admission declarations conspirators. Section V, 399—402, 543—545, however, contains industry's per se. Paramount Pictures, 334 131, 143, 915, 922, 1260. 11 Of course, they might why one them should found reference 402, footnote 20, Gulbenkian Gulbenkian, Cir., 147 F.2d 173, shows that. Deposit Ins. Mason, 115 552; Bowles Biberman Bros., 152 700, 705. Furthermore, even though substantial overcome conclusion violation, before pertinent decision example, action, reason making new available willingness applicants privilege. Such rights, did admit affect outcome proceedings. They progress way avoid waste time. 12 permissible allowed, last paragraph shows, 'held monopolized section hereinafter referred territory heretofore explained, followed decision, if controverted ruling offered. therefore examine briefly 13 sixty-two paragraphs proposed full exposition impracticable. Stress laid rebut plan prices.6 Evidence offered settlement infringements, character used subterfuge gain control. determination, set above, made knowing standardized requirements very existence. 14 Defendants prove royalties unpatented compensation installment payment prior infringement damages. added cost producing board. Proof covenants transfer maintenance equality terms, bulletin orders rebates selling cheaper articles sold, protect letters patent. activities Board Survey Company, secure compliance licenses; eliminate jobbers but maintain discontinuing jobber's discount. view legal prices. pass offers clearly immaterial liability violation. Good intentions, plans designed solely exploiting patents, defense admitted producer's devices. do think that, true, enough change actions permissible. manufacturers violate introduced below erroneous licenses.7 16 agree counsel argument 'matter formulating decree' many proven effect terms. However, read proffer. judges understood be, Judge Stephens said, 'limited undisputed question.' Garrett Jackson agreed.8 Gypsum's II. 17 amendments decree.—A duty conspirators will, far practicable, cure ill effects conduct, assure public continuance. prohibition means evil accomplished, range practices connected acts actually illegal.9 Acts entirely proper viewed alone prohibited.10 should, denied future benefits forbidden conduct. 18 accomplish peculiarly responsibility court. Its opportunity know appraise need prohibitions affirmative normally exceeds reviewing repeatedly recognized us.11 Notwithstanding molding wisest practice most productive good results, never treated dsicretion, subject gross abuse. Rather felt obligation intervene significant phase inappropriate decree.12 resolving doubts desirability including restore trade, courts give weight conviction well circumstances occur.13 disregard law call repression sterner measures where steps reasonably thought turn proposals modification assumption proven, recognizing, conceded effective, must go beyond narrow limits 19 (a) acceptable desirable. II, defines 'made embodying inventions improvements forth claimed Patents.' too restrictive, words 'and Patents' stricken, definition used. 20 (b) accepts objects V (2) (3) because, together, allow Pacific Coast restricted applied area. close similarity western seems justify enlargement geographical commerce. indicates extension accomplished. 21 (c) asks alone. Compare Art. V. required open edge Survey, organization created enforce possibilities evasion exist licensee's cutting prevailing commodities, sold conjunction Bulletins, issued standarize sale criticized violative 386, 537, 746. deny systematize sales. Their explanation efforts legitimate calculated monopoly. request reasonable allowed. 22 (d) standardization 382—383, 535, 536, gives adopted. Another method regulating sales special provision classes manufacturing distributors. 397 399, n. 18, 543 requests. 6. 23 (e) insertion 5, quoting according system. points system 382, employed, proffer contrary made. 24 argue product lowest mill rail freight destination.' urge witness who interrogated about pricing opposite basing system; base extended mills; really equalization resulted customer always getting possible matter whom he bought.' 25 And say 'It licensor, stating price, merely existed.' Further, 'If companies questioned pricing, afforded hearing bearing defend contempt court.' 27 unduly apprehensive. arrangements manufacturer adopt make.14 Since furthered arrangement, use banned future. To possibility individual's meeting competitors' construed '5. Agreeing determined results identical quotations given quotation using plan;' (f) VI provides, compulsory 90 days applicant then-owned relating exceed theretofore charged defendant time makes requirement futile except corollary VIII because approved Particular requiring report monthly inspection certified accountant parties. fears competitive advantage prices, depressive information strenuous program licensee. suggests expanding old new, excluded after five years. VI, Other receive equal treatment royalties, put burden establishing values attack validity patents. 29 Lead 332 319, 335—351, 1634, 1641—1649, 91 2077, recently dealt account titanium pigments adjudged violators offensive case. Depending largely discretion court, refused modify ordered accused controlled concerning manufactures during succeeding years fixed Paragraphs 335—337, 1641—1642, 2077. 30 somewhat like here. reciprocal grants. 336, 1642, 31 Company field Whether term years, longer period privilege move provided suggested 6, leave provide either instance form discretion. 32 disapprove suggestion reasonableness requested decide lies forward particular instance. 33 suggestion, shall taken preventing 'applicant' (we construe meaning licensee) attacking importing it. see occasion unusual omitted.15 34 modified conform above suggestions. 35 approve licensees' reports substantially 2(c). 36 (g) access records personnel advising judgment. VIII. Construing article Bausch & Lomb Optical 321 707, 725, 64 805, 814, 88 1024, reasonable. article, import, included 37 (h) contentions regard Avery, Knode, Baker, Ebsary Tomkins, 'defendants' line, 'defendant companies.' these individuals signed officials bar engaging conspiracies. 38 (i) costs taxed companies. IX, X, entered. interfere matter. 39 'With general suggestions, details can satisfactorily Court.'16 flexible ours. cause 40 Reversed. 41 BLACK believes continuation monopolistic Gypsum. 42 JACKSON CLARK consideration 43 APPENDIX. 44 Decree 1949. 45 Preliminary Statement. 46 came 15, 1943. At plaintiff's moved, dismissing merits. August 1946. rendered Supreme States, Following remand, plaintiff, moved favor pleadings or, alternative, direct, direction proffers proof. 48 Argument respective parties heard due Garrett, Jackson, J., majority announced granted, Stephens, presided his dissent ruling. 49 Thereafter submitted forms final decrees latter event deem additional originally stated 50 arguments respecting thereto which, held embraces westward coast thereof Rocky Mountains Mexico, Colorado, Wyoming, half Montana. '45. Said formed, out, (acting, part, officers directors herein) engaged manufacture products. into, carrying purpose, effect, restraining, dominating, controlling Eastern area by: '(a) Concertedly raising arbitrary noncompetitive levels manufactured area; '(b) concertedly production uniform methods, kinds board, eliminating arising variations distributed '(c) raising, maintaining, stabilizing level plaster miscellaneous '(d) refraining distributing plaster, area, refusing sell companies' dealers, '(e) inducing coercing distributors resell, aforesaid, purchased portions appendix parallel columns brief proposal Exhibit contain involved litigation. dissenters (333 583) joined since despite multiplication Line, 'produces repetition (as Electric) rather different issue.' 354, 583. petition rehearing sought position. argued 'separate still unlawful.' rehearing. 869, 788, 1147. E.g., '1. (USG), associate blanket number them.' One Corporation, indicating purchaser licensee, American Company. transfer, assumed obligations price. contends impose restriction maintenance. purchase operate accordance 'Judge I within course nothing us attitude specifically passed. 'Now, judgment.' Ethyl Gasoline 309 436, 461, 60 618, 627, 84 852; Hartford-Empire 323 409, 65 373, 385, 322; International Salt 392, 12, 17, 20. 724, 1024. Associated Press 326 22, 1416, 1425, 2013; cf. 399—401, Ct. 16—17, Crescent Amusement 185, 254, 260, 160. Standard Oil Jersey 221 78—82, 502, 523—524, 55 619; Tobacco 106, 184—188, 632, 650 651, 663; 185—187, 261, 160; note especially 409 435, 385—389, 322. Local 167, I.B.T. 291 293, 299, 54 396, 78 804; discussion Trade Comm'n Cement Institute, 683, 727—728, 793, 816, 1009. Sola Jefferson 317 63 172, 87 165; Edward Katzinger Chicago Metallic Mfg. 329 394, 416, 374; MacGregor Westinghouse 421, 424, 380; Scott Paper Marcalus 249, 66 101, 47. Warner Eli Lilly 265 526, 533, 615, 1161.

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