Document: 374 U.S. 174 83 S.Ct. 1773 10 L.Ed.2d 823 UNITED STATES, Appellant,v.The SINGER MANUFACTURING COMPANY. No. 438. Argued April 25 and 29, 1963. Decided June 17, Daniel M. Friedman, Washington, D.C., for appellant. Arthur E. Pettit, New York City, appellee. Mr. Justice CLARK delivered the opinion of Court. 1 This is a direct appeal from judgment United States District Court Southern York, 205 F.Supp. 394, dismissing civil antitrust action brought by against Singer Manufacturing Company to prevent restrain alleged violations §§ 2 Sherman Act, 15 U.S.C. 2. The complaint that combined conspired with two competitors, Gegauf Switzerland Vigorelli Italy, monopolize unilaterally attempted interstate foreign trade in importation, sale distribution household zigzag sewing machines. dismissed after an extended trial, concluding charges were without merit. appealed under § Expediting but has abandoned its claim as monopolization. We noted probable jurisdiction light fact unless we did so parties would be deprived any appellate review case. 371 918, 289, 9 228. have examined record (1,723 pages) detail, necessary these appeals,1 upon consideration it, well briefs argument counsel, concluded there was conspiracy exclude Japanese competitors machines must reversed. I. details facts are long complicated. amended corrected includes not only description involved their operation also analysis patents covering them. shall, therefore, relate detail satisfy ourselves overriding ones. 3 A. As stated, this 'concerns commerce arising importation into particular type machine known 'machine-carried multicam machine." F.Supp., at 396. stitch produces various ornamental functional stitches straight automatic machine, unlike manually operated replaceable cam each which requires hand manipulation or insertion, operates response turning knob dial on exterior machine. While here function slightly different ways, all variant same basic principle. 4 B. sole manufacturer In addition variety issue here, it zigzag. sells country through wholly owned subsidiary countries independent distributors. Singer's sales comprised approximately 61.4% domestic 1959. During year some 22.6% imported Japan about 16% Europe. 1958 percentage 69.6%, imports 20.7% European 9.7%. Further, 1959 1960 amounted $46 million per year, years such accounted 45% sales. 5 C. It appears 1953, experimental department, had completed design multiple mechanism what calls '401' disclosed Johnson Patent. 1953 developing Perla Patent used '306' 1954 '319' machine-carried September Vigorelli, Italian corporation, introduced incorporating stack cams single follower. file applications patent offices world infringe. On 10, 1955, bought $8,000 disclosing plurality follower Carl Harris, Canadian. believed patent, filed 9, 1952, might reissued claims 401 319 dominate one Brother International Corporation. Thereafter litigation result between cross-licensing agreement could made, effected November 1955. license nonexclusive, world-wide royalty free. trial court found purpose effect cross-licensing, certain correspondence does cast shadow negotiations.2 contained provisions agreed bring infringement other 'in country' institute opposition, nullity invalidation proceedings country. accordance withdrew opposition Vigorelli's application Brazil later (1958) interference cleared way December year. 6 D. negotiating cross-license learned Gegauf, Swiss mechanism. placed additional cloud over Harris reissue plan because enjoyed effective priority date Italy May 31, 1952. nine days earlier than filing States. 1955 entered similar Vigorelli-Singer agreement. January 1956 pending Office assumed based date, i.e., If true use oppose allowance broad Gegauf. therefore made preparation negotiate first approaching order ascertain how latter induced grant him royalty-free drop infringement. arrangements conference 12, 1956, 14, 1956. 7 setting meeting dominant Germany, prior Singer. addition, counsel Gegauf's advised valid. opened conversation indications coming concealing applications. felt secure his insecure reference inroads making market. 'lever' license, pointing out litigate protracted period; they should fighting delay respective patents; and, finally, get 'so enforced whoever own patent.' discussions worked fears competition 'because strong points' fight building reads Bernina (Gegauf) conflict.'3 judge 'disclosed very convince advisability entering agreement' 'obtain protection patent; sprang fear good reason believe founded.' 413. he founds 'underlying, * settle conflict right patent,' ibid., significant no been 8 covered (1) Singer-Harris corresponding ones, (2) Swiss, German patents, same. paragraph 'not do anything, either directly indirectly country, restrict scope party relating subject matter above mentioned applications.' 'each undertakes, laws regulations concerned, facilitate possible, regards referred above.' sue another basis make 'slavish' copy give 'the amical assistance attorneys defense cancellation.' mention aplications, existence wish know. Approximately week met Milan, latter's request. suggested Singer, having arrived agreements, act concert prosecuting others field. question, immediately replied, advising 'what appeared us proper prosecute take care cases appear.'4 subsequent conversations reported source follows: 'Upon learning joint three companies who field, dropped *. 11 'At point, perhaps Stanford I discussed whether say anything our feeling will issued sometime within next few months better if them, decided time. 12 'In talking lawyer, view him. point understood, question raised objection pass word raising point. said that, course, this, want suggestion time us. wanted suggest right. would, arrangement turn believes able before rewrite stronger now being States, Gegauf.' 13 testimony Stanford, attorney, varies somewhat memorandum Waterman, substantially same.5 That approach casually laid shown 7, letter Department employees said, 'When careful plans third best handle situation Think bear fruit. suggestion, attorney pressure direction.' 14 Majnoni 'opportunity Attorneys F. number occasions' concerning advantage American possession useful defence *.' He stated character question,' possibility assisgned Singer,' required 'such prompt initiative end hopeful accomplished. 19 Dr. S. Lando, representative 'is today effectively willing transfer regard little financial side matter.' about, Van Tuyl validity 'made informally withdrawing greatly appreciated, issuance printed wherein exists parties'; withdraw consequence 'drop means adapted protect U.S., quite sure general interest, patents.' summer Jr., sister attended convention Kansas City. returning home (Messrs. Waterman & Stanford) office expressed concern seen convention. again opportunity employ problem stressed difficulties enforcing States—namely, large importers, size judicial circuits, etc. emphasized presented problems owner patent. could, enforce could. They asked thought father interested selling Thereafter, 3, Jr. wrote taken up Sr., 'we agreement.' closing says: 'We agree something done your maybe South America looking forward early reply.' replied Germany 18 25; directed meet City authorization disclose content saved closed belief 'that may possible can both strengthen positions respect you set 23 demanded $250,000 negotiations broke off. Milan agent, October informing paragraph: 'I like information come attorney.' And 24 declared applications; provided settled States; 'since usually consuming costly involved, appear advantageous rather continue proceeding rely finally award priority'; together settling interference. March 15, 1957, verbatim claim. Nothing more toward securing until when anticipated several soon presumed granted. Then followed 16 pleasure last fall discussion relative procedures *, issued, infringing manufacturers primarily seeking markets throughout entire world. These bringing terms awarded aforementioned patents. A enforcement instigate suits importers whom many. think me neither alone himself most effectively.'6 Zurich 16, 1957. position found, 'while 'to stop far market,' conditions.' 416. Finally, $125,000 plus conditions declaring 'was cheap go lower since money licensed invention. Kirker (of Singer) comparison insurance common why pay.' Ibid. exchange 17 'advanced stopped run Europe; answered greater risk Europe permitted infringements continued drive point' stood benefit 'Brother Pacesetter' big Japanese-made free arm type.' 417. Finally assigned rights invention claimed granted $90,000. accompanying nonexclusive sell factory Switzerland; institute, consent legal asserting Pfaff manufactured factories; (3) 1958, Brother, largest importer sued distributors machines, those actions terminating decrees. 1959, eight Tariff Commission 337 Act 1930, s 1337. sought President excluding term naming infringers. tremendous volume zigzag, eliminated save itself small part-time concern. further increasing similarly threatened curtailment ultimate cessation manufacturing operations zigzags, heavy loss highly paid skilled labor capital investment. At filing, alleged, foreign-made 'primarily Japan,' extent 50% country; represented important product minimum price $300; infringers firm price, average $100 less often below figure; export $40 $54. 20 hearing negative became skeptical believing 'have chance prevailing Commission,' ask revise agreement, originally excepted proceedings, except condition Phoenix, party-defendant substituted. 21 Upon commencement stayed abeyance disposition II. 22 First helpful There Government illegal merely acquire competitors; lawfully acquired cannot licensee acccount, even dominates industry firm. Therefore, put matters aside discussion. What engaged series transactions purpose, rid together, perhaps, manufacturers. identity among pursuant thereto law amount combination violative Act. established findings note came notice introduction incorporated By importations reached 1,100,000, while 100,000. Moreover, business four appeared. remaining domentic company specializing customer. during licensing where meetings 'protection Japanese' 'one Here, though 'dominant priority,' specifically, opinion, 'secondary' connection finding court, namely, Under settlement purpose' Indeed, conflict. Furthermore 'as possible' indicates desire coverage stifle competition, overwhelming Japanese. accomplished, (Singer) interference, proceeding, thus facilitating Gegauf.7 26 assignment found: six proceeded held Vigorelli. events took place led acquisition proposal others' rejected representatives, meeting, however, proposed agreed, solicited help getting assign went 'acting agent,' 414, convinced sufficiently write favored idea doing 'against competition.' 'equally both.' (4) thereafter, 'their mutual interests themselves machines.' (5) happy discuss 'mutual enforcement' reissue. Then, (6) final conferences told market.' assured 'Singer competitors' (the Japanese) Europe, unfounded (7) determined '(t)he apparently home'—Gegauf ultimately $90,000, much original asking realize annually grant. beliefs inadequacy monetary founded, received twice two-year period incidentally, Sears, Roebuck Company, III. 27 undisputed support conclusion underlying, court's 'desire obtain Likewise reject, law, inference attitude suspicion, wariness self-preservation negated conspiracy. See v. Line Material Co., 333 287, 297, 68 550, 555, 92 L.Ed. 701 (1948); Masonite Corp., 316 265, 280—281, 62 1070, 1078—1079, 86 1461 (1942); General Electric 80 989, 997—998 (S.D.N.Y.1948). 28 'Gegauf knew,' acquisition, 'would certainly include principal infringers,' shared competition' establish 419. Given clear import record, apparent conclusions predicated 'an erroneous interpretation standard applied. *' Thus, '(b)ecause nature Court's error reviewing applied essentially facts.' Parke, Davis 362 44, 503, 512, 505 (1960). violation Act' 'merely limited complexes,' citing Bausch Lomb Optical 321 707, 64 805, 88 1024 (1944), Federal Trade Comm. Beech-Nut Packing 257 441, 42 150, 66 307 (1922). 'Both cases,' continued, 'teach inquiry search evidence purely contractual arrangements. Whether achieved tacit understanding, 'acquiescence coupled effectuating immaterial.' Lomb, supra, 723, 813. Here hands achieve both' well.8 refused acting others,' simple expedient transferring 29 Thus entwining program beyond protecting machine—it licensees time, umbrella. permit. Frey Son, Inc. Cudahy 256 208, 210, 41 451, 452, 65 892 (1921), arises implicitly course dealing parties, resulting obligation parties. contract stipulating, indicate purpose9 suppress secured assurances colicensee, result. supra. cannot, contend assure produce preceding likewise served consequence, controlling factor overall design, destroy placing concerted trade, clearly dealings, condemns 'whether unlawful proved judged actually words used.' 30 Moreover illustrated Commission. Less started effort bar sweep. action. When references success consented deletion maneuver giving "a Commission' efforts exclude' 427. tariff leveled allegations beamed attributed destruction itself. agreements knew, '(b)y Japanese.' 418. 31 strongly urged case significantly deleterious producer use, market increasingly preempted economic consequences warrant relaxation laws, policy committed congressional executive resolution. province courts, whose apply existing law. '(b)eyond monopoly granted, utilized law,' 277, 1077 equally valid patentee exemption limits monopoly. aggregating control, holder escape prohibitions Act.' 308, 561. imposes strict limitations activities owners engage, see Gypsum 364, 525, 746 supra; National Lead 63 513, aff'd, 332 319, 67 1634, 91 2077 (1947), exceeded 32 reversed remanded entry appropriate decree opinion. ordered. 33 Reversed remanded. 34 WHITE, concurring. 35 phases Government's here: one, market, other, collusive termination invalidity considerations notwithstanding. finds totality conduct, intimates views phase standing alone. Since, my view, branch sufficient relief, join footnote, 1, disagree. 36 Japanese, points out, competitor another; implicit undertaking behalf acquiring dominated aspect raises serious questions, future consideration. p. 189, 37 More settlement. 'Harris' reissue-patent Office; matter, enjoying nine-day date. 119. circumstances, least valuable claims. But them applicants declares 'interference.' adversary rival applicants, determining priority. can, drawing art attention require anyone, CFR 1.232, 1.237(a); cf. 101 102, manufacture matter. 154. approached feared self-defense draw unaware of, cause invalidated; 'let know knock probably going hurt us.' 38 providing attack another's 'directly indirectly,' applications, 'claims possible.' August agreement: interfering 1957 dissolved ever stage. 1.262. Eventually sold part case, 197. 39 unexceptionable—when unilateral involved. stake adversaries, dispute invalidity, art, consistent favoring litigation. present involves innocuous setting. part, open validity. public interest Mercoid Corp. Mid-Continent Inv. 320 661, 665, 268, 271, 376; 278, 1077, 1461, subordinated private ends—the granting monopolies progress arts science furthered given novel U.S.Const., Art. I, 8; 101; Statute Monopolies, Jac. c. 3. novelty parts return, imposed clause subverted. Bell Telephone 128 315, 357, 370, 90, 93, 98, 450; Katzinger Co. Chicago Metallic Mfg. 329 400—401, 416, 419—421, 374; Cuno Engineering Automatic Devices 314 84, 92, 37, 41, 58; Great Atlantic Pacific Tea Supermarket Equipment 340 147, 154—155, 71 127, 131—132, 95 162 (concurring opinion). Whatever duty Office's attention, 115; 1.65(a); Telephone, 356, collusion drawn inequitable imposition public. Precision Instrument Automotive Maintenance Machinery 324 806, 993, 89 1381; H.R.Rep.No.1983, 87th Cong., 2d Sess. (Rep. 1962 Pub.L. 87—831, 76 Stat. 958; U.S.Code Cong. Adm.News, 1961, 3286). runs afoul Act's conspiracies restraint trade*—if bad se, then presumptively bad. Compare Mitchel Reynolds, P.Wms. 181, 191—192, Eng.Rep. 347, 350 351. authorize, permit, rivals encroach domain usurp themselves. 40 HARLAN, dissenting. Although reverses ground premises, serve obscure majority really overturn fact. mere reading exhaustive show not, holds, fail recognize pursuit thwart violate Rather out. 43 predicate attributing following 'direct conflict' sees machines' (ante, 190). indeed slender reed position. For left understand deemed inconsistent. Obviously 'priority' solid comers particularly ability popular forefront seems 'dominant' purposes entirely consistent, supposed inconsistency rest nothing substantial play 'sole' finding. circumstance goes 'consistency' sufficiency 44 Nor episodes pp. 191 196) lend transparent reversal necessity grips case: fact—which accepted case—'clearly erroneous'? Again bits pieces called lengthy consistency findings. 45 invulnerable Rule 52(a) Rules Civil Procedure. members opposite sitting nisi prius justify 'clearly erroneous' rule. Yellow Cab 338 338, 341—342, 70 177, 179—180, 94 150. 46 conclusion, gratifying observe recognition requirement become anachronism modern work load Ante, 1; separate writer Brown Shoe 370 294, 364—365, 82 1502, 1542, 1546, 1547, 510. outcome Courts Appeals' 1). 47 affirm wisdom appeals enactment 1903, proven unsatisfactory. See, e.g., Gesell, Much Needed Reform—Repeal Antitrust Cases, 1961 N.Y. State Bar Ann. L.Sym. 98 (CCH). Direct great burden deprive Appeals. 'Unless due invalidate thing France procedure undoubtedly cancelling rate, severely limit hand, refrain instituting Brazilian develop dominating industry. hold trouble broaden theirs pooled Letter Lightner, President, W. P. Evans Corporation, Memorandum L. Vice 13, notes dictated 20, testified Majnoni, (which English participants spoke native tongue) speak English. 'about locked shortly; ahead afraid win sorry keep approaches 'go sky high'; knew 'frequent contacts him' offered 'didn't good; just bad.' let think,' added, 'it f interpreted mean 'if corporation it.' sent transmittal quoted phrased letter: 'You doubt aware recently many deal enforced. 'Your (sic) competing copies models.' Since dealings including establishes need contention interfrence apart circumstances here. Note, Geo.Wash.L.Rev. 643 (1963). arrangement, permit consequential indicated statistic furnished findings, noted, inconsistent respects. repeatedly described role parties' interests' achievement competition,' 419, Still, states characterized absence unity motive.' Insofar derived improper facts, 'inferences documents Procedure applicable.' 541, (1948). rule '(a) although definite conviction mistake committed.' Id., 395, 542. compels motivated contrary regarded erroneous. Portland Cement Food Mach. Chem. 178 F.2d 541 (C.A.9th Cir. 1949). already unenforceable. 'patent estoppel' favors exposure invalid courts effects. prevented attacking licensor's Sola Elec. Jefferson 317 173, 172, 87 165; Scott Paper Marcalus 326 249, 101, 90 47; MacGregor Westinghouse 402, 421, 380; 387—388, 538—539, 746. specific promise cooperate proceedings.

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