Court Opinion

ID: 9454275
Source: CourtListenerOpinion
Date Created: 2023-08-04 18:41:56.237632+00
Date Added: 2024-06-11T17:34:03.220255
License: Public Domain

*172TIMBERS, District Judge
(dissenting):
I dissent.
It is quite true that a distinction has been drawn limiting the right to bring actions under the antitrust laws to those who have been directly, as opposed to indirectly, injured by anticompetitive activity. But Productive Inventions, Inc. v. Trico Products Corp., 224 F.2d 678 (2 Cir. 1955), cert. denied, 350 U.S. 936 (1956), recognized that no hard and fast rule could be laid down, and the decision was specifically limited to the facts there presented. Furthermore, the very validity of Productive Inventions has been cast in some doubt by comments of the Supreme Court in such cases as Radiant Burners, Inc. v. Peoples Gas Light & Coke Co., 364 U.S. 656, 660 (1961), and Radovich v. National Football League, 352 U.S. 445, 454 (1957). See Data Digests, Inc. v. Standard & Poor’s Corp., 43 F.R.D. 386 (S.D.N.Y.1967) (Weinfeld, J.).
With this in mind, I think a viable distinction exists between the facts as stated by this Court in Productive Inventions and the facts here.
In Productive Inventions the relevant market apparently was assumed to be windshield wipers and their components. Trieo’s participation in that market was by virtue of its own devices and patents ; while, by exerting monopoly power over appellant’s licensee, Trico might have eliminated appellant as a competing patent licensor, there is no indication that this was the thrust of appellant’s claim. Therefore, viewing appellant’s claim as simply one arising out of a possible loss of royalties, we concluded that Trico’s activity was not aimed at appellant and appellant could not maintain an action.
In the instant case, on the other hand, RCA alleges the relevant market and submarkets to be limited to Electrofax machines and paper, areas covered by its patents. Assuming as we must that these market definitions are correct and also assuming the validity of the patents, then SCM has much to gain from RCA by eliminating the other licensees. SCM’s position in the market rests on the use of RCA patents. By eliminating the licensees, SCM places itself in a position vis-á-vis RCA where it can make its own demands with respect to use of the patents. In fact, SCM did make such demands; and, despite Judge McLean’s conclusion that RCA did not succumb to these demands, RCA should not be precluded from seeking injunctive relief. The protection of the antitrust laws should not be withheld from a patentee where it is endeavoring to maintain a system of non-exclusive licensing. While it may be true that a misbehaving licensee such as SCM may be eliminated by the termination of the licensing agreement, the patentee should not be put to the choice of such termination or the alternative of assenting to the licensee’s demands. It is an untenable choice and one not in the public interest. See Dairy Foods, Inc. v. Dairy Maid Products Corp., 297 F.2d 805 (7 Cir. 1961).
All of the cases relied on in Productive Inventions were brought by unions, shareholders, creditors, directors, officers or landlords alleging antitrust violations against their employers, companies or tenants. In not one of these cases was it alleged that the anticompetitive action was taken with the specific aim of harming the plaintiffs. Indeed the defendants in these suits would have no reason to act against the plaintiffs.
The cases after Productive Inventions which . have cited it with approval have been of a similar nature. All have involved antitrust activity which, while perhaps resulting in real injury to the plaintiffs, was not carried on for the purpose of injuring them. See, e.g., Bookout v. Schine Chain Theatres, Inc., 253 F.2d 292 (2 Cir. 1958).
SCM asserts that RCA is at best a supplier to its licensees of immunity from patent infringement suits which might be brought by itself, and then cites Productive Inventions, Inc. v. Trico Products Corp., supra, Volasco Products Co. v. Lloyd A. Fry Roofing Co., 308 F.*1732d 383, 393-95 (6 Cir. 1962), cert. denied, 372 U.S. 907 (1963), and Snow Crest Beverages, Inc. v. Recipe Foods, Inc., 147 F.Supp. 907 (D.Mass.1956), for the proposition that suppliers cannot bring actions to recover for injuries sustained through antitrust activities against those they supply. But as with Productive Inventions, the suppliers in the latter two cases were not the intended victims of the anticompetitive activity of the defendants. If RCA is but a supplier, it is also the supplier to SCM, and it is for the purpose of altering their relationship, to the benefit of SCM and to the detriment of RCA, that SCM has acted to deter competition.
Therefore, to me the conclusion is inescapable that RCA suffered sufficient injury even prior to SCM’s termination of the licensing agreement and institution of the action to permit RCA to maintain its claim for injunctive relief.
I would also hold that Judge McLean erred in determining that RCA’s loss of royalties and its litigation expenses were not, as a matter of law, a result of SCM’s anticompetitive activities. Admittedly there are many problems in this respect, particularly the obvious desirability of not discouraging challenges to claimed patent rights where appropriate. See Walker Process Equipment, Inc. v. Food Machinery & Chemical Corp., 382 U.S. 172 (1965). Nevertheless, I fail to see why the termination of a licensing agreement and institution of a patent suit may not be part of an anti-competitive plan despite the seeming “cut - off - your - nose - to - spite - yourfaee” result upon which Judge McLean focused. For example, RCA in its brief points out that SCM has used the period since termination of the agreement, during which it has paid no royalties, further to eliminate and discourage other licensees. Therefore, where a party can show that such action was. part of a plan to monopolize, and not simply an assertion of claimed legal rights, that party should be entitled to recover whatever additional damages the antitrust laws provide over what the patent laws permit. I would therefore leave appellant to its proof on this issue.
For the reasons stated, I would reverse and remand for trial on RCA’s antitrust counterclaim in the pending patent suit.1

. Since the only issue on this appeal is the correctness of the District Court’s dismissal before trial of RCA’s second counterclaim, I recognize the anomaly of our ruling on that issue now that the trial of the rest of the case, absent the second counterclaim, has been concluded. N.Y.L.J., Oct. 9, 1968, p. 21, col. 1. For whatever reason, counsel proceeded with the trial while this appeal was pending. The majority opinion is addressed to the record as it stood when the appeal was argued on June 17, 1968, as likewise is this dissent.