CHANROBLES VIRTUAL LAW LIBRARY
US LAWS, STATUTES and CODES : Chan Robles Virtual Law Library USA Supreme Court Decisions | Resolutions : Chan Robles Virtual Law Library

ChanRobles™ Virtual Law Library™ | chanrobles.com™   
Main Index Repository of Laws, Statutes and Codes Latest Philippine Supreme Court Decisions Chan Robles Virtual Law Library Latest Legal Updates Philippine Legal Resources Significant Philippine Legal Resources Worldwide Legal Resources Philippine Supreme Court Decisions United States Legal Resources United States Supreme Court Jurisprudence ChanRobles LawTube - Social Network

ChanRobles Internet Bar Review : www.chanroblesbar.com DebtKollect Company, Inc. - Debt Collection Firm Intellectual Property Division - Chan Robles Law Firm

Philippine Supreme Court DecisionsChanRobles On-Line Bar Review

google search for chanrobles.comSearch for www.chanrobles.com


ZENITH RADIO CORP. V. HAZELTINE RESEARCH, INC., 395 U. S. 100 (1969)

Subscribe to Cases that cite 395 U. S. 100 RSS feed for this section

U.S. Supreme Court

Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100 (1969)

Zenith Radio Corp. v. Hazeltine Research, Inc.

No. 49

Argued January 22, 1969

Decided May 19, 1969

395 U.S. 100

Syllabus

Upon the expiration in 1959 of petitioner, Zenith's, license agreement with Hazeltine Research, Inc. (HRI), which permitted Zenith to use all of HRI's so-called standard package license, Zenith refused to renew, asserting that it no longer required a license. HRI brought a patent infringement suit in November, 1959. Zenith's answer alleged invalidity of the patent, noninfringement, patent misuse by HRI, and HRI's unclean hands through conspiracy with foreign patent pools. In May, 1963, Zenith counterclaimed against HRI for treble damages and injunctive relief, alleging Sherman Act violations by misuse of HRI patents, including the one in suit, as well as by conspiracy among HRI, its parent Hazeltine Corp. (Hazeltine), and patent pools in Canada, England, and Australia. Zenith contended that the patent pools refused to license the foreign patents, including Hazeltine's, placed within their exclusive licensing authority, to Zenith and others seeking to export American-made radios and television sets into those foreign markets. HRI and Zenith had stipulated before trial that HRI and Hazeltine were to be considered as one entity for purposes of the litigation. Hazeltine was not served with the counterclaim or named as a party, and made no appearance until Zenith proposed that judgment be entered against it, at which time Hazeltine filed a "special appearance." The District Court, sitting without a jury, ruled for Zenith on the infringement action, and on the counterclaim held that (1) HRI had misused its domestic patents by attempting to coerce Zenith's acceptance of a five-year package license and by insisting on extracting royalties from unpatented products, and (2) HRI and Hazeltine conspired with foreign patent pools to exclude Zenith from the Canadian, English, and Australian markets. With respect to patent misuse, judgment was entered for Zenith for treble the actual damages of approximately $50,000, and injunctive relief given against further misuse. Treble damages for almost $35,000,000 were awarded Zenith on the conspiracy claim, together with injunctive relief against further participation chanroblesvirtualawlibrary

Page 395 U. S. 101

in any arrangement to prevent Zenith from exporting electronic equipment into any foreign market. Relying on the "one entity" stipulation, the court entered the judgments for treble damages and injunctive relief against Hazeltine as well as HRI. The Court of Appeals set aside the judgments against Hazeltine, ruling that the lower court lacked jurisdiction over that company and that the stipulation was an insufficient basis for entering judgment against Hazeltine. On the patent misuse claim, the treble damage award against HRI was affirmed, but the injunction against further misuse was modified. The conspiracy treble damage award was reversed, the Court of Appeals holding that Zenith had failed to prove it had, in fact, been injured during the relevant four-year period preceding the filing of its counterclaim. That court also struck down the injunction against HRI's participation in conspiracies restricting Zenith's foreign trade.

Held:

1. One is not bound by a judgment in personam resulting from litigation in which he is not designated as a party or to which he has not been made a party by service of process. Pp. 395 U. S. 108-112.

(a) The judgments against Hazeltine were properly vacated, as Hazeltine was not named as a party or served, and did not formally appear at the trial, and the stipulation executed by HRI was not an adequate substitute for the normal means of obtaining jurisdiction over Hazeltine. P. 395 U. S. 110.

(b) It was error to enter an injunction against Hazeltine without determining that it was "in active concert or participation" with HRI in a proceeding in which Hazeltine was a party. P. 395 U. S. 112.

2. The Court of Appeals erred in setting aside the District Court's decision with respect to the fact of damage in Canada. Pp. 114-125.

(a) The evidence was sufficient to sustain a finding that the Canadian patent pool refused to license imported goods, thus excluding foreign manufacturers like Zenith from the Canadian market for radio and television products. P. 395 U. S. 118.

(b) The evidence clearly warrants the inference that the Canadian patent pool's past conduct interfered with and made more difficult the distribution of Zenith products in the relevant 1959-1963 period, and it could rationally be found that Zenith suffered damage during the pertinent period from having a smaller share of the market than it would have had if the pool had never existed. Pp. 395 U. S. 118-119. chanroblesvirtualawlibrary

Page 395 U. S. 102

(c) The evidence is sufficient to support a finding of damage resulting from events occurring after the damage period began. Pp. 395 U. S. 119-123.

(d) In applying the clearly erroneous standard of Fed.Rule Civ.Proc. 52(a) to the findings of a district court sitting without a jury, the appellate court must determine whether, "on the entire evidence, [it] is left with the definite and firm conviction that a mistake has been committed," and not whether it would have made the same findings the trial court did. P. 395 U. S. 123.

(e) Where a treble damage plaintiff seeks recovery for injuries from a total or partial market exclusion, a court may

"conclude as a matter of just and reasonable inference from the proof of defendants' wrongful acts and their tendency to injure plaintiffs' business, and from the evidence of the decline in prices, profits and values, not shown to be attributable to other causes, that defendants' wrongful acts had caused damage to the plaintiffs."

Bigelow v. RKO Radio Pictures, Inc., 327 U. S. 251,