Otter Tail Power Co. v. United States

Last updated
Otter Tail Power Co. v. United States
Seal of the United States Supreme Court.svg
Supreme Court of the United States
Argued December 5, 1972
Decided February 22, 1973
Full case nameOtter Tail Power Co. v. United States
Citations410 U.S. 366 ( more )
93 S. Ct. 1022; 35 L. Ed. 2d 359
Case history
PriorUnited States v. Otter Tail Power Co., 331 F. Supp. 54 (D. Minn. 1971), probable jurisdiction noted, 406 U.S. 944(1972).
SubsequentUnited States v. Otter Tail Power Co., 360 F. Supp. 451 (D. Minn. 1973); affirmed, 417 U.S. 901(1974).
Court membership
Chief Justice
Warren E. Burger
Associate Justices
William O. Douglas  · William J. Brennan Jr.
Potter Stewart  · Byron White
Thurgood Marshall  · Harry Blackmun
Lewis F. Powell Jr.  · William Rehnquist
Case opinions
MajorityDouglas, joined by Brennan, White, Marshall
Concur/dissentStewart, joined by Burger, Rehnquist
Blackmun and Powell took no part in the consideration or decision of the case.

Otter Tail Power Co. v. United States, 410 U.S. 366 (1973), is a United States Supreme Court decision often cited as the first case in which the Court held violative of the antitrust laws a single firm's refusal to deal with other firms that denied them access to a facility essential to engaging in business (a so-called essential facility). [1]

Contents

Background

Facts

Otter Tail Power Company (Otter Tail) is an investor-owned electric power utility with headquarters at Fergus Falls, Minnesota. It buys its electric power largely from the United States at the Government Bureau of Reclamation's Red Wing Dam power generation facility and other Bureau sites; transmits ("wheels") the power over high-voltage power transmission lines that Otter Tail owns, extending across the northern half of Minnesota; and sells the power to customers in small towns in northwestern Minnesota and eastern North and South Dakota. [2]

The case involved two principal types of conduct, both of which resulted from Otter Tail's desire to prevent small towns in which it sold power to customers from establishing municipal power systems of their own instead of the residents continuing to be retail customers of Otter Tail. One type of conduct was bringing allegedly frivolous and vexatious suits to prevent the towns from being able to sell municipal bonds to finance the establishment of their municipal power systems. The more important conduct, leading to the essential facilities legal precedent, was Otter Tail's refusal to wheel and sell power to the proposed new local power systems that would replace Otter Tail as power supplier in their towns. [3]

The United States sued Otter Tail for monopolizing the retail distribution and sale of power to towns in its operating area.

District court opinion

The district court (Devitt, J.) ruled for the Government. It acknowledged:

It is not contended that defendant acted illegally or improperly in achieving this claimed monopoly position but rather in its actions seeking to preserve this position. Specifically, it is urged that Otter Tail's refusal to sell or wheel power to towns desiring to establish municipal systems, and its actions participating in local municipal power political campaigns, and sponsoring, encouraging, and financially supporting court litigation are all intended to impede and frustrate attempts to establish independent municipal electric systems. Otter Tail does not deny its refusal to sell or wheel power to municipalities which it formerly served at retail but argues that to supply power to these municipalities would aid in its own demise. It admits its participation in local municipal political campaigns and in litigation surrounding attempts to establish municipal systems but contends this is proper and legal conduct. Such actions were taken, defendant argues, to preserve the electric power free enterprise system for the benefit of its customers, shareholders and employees. [4]

The court found that Otter Tail had a monopoly in the sale of electric power at retail in the area in which it operated—more than 75% of the relevant market. Many towns cannot obtain power from the Bureau because Otter Tail owns the only transmission lines and refuses to deal with them. It is not economically feasible or practical for a municipality to construct its own transmission lines. [5]

The court concluded "that Otter Tail has a strategic dominance in the transmission of power in most of its service area. [6] The court found that Otter Tail used its refusal to deal and its dominance to prevent towns such as Elbow Lake, Minnesota, from obtaining power to supply the town's municipal power system. [5]

The court ruled that this and similar conduct toward other towns was monopolization in violation of section 2 of the Sherman Act:

Here the defendant does not dispute that its purpose in refusing to deal with municipalities desiring to establish municipally owned systems is to protect itself in the position it now enjoys in the area. Such is a monopoly position, and the law prohibits conduct such as this when such is intended to preserve the monopoly.

. . . Here Otter Tail refuses to sell power to municipalities which would thereby take retail power business from defendant and refuses to wheel power for others willing to sell to these municipalities. Because of its dominant position Otter Tail is able to deprive towns of the benefits of competition which would result from municipally owned facilities.

Pertinent to an examination of the law is a reference to cases expressive of the "bottleneck theory" of antitrust law. This theory reflects in essence that it is an illegal restraint of trade for a party to foreclose others from the use of a scarce facility. [7]

The court then turned to Otter Tail's litigation, finding "Otter Tail either instituted or sponsored and financially supported court litigation which had the effect of frustrating the sale of revenue bonds to finance the municipal systems." The effect was "halting, or appreciably slowing, efforts for municipal ownership" and "the large financial burden imposed on the towns' limited treasury dampened local enthusiasm for public ownership." [8] The court analogized this to litigation under spurious patents and concluded that it was part of a monopolistic scheme.

The court therefore enjoined Otter Tail's monopolistic conduct. Its judgment prohibited Otter Tail from: refusing to sell electric power at wholesale to existing or proposed municipal electric power systems in the areas serviced by Otter Tail, refusing to wheel electric power over the lines from the electric power suppliers to existing or proposed municipal systems in the area, entering into or enforcing any contract which prohibits use of Otter Tail's lines to wheel electric power to municipal electric power systems, or from entering into or enforcing any contract which limits the customers to whom and areas in which Otter Tail or any other electric power company may sell electric power. The district court also enjoined Otter Tail from instituting, supporting, or engaging in litigation, directly or indirectly, against municipalities and their officials who have voted to establish municipal electric power systems for the purpose of delaying, preventing, or interfering with the establishment of a municipal electric power system. [9]

Supreme Court ruling

The Supreme Court affirmed (4-3) the essential facility part of the case but remanded for additional findings on the litigation part. Justice William O. Douglas delivered the opinion of the Court, in which Justices William J. Brennan, Byron White, and Thurgood Marshall joined. Justice Potter Stewart filed an opinion concurring in part and dissenting in part, in which Chief Justice Warren Burger and Justice William Rehnquist joined.

Majority opinion

Justice Douglas authored the opinion of the Court Detail of official portrait of William O Douglas.jpg
Justice Douglas authored the opinion of the Court

The Court explained that proposed municipal systems face "great obstacles." They must purchase the electric power at wholesale. To do so, they must have access to existing transmission lines. The only ones available belong to Otter Tail. While the Bureau of Reclamation has high-voltage bulk-power supply lines in the area, it does not operate a network for local power delivery, but relies on wheeling contracts with Otter Tail and other utilities to deliver power to its wholesale customers. [10]

When Otter Tail's franchise in several towns expired, the citizens voted to establish their own municipal distribution systems. Otter Tail refused to sell the new systems energy at wholesale and refused to agree to wheel power from other suppliers of wholesale energy to these towns. [11]

The Court said: "The record makes abundantly clear that Otter Tail used its monopoly power in the towns in its service area to foreclose competition or gain a competitive advantage, or to destroy a competitor, all in violation of the antitrust laws." Otter Tail used its "dominance to foreclose potential entrants into the retail area from obtaining electric power from outside sources of supply." [12]

Otter Tail argued that, "without the weapons which it used, more and more municipalities will turn to public power and Otter Tail will go downhill." The Court responded that Otter Tail should "protect itself against loss by operating with superior service, lower costs, and improved efficiency." [13]

While the Court affirmed the part of the judgment enjoining the monopolistic practices relating to denial of access to electric power, it did not affirm the injunction against litigation. After the district court's judgment was entered, the Supreme Court decided California Motor Transport Co. v. Trucking Unlimited , [14] in which it held that "the right to petition extends to all departments of the Government [and] [t]he right of access to the courts is indeed but one aspect of the right of petition" that the First Amendment protects. The Court also held in that case, however, that "where the purpose to suppress competition is evidenced by repetitive lawsuits carrying the hallmark of insubstantial claims," the conduct "is within the 'mere sham' exception" to that protection and is thus subject to antitrust prohibitions. The Court therefore vacated this part of the judgment "and remand[ed] for consideration in light of our intervening decision in California Motor Transport Co." [13]

Dissent/concurrence

The dissent agreed with the part of the Court's opinion that vacated and remanded for consideration of Otter Tail's litigation activities in light of the Court's decision in California Motor Transport Co, but disagreed with the remainder dealing with monopolistic denial of access to electric power.

In the dissenting justices' view, "As a retailer of power, Otter Tail asserted a legitimate business interest in keeping its lines free for its own power sales and in refusing to lend a hand in its own demise by wheeling cheaper power from the Bureau of Reclamation to municipal consumers which might otherwise purchase power at retail from Otter Tail itself." [15] Furthermore, "Otter Tail's refusal to wheel or wholesale power was conduct exempt from the antitrust laws and . . . the District Court's decree improperly preempted the jurisdiction of the Federal Power Commission." [16]

Subsequent developments

Remand

In accordance with the Supreme Court's order for a remand as to the litigation prong of the case, in United States v. Otter Tail Power Co., the district court (Devitt, J.) reconsidered that aspect of the case. [17] After hearing arguments but without taking additional evidence, the court found:

[T]he repetitive use of litigation by Otter Tail was timed and designed principally to prevent the establishment of municipal electric systems and thereby to preserve defendant's monopoly. I find the litigation comes within the sham exception to the Noerr doctrine as defined by the Supreme Court in California Transport, and reaffirm the Findings and Conclusions previously entered. [18]

Otter Tail appealed this ruling, but the Supreme Court affirmed it without opinion. [19]

Aspen case

In Aspen Skiing Co. v. Aspen Highlands Skiing Corp. , [20] the defendant controlled three of the four ski mountains in Aspen, Colorado. The defendant and plaintiff (owner of the fourth ski mountain) had long engaged in a popular joint-venture arrangement for ski lift tickets. The defendant suddenly terminated the joint venture without a credible business justification. The Supreme Court affirmed a judgment for the plaintiff without addressing the essential facilities doctrine. Instead, the Court spoke of the defendant's termination of a successful program that was beneficial to consumers, failure to establish a plausible business justification, and willingness to sacrifice short-term profits in order to injure competition down the road.

Hecht case

In Hecht v. Pro-Football, Inc. [21] a group of sports promoters (Hecht) were refused an American Football League (AFL) franchise in Washington, D.C. They sued Pro-Football (PF), owner of the Washington Redskins, a National Football League team operating in D.C., and the D.C. Armory Board, which operated the only stadium in D.C. The Redskins had a 30–year contract with the Armory Board prohibiting it from leasing to any other professional football team. The AFL would not consider the Hecht franchise application until Hecht had a stadium lease. PF would not negotiate a waiver of its exclusive stadium rights until Hecht had a franchise. The D.C. Circuit held that the district court should have instructed the jury concerning the essential facility doctrine, citing Otter Tail as having reaffirmed its announcement in Terminal Railroad. [22]

The court held that PF could not defend by showing that its restrictive contract was reasonable, because:

The garden-variety restrictive covenant does not violate section 1 unless it unreasonably restrains trade; when the restrictive covenant covers an essential facility, however, all possible competition is by definition excluded and the restraint is thus unreasonable per se—provided, of course, that the facility can be shared practically. [23]

MCI case

In MCI Communications Corp. v. AT&T Co., [24] the Seventh Circuit stated a four–part test that has since been widely cited as authoritative for the essential facilities doctrine:

  1. the accused monopolist controls access to an essential facility,
  2. the facility cannot reasonably be duplicated by the competitor,
  3. the accused monopolist denies access to the competitor, and
  4. it was feasible for the accused monopolist to grant access to the competitor. [25]

Some courts have stated a fifth factor perhaps implicit in MCI: that the defendant monopolist lacked a valid business justification for its refusal to deal. [26]

Trinko

In Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP , [27] the Supreme Court in dicta spoke harshly against the essential facilities doctrine. In Trinko, a customer of a telephone company monopolist brought a treble-damage class action challenging discrimination against a competitor that allegedly caused the class to suffer overpriced and inadequate phone service. The Court held that the only remedies were under the Telecommunications Act of 1996 and dismissed the antitrust claims. It then added that it would not have ruled differently even if it accepted the essential facilities doctrine:

This conclusion would be unchanged even if we considered to be established law the "essential facilities" doctrine crafted by some lower courts, under which the Court of Appeals concluded [Trinko] 's allegations might state a claim. We have never recognized such a doctrine, and we find no need either to recognize it or to repudiate it here. It suffices for present purposes to note that the indispensable requirement for invoking the doctrine is the unavailability of access to the "essential facilities"; where access exists, the doctrine serves no purpose. . . . To the extent respondent's "essential facilities" argument is distinct from its general § 2 argument, we reject it. [28]

Commentary

Alon Kapen addresses two lines of cases in which court have ordered monopolists to stop refusing to deal with competitors. "First, firms may not refuse to deal where they seek to create or maintain a monopoly. Second, a business or group of businesses controlling an "essential facility" has a duty to provide reasonable access to competitors." [29] He sees the Otter Tail case as using both theories, the first based on intent and the second based on effects. [30]

Michael Boudin in contrast sees Otter Tail as emphasizing the defendant's "intent to destroy competition" and "malign intent." [31]

Daniel Troy states that Otter Tail "is commonly cited to justify a per se rule in essential facility cases," but a "close examination" belies that claim. While its fact pattern may fit the essential facilities doctrine, "the Court's reasoning makes clear that it did not treat Otter Tail differently from any other monopolist using its monopoly power to suppress competition in a downstream market." Rather, he insists, "the Court employed a traditional section 2 intent-focused monopolization analysis." [32]

Phillip Areeda criticized the essential facilities doctrine harshly in a much cited article initially delivered as an address at a 1989 program of the ABA Antitrust Section—"The Cutting Edge of Antitrust: Exclusionary Practices. [33] He summarized his arguments with six points:

  1. There is no general duty to share.
  2. A single firm's facility, as distinct from that of a combination, is "essential" only when it is both critical to the plaintiff's competitive vitality and the plaintiff is essential for competition in the marketplace.
  3. No one should be forced to deal unless doing so is likely substantially to improve competition in the marketplace by reducing price or by increasing output or innovation.
  4. Even when all these conditions are satisfied, denial of access is never per se unlawful; legitimate business purpose always saves the defendant.
  5. The defendant's intention is seldom illuminating, because every firm that denies its facilities to rivals does so to limit competition with itself and increase its profits.
  6. No court should impose a duty to deal that it cannot explain or adequately and reasonably supervise. [34]

James Ratner recognizes that there are substantial problems in administering the essential facilities doctrine, but he argues that addressing denials of access to essential facilities is socially necessary:

If a facility is essential, the market in which it produces has become like a dead mouse on the kitchen floor. No one wants to pick up the mouse, and doing so may be repulsive to some, but it is probably best not to leave it there. Finding a facility to be essential means that the competitive process is an unreliable mechanism for correcting significant short-run welfare losses. The market requires some form of intervention, or those losses will persist. [35]

Ratner concedes that vertical behavior such as refusals to allow access to essential facilities "fall under criticism that the behavior does not create new power and may be efficient." Critics then argue that the real economic problem is caused by the monopoly, not by the behavior. That criticism, Ratner argues, does not adequately address the problem of whether to prohibit the activities because they are socially harmful even without increasing market power. If nothing else, "the market power possessed by essential facilities suggests that denial of access frequently will create economically harmful output reduction without increasing or maintaining market power." Therefore, the essential facilities doctrine provides "the only meaningful remedy for these harmful denials" and unfortunately that "requires someone, usually a poorly equipped federal court," to impose judicial regulation. "While such judicial regulation has unavoidable drawbacks," nonetheless, "ignoring the essential facility problem is to ignore one of the basic harms [that the antitrust] laws seek to correct." [36]

Glen Robinson argues that "the essential facilities doctrine provides the proper framework for analyzing both regulatory and antitrust requirements for forced dealing or sharing among rivals." [37] In deciding what is an essential facility, Robinson deprecates the distinction between tangible assets (such as the transmission lines in Otter Tail) and intellectual property, based on the claim that it "is critical for encouraging owners to invest in innovation." He points out:

An incentives problem is created any time one firm is permitted to free-ride on a competitor's investments, whether those investments are represented by tangible assets or intellectual property. Forced sharing of an unpatented or uncopyrighted gizmo undermines investment incentives to the same degree as forced sharing of a patented or copyrighted widget. In the former case, the owner's common law property right in the unpatented widget is entitled to the same legal protection as the property right in the patented gizmo for basically the same reason-to protect settled expectations and the incentive to create wealth. Innovation is merely one form of investment in wealth-creating activity. Regardless of the form of the investment, the ultimate task is to accommodate both the general laws of property and the special laws of antitrust. [38]

Instead, he argues, the proper basis for any distinction is "to examine the underlying interest at stake." Thus, "courts should be skeptical about ordering a firm to share new technologies promising only uncertain returns to the investing firm" because a "firm's investment incentives are especially sensitive to the firm's ability to capture all of the upside return, particularly if it cannot share the downside loss." In such circumstances, "a court should force sharing of essential information only if there is no alternative method of accomplishing the purpose of establishing workable competition." [39]

Robinson disagrees with Judge Posner's view that "forced sharing of facilities deemed to be naturally monopolistic can [never] serve a legitimate competitive purpose." Robinson argues that "in some cases the essential facilities doctrine is properly invoked to prevent a monopolist from leveraging its power from one market into another by withholding access to an input that is needed in the second market." Also, "forced sharing might be the only vehicle for testing [false claims that] a market is naturally monopolistic," as in the case of the long distance telecommunications market. [40] Robinson concludes that a well-defined essential facilities doctrine is preferable to "the amorphous and untheorized 'it-all-depends' principle followed in Aspen Skiing." [41]

See also

Related Research Articles

United States antitrust law American legal system intended to promote competition among businesses

In the United States, antitrust law is a collection of mostly federal laws that regulate the conduct and organization of business corporations and are generally intended to promote competition and prevent monopolies. The main statutes are the Sherman Act of 1890, the Clayton Act of 1914 and the Federal Trade Commission Act of 1914. These Acts serve three major functions. First, Section 1 of the Sherman Act prohibits price fixing and the operation of cartels, and prohibits other collusive practices that unreasonably restrain trade. Second, Section 7 of the Clayton Act restricts the mergers and acquisitions of organizations that may substantially lessen competition or tend to create a monopoly. Third, Section 2 of the Sherman Act prohibits monopolization.

In United States antitrust law, monopolization is illegal monopoly behavior. The main categories of prohibited behavior include exclusive dealing, price discrimination, refusing to supply an essential facility, product tying and predatory pricing. Monopolization is a federal crime under Section 2 of the Sherman Antitrust Act of 1890. It has a specific legal meaning, which is parallel to the "abuse" of a dominant position in EU competition law, under TFEU article 102. Section 2 of the Sherman Act states that any person "who shall monopolize. .. any part of the trade or commerce among the several states, or with foreign nations shall be deemed guilty of a felony." Section 2 also forbids "attempts to monopolize" and "conspiracies to monopolize". Generally this means that corporations may not act in ways that have been identified as contrary to precedent cases.

Verizon Communications v. Law Offices of Curtis V. Trinko, LLP, often shortened to Verizon v. Trinko, 540 U.S. 398 (2004), is a case decided by the Supreme Court of the United States in the field of Antitrust law. It held that the Telecommunications Act of 1996 had not modified the framework of the Sherman Act, preserving claims that satisfy established antitrust standards without creating new claims that go beyond those standards. It also refused to extend the essential facilities doctrine beyond the facts of the Aspen Skiing Co. v. Aspen Highlands Skiing Corp. case.

The essential facilities doctrine is a legal doctrine which describes a particular type of claim of monopolization made under competition laws. In general, it refers to a type of anti-competitive behavior in which a firm with market power uses a "bottleneck" in a market to deny competitors entry into the market. It is closely related to a claim for refusal to deal.

United States v. Glaxo Group Ltd., 410 U.S. 52 (1973), is a 1973 decision of the United States Supreme Court in which the Court held that (1) when a patent is directly involved in an antitrust violation, the Government may challenge the validity of the patent; and (2) ordinarily, in patent-antitrust cases, "[m]andatory selling on specified terms and compulsory patent licensing at reasonable charges are recognized antitrust remedies."

Aspen Skiing Co. v. Aspen Highlands Skiing Corp., 472 U.S. 585 (1985), was a United States Supreme Court case that decided whether a dominant firm's unilateral refusal to deal with a competitor could establish a monopolization claim under Section 2 of the Sherman Act. The unanimous Supreme Court agreed with the 10th Circuit that terminating a pro-consumer joint venture without a legitimate business justification could constitute illegal monopolization. However, its decision created an exception to the general rule that firms can decide with whom to do business absent collusion, sparking significant controversy about the appropriate scope of this exception. In a subsequent case, Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP, Justice Scalia, writing for the majority, stated that Aspen Skiing is "at or near the outer boundary of § 2 liability." Although its holding has been narrowed, this case's relevance remains contested, especially in the context of refusals to license intellectual property.

Eastman Kodak Co. v. Image Technical Servs., Inc., 504 U.S. 451 (1992), is a 1992 Supreme Court decision in which the Court held that even though an equipment manufacturer lacked significant market power in the primary market for its equipment—copier-duplicators and other imaging equipment—nonetheless, it could have sufficient market power in the secondary aftermarket for repair parts to be liable under the antitrust laws for its exclusionary conduct in the aftermarket. The reason was that it was possible that, once customers were committed to the particular brand by having purchased a unit, they were "locked in" and no longer had any realistic alternative to turn to for repair parts.

FTC v. Actavis, Inc., 570 U.S. 136 (2013), was a United States Supreme Court decision in which the Court held that the FTC could make an antitrust challenge under the rule of reason against a so-called pay-for-delay agreement, also referred to as a reverse payment patent settlement. Such an agreement is one in which a drug patentee pays another company, ordinarily a generic drug manufacturer, to stay out of the market, thus avoiding generic competition and a challenge to patent validity. The FTC sought to establish a rule that such agreements were presumptively illegal, but the Court ruled only that the FTC could bring a case under more general antitrust principles permitting a defendant to assert justifications for its actions under the rule of reason.

Kimble v. Marvel Entertainment, LLC, 576 U.S. 446 (2015), is a significant decision of the United States Supreme Court for several reasons. One is that the Court turned back a considerable amount of academic criticism of both the patent misuse doctrine as developed by the Supreme Court and the particular legal principle at issue in the case. Another is that the Court firmly rejected efforts to assimilate the patent misuse doctrine to antitrust law and explained in some detail the different policies at work in the two bodies of law. Finally, the majority and dissenting opinions informatively articulate two opposing views of the proper role of the doctrine of stare decisis in US law.

The Mercoid cases—Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661 (1944), and Mercoid Corp. v. Minneapolis-Honeywell Regulator Co., 320 U.S. 680 (1944)—are 1944 patent tie-in misuse and antitrust decisions of the United States Supreme Court. These companion cases are said to have reached the "high-water mark of the patent misuse doctrine." The Court substantially limited the contributory infringement doctrine by holding unlawful tie-ins of "non-staple" unpatented articles that were specially adapted only for use in practicing a patent, and the Court observed: "The result of this decision, together with those which have preceded it, is to limit substantially the doctrine of contributory infringement. What residuum may be left we need not stop to consider." The Court also suggested that an attempt to extend the reach of a patent beyond its claims could or would violate the antitrust laws: "The legality of any attempt to bring unpatented goods within the protection of the patent is measured by the antitrust laws, not by the patent law."

United States v. Terminal R.R. Ass'n, 224 U.S. 383 (1912), is the first case in which the United States Supreme Court held it a violation of the antitrust laws to refuse to a competitor access to a facility necessary for entering or remaining in the market. In this case a combination of firms carried out the restrictive practice, rather than a single firm. That made the conduct susceptible to challenge under section 1 of the Sherman Act rather than under the heightened standard of section 2 of that act, but the case was brought under both sections.

Lorain Journal Co. v. United States, 342 U.S. 143 (1951), is a decision of the United States Supreme Court often cited as an example of a monopolization violation being based on unilateral denial of access to an essential facility, although it in fact involved concerted action. When the Lorain Journal's monopoly over advertising in the Lorain, Ohio area was threatened by the establishment of a competing radio station, the Journal's publisher refused to accept advertising from those who advertised over the radio station and required them to advertise only in the Journal. The purpose of the publisher was to eliminate the competition of the radio station. The Supreme Court held that the publisher had attempted to monopolize trade and commerce, in violation of § 2 of the Sherman Antitrust Act, and was properly enjoined from continuing the conduct.

<i>United States v. Vehicular Parking Ltd.</i>

United States v. Vehicular Parking Ltd. is a patent–antitrust case in which the United States Government eroded the doctrine of United States v. General Electric Co. permitting patentees to fix licensee prices, but failed to persuade the court to decree royalty-free licensing as a remedy.

United States v. United States Gypsum Co. was a patent–antitrust case in which the United States Supreme Court decided, first, in 1948, that a patent licensing program that fixed prices of many licensees and regimented an entire industry violated the antitrust laws, and then, decided in 1950, after a remand, that appropriate relief in such cases did not extend so far as to permit licensees enjoying a compulsory, reasonable–royalty license to challenge the validity of the licensed patents. The Court also ruled, in obiter dicta, that the United States had standing to challenge the validity of patents when a patentee relied on the patents to justify its fixing prices. It held in this case, however, that the defendants violated the antitrust laws irrespective of whether the patents were valid, which made the validity issue irrelevant.

United States v. Westinghouse Electric Corp., 648 F.2d 642, is a patent-antitrust case in which the United States unsuccessfully tried to persuade the court that a patent and technology licensing agreement between major competitors in the highly concentrated heavy electrical equipment market—Westinghouse, Mitsubishi Electric (Melco) and Mitsubishi Heavy Industries (MHI)—which had the effect of territorially dividing world markets, violated § 1 of the Sherman Act. The Government had two principal theories of the case: (1) the arrangement is in unreasonable restraint of trade because its effect is to lessen competition substantially by precluding the Japanese defendant companies from bidding against Westinghouse on equipment procurements in the United States, when they are ready, willing, and able to do so; and (2) the arrangement is an agreement—explicit or tacit—to divide markets, which is illegal per se under § 1. Neither theory prevailed.

<i>United States v. Krasnov</i>

United States v. Krasnov, 143 F. Supp. 184, was a 1956 district court patent–antitrust decision that the United States Supreme Court affirmed per curiam without opinion. The district court granted the Government's summary judgment motion because it concluded:

That the defendants in combination controlled the market and had the ability to and did drive competitors from the business of manufacturing knitted fabric slip covers is abundantly clear from the record. That the defendants in combination fixed and maintained prices is likewise crystal clear. That the defendants in combination and cross-licensing created a situation in the industry which, particularly by agreement for joint action respecting the patents, effectively hindered newcomers in the field, is also established beyond peradventure of doubt. That the harassing suits against competitors, previously discussed in some detail, were designed as and were actually only harassing suits is clear from an examination of the correspondence between the parties and the Court feels that such conclusion in inescapable from an objective analysis of the documents. All of these actions taken in concert constitute a clear violation of the Sherman Anti-Trust Act and the Government has established to the satisfaction of the Court that the combination and conspiracy above referred to represents an unreasonable restraint of trade and commerce among the several states of the United States in the manufacture and sale of ready-made furniture slip covers, is unlawful, and in violation of Section 1 of the Sherman Anti-Trust Act. Further, the Government, in the opinion of the Court, has effectively demonstrated that the defendants combined and conspired not only to restrain trade unreasonably but also to monopolize trade and commerce among the several states of the United States in the manufacture and sale of ready-made furniture slip covers, in direct violation of Section 2 of the Sherman Anti-Trust Act. The Court also feels that by documentary proof the Government has established that the defendants have used patent rights unlawfully in instituting, effectuating and maintaining the aforesaid combination and conspiracy which likewise constitutes a clear violation of the Sherman Anti-Trust Act.

Gamco, Inc. v. Providence Fruit & Produce Building, Inc., 194 F.2d 484, is a 1952 First Circuit decision in the United States.

United States v. Masonite Corp., 316 U.S. 265 (1942), is a United States Supreme Court decision that limited the scope of the 1926 Supreme Court decision in the General Electric case that had exempted patent licensing agreements from antitrust law's prohibition of price fixing. The Court did so by applying the doctrine of the Court's recent Interstate Circuit hub-and-spoke conspiracy decision.

United States v. Dentsply Int'l, Inc., was a 2005 Third Circuit antitrust decision in the United States finding that Dentsply, a monopolist manufacturer-supplier of dental supplies, used its exclusive dealing policy to keep rival firms' sales "below the critical level necessary for any rival to pose a real threat to Dentsply's market share,".

Hartford-Empire Co. v. United States, 323 U.S. 386 (1945), was a patent-antitrust case that the Government brought against a cartel in the glass container industry. The cartel, among other things, divided the fields of manufacture of glass containers, first, into blown glass and pressed glass, which was subdivided into: products made under the suction process, milk bottles, and fruit jars. The trial court found the cartel violative of the antitrust laws and the Supreme Court agreed that the market division and related conduct were illegal. The trial court required royalty-free licensing of present patents and reasonable royalty licensing of future patents. A divided Supreme Court reversed the requirement for royalty-free licensing as "confiscatory," but sustained the requirement for reasonable royalty licensing of the patents.

References

The citations in this article are written in Bluebook style. Please see the talk page for more information.

  1. ↑ The Court had held illegal a combination of firms' denial of access to an essential facility (the only railroad bridge across the Mississippi River at St. Louis) in United States v. Terminal R.R. Ass'n , 224 U.S. 383 (1912).
  2. ↑ United States v. Otter Tail Power Co., 331F. Supp.54 , 56( D. Minn. 1971).
  3. ↑ 331 F. Supp. at 57–58.
  4. ↑ 331 F. Supp. at 58.
  5. 1 2 331 F. Supp. at 59–60.
  6. ↑ 331 F. Supp. at 60.
  7. ↑ 331 F. Supp. at 61.
  8. ↑ 331 F. Supp. at 62.
  9. ↑ See 410 U.S. at 368–69.
  10. ↑ 410 U.S. at 370.
  11. ↑ 410 U.S. at 371.
  12. ↑ 410 U.S. at 377.
  13. 1 2 410 U.S. at 380.
  14. ↑ California Motor Transport Co. v. Trucking Unlimited , 404 U.S. 508 (1972).
  15. ↑ 410 U.S. at 388.
  16. ↑ 410 U.S. at 395.
  17. ↑ United States v. Otter Tail Power Co., 360F. Supp.451 (D. Minn.1973).
  18. ↑ 360 F. Supp. at 451-52.
  19. ↑ Otter Tail Power Co. v. United States, 417 U.S. 901(1974).
  20. ↑ Aspen Skiing Co. v. Aspen Highlands Skiing Corp. , 472 U.S. 585 (1985).
  21. ↑ 570 F.2d 982 (D.C. Cir. 1977).
  22. ↑ 570 F.2d at 992–93.
  23. ↑ 570 F.2d at 993.
  24. ↑ 708 F.2d 1081, 1132-33 (7th Cir. 1983).
  25. ↑ 708 F.2d at 1132.
  26. ↑ See, e.g., Morris Communic'ns Corp. v. PGA Tour, Inc., 364 F.3d 1288 (11th Cir. 2004).
  27. ↑ Verizon Communications Inc. v. Law Offices of Curtis V. Trinko, LLP , 540 U.S. 398 (2004).
  28. ↑ 540 U.S. at 410-11.
  29. ↑ Alon Y. Kapen, Duty to Cooperate Under Section 2 of the Sherman Act: Aspen Skiing's Slippery Slope, 72 Cornell L. Rev. 1047, 1054 (1987).
  30. ↑ Id. at 1056,
  31. ↑ Michael Boudin, Antitrust Doctrine and the Sway of Metaphor, 75 Geo. L.J. 395, 400 & n.43 (1986).
  32. ↑ Daniel E. Troy, Unclogging the Bottleneck: A New Essential Facility Doctrine, 83 Colum. L. Rev. 441, 450–51 (1983).
  33. ↑ "Phillip Areeda, Essential Facilities: An Epithet in Need of Limiting Principles, 58 Antitrust L.J. 841 (1990).
  34. ↑ Id. at 852–53.
  35. ↑ James R. Ratner, Should There Be an Essential Facility Doctrine?, 21 U.C. Davis L. Rev. 327, 380 (1988).
  36. ↑ Id. at 382.
  37. ↑ Glen O. Robinson, On Refusing to Deal with Rivals, 87 Cornell L. Rev. 1177, 1184 (2002).
  38. ↑ Id. at 1210.
  39. ↑ Id. at 1210–11.
  40. ↑ Id. at 1213–14.
  41. ↑ Id. at 1231.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.