*1 Gordon, Cahill, Reindel, Zachry New & SERVICES, v. BENE Inc. FOUNDRY City, defendant-appellant. York for Jer- CORPORATION. FLUX q yan Qse> Doyle, William. rold Jerome 262, Docket 22690. No. Sayre, City, York of counsel. M. New Appeals Lynch, City, States Court & York for Glass Second Circuit. plaintiff-appellee. Brett, New York Simon Clty> of counsel- Argued April 17, 1953. HAND,' Before L. N.
J AUGUSTUS uly 14, 1953. CHASE, Judges. HAND and Circuit CHASE, Judge, Foundry Services, Haintiff. llee and , , . . £r <- Lmnted, English parties corporation, an are concerning í0 manufacture products- alld sale of fluxes according secret owned n the latter. One of the agree which is called a license ment, Foundry is that Ltd. Services jjqj- manufacture or sell such Qr plain. the United States Tlle Canada. enjoin br ht this tiff suit t0 defendant ° , , Corp., wholly The ®ene“ux sub owned sidiary Foundry Ltd., Services vio lating provision, and for accounting profits an attributable to occurred, which already violations have appeal is granting from an order plaintiff-appellee’s motion pendente lite. English corporatioI1)
In 1932 the owning controlling processes, various formulae, began to recÍPes manufacture pioducts and allied used to ^uxes facilitate of molten metaL n sold its castinS England products in and on the continent Europe, but not in the United States or appellee, in business Canada. States, prod tbe United did not deal Foundry of the kind made ucts Services V Utd.; and in 1934 the made the Foundry contract with Ltd. Services pertinent *s bas's suit. now °bligations of tlle ri§'hts Parties Pá follow, the terms of that contract suant appellee, „the therein called Li- censees, granted exclusive license to manufacture elsewhere, Canada, prod- but not English corporation, called ucts corporation English agreed Licensors. *2 appellee arrangements repre- for Mexican at once to the to communicate description concluded, they of the secret sentation had been full accurate not and pos- processes, recipes shipments could make and formulae and there products, quested by the of of new views the sessed also all Licensors on that developments In following and alterations while the matter. the course of cor- respondence subject, on that the agreement remained force. Licensors pounds learned five of flux had been appellee pay to the Licensors was to response request. sent in to the It later at- sales, royalties based with a minimum an- tempted by to the agreement terminate no- $250 royalty year, of first nual for the tice, ground on the that the Licensees had second, third, $1,000 for the for the $500 by making broken it the sale. The Li- appellee thereafter. The also $1250 acquiesce censees not attempt did in that “manufacture, agreed not sell or in- to and, present pur- termination at least for in the manufacture or sale of terested poses, appellant rely the upon it. fluxes, competitive products or other products agree- the of the of After this get unsuccessful effort to rid during agree- the of provisions ment continuance of the restrictive the of period years for a ment and of two the organized after Licensors subsidiary cor- poration the termination thereof.” Delaware, under the of laws the appellant here, through began which it to original term was five compete in 1952 with appellee the years, appellee but the given right the sale of fluxes and allied made ac- provided to continued renewals of that term processes. to cording the secret This suit equal it made annual sales least stated was then brought order, and the pro- minimum amounts. It was further appeal taken, which this has been was made. vided that Licensees could terminate the agreement by giving appellant the Licensors “six cal- now seeks reversal on two independent endar months notice of their grounds. intention so to is that the and, do” if the licensees did not make contract provides invalid because it equal specified unlawful minimum restraint of trade in violation years for two amounts consecutive the Li- of the by anti-trust laws dividing the avail- agreement by competitive censors could terminate the able area and creates areas like giving notice. competition within which prevented period be forever. The sec- performed For a while the contract was ond is that it was neither shown nor found way apparently mutually in a that was satisfactory; years but after some the Li- appellee irreparable censors, whose business elsewhere had flour- ished, became dissatisfied with the judge amount The district considered the first and, by appellee. ground sales made opinion, dis- in a well reasoned brought satisfaction about held its decision in it insufficient to right foreclose the he try get 1951 to relief thought appellee from the had otherwise shown prohibiting making sales in protection to the a temporary injunction. Canada He not did find that in the absence of such appellee. appellee would suffer irreparable injury. happened It so that a business firm in sample wanted a Mexico one of the As ground to the first flux- were es that covered agreement, argued agreement that since the relates to April early 1951 it sent a check for sale $5.00 requested Licensees and that as thereunder, much manufactured type flux of the as that desired sum would does restrain trade unlawful April buy be sent it. On way; that, broadly the Licensees speaking, was the request wrote Licensors that view had taken the district judge. However, been received and also another inquiry we it is think neither advisable nor neces- from Mexico. The suggested Licensees sary decide at this time whether the con- HAND, Judge (concurring): L. to notice enough It is
tract is valid. about that doubt is a substantial result, upon there I concur in the up so bound question is an involved defence mentioned in brothers’’ “first” *3 particular circumstances facts and with the opinion. plaintiff failed indeed has to' fully- them to let be that it is better any “irreparable by that injury,” if show findings developed trial and at a satisfy any money meant that will been done. after that has competition will loss the defendant’s that part of irreparable ment. tion It effect thing threatened with Behre upon proof, it redressed plaintiff reparable [*] the sales junction restrained er providently granted of such competing with the so caused York, 2 Aeolian American 295; pellee would “from acting States. finding Pending is well give [*] pendente the exclusive here to competing or of such Behre v. Anchor *” providing or American injunction or products in the the relief especially so Cir., Co. v. under It serves settled Mercury Kiely, 2 could, pendente injury necessary to showing that without final decision injury party it from v. money 297 indicate ordinary and lite should Fischer, Cir., 29 F.2d appellee; suffer from Anchor Ins. Ins. Co. of New if a that, F. Mercury Kiely, injunction is any technical data sought in seeking it a substantial pendente terms v. lite. Nor license 986. appellee in from offering to selling if there some other wrong, would be to prevent interfering otherwise where, absent that this irreparable 2 appellant and those United constitute but aiding kind, v. kind of granted the final natural result be since lite was granted, ascertainable as is there Co. of has Cir., prematurely suit, the in showing of appellee is States justify an no fluxes and adequately provide in it York, su here, others been no any loss dampen injunc 19 the ir or injury. supra; judg any F.2d 679; oth im- ap- them. tempting veloped properly be so limited. The ers wished v. with the ground, valid; tiff is entitled to when Maybe in the case decide this construed as a it stand on against what is at best an enjoyment serious doubt sidered trust fence; we should refuse plaintiff it good defence will injury, if that includes the should claim must company. ascertaining with restraint of trade causé; lose, open I. its times any I am not at all sure that Rokeach, Cir., will laws.” I do not indeed the British meaning; the contract on loss. That has However, and if it was decide that and am not how far such nevertheless it other I will ever be able defendant’s say nothing as one maintain could far-reaching, On of the license I question rest, “provides question until to affirm the trial how turn ground; whether the other necessary protection and I cannot equitable not be company undertook not to as of the any temporary question at bar out not, sure licensee of the violation a covenant always been included which the accuracy Parev has that covenant to be far whether the persuaded hand, I wish to reverse license, F.2d effects the covenant can relief. We con- indirect, unpalatable impossibility of shown order on this we in the end the mean that we injunction of the British situation is Products the licensee. see how the an unlawful good. of the anti- prove status scope should not the extent agree will plaintiff’s I upon its might been de- and left compete record; have a though broth- plain- make what join Yet, that quo Co. de- be- be it, pra. enough support gives clause to that me sult to concur. to induce injunction dissolved. reversed and
Order