*1 corporation, INDUSTRIES, ROYAL Appellant, COMPANY, a PAPER
ST. REGIS Appellee. corporation,
Nos. Appeals Court of Circuit. Ninth
Dec. *2 Regis’ effectively
unless St. license was terminated. St.
Royal it terminated contends con- an oral Regis’ of for breach license re- the written license dition to prices Regis to sale quired adhere St. Regis replies that: by Royal. St. set the California any oral proof that there was forecloses agreement; even Royal, as proved, condition oral, licensors, unilater- could not of one two ally the license and terminate of joined the notice in neither eolicensor (3) if action; and nor termination condition, any it oral such there were an- it violates unenforceable titrust following facts uncontrovert- patent
ed in suit : obtained assignment inventor-patentee, from Bower, April, Short- Gerald C. pur- ly acquired patent, it after (argued), of Newall Robert M. Newall percent Plas- of the chased 80 stock Cal., Christie, Chester, Angeles, Los & Corporation (“Plas-Ties”). Bower Ties ap- Pasadena, Cal., Hale, for Parker & percent other 20 retained pellant. manufacturing and stock. was (argued), Priest Bennett W. selling article, patented and at all Cal., O’Melveny Myers, Angeles, Los & hereto, times it has continued material Ward, Haselton, McElhannon, Brooks & Royal acquired do At time so. Fitzpatrick, White, Nicholas A. Stuart negotiations underway patent, Coch, City, appellee. for L. York between and on one Bower CARTER, ELY, Before and HUF- Paper Company side and Pollock Divi- Judges. STEDLER, Circuit Regis looking to- sion on the St. other licensing Regis prac- ward the of St. Judge: HUFSTEDLER, Circuit manufacturing patent tice to use brought (“Royal”) Industries developed pro- know-how Plas-Ties to Regis against Paper this action St. Com- product. acquired After duce the pany Regis”) patent infringe- (“St. patent interest competition. ment and unfair Federal negotiations. Royal entered the The ne- jurisdiction on 28 based U.S.C. § gotiations way proceeded by of corre- Royal appeals from the orders spondence among Roy- and conferences denying Royal’s District mo- president, presi- al’s Johnson, Plas-Ties’ injunction preliminary (28 tion for a U. dent, counsel, Bower, patent and their (1)) granting 1292(a) S.C. St. § Regis’ representatives, and St. Jacobs Regis’ summary judgment motion for Lacy, patent lawyer. and their On (28 1291). U.S.C. § May 2, Pasadena, meeting aat Regis practice St. signed was licensed the written license patent in suit to use the manufac- Johnson for Bower turing produce patent- by Lacy Regis. know-how to for St. product, plastic strips. Royal Lacy tie president can- was vice Pollock successfully patent maintain its Paper signature in- Division. The fringement-unfair competition Regis president action of St. was not added un- negotiations to St. out the contract was sent til the provision permitting Regis’ York. must contain a corporate in New offices fix at which Re- St. contract contains gis patented product. could sell provisions and know- usual protection pricing, told he Without pegs amount Then it license. how *3 might Regis’ negotiators, just St. “I as royalties percentage of payable a to Regis gun put my a to St. well head.” Regis. by also It St. net dollar sales the representatives “objected strenuously on price reduction formula: this contains agree- including anything in [sic] selling prices below its “If reduces regarding price ment Exhibit in attached set forth those they probably have said that we would A, royalty one reduced shall be said 10% go jail illegal, and that to as it was to percentage point reduction for each 5% anything they put that not like selling provided prices, however in the agreement.” that Johnson said into royalty shall not be reduced be- ille- think the he is list Plas- “A” low Exhibit 5%.” Regis gal. representatives remained St. prices. The written sales Ties’ “Well, adamant, Johnson then said clauses, termination contains several simply if that we can’t reach is case conspicuous any re- none of bears agreement.” juncture, an At prices lationship maintain to a failure to Regis Johnson, people “not to St. said fixed licensors. “ times,” many once ‘While but we strips Regis’ plastic prices tie St. agreement, you put in the can’t charged the same as those positive have our assurance at all times February 1966, at which until respect your prices. There that we will Regis prices. Plas- its time St. reduced may may you we want come time when In next month. followed suit the Ties drop prices, in such event to we will Regis price made June St. another you, you you to come and ask but Royal complained, and a con- reduction. you can, think don’t it is not the Regis fol- and St. ference between right thing do, stay to then we will Regis its raised Thereafter St. lowed. ” your price.’ After he assur- received as prices, but not to the same level complete, positive, ance that “we have Regis again May 1967, Plas-Ties. In St. thorough understanding expressed by all prices. Royal’s response was reduced they three them that all times will at claiming June letter dated agreed Royal’s respect pricing,” to he stating breach of contract sign agreement omitting the condi- days in license would be terminated tion. Regis Royal’s price in the unless St. met Regis according Royal’s did not its Even to St. raise version interim. negotiations, however, prices. recognize termina- It it refused to means to tion to manufacture clear whether the reference and has continued “your prices” product. was to to and sell the compound- or both.1 The confusion is Royal acquired In the remainder by Royal’s insistence that Plas-Ties stock, since of Plas-Ties and Plas-Ties were somehow one enti- by Royal. wholly has then ty. claimed oral The existence of Royal’s dispute. ground upon ver- The first Dis- which the according testimony, sion, judg- summary to Johnson’s trict Court decided that through- is this: Johnson had insisted ment should issue was that Califor- example, July Corporation 1. For lished the Plas-Ties be Johnson’s affidavit protect 1967, says: recognized order followed and a condition “[I]n my personally company, granting license; I in the discussed length great discussions, par- on the the matter of course of these all the strips by Royal’s plastic agreed pricing I tie to be licensed and ties abide * * pricing estab- insisted that structure structures or writing integration, in whole consid- to be an foreclosed parol rule nia evidence concerning parol rule evidence part, evidence eration applicable decision is that at all. If the alleged If the Dis- condition. oral writing parties right, did intend the conflicts trict Court relating a full and final embodiment oral to the claimed the evidence operates bargain, can- If immaterial. condition condition, add col- to exclude all evidence that would its case prove oral judg- vary Regis The District or terms. lapses, is entitled and St. ques- parol evidence not reach the forthwith. ment tion the threshold inte- until resolved agree law parties that California gration integration issue issue. The *4 law, as enunci- That issue. this controls summary judg- on could hot be decided (1968) 68 Sine in Masterson v. ated ment, the relevant evidence because 545, Cal.Rptr. 436 P.2d 222, 65 Cal.2d conflicting. (E. g., Mold Roll-Die & Royal’s 561, evidence. not exclude does Decorators, Rubber Inc. v. W. Voit J. Court nor District the Neither counsel 306; 1967) Corp. 387 F.2d (9th Cir. case, because Masterson the knew about Corp. Mu- Steel v. Lumbermens Bowman down until not handed the decision was (3d 1966) Casualty 364 tual Co. Cir. F. filed day the District the before 246.) 2d judgment. the However, the District Court did Long Masterson was before Royal’s pur for not evidence all exclude decided, principle that was settled the ground poses. As for its an alternative only “in parol rule evidence affected the decision, ac the District Court said it integrat tegrated” writings, an and that Royal’s cepted as true and held evidence par writing the a document which is as a that matter law no relief complete and final the as ties intended be based on the oral because agree of the terms embodiment the antitrust condition would violate Berney Homes, (Pollyanna Inc. v. ment. judgment Summary imper laws. 345, 676, Cal.Rptr. (1961) 16 56 Cal.2d evidence, Royal’s missible because own (1952) 401; Hale Bohannon v. 365 P.2d issues, to antitrust relevant was con 4; 458, 241 P.2d Restatement 38 Cal.2d flicting. not The District Court could 228, 237.) (1932) The §§ Contracts conflicts, trial, resolve those absent parties in question is: Did critical g., (E. do so this we cannot record. integra writing an their to be tend 1964) (9th Britt Damson 334 F. v. Cir. that held evidence tion? Masterson (1965) 966, 896, 2d denied 379 cert. U.S. writing always of is outside the face 661, 560.) if 85 13 L.Ed.2d Even S.Ct. answering purpose of admissible for the the record were clear that was a parol question. evidence rule that The nonmanufacturing that, patentee a as applied exclude evidence cannot be to license, condition of the fixed its licen tending prove is rule itself to that patented product, see’s parties inapplicable did because foregone conclusion is not that integration. writing an intend the to be agreement violates the antitrust as Heff such cases Masterson overruled United States v. General Electric Co. 738, (1919) P. 178 Gross 179 Cal. ner v. (1926) 192, 476, 272 U.S. 47 71 S.Ct. L. upon 860, District Court re which permitted patentee Ed. 362 to license lied, the search confined had competitor pat produce and sell integrate parties’ proof intent product ented with limitation writing. to the face patentee. question fixed The Masterson, nonmanufacturing According patentee the whether until falls within or Elec has no effect without the General integrate yet tric rule has not intention to answered after the fact of Supreme issue Court. United v. decision on the States If the is decided. Wrinkle, Inc. 342 parties intend U.S. did not Cleaning Hollywood 649; L.Ed. 417 P.2d 72 S.Ct. cf. Laundry Hollywood Pressing Co. v. Line Material Co. 17 P. 701 did 217 Cal. Service, L.Ed. S.Ct. Inc. U.S. showing Electric, all neither 709.) is no not overrule General There 2d hypo- question thus to disre- permit considered case a refusal identity thetically presented. do not its subsidi- We have separate gard the injus- here, question decline and we or work decide that a fraud ary sanction Court’s agree to do so. the District tice. We presents record conclusion Summary judgment was nevertheless treating Plas-Ties basis ground: upon appropriate one narrow ego. Royal’s alter upon complaint claim state a granted argument relief can be alternative Royal could not terminate the know-how was ownership licensed material, joinder or con- without issue issue. a triable sent colieensor says, because joined know-how, had in the termina- neither con- license, tion notice nor otherwise assented to nothing and it cannot *5 termination. Denker v. Twentieth Cen- sole items a colicensor. sidered Corp. tury points Royal Film N.Y.2d Fox 10 to which the record in 3 179 223 N.Y.S.2d N.E.2d evidence was support its claim Black, 1292; see Rescission A.L.R.3d in the re- conflicting statements two are (2d 1929); 3 and Cancellation 1362 ed. Here license. written citals Walker, (Dellers designed Patents ed. § has “ROYAL statements: Royal (1937).) quarrel plastic does not product line developed a argues Rather, that rule of law. strips owner United is the * ** judgment, 12(b), summary under Rule 2,767,113 No. Patent Procedure, design Federal Rules of Civil pertaining how know * * improper questions whether is desirous “POLLOCK * * * Royal separate Plas-Ties cor- under acquiring porate Royal, entities and whether rights owned how and know * * Plas-Ties, owned the know-how were added (Emphases *.” ROYAL triable issues of fact. follow Royal.) recitals These contract, stating, per- preamble of the inquiring Without into the part: AGREEMENT “THIS tinent separateness purposes, issue for other subsidiary DUSTRIES, INC. legality such as the of the claimed * * * IN- between ROYAL is made price-fixing condition, we have no diffi Corporation (hereinafter Plas-Ties culty deciding and Plas ** ROYAL) It ob- called separate Ties were re entities in Royal relies the statements vious that spect licensing of their contract. Plas whatever upon inference raise no identity Ties’ was never obliterated Plas-Ties, the know- owned merger agree or dissolution after Royal’s president Moreover, testi- how. signed ment was and before developed the Plas-Ties know- fied that brought separate suit. The identities of bought into how before parent subsidiary, and its even whol owns know-how still ly subsidiary, will not disre royalty. There for which it receives garded recognition sep unless a contrary is no evidence. circumstances, arateness, under ample opportunity obtain had promote sanction a fraud or in (E. justice. g., Luis v. Orcutt Town before to termination assent Plas-Ties’ Cal.App.2d 433, ample opportunity Water Co. It had it filed suit. Cal.Rptr. 389; plaintiff join Marr if Plas- v. Postal as a Union Life ratify Royal’s willing Ins. Co. acts. Cal.App.2d Ties was complaint stated Its neither. It have been upon relief could which claim INDUSTRIES, INC., WYATT Plaintiff-
predicated. Appellee, judgment is affirmed. INDUSTRIES, INC., PUBLICKER Defendant-Appellant. Judge CARTER, Circuit M. JAMES No. 28122 (concurring): Summary Calendar. in the result. Appeals I concur States Court of Fifth Circuit. Judge Hufstedler’s portion That Dec. Royal opinion states terminate of its co- joinder or consent without sup- is sufficient licensor, summary judg- port affirmance portion of the I concur ment and
opinion. concerning
The discussion dicta, problem since the deci- upon
sion does not rest it. judgment affirm further I would upon ground, relied
on another *6 Assuming Royal’s con- court. district agree- tentions anti-
ment, violates an- The conflict between laws. trust arising rights under
titrust laws discussed monopoly have patent pat- that a doctrine many cases. prices at may fix ent holder one, is a narrow sells his licensee where situations limited to selling. manufacturing also
holder Co., Electric v. States General United 192, L.Ed. 47 S.Ct. 272 U.S. where situation limited to a to make “patentee licenses another right contin- and retains and vend ac- his own make
ue to vend
count,” at at 47 S.Ct. 272 U.S. Com- Line Material States v.
See United 310, 68 S.
pany,
at
333 U.S.
Ct. Inc., Wrinkle, 342 U.S. L.Ed. S.Ct. price fixing, opinion, as- my
In illegal
suming existed, in vio-
lation of the antitrust