ZENITH RADIO CORP. v. HAZELTINE RESEARCH

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Case Basics
Docket No. 
80
Petitioner 
Zenith Radio Corp.
Respondent 
Hazeltine Research Inc.
Advocates
(for the petitioner)
(for the respondent)
(for the respondent)
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Facts of the Case 

After refusing to renew a patent licensing agreement, Zenith Radio Corp., a radio and television manufacturer, was sued by Hazeltine Research, Inc., for patent infringement in United States District Court for the Northern District of Illinois. Zenith counterclaimed, alleging anti-trust violations, misuse of patents, and a conspiracy to restrain trade in Canada, England, and Australia. Zenith asked for treble damages and injunctive relief. Zenith contended that Hazeltine’s license forced them to pay for use of unpatented products and that Hazeltine had illegally conspired with foreign patent pools to prevent Zenith from expanding into those markets.

Before trial, Zenith had stipulated that Hazeltine and its parent corporation were one entity for the purposes of litigation. The District Court entered judgment against Hazeltine and its parent corporation, awarding Zenith treble damages and injunctive relief. The Court of Appeals for the Seventh Circuit affirmed the damages award, but otherwise reversed the District Court’s judgment. The Court of Appeals vacated all judgments against Hazeltine’s parent corporation because Zenith’s pretrial stipulation did not properly designate the parent corporation as a party to the litigation.

Question 

Should Hazeltine’s parent corporation be bound by the District Court’s judgment? Was Zenith injured by Hazeltine’s conspiracy with foreign patent pools?

Conclusion 
Decision: 9 votes for Zenith Radio Corp., 0 vote(s) against
Legal provision: Clayton

No, Yes as to Canada. In a 7-1 decision Justice Byron R. White delivered the opinion of the court, affirming the Court of Appeals decision to vacate the judgments against Hazeltine’s parent corporation. The Supreme Court also held that damages were only proper with respect to the Canadian market because it was the only market in which Zenith had sustained injury. The Supreme Court reinstated the District Court’s injunction against Hazeltine’s conspiracy to restrict trade in foreign markets. The Supreme Court remanded the case to the Court of Appeals to determine whether Hazeltine conditioned the grant of its licenses on the payment of royalties for unpatented products.

Justice John M. Harlan concurred in part and dissented in part, objecting to the majority’s apparent double standard that royalties provisions that measure royalties by a percentage of the licensees sales is lawful if included for the convenience of both parties, but unlawful if insisted on by the patentee.

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ZENITH RADIO CORP. v. HAZELTINE RESEARCH. The Oyez Project at IIT Chicago-Kent College of Law. 11 September 2014. <http://www.oyez.org/cases/1970-1979/1970/1970_80#argument>.
ZENITH RADIO CORP. v. HAZELTINE RESEARCH, The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/1970-1979/1970/1970_80#argument (last visited September 11, 2014).
"ZENITH RADIO CORP. v. HAZELTINE RESEARCH," The Oyez Project at IIT Chicago-Kent College of Law, accessed September 11, 2014, http://www.oyez.org/cases/1970-1979/1970/1970_80#argument.