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SPERRY RAND CORP. v. NASSAU RESEARCH & DEV. ASSOCS

June 6, 1957

SPERRY RAND CORPORATION, Plaintiff,
v.
NASSAU RESEARCH AND DEVELOPMENT ASSOCIATES, Inc., and John C. McGregor, Defendants



The opinion of the court was delivered by: BYERS

This is a plaintiff's motion to dismiss a counterclaim and strike a defense proffered as part of a second amended answer. A previous pleading of the same general character was stricken by order of Judge Rayfiel dated March 12, 1957, D.C., 149 F.Supp. 93, 94, with leave to file a second amended answer and counterclaim, reserving to the plaintiff the right to make an appropriate motion addressed thereto. In granting the leave sought by the defendant, the judge said:

'However, a reading of the proposed counterclaim reveals that it is so indefinite, and so utterly lacking in specificity as to defective on its face.'

 The present task is to compare the two pleadings to ascertain if the defects referred to have been remedied.

 The action is for alleged infringement by defendants of five listed patents said to be owned by plaintiff. An injunction is sought, damages, and attorneys' fees.

 The defenses are invalidity and, seemingly non-infringement.

 The asserted counterclaim alleges violation by plaintiff of the Sherman Act, 15 U.S.C.A. § 1, the Robinson-Patman Act, 15 U.S.C.A. § 13a; and the Clayton Act, 15 U.S.C.A. § 15.

 The question for decision is whether the proposed pleading now alleges facts sufficient to enable it to survive the earlier ruling.

 The paragraphs involved are:

 Thirty-first and Thirty-second: As to both, the original charge is of conspiracy in violation of the Sherman Act. The alleged conspirators were said to be the plaintiff by its officers, etc., 'together with other persons not presently known to the corporate defendant.'

 The revised designation of conspirators is of the plaintiff 'together with one S. C. Yeaton and one W. G. Newman as well as with other persons not presently known to the corporate defendant.'

 The Thirty-second paragraph is changed only to add the names of Yeaton and Newman; the activities of plaintiff and the persons named with others are said to comprise a plan to control and restrict the sale of radar and microwave equipment, to the prejudice of the public.

 The insertion of the names of the two individuals might be thought to introduce a hitherto missing element in the proposed pleading, except for the conceded fact that they are employees of the plaintiff. It is true that they are not so designated in the proposed pleading, but are thus described in the defendants' brief on this motion (p. 2):

 'At this point, Sperry, (plaintiff) submitting to certain schemes of its employees, Yeaton & (sic) Newman, directed attempts to crush the new company (the corporate defendant).'

 The question then is whether a conspiracy under the Sherman Act is pleaded; that is, whether Sperry could have conspired with itself.

 The answer is necessarily in the negative. See Nelson Radio & Supply Co. v. Motorola, Inc., 5 Cir., 200 F.2d 911; Cott Beverage Corp. v. Canada Dry Ginger Ale, Inc., D.C., 146 F.Supp. 300.

 In the latter case, as in this, there is no allegation of a monopoly under Sec. 2 of the Sherman Act, 15 U.S.C.A. § 2. As to this paragraph, the motion is granted.

 Thirty-third: This paragraph has been recast so as to allege five instead of two forms of oppression on the part of the plaintiff. The original subd. (a) alleged that the plaintiff had exercised coercion upon its customers to force them from doing business with the defendant. The new subdivision has to do with Peerless Instrument Co. and Adolf Fischer said to have been in January, 1953 'substantial suppliers and sub-contractors of the plaintiff.' (It is assumed that they were purchasers of plaintiff's products.)

 That the former had 'agreed to give financial and manufacturing assistance and orders for material to the defendant or defendant's successor.' That 'pursuant to the illegal monopoly, hereinbefore set forth, (as stated there is no allegation of monopoly), S. C. Yeaton, W. G. Newman and others, in concert with plaintiff, threatened to withdraw the business of plaintiff from the aforesaid Peerless Instrument Co. and Adolf Fischer unless the latter refrained from engaging in business transactions with the defendant or defendant's successor.'

 The added subd. (d) is that as a result the named enterprises 'were restrained from doing business with the ...


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