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UNITED STATES v. CHAS. PFIZER & CO.

November 30, 1973

United States
v.
Chas. Pfizer & Co., Inc., American Cyanamid Co. and Bristol-Myers Co.


Cannella, J.


The opinion of the court was delivered by: CANNELLA

CANNELLA, J.:

The motion for acquittal made by each defendant as to each count of the indictment, pursuant to Rule 29 of the Federal Rules of Criminal Procedure, is granted. Each defendant is acquitted on each count of the indictment in all respects.

 This criminal antitrust prosecution was commenced by the filing of an indictment on August 17, 1961. The indictment charges that the defendants, Chas. Pfizer & Co., Inc. (Pfizer), American Cyanamid Company (Cyanamid) and Bristol-Myers Company (Bristol) and the co-conspirators, Olin Mathieson Chemical Corporation (Squibb) and the Upjohn Company (Upjohn) violated sections one and two of the Sherman Act, 15 U.S.C. ยงยง 1 and 2, *fn1" by virtue of their manufacture, use and sale of the broad spectrum antibiotic drug tetracycline. *fn2"

 Procedural History

 These defendants were first tried before a jury in October-December 1967. The jury found each defendant guilty under every applicable count of the indictment on December 29, 1967. *fn3" The Court of Appeals reversed their convictions and remanded the case for a new trial. United States v. Chas. Pfizer & Co., 426 F.2d 32 (2 Cir. 1970), modified and petition for rehearing en banc denied, 437 F.2d 957 (2 Cir. 1970). An equally divided Supreme Court affirmed the Court of Appeals, 404 U.S. 548, 92 S. Ct. 731, 30 L. Ed. 2d 721 (1972) (three justices not participating). The case was, thereafter, remanded to this court for all purposes by the Court of Appeals. The parties stipulated to a nonjury trial before the court. *fn4"

 The Charges

 Each defendant is charged in three counts with having violated the Sherman Act during the years 1953-1961 by: (1) count one -- conspiring to exclude competitors and fix and maintain prices in the broad spectrum antibiotic market in violation of section 1 of the Act; (2) count two -- conspiring to monopolize; and (3) count three -- monopolization of the broad spectrum antibiotic market, both in violation of section 2 of the Act. The terms of the conspiracy charged in counts one and two of the indictment are as follows:

 
(a) The manufacture of tetracycline be confined to Pfizer, Cyanamid and Bristol;
 
(b) The sale of tetracycline products be confined to Pfizer, Cyanamid, Bristol, Upjohn and Squibb;
 
(c) The sale of bulk tetracycline be confined to Bristol and bulk tetracycline be sold by Bristol only to Upjohn and Squibb, and
 
(d) The sale of broad spectrum antibiotic products by the defendant companies and the co-conspirator companies be at substantially identical and non-competitive prices. *fn5"

 The Indictment sets forth twelve "means and methods" by which the defendants are alleged to have accomplished the illegal acts specified:

 
(a) Cyanamid licensed Pfizer and Bristol to use its Aureomycin patent in the manufacture of Tetracycline and refused to license all other applicants.
 
(b) Pfizer licensed Cyanamid and Bristol under its Tetracycline patent and refused to license all other applicants.
 
(c) Cyanamid assisted and cooperated with Pfizer in obtaining for Pfizer a patent on Tetracycline.
 
(d) Pfizer, Cyanamid and Bristol suppressed litigation involving the validity of Pfizer's Tetracycline patent.
 
(e) Pfizer and Cyanamid and Bristol withheld pertinent and material information from the Patent Office and otherwise misled the Patent Office prior to the issuance of Pfizer's Tetracycline patent.
 
(f) Cyanamid acquired the competing Heyden patent application on Tetracycline and abandoned the product claims therein.
 
(g) Bristol sold bulk Tetracycline only to Upjohn and Squibb. Each of the defendant companies refused to sell bulk Tetracycline to all others except that Cyanamid sold a large amount of bulk Tetracycline to Pfizer in early 1954 in assisting ...

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