United States v. Jerrold Electronics Corp.

187 F. Supp. 545 (E.D. Pa. 1960)

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Nature of the Case

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Facts

D engaged in the sale of a television booster designed to improve television reception in fringe areas by amplifying the weak signals available there. D developed an operational master antenna system. This master antenna equipment was sold through the distributors who were handling the booster. This proved unsatisfactory because these distributors and their customers lacked the technical training and experience with respect to master antenna systems which was necessary to install and maintain them properly. In late 1949, the master antenna equipment would only be marketed through distributors who had men specially trained in the sale, installation, and maintenance of master antenna systems. D also engaged in community systems, W equipment, which received enormous publicity. The new W equipment was only sold with engineering services to ensure that the system would function properly. Equipment was sold only on a full system basis and in conjunction with a service contract which provided for technical services with respect to the layout, installation, and operation of the system. Over time, the equipment became reliable such that a service contract was no longer necessary. P continued to sell the bundled system even though it priced its equipment on an individual basis. Antennas and cable could always be purchased separately. P contends that D's policy and practice of selling on a system basis only and of making sales only in conjunction with a service contract constituted unlawful tie-ins in violation of §1 of the Sherman Act and §3 of the Clayton Act.