United States V. Jerrold Electronics Corp.

2 Pages 498 Words

United States v. Jerrold Electronics Corp.

Jerrold Electronics Corporation made and sold “television boosters to improve television reception in fringe areas by amplifying the weak signals available there.” In 1948 the company expanded its outfit to master antenna systems and this gave Jerrold the ability for one antenna to serve a much larger area. Jerrold expanded to more than just antenna and became involved in development, service and manufacturing of the booster technology. The equipment is, as stated by Judge Van Dusen, quite sophisticated and requires antenna stations, receivers, and cables to provide a remote town with the ability to receive television transmission. Jerrold sells the whole system and individual parts cannot be purchased from the company. The company’s contracts state that only Jerrold can install, repair and service the equipment. Jerrold also forbade the use of competitor’s equipment to be used in expansion of systems unless the Jerrold gave its approval.
The District Court believed that after its inception Jerrold should have abandoned its tying agreements and also failed to show the court evidence otherwise as the industry matured. Jerrold did, however, stop using the policy but only on an “area-by-area and case-by-case basis.” This resulted in the Court concluding that Jerrold was in violation of Section 1 of the Sherman Act and Section 3 of the Clayton Act in terms of full system sales. It was already decided that tying services could not fall under the Clayton Act but the full system sales was tying the sale of one product to another. The District Court determined this by analyzing the complete package of other companies that sold complete community television antennas. “Others who entered the community antenna field offered all of the equipment necessary for a complete system, but none of them sold their gear exclusively as a single package as did Jerrold.” 187 F. Supp. 545 ...