United States v. Krasnov, 143 F. Supp. 184 (E.D. Pa. 1956), was a 1956 district court patent–antitrust decision that the United States Supreme Court affirmed per curiam without opinion. The district court granted the Government's summary judgment motion because it concluded:
That the defendants in combination controlled the market and had the ability to and did drive competitors from the business of manufacturing knitted fabric slip covers is abundantly clear from the record. That the defendants in combination fixed and maintained prices is likewise crystal clear. That the defendants in combination and cross-licensing created a situation in the industry which, particularly by agreement for joint action respecting the patents, effectively hindered newcomers in the field, is also established beyond peradventure of doubt. That the harassing suits against competitors, previously discussed in some detail, were designed as and were actually only harassing suits is clear from an examination of the correspondence between the parties and the Court feels that such conclusion in inescapable from an objective analysis of the documents. All of these actions taken in concert constitute a clear violation of the Sherman Anti-Trust Act and the Government has established to the satisfaction of the Court that the combination and conspiracy above referred to represents an unreasonable restraint of trade and commerce among the several states of the United States in the manufacture and sale of ready-made furniture slip covers, is unlawful, and in violation of Section 1 of the Sherman Anti-Trust Act. Further, the Government, in the opinion of the Court, has effectively demonstrated that the defendants combined and conspired not only to restrain trade unreasonably but also to monopolize trade and commerce among the several states of the United States in the manufacture and sale of ready-made furniture slip covers, in direct violation of Section 2 of the Sherman Anti-Trust Act. The Court also feels that by documentary proof the Government has established that the defendants have used patent rights unlawfully in instituting, effectuating and maintaining the aforesaid combination and conspiracy which likewise constitutes a clear violation of the Sherman Anti-Trust Act.
Background
The Government brought a civil antitrust action against the defendants for combining and conspiring to restrain and monopolize trade and commerce in the manufacture and sale of ready-made furniture slip covers, and for attempting to monopolize and monopolizing such trade. The defendants were Joseph A. Krasnov, Samuel Krasnov and Seymour Krasnov, partners in the business of manufacturing and selling ready-made furniture slip covers, doing business under the trade name of Sure-Fit Products Co.; Comfy Manufacturing Company, another manufacturer and seller of ready-made slip covers; Fred E. Katzner, President and CEO of Comfy; and Arthur Oppenheimer, an inventor and patentee of a patent involved in the case. Sure-Fit and Comfy were the two largest manufacturers of slip covers in the United States; in 1949 they manufactured approximately 62% of all slip covers manufactured in the United States; and 13 other manufacturers accounted for the remaining 38% of sales, the largest other competitor accounting for only 9% of the total. In 1949, total U.S. sales of ready-made furniture slip covers were more than $23 million.
In 1938, Oppenheimer transferred title in his U.S. Patent No. 2,199,868 to Comfy, but retained a reversionary interest in it as well as rights to royalties on patented slip covers and 25% of any patent infringement damages. Comfy began to enforce the Oppenheimer patent by suing retailers only and demanding, as the condition for settlement, discontinuance of the sale of competitors' goods and adoption of the Comfy line. In 1938 Comfy sued and settled with Hecht's of New York, a Sure-Fit customer; Hecht agreed to Comfy's terms and Comfy dismissed the suit. When Sure-Fit found its customers receiving notices of infringement and being threatened with suit, it sought an opinion from its attorney, who informed it "that there was no possibility of the Oppenheimer patent being sustained in an adequately contested suit." In 1928 Sure-Fit filed a suit against Comfy, in the Southern District of New York, seeking to have the Oppenheimer patent declared invalid and charging Comfy with unfair competition and violation of the antitrust laws. In October 1938, Comfy and Sure-Fit, with Oppenheimer's approval, entered into an agreement, the basic document of the alleged conspiracy; Sure-Fit then dismissed its suit against Comfy, by stipulation of counsel.