Full opinion text
MEMORANDUM OF DECISION DUPREE, District Judge. This patent-antitrust litigation consisting of thirty-seven separate actions consolidated for purposes of trial has been tried to the court without a jury on the liability issues only, and in this memorandum of decision the court will record its findings of fact and conclusions of law in compliance with Rule 52(a), F.R.Civ.P. Jurisdiction is based on 28 U.S.C. §§ 1331, 1332, 1337, 1338, 2201 and 2202. HISTORY OF THE LITIGATION The first of the many complaints involved here was filed in the Spartanburg Division, United States District Court for the District of South Carolina, on August 8, 1968, as Case No. 68-705. In this original suit Peering Milliken Research Corporation (DMRC) and Moulinage et Retorderie de Chavanoz (Chavanoz) sought recovery of royalties alleged to be due by Textured Fibres, Inc., as a sub-licensee of DMRC which in turn was the exclusive use-licensee in the United States of certain apparatus and process patents issued to Chavanoz in the United States and relating to the false twist texturing of synthetic yams. Similar suits were thereafter instituted by DMRC and Chavanoz against various other textile manufacturers (Throwsters) engaged in the yarn texturing business. On November 25, 1969, the Duplan Corporation instituted in the United States District Court for the Southern District of New York the first of a series of actions by the Throwsters against DMRC and Chavanoz attacking the validity of the Chavanoz patents and asserting claims under the antitrust laws. Joined as defendants with DMRC and Chavanoz in these Throwster actions were Peering Milliken, Inc. (DMI), of which DMRC is a corporate subsidiary, Ateliers Roannais de Constructions Textiles (ARCT-France), a French manufacturer of textile machinery, and ARCT, Inc., a corporate subsidiary of ARCT-France organized under the laws of North Carolina for the purpose of selling in the United States the textile machinery manufactured by ARCTFrance and embodying the Chavanoz patents. These actions by the Throwsters were followed by countersuits and counterclaims by DMRC and Chavanoz for unpaid royalties and patent infringement. At that time the thirty-seven actions were pending in the federal courts in South Carolina, North Carolina, Virginia and New York. After treatment by various United States District Courts and a Panel on MultiDistrict Litigation all of the cases, which by this time involved generally the same, basic issues of unpaid royalties, patent validity and infringement, patent misuse and alleged antitrust violations, were consolidated in the District of South Carolina in 1971 as Civil Action No. 71-306. The thirty-seven actions are listed in Appendix B attached hereto. Assigned originally to the Honorable Donald Russell, these cases were re-assigned to the Honorable Robert W. Hemp-hill of the District of South Carolina upon Judge Russell’s elevation to a seat on the Court of Appeals for the Fourth Circuit in 1971. Thereafter Judge Hemphill assumed charge of the litigation, held numerous hearings, ruled on innumerable motions involving procedural, evidentiary and summary judgment matters and personally presided over the taking of a massive volume of deposition testimony in this country and in France. A summary of the previously-reported rulings and decisions in the case is attached as Appendix C. The prodigious work of Judge Hemphill is summarized in a footnote to one of his decisions, Duplan Corporation v. Deering Milliken, Inc., 400 F.Supp. 497 at page 502 (D.S.C.1975). That case was concerned with a recusal motion filed by counsel for DMRC, DMI and Chavanoz which after characteristically careful and painstaking consideration Judge Hemphill denied. The decision was not appealed. Because of the press of other duties (see 400 F.Supp. at page 526, Footnote 159) Judge Hemphill thereafter asked to be relieved from further duties in this litigation, and the same was assigned to this writer. Pre-trial conferences were held at Raleigh, North Carolina, on March 26 and June 4, 1976. The Throwsters who were aligned in interest on one side of the case were designated as plaintiffs and the parties opposing the Throwsters, DMRC, DMI, Chavanoz, ARCT-France and ARCT, Inc., were designated as defendants and will be so referred to during the course of this memorandum. The trial which was commenced at Rock Hill, South Carolina, on June 14, 1976 consumed ninety-one trial days and with periodic recesses was concluded on February 11, 1977. THE PARTIES AND THEIR ALIGNMENT The plaintiffs are companies, or divisions of companies, whose businesses involve the processing of synthetic filament yarns in order to make them suitable for a wide variety of end uses. Each plaintiff is a corporation organized and existing under the laws of the state indicated below and conducts its principal texturing activities in the city indicated: State of Principal Place Plaintiff Incorporation of Business Blanchard Yarn Company, Inc. Delaware Whitakers, N. C. Burlington Industries, Inc. Delaware Greensboro, N. C. Burkyarns, Inc. North Carolina Valdese, N. C. Dixie Yarns, Inc. Tennessee Stanfield, N. C. The Duplan Corporation Delaware Winston-Salem, N. C. Frank lx & Sons Virginia Corporation New Jersey Charlottesville, Va. Hemmerich Industries, Inc. Pennsylvania Denver, Pa. Jonathan Logan, Inc. Delaware Spartanburg, S. C. Lawrence Texturing Corporation (Division of Duplan) Lillington, N. C. Leon-Ferenbaeh, Inc. Pennsylvania Johnson City, Tenn. Madison Throwing Company (Division of Burlington) Madison, N. C. National Spinning Company, Inc. New York Washington, N. C. Olympia Industries, Inc. Delaware Tuscaloosa, Ala. Reliable Silk Dyeing Company, Inc. New York New York, N. Y. Schwarzenbach-Huber Company New Jersey Luray, Va. Spring-Tex, Inc. North Carolina Gibsonville, N. C. Texelastic Corporation North Carolina High Point, N. C. Texfi Industries, Inc. Delaware Lumberton and New Bern, N. C. United Merchants & Manufacturers, Inc. Delaware Cartersville, Ga. and South Carolina The defendants opposing the Throwster plaintiffs are the following parties: 1. DMRC is a South Carolina corporation and is a wholly-owned subsidiary of DMI. It is the successor to Deering Milliken Research Trust, and its newly-acquired corporate name is Milliken Research Corporation. Under a license agreement with Chavanoz, DMRC is the exclusive use licensee in the United States and Canada of the right to use the Chavanoz patents in suit and the right to grant sublicenses. 2. DMI is a Delaware corporation which maintains a place of business in New York, but its headquarters and much of its manufacturing operations are maintained in South Carolina. Its newly-acquired corporate name is Milliken & Company. DMI is a diversified textile manufacturer. 3. Chavanoz is a French “societe anonyme” with its principal place of business in Chavanoz, France. Chavanoz is the owner of the eight patents in suit. 4. ARCT-France is a French corporation with its principal place of business in Roanne, France. It is a manufacturer of various kinds of textile machinery, and under contractual arrangements with Chavanoz, ARCT-France is the exclusive licensee of the rights to make and sell the inventions made pursuant to the Chavanoz patents. 5. ARCT, Inc., is a North Carolina corporation with its principal place of business at Greensboro, North Carolina. It was formed in 1966 by ARCT-France for the purpose of distributing in the United States the textile machinery manufactured by ARCT-France. In addition to the named defendants herein, other persons and concerns are alleged to have conspired with the defendants in one or more of the antitrust offenses charged, including: Leesona Corporation (formerly known as Universal Winding Company) (“Leesona”), the Permatwist Company (“Permatwist”), a partnership whose members are Warren A. Seem, Nicholas J. Stoddard, Fred Tecce and Harold P. Berger, and Whitin Machine Works (“Whitin”). a. Leesona is a Massachusetts corporation with its principal place of business in Warwick, Rhode Island. Leesona is a manufacturer and seller of false twist and other textile machinery and has licensed patents and technology relating to false twist and post-treating. b. Permatwist is a Pennsylvania partnership which has been engaged in the promotion and licensing of apparatus and processes relating to false twist and post-treating. c. Whitin was a Massachusetts corporation engaged in the manufacture and sale of textile machinery with its principal place of business in Whitinsville, Massachusetts. Prior to 1966, Whitin purchased ARCT false twist machines from ARCT-France and was the exclusive distributor of such machines in the United States. The acts alleged to have been done by the corporate defendants and their alleged co-conspirators have been carried out by their officers, directors or employees, including but not limited to, the following: a. Norman C. Armitage was an officer of DMRC and from time to time an officer of DMI. Dr. Armitage, who was a lawyer, was in charge of the business, legal, policy and administrative aspects of DMRC's false twist licensing program from its inception until his death in 1972. b. Leo M. Soep was a French “conseil en brevets” employed until about 1966 by Comptoir des Textiles Artificiéis, an affiliate of Chavanoz. Soep represented Chavanoz in connection with its false twist activities. After 1966.he became an independent conseil en brevets but continued to perform services for Chavanoz. From time to time Soep represented ARCT-France in connection with its false twist activities. From 1966 until his death in 1971, Soep owned five per cent of the issued and outstanding shares of ARCT, Inc., and was a member of its board of directors. c. Henri Crouzet was at all relevant times the president of ARCT-France, and also, from the time of its formation in 1966, the president and member of the board of directors of ARCT, Inc. d. Yves de Moncuit was at all relevant times an officer of Chavanoz and the Chavanoz employee who worked with Leo Soep on false twist matters. In 1969 or 1970 he became president of Chavanoz. e. Robert F. Waters handled all ARCT false twist machinery sales for Whitin from 1959, when the first ARCT false twist machines were introduced in the United States, through 1965. Since the formation of ARCT, Inc. in 1966, Waters has been its executive vice president in actual control of its day-to-day operations, a member of its board of directors, a shareholder, and has continued to be the prime salesman for ARCT false twist machinery in the United States. f. Walter E. Mueller was chief house patent counsel for DMRC (and its predecessor Deering Milliken Research Trust) from April, 1951 to March 1, 1968. g. Robert Leeson, at all relevant times until 1967, was the president and chief executive officer of Leesona. Mr. Leeson was also chairman of the board of Leesona from 1956 or 1957 until at least February, 1972. h. Albert P. Davis was at all relevant times the house patent counsel for Leesona. THE PLEADINGS At one time there were twenty-two Chavanoz patents in suit. Prior to trial twelve of the patents had been held not infringed on motions for summary judgment, and two of the patents had been held invalid under 32 U.S.C. § 102(d). Eight patents remain in suit. They are United States Patents Nos. 2,891,375 3,165,881 2,944,319 3,232,037 3,012,397 3,283,414 3,123,973 3,584,450 Plaintiffs allege in complaints, counterclaims and affirmative defenses against DMRC and Chavanoz that these remaining Chavanoz patents are invalid and not infringed. They seek declaratory judgments of invalidity and non-infringement. They deny any liability for royalties or for patent infringement. They also allege that DMRC, DMI, Chavanoz, ARCT-France and ARCT, Inc., have violated Sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1 and 2, and have committed acts of patent misuse. The antitrust claims fall into two categories: (a) the claim of a vertical conspiracy between the named defendants arising out of the license and sub-license agreements and the manner in which the business of the defendants was conducted, and (b) a claim of horizontal conspiracy between the named defendants and Leesona arising out of agreements entered into in 1964 which settled certain patent litigation then pending between Leesona and the defendants. The misuse claims relate to proceedings before the Patent Office, license provisions and the conduct of the present litigation by the defendants. As previously indicated, the first of the actions here involved was brought by DMRC against Textured Fibres, Inc. (now Texfi Industries, Inc.), on August 8,1968, as a simple contract action for the recovery of alleged unpaid royalties in the amount of $45,691.45. Following the institution of the suit by Duplan Corporation on November 25,1969, seeking a declaratory judgment of invalidity and non-infringement as to the Chavanoz patents and alleging antitrust violations and patent misuse DMRC asserted claims or counterclaims against each of the plaintiffs for breach of the sub-license agreements arising out of plaintiffs’ refusal to pay royalties and infringement of the Chavanoz patents arising out of the plaintiffs’ continued use of the ARCT machines embodying the Chavanoz patents following repudiation or termination by the plaintiffs of the sub-license agreements. Chavanoz, which is not a party to the sub-license agreements, has joined DMRC in asserting claims of patent infringement and, of course, is defending against plaintiffs’ claims of antitrust violations and patent misuse. ARCT-France, ARCT, Inc., and DMI disclaim any interest in or to the patents in issue and therefore make no claims for infringement damages or royalties against the plaintiffs. In their answers these three defendants have denied any liability to the plaintiffs by reason of the alleged antitrust violations. THE ISSUES All questions of damages, if any, to which any party may be found entitled having been reserved for trial at a later time, the issues arising on the pleadings to be resolved by the court at this time fall into four categories: I. ANTITRUST II. PATENT MISUSE III. PATENT VALIDITY AND INFRINGEMENT IV. NONPAYMENT OF ROYALTIES These issues will be treated in the succeeding sections of the memorandum. I. THE ANTITRUST ISSUES A. The Vertical Conspiracy. The facts on which the plaintiffs’ allegations of antitrust conspiracy between the parties defendant in the chain of distribution are based are not in substantial dispute, the plaintiffs contending that the alleged restraints of a vertical nature are set forth in writing in the instruments the defendants signed. A review of the essential provisions of these agreements is therefore in order. 1. The Chavanoz-ARCT Agreements. On October 30, 1954, Chavanoz entered into an agreement with ARCT-France (The “1954 Agreement”) under the terms of which Chavanoz granted to ARCT-France “the exclusive right to manufacture and sell” the inventions described in certain Chavanoz false twist patents and patent applications as well as any later improvements. At that time Chavanoz owned French Patent No. 1,054,338 and two applications (Nos. 52,346 and 54,253) for certificates of addition, but it owned no United States patents relating to false twist. The pertinent provisions of the 1954 agreement were as follows: “1. [Chavanoz] grants to ARCT the exclusive right to manufacture and sell the devices described in the patent and additions mentioned above as well as any later improvement. “4. . . . [T]he rights of industrial property are reserved exclusively for [Chavanoz] including those attached to the new models. Any application for a patent that could concern such new models must be made by [Chavanoz] in its name and at its expense. ARCT will take the necessary steps to inform [Chavanoz] promptly of any improvements so as to allow it to insure adequate protection of which [Chavanoz] is the sole judge. “6. ARCT shall not deliver the patented material to any firms other than licensees of the HELANCA process, except in the case of a prior and written authorization from [Chavanoz]. “7. In exchange for the present exclusive grant, ARCT shall pay to [Chavanoz] royalties on all the material built and invoiced by ARCT or by its sub-licensees by virtue of the present document, delivered to any firms other than [Chavanoz], The royalties shall be as follows . [ten per cent for first year decreasing annually to two per cent for the sixth and following years]. “9. The present license for construction and sale is granted and accepted for the duration of the main patent [French Patent No. 1,054,338], and it shall come into effect on the day the first mass-produced machine following the prototype is delivered.” Thereafter Chavanoz obtained United States patents corresponding to the French patent and applications which were issued as United States Patents Nos. 2,741,893 (the “bathtub” patent — so-called because of the similarity in shape of the vessel designed to contain a hot liquid through which the yarn passed during processing to a conventional bathtub); 2,761,272; 2,780,047; 2,823,513; and 2,823,514. Since the 1954 agreement covered “improvements” as well as the existing French patent and applications and was worldwide in scope, these and subsequent United States patents obtained by Chavanoz relating to false twist came under the 1954 agreement. All five of these patents were held by Judge Hemphill on motions for summary judgment to be non-infringed by any ARCT machine purchased by the plaintiffs in this action. Chavanoz and ARCT-France entered into a revised agreement dated July 18, 1962 (The “1962 Agreement”) which consolidated “in a comprehensive instrument” the 1954 agreement and a “number of verbal agreements” stating “the parties are at one in considering that the various agreements should be brought into line and consolidated in a comprehensive instrument.” The essential provisions of the 1962 agreement were as follows: “1. [Chavanoz] grants to [ARCT] the exclusive right of construction and sale in the whole world of the devices described in the patents and patents of addition listed on the attached List A, as well as of any subsequent improvement in the field of the manufacture of crimped textile yarns, either natural, artificial or synthetic, curled through the application of a false twist which is heat set, and in the yarns which may be obtained from said crimped or curled yarns, through an additional treatment or shaping. This field is called the ‘field of the patents’. “4. All patent rights attached to the improvements in the field of the patents remain the property of [Chavanoz]. Any patent application which may concern new models must be filed by [Chavanoz] in his name and at his expense, and [ARCT] must take all necessary measures so as to diligently communicate the improvements to [Chavanoz] to enable him to assure adequate protection, of which [Chavanoz] remains the only judge. “7. [ARCT] has filed in its name the patents listed on List B and the patents have been assigned to [Chavanoz] with a retrocession of the complete freedom of exploitation outside of the field of the patents . . . “8. [ARCT] shall deliver the devices under the present contract only to the ■holders of a process license which is granted by [Chavanoz], except in the case of a prior and written authorization by [Chavanoz], In the countries where [Chavanoz] has no patents, [ARCT] may deliver without authorization. “9. [ARCT] pays to [Chavanoz] in exchange for the exclusive right of construction and sale according to Article 1 and the technical assistance according to Article 2 [‘the drawings and models of the prototypes made by the patentee’], a royalty which is two per cent of the value before taxes, leaving factory, electric motors not included. “11. The present license of construction and sale is granted and accepted for the duration of the French Patent No. 1,054,338 [U.S. Patent No. 2,741,893 — the “bathtub” patent]. “19. By reason of the technical assistance supplied by [Chavanoz] according to Articles 1 and 2, the present contract is not cancelled in the case of the complete invalidity of the patents of List A, but in this case the protection according to Article 15 is de facto eliminated.” An additional French patent of addition (No. 67151) issued subsequent to the 1954 agreement was listed in List A attached to the 1962 agreement, but apparently no United States patent was issued corresponding to it. Of the six French patents assigned by ARCT to Chavanoz as shown on List B, United States patents were obtained on two of them (French Patent Nos. 1,126,-065 and 1,216,847) and these two United States Patents, Nos. 2,788,634 and 3,177,361, were held by Judge Hemphill not to have been infringed by the plaintiffs herein. The royalties payable by ARCT to Chavanoz under the 1954 and 1962 agreements were in fact paid, and there was no difference in the royalty rate for machines sold in the United States where customers also paid a production royalty for use of the machines and the royalty rate paid on machines sold in countries where no use royalty was payable. 2. The Chavanoz-DMRC Agreements. On December 31,1957, DMRC and Chavanoz signed an agreement giving DMRC the exclusive use rights in the United States and Canada under the Chavanoz false twist patents with the right to grant sub-licenses. The pertinent portions of this agreement were as follows: “1. Chavanoz hereby grants to DMRC throughout the United States, its territories and dependencies and Canada upon the conditions hereinafter set forth and subject to certain rights of cancellation as defined below, an exclusive license to use the FT process and FT machines for the purpose of making, using and selling [false twist] yarns in accordance with technical information and the inventions of the FT patents set forth in Appendix ‘A’ appended hereto, with the right to grant sublicenses in the United States and Canada. The right to manufacture and sell FT machines in accordance with said FT patents is specifically excepted. “3. The manufacture and delivery of FT machines by ARCT or its sublicensees for use in the United States and Canada shall, as between Chavanoz and DMRC, be the responsibility of Chavanoz and Chavanoz shall direct ARCT or ARCT’s sublicensees for the manufacture and sale of FT machines to sell or deliver FT machines in the United States and Canada only to parties sublicensed by DMRC to use the machines, such sublicenses and parties being respectively referred to hereinafter as ‘use licenses’ and ‘use licensees’ . “DMRC under its rights to sublicense hereunder shall issue use licenses to reputable customers of ARCT or of ARCT’s sublicensees when called upon by ARCT or ARCT’s sublicensees so to do, but shall have the right to refuse the grant of a use license to any parties for sufficient cause. The grant of a use license shall not be arbitrarily or unreasonably withheld . . . “9. DMRC shall charge its use licensees royalties in the amount of five per cent of the manufacturer’s list price of the raw yarn which is converted to mousse [false twist] yarns by such use licensees according to the FT process or on FT machines and is sold or used; provided, however, that this rate of royalty may be reduced by DMRC and at its discretion to a figure of not less than two and one-half per cent if there is substantial unlicensed competition by producers using the FT process or FT machines embodying the inventions of this agreement to the extent of at least 10,000 pounds of [false twist] yarn per month and further provided, that DMRC shall exact from each use licensee a minimum annual royalty of $1,000.00 payable in advance. “10. DMRC shall remit to Chavanoz fifty per cent of all revenues which DMRC itself receives from the use licensees . “15. This agreement and the license granted hereunder, unless sooner terminated or cancelled as hereinafter provided, shall continue for a period until expiration of the last patent to issue to Chavanoz in the United States and Canada respectively.” In addition to the quoted provisions the agreement also required Chavanoz “to furnish to DMRC all the technical information and know-how Chavanoz possesses in the field of the FT process”, and there was a grant-back provision requiring DMRC to assign to Chavanoz improvements in the FT process made by DMRC and to include in its sublicense agreements a provision requiring its sub-licensees to grant Chavanoz a license in the sub-licensees’ own country under any such improvements and to assign all foreign rights to Chavanoz without payment of royalty. DMRC and Chavanoz executed six supplemental agreements between 1957 and 1962 under the terms of which Mexico was added to the territory in which DMRC was given use rights, the grant-back provision in the 1957 agreement was first modified and then deleted, the royalty rate was fixed at two and one-half per cent and DMRC was authorized to grant non-commercial use licenses with no minimum royalty. A further supplemental agreement provided that the sub-licenses granted by DMRC would not ipso facto terminate “if for any reason the exclusive license granted DMRC by Chavanoz is terminated.” On December 28,1962, DMRC and Chavanoz entered into a new basic agreement which revised the 1957 agreement, but in all material respects it remained the same as the 1957 agreement as modified by the intervening supplemental agreements. With a few subsequent modifications, the 1962 DMRC-Chavanoz agreement remained the basic agreement between them until after the commencement of the present litigation. One of the modifications incorporated the terms of an agreement between DMRC, Chavanoz and Whitin in June, 1963 increasing the royalty rate to three and one-half per cent with all but .6% being escrowed for return to the licensees in the event of the unsuccessful defense of litigation then pending between the Leesona Corporation, DMRC, Chavanoz and Whitin. 3. The ARCT-France-Whitin Agreement. On February 20,1959, ARCT-France and Whitin Machine Works entered into an agreement under which Whitin was granted the exclusive right to sell ARCT false twist machines in the United States, Canada and Mexico. (An option granted Whitin to manufacture the machines was never exercised.) Following several recitals including reference to the 1954 agreement between Chavanoz and ARCT-France and the fact that Chavanoz has granted to DMRC “the exclusive right and the right to grant sub-licenses to practice and use the processes covered by said [Chavanoz] patents in the USA, Canada and Mexico” the agreement contained the provision that “Whitin agrees to sell FT machines only to persons or firms approved by [Chavanoz] and/or DMRC.” While the agreement speaks in terms of Whitin’s acting “as a selling agent for such machines”, in practice Whitin purchased the machines outright from ARCT-France and took title to them at the French port of embarkation. At that time ARCT-France parted with all dominion and control over the machines and the risk of loss was transferred to Whitin. Whitin had the absolute right to set its own price for the resale of these machines to Throwsters in the United States, Canada and Mexico. 4. The ARCT-France — ARCT, Inc., Agreement. In February, 1966, ARCT, Inc., was organized as a North Carolina corporation to undertake to sell the ARCT machines in the United States. Stock in this new corporation was owned sixty per cent by ARCTFrance, thirty-five per cent by Robert Waters, who had been Whitin’s sales manager for the ARCT machines, and five per cent by Leo Soep, a French “conseil en brevets”, who, in addition to representing Chavanoz in patent matters, also negotiated agreements in patent and other matters on behalf of ARCT-France from time to time including the Whitin agreement. With the formation of ARCT, Inc., Robert Waters left Whitin, where he had been responsible for the sale of all ARCT false twist machines in this country, to become executive vice president and director of ARCT, Inc., in actual control of its day-today operations. On February 7, 1966, ARCT-France and ARCT, Inc., entered into an agreement for the purchase of ARCT machines from ARCT-France by ARCT, Inc. This agreement provided that “property in the machine and risk of loss will shift to ARCT, Inc., upon delivery to the ocean carrier at the French port of embarkation” and that ARCT, Inc., had the absolute right to set its own resale price to its Throwster customers. Although Whitin retained the right to distribute the machines after the formation of ARCT, Inc., it in fact went out of that business and did not sell any false twist machines thereafter, and since 1966 ARCT, Inc., has acted as the distributor of ARCT false twist machines in the United States. The written agreement between ARCTFrance and ARCT, Inc., contained no express covenant, such as that found in the ARCT-Franee-Whitin agreement, restricting the resale of ARCT machines by ARCT, Inc., to DMRC licensees, but in practice ARCT, Inc., did in fact so restrict delivery of the machines until well after the institution of this litigation. The sales contracts of ARCT, Inc., and its predecessor, Whitin, contained no reference to the DMRC use license or the fact that DMRC had any use rights in the Chavanoz patents, but the Throwster purchasers were routinely informed by Waters while he was employed by Whitin and later by ARCT, Inc., that it would be necessary to obtain a use license from DMRC before the machinery could be placed in operation. It was also publicly announced in trade publications as early as April, 1959, that Chavanoz had granted DMRC the right to license users of the ARCT machines in the United States which Whitin had been licensed to manufacture and sell, and it was common knowledge in the trade that a DMRC use license was required to operate these machines. 5. The Standard DMRC License Agreement. Prior to the sale of the first ARCT machine in the United States DMRC prepared with Chavanoz’s approval a printed form standard license agreement (the “DMRC Use License”) to be signed by all purchasers of ARCT machines. The subject matter of the DMRC use license, which was signed by each of the plaintiffs in substantially identical form, is spelled out in the “Whereas” clauses as follows: “WHEREAS, DMRC has an exclusive license throughout the United States, Canada and Mexico with the right to a grant sublicenses under certain inventions and technical information relating to processes and devices for the manufacture of crimped synthetic yarns based upon the application of a false twist (such processes and devices being hereinafter referred to respectively as ‘FT processes’ and ‘FT machines’), which inventions are described in United States patents and/or applications for Letters Patent in the United States, owned by MOULINAGE ET RETORDERIE DE CHAVANOZ (hereinafter referred to as CHAVANOZ) and listed in Appendix ‘A’ appended hereto, together with certain improvements thereon as such may hereafter be made or acquired by CHAVANOZ and any patent applications and/or patents in the United States relating thereto, to use said processes and devices for the purpose of making said crimped yarns for use and sale, such right of DMRC under the inventions, applications and patents aforesaid being hereinafter referred to as ‘FT PATENT RIGHTS,’ and “WHEREAS, LICENSEE desires a use license to use processes and devices embodying the inventions of said FT PATENT RIGHTS, ...” The pertinent contractual provisions of the agreement are as follows: “1. DMRC hereby grants to LICENSEE upon the conditions hereinafter set forth and subject to certain rights of cancellation as defined below, a nonexclusive and nontransferable use license for a period until expiration of the last patent to issue in the United States, upon which said FT PATENT RIGHTS are based, to use the FT processes and FT machines for the purpose of making for use and sale crimped yarns in accordance with technical information and the inventions of said FT PATENT RIGHTS. The use license hereby granted is restricted as to the use of the FT process and FT machines to the plants of the LICENSEE situated in the United States, but subject to intervening rights, if any, of third parties, the crimped yarn manufactured by such use may, as between DMRC and LICENSEE, be sold freely in all of the countries of the world. “2. DMRC has already furnished to LICENSEE certain technical information relative to the present inventions, which LICENSEE acknowledges, and as promptly as practicable after the date of this agreement DMRC shall furnish to LICENSEE such additional technical information and ‘know-how’ as is necessary in DMRC’s opinion to enable LICENSEE to practice the inventions licensed hereby and shall from time to time while this agreement is in effect furnish further additional information as it similarly deems necessary to supplement information heretofore furnished hereunder, provided, however, there shall be no obligation on the part of DMRC or its licensor to perform any additional or future research or development in the field of the inventions covered by this agreement. DMRC shall disclose to LICENSEE said additional information and ‘know-how’ after mill test has in DMRC’s judgment confirmed that an improvement has been made and within sixty (60) days after the improvement has in DMRC’s judgment been successfully reduced to practice in commercial production. If DMRC hereafter makes or acquires any improvements of the inventions of FT PATENT RIGHTS upon which it obtains patents, it shall then grant to LICENSEE licenses to use such improvements at no increase in royalty by incorporation of such patents into FT PATENT RIGHTS under the present agreement. LICENSEE shall be entitled to send its engineers or other personnel to DMRC or its designee for the purpose of obtaining instructions as to the best methods of practicing these inventions, and may request DMRC to send to LICENSEE upon terms to be mutually agreed upon technical personnel for the purpose of instructing LICENSEE at LICENSEE’S premises in the said best methods of practicing the inventions. “3. LICENSEE shall disclose to DMRC within thirty (30) days of the first use or embodiment thereof in commercial practice, any improvements of the FT process or FT machines, whether or not patentable, conceived and made by LICENSEE or its employees subsequent to the date of this agreement and shall grant to DMRC or its designee throughout the United States, its territories and dependencies, a nonexclusive license thereunder and any patent application or patent thereon with the exclusive right in DMRC or its designee to sublicense its licensees and sublicensees thereunder for the life of the last patent to issue in the United States of the patents upon which said FT PATENT RIGHTS are based, said improvements being available for use by LICENSEE, and LICENSEE shall assign to DMRC or its designee all foreign rights thereto, all without payment of royalties. [This grantback clause deleted after 1961.] “4. Except as hereinafter provided, LICENSEE shall pay DMRC during the life of this agreement royalties in the amount of two and one-half per cent (2%%) [later 3%%] of the manufacturer’s list price of the raw yarn (but including any customs tariff on yarn imported from abroad) which is converted to crimped yarn by LICENSEE according to the FT process or on FT machines and is sold . The present use license is related only to the use of FT machines manufactured under license of CHAVANOZ by Ateliers Roannais de Constructions Textiles, of Roanne, France, referred to hereinafter as ‘ARCT,’ or its sublicensees, and LICENSEE is required to pay royalties under the provisions of the present paragraph only upon the production of such machines, provided that LICENSEE shall have the right to include under this use license the use of any other false twist or FT process or any other false twist or FT machine upon notice to DMRC, whereupon royalties upon the production thereof shall thereafter be payable in accordance with the above provisions. “5. LICENSEE shall pay to DMRC a minimum annual royalty of One Thousand Dollars ($1,000.00) in United States currency, the first said payment to be made upon the signing of this agreement by LICENSEE and succeeding payments upon each anniversary of the execution of the agreement. These minimum royalties in their entirety shall be respectively credited against royalties accruing under paragraph 4 hereof in the next succeeding twelve (12) months but shall not be credited against any royalties payable thereafter. “9. DMRC warrants that CHAVA-NOZ has undertaken that, in the event that LICENSEE is threatened with suit or is sued for patent infringement based upon the use of techniques or procedures specifically recommended by DMRC to LICENSEE hereunder, CHAVANOZ shall upon request from LICENSEE (transmitted through DMRC) defend such suit at the expense of CHAVANOZ insofar as such alleged patent infringing activities may be involved; provided that DMRC is notified promptly in writing of all such claims of or suits for infringement, and further provided that any damages awarded or expenses of any kind incurred in such defense beyond court costs and attorneys’ fees shall be borne by LICENSEE. “10. DMRC further warrants that CHAVANOZ has agreed that, if for any reason the exclusive license granted DMRC by CHAVANOZ and referred to above is terminated, the present use license shall not be terminated ipso facto but LICENSEE shall have the right and option to continue under the terms of the present use license, except that CHAVA-NOZ shall succeed to the rights and obligations of DMRC hereunder. “11. LICENSEE shall have the right to terminate this license and agreement five (5) years after the date of commencement of the first fiscal year hereunder or on any anniversary thereafter by giving DMRC sixty (60) days’ notice in writing of such termination . “13. In the event of termination or cancellation of this agreement by operation of paragraphs 10, 11 or 12 hereof, LICENSEE agrees to cease using the FT process and FT machines for the manufacture of crimped yarn according to inventions which are the subject of the present agreement, except that LICENSEE shall have the right to complete any and all contracts for the manufacture of said crimped yarn which it may then have upon its books or for which it has become obligated ... In the event of termination or cancellation of this agreement, LICENSEE shall not use or disclose the technical information furnished hereunder except as such information is published or otherwise made available to the public through other sources, and LICENSEE shall deliver to DMRC within ninety (90) days after the date of such termination or cancellation all written or printed material in LICENSEE’S possession relating to the FT process or FT machines of this agreement, whether or not such written or printed material was furnished to LICENSEE by DMRC, and including all copies of instructions, drawings, photographs, and the like. “14. LICENSEE acknowledges the validity of any patents issued or which may issue on applications as aforesaid, and agrees that it will not contest the same or be a party directly or indirectly to any proceeding disputing such validity or tending to impair the value of FT PATENT RIGHTS or by which the enjoyment of full revenue therefrom by DMRC may be reduced. From the outset of the DMRC licensing program in the United States DMRC and Whitin actively cooperated in compelling compliance with the use license requirement, and this cooperation was continued by ARCT, Inc., when it took over the sales of the ARCT machines in this country. DMRC took such measures as threatening to embargo the shipment of ARCT machines to the United States in an effort to prevent the delivery of machines to non-licensed Throwsters. The procedures which had been established during the Whitin period continued essentially unchanged by ARCT, Inc., until after the commencement of this litigation. Although there were some isolated instances in which machines were delivered prior to the execution by the purchaser of the use license, Waters never told a customer or prospective customer that it was not necessary to sign the DMRC license or that he would deliver a machine if the agreement was not signed. ARCT-France through its chief executive officer, Henri Crouzet, also continued to cooperate with Chavanoz and DMRC in the use licensing program. As late as February, 1970, Crouzet wired Armitage of DMRC: “. . .It has never been in our intention nor Bob Waters’ to deliver machines to your customers without signature of a license . . . The agreement given to Bob Waters is to sell at the present conditions up to end of February to the new customers who would have taken towards ARCT the binding of signing a license with you . . . The license will always been [sic] regularized before delivery of the machines . . . ” (PX 539). And in March of 1970 Crouzet wrote to deMoncuit of Chavanoz: “Pursuant to Article 8 of the agreement of 7/18/62 we refrained from and prohibited our affiliate, ARCT, Inc., from selling false twist machines to American customers who have not taken a license with DMRC.” (PX 212). The result of this concert of action between the defendants was that at the time of the institution of this litigation there was no ARCT FT machine in commercial operation in the United States by an unlicensed user. Because the requirement that the machines be sold only to use licensees was a disadvantage to Whitin and ARCT, Inc. in making sales, the cooperation of Robert Waters in the DMRC licensing program while he was sales manager for Whitin and later when he became executive vice president of ARCT, Inc. was tinged with some reluctance. As shown in more detail in the proposed findings of fact of ARCT, Inc., Nos. 51-52 adopted below, this eventually led to a deterioration of the relationship between Waters, whose sole interest was in selling machines, and Norman Armitage of DMRC, whose sole interest was in licensing the machines and collecting royalties. Finally in late August, 1970, long after this litigation had been pending, ARCT, Inc., added a disclaimer paragraph to its sales contracts reading as follows: “There is no warranty, express or implied, that the sale, delivery- or use of the FT machine provided for in this contract does not infringe patents owned by third parties. A use license under certain patents covering this machine may be obtained from Deering Milliken Research Corporation.” (DX 821). Thereafter ARCT, Inc., sold the machines without regard to whether the customer had signed a use license, and no new purchaser has since signed a DMRC use license. In addition to the foregoing findings of fact with respect to the alleged vertical conspiracy the court expressly adopts as its own the following proposed findings of fact submitted by the parties: 1. Plaintiffs’ proposed findings of fact on the antitrust issues Nos. 14.40, 14.43, 14.46, 14.51, 14.56, 14.59, 14.60, 14.61, 14.64, 14.66, 14.80, 14.81 and 14.82. 2. Chavanoz, DMRC and DMI proposed findings of fact on the antitrust issues under Section I, Nos. 1-9 inclusive, 11, 12, 20-23 inclusive, 29, 33, 72 and 73. 3. ARCT-France’s proposed findings of fact Nos. 7-12 inclusive, 16, 17, 24, 25, 27 and 30-33 inclusive. 4. ARCT, Inc.’s proposed findings of fact Nos. 50, 51 (with the exception of the last paragraph) and 52. While the foregoing facts relating to the alleged vertical conspiracy are not in serious dispute, the legal conclusions drawn by the opposing parties from these facts are in diametric contradiction. The plaintiffs have confidently asserted that they have established by a preponderance of the evidence per se and other violations of Section 1 of the Sherman Act while the defendants with equal confidence have contended to the contrary, asserting that the facts establish only that the defendants have exercised lawful rights granted them under the patent laws. Plaintiffs’ position may be briefly summarized as follows: (1) Chavanoz’s license to ARCT-France and its sale of the machines exhausted the patent monopoly and gave all subsequent purchasers of the machines an implied license to use them without further payment of royalties; (2) The Chavanoz-ARCT-France agreements required ARCT-France to assign to Chavanoz (“grant-back”) patent rights in all improvements; (3) Chavanoz and DMRC conspired to fix the price of the ARCT machines through the use royalties exacted from the Throwster purchasers; and (4) Chavanoz and DMRC conspired to tie the purchase of the machines to the purchase of a compulsory package license covering unpatented “technical information” and technology and a large number of patents most of which were not applicable to the machines. These charges will now be considered seriatim. The Exhaustion-Implied License Theory Plaintiffs do not deny that the rights inuring to a patentee under Section 154 of the patent laws, 35 U.S.C. § 154, to exclude others from making, using or selling a patented invention may lawfully be assigned or licensed separately under Section 261, 35 U.S.C. § 261, and that the patentee is entitled to a monetary reward for any one or all three of such rights. Plaintiffs earnestly contend, however, that Chavanoz failed to achieve its apparent purpose in this case with the result that the sale of the ARCT machines, first to Whitin and later to ARCT, Inc., exhausted the patent monopoly and that upon resale of the machines the purchasers acquired an implied right to use them without payment of a use royalty to Chavanoz or its sublicensee, DMRC. From this premise it is argued that the restriction on the resale of the machines to DMRC licensees was a restraint on trade which constituted a per se violation of Section 1 of the Sherman Act under United States v. Arnold, Schwinn and Company, 388 U.S. 365, 87 S.Ct. 1856, 18 L.Ed.2d 1249 (1967). In support of their argument that the exhaustion doctrine is applicable here plaintiffs point to the absence of any express reservation of use rights in the 1954 agreement. This agreement gave ARCT-France, so the argument goes, the unlimited right to sell the machines free and clear of any use rights later claimed by Chavanoz to have been retained, and notwithstanding all purchasers of the machines in the United States fully understood that use royalties were payable, and were in fact paid prior to the institution of this litigation, the purchasers were under no legal obligation to do so. Settled principles of contract and patent law impel a contrary conclusion. The general rules of construction for contracts are applicable to the construction of patent licenses. De Stubner v. United Carbon Company, 67 F.Supp. 884, 891 (S.D.W.Va.1946), aff’d, 163 F.2d 735 (4th Cir. 1947); Baldwin Rubber Company v. Paine & Williams Company, 107 F.2d 350 (6th Cir. 1939). The construction placed on a license contract by the parties is entitled to great weight. Limbershaft Sales Corporation v. A. G. Spalding & Brothers, 111 F.2d 675 (2nd Cir. 1940). And, of course, a license contract must be construed as a whole and the intention of the parties must be determined from the entire agreement. Victory Bottle Capping Machine Company v. O. & J. Machinery Company, 280 F. 753, 759 (1st Cir. 1922). None of the agreements between Chavanoz and ARCT-France expressly reserved to Chavanoz the use rights in machines to be built embodying the Chavanoz inventions, and sales were only limited by the 1954 agreement to licensees of the HELANCA process. Nothing was said of the right of those licensees to use the machines following purchase. The 1957 Chavanoz-DMRC agreement, however, obligated Chavanoz “to direct ARCT ... to sell or deliver FT machines in the United States only to parties sublicensed by DMRC to use the machines . . .” The record is not clear as to how Chavanoz undertook to discharge this obligation, but without question ARCT-France and its affiliates in the United States, first Witin and later ARCT, Inc., faithfully adhered to the directive which Chavanoz doubtless gave, and no sales or deliveries were made to purchasers in the United States who did not at the time of the sale or shortly thereafter sign a DMRC use license. It must be assumed, therefore, that ARCT-France accepted this obligation as an amendment to its 1954 agreement with Chavanoz. The 1962 agreement which consolidated “in a comprehensive instrument” the 1954 agreement and a “number of verbal agreements” contained an express prohibition against the delivery of the machines by ARCT-France to non-licensed users. In the meantime a similar prohibition had been incorporated in the 1959 agreement between ARCT-France and Whitin. Even if there had been no express limitation on ARCT-France’s right to sell and deliver to non-licensed users, such term may be implied from the conduct of the parties. “Terms may be implied in a contract, not because they are reasonable, but because they are necessarily involved in the contractual relationship so that the parties must have intended but failed to specifically include them because of their obviousness. Where, from the nature of a contract and the circumstances under which made, it is apparent the parties must have proceeded on the basis that certain conditions existed, without which its performance would be unnecessary, the existence of such conditions will be regarded as implied terms of the obligation. Sacramento Navigation Company v. Sate, 273 U.S. 326, 329 [47 S.Ct. 368, 71 L.Ed. 663]; Wheeling & L. E. R. Company v. Carpenter, 218 F. 273 (CCA 6).” Baldwin Rubber Company v. Paine & Williams Company, 107 F.2d 350, 353 (6th Cir. 1939). Plaintiffs cite the intermediate sales by ARCT-France to Whitin and ARCT, Inc., as further evidence in support of their exhaustion argument, but in the court’s view these sales did not serve to free the machines from the use right restriction any more than if the plaintiffs had purchased directly from ARCT-France. In either case, they would have purchased from a party who had no use rights in the machines, a fact well known to all concerned. Thus the sales remained conditional under the patent laws. Since ARCT-France’s right to manufacture and sell the machines was a contractually-limited one, the use rights were effectively reserved and Chavanoz and DMRC had the right to license the use of the machines separately from their manufacture and sale, Brulotte v. Thys Company, 379 U.S. 29, 85 S.Ct. 176, 13 L.Ed.2d 99 (1964); General Talking Pictures Corporation v. Western Electric Company, 304 U.S. 175, 58 S.Ct. 849, 82 L.Ed. 1273 (1938); In Re Yarn Processing Patent Validity Litigation, 541 F.2d 1127 (5th Cir. 1976); Extractol Process, Ltd. v. Hiram Walker & Sons, Inc., 153 F.2d 264 (7th Cir. 1946). In the Schwinn case, so heavily relied on by plaintiffs, the Supreme Court extended the per se doctrine to cover restrictions imposed by a vendor on the resale by a distributor of unpatented merchandise as to which the vendor had surrendered title, dominion and control. The plaintiffs have cited no case, however, and the court has found none, extending Schwinn to a restriction imposed by a patentee in the lawful exercise of his patent monopoly rights. Having concluded that the sales by ARCTFrance did not exhaust the patent monopoly, the court declines to apply the Schwinn doctrine to the facts of this case. The Grant-Back Clause Covenants in a license requiring the licensee to assign or license any improvements he may make to the patentee, commonly referred to as “grant-backs”, are not as such inherently illegal. Transparent-Wrap Machine Corporation v. Stokes-Smith Company, 329 U.S. 637, 67 S.Ct. 610, 91 L.Ed. 563 (1947). Plaintiffs contend, however, that the contractual obligation of ARCT-France to assign to Chavanoz all rights in improvements in the “patent field” as defined in paragraph 1 of the 1962 agreement “far exceeds the scope and form of grant-back obligation exempted from the per se rule in [Transparent-Wrap]”, and constituted a per se violation of Section 1 of the Sherman Act as well as an unreasonable restraint on trade under that statute. Because the scope of the improvements required to be granted back by ARCT-France extended substantially beyond the scope of Chavanoz’s original patents, the question here is a close one, but the court has concluded that the grant-back clause did not in this instance offend the antitrust laws. Considerations leading to this determination include the following: 1. The grant-back had no adverse effect on competition in the manufacture of false twist machinery. Neither Chavanoz nor DMRC manufactured machinery, and ARCT-France’s principal competitor in the United States, Leesona, was not affected by this grant-back arrangement between Chavanoz and ARCT-France. 2. ARCT-France was the only manufacturing licensee involved in the grant-back arrangement, and it was free to incorporate its own inventions in its machines without payment of further royalties to Chavanoz. Since all ARCT machines sold in this country included at least two inventions patented initially to Chavanoz in its own right (DX 628), the plaintiff use licensees were under a continuing obligation to pay the level royalty rate established by Chavanoz and DMRC. When new improvements were developed and incorporated in the machines they were made available to plaintiffs without any increase in this fixed royalty rate. Thus the plaintiffs were not harmed by the grant-back arrangement. 3. Invention by ARCT-France was not discouraged by the grant-back clause. Of the twenty-two patents originally in suit here twelve were developed by ARCTFrance and assigned back to Chavanoz. Its research and development efforts obviously were not stifled by the arrangement. In the early DMRC standard use license form there was incorporated a grant-back clause applicable to DMRC’s use licensees, the plaintiffs in this case, but this provision was deleted in 1961 following an amendment to the Chavanoz-DMRC agreement. The questions raised by the several grant-back clauses which continued to appear in the Chavanoz-ARCT-France agreements will be re-examined under the patent misuse section of this memorandum, but at this point the court is of opinion that the requirement that ARCT-France assign back to Chavanoz all improvements it might make in the “patent field” did not rise to the level of an antitrust violation. The Price-Fixing Charge In support of their position on the price-fixing charge plaintiffs argue that the amount of the royalty established by the agreement between Chavanoz and DMRC which the licensees were to pay, and which DMRC consistently maintained was non-negotiable, constituted a part of the sales price of the machines. The fixing of this portion of the price paid by the Throwsters, the plaintiffs contend, constituted a per se violation of Section 1 of the Sherman Act. Here again we find the plaintiffs relying on the assumption that the sale by ARCTFrance of the machines exhausted the patent monopoly and carried with it an implied license to use the machines without payment of royalties. Since the court has been unable to accept this argument, the charge of price-fixing must be examined in the light of the unquestioned right of a patentee “to exact royalties as high as he can negotiate within the leverage of that monopoly.” Brulotte v. Thys Company, 379 U.S. 29, 33, 85 S.Ct. 176, 179, 13 L.Ed.2d 99 (1964). Plaintiffs’ reliance on such cases as Ethyl Gasoline Corporation v. United States, 309 U.S. 436, 60 S.Ct. 618, 84 L.Ed. 852 (1940), and United States v. Univis Lens Company, 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408 (1942), is misplaced. In each of those cases the patentee had licensed a manufacturer to make and sell the patented product but had reserved the use rights to itself. The patentee had then issued use licenses to wholesalers and retailers, and in each license had set the price at which that party could sell to the next party in the chain. Therefore, on the purported basis of a retained use license, the patentees had set the price paid by the first wholesaler to the manufacturer, by the first retailer to the wholesaler and by the public to the retailer. The holding in these cases is simply that the Sherman Act prohibits the use of a patent monopoly to fix the resale price once the product has passed into the hands of a purchaser from a manufacturing licensee. They in no way impose a restriction on the amount a patentee may set as the purchase price for his invention or the amount he may exact as a royalty for its use. Eastern Venetian Blind Company v. Acme Steel Company, 188 F.2d 247, 253 (4th Cir. 1951). In Re Yarn Processing Patent Validity Litigation, 541 F.2d 1127 (5th Cir. 1976), another case relied on by plaintiffs, is also distinguishable. In that case the patentee, Leesona, licensed other manufacturers to make and sell machines incorporating its patents but reserved the right to charge the purchasers a production royalty one-third of which was shared with its competitor manufacturers. The Fifth Circuit held that the sales price of the machinery consisted of two elements, the initial price and the royalty payments, and that since the royalty rate was not negotiable by the manufacturers, this portion of the purchase price of the machinery was fixed. A finding by the district court of violations of Sections 1 and 2 of the Sherman Act was affirmed. The court said: “A patentee may usually exact whatever royalty it wishes. But, Leesona and Permatwist elected to take a one-third reduction in their royalty income. There is nothing in the patent laws that allows them to decide unilaterally that the machine manufacturers would get the entire benefit of their own royalty reduction. By allocating this benefit, Leesona guaranteed income to the manufacturers and effectively fixed the price of the machinery. The machinery manufacturers who participated in the scheme were protected against free competition and free bargaining in effecting their sales to throwsters.” 541 F.2d at p. 1136. Although this court is inclined to agree with the plaintiffs that the royalties paid by them to DMRC constituted in effect a part of the purchase price for the machines, the royalties were not shared with a manufacturer but were simply retained by Chavanoz and its licensing agent, DMRC, as the patentee’s reward for its patented inventions. The court concludes that the plaintiffs’ price-fixing charge has not been established. The Tying Arrangement Plaintiffs strongly urge that the defendants conspired to impose on them a tying arrangement which constituted a per se violation of Section 1 of the Sherman Act. More specifically, they contend that as a result of the requirement that they take the DMRC use license, patents and unpatented technical information were tied to the machines and non-applicable patents and unpatented technical information were tied to other patents. Although the facts on which plaintiffs’ contentions are based may be seen later to justify a finding of patent misuse, in the court’s view they do not support the conclusion that the tying arrangement violated the antitrust laws. A tying arrangement is an agreement by a party to sell one product (the tying product) but only on condition that the buyer also purchase a different (or tied) product. Illegality under the tying cases is established when it is shown that the antitrust defendant has sufficient market power with respect to the tying product to restrain free competition in the market for the tied product and a not insubstantial amount of commerce in the tied product is affec