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21. Section 7 of the Clayton Act

  1. Count III of the Amended Complaint of May 1, 1968, charged defendants with a violation of Section 7 because of the 1950 acquisition of the ENIAC patent.
  2. The Court on November 29, 1971, dismissed Count III.
  3. In asking for injunctive relief under Section 16, plaintiff emphasized the ENIAC asset acquisition and states that this was the root cause of defendants' ability to dominate the EDP market.
    1. On February 6, 1950, Remington Rand acquired control of Eckert-Mauchly Computer Corporation ("EMCC").
    2. At the time of Remington Rand's 1950 acquisition of EMCC, EMCC was an under-financed company.
    3. At the time of Remington Rand's 1950 EMCC acquisition, the ENIAC patent application was owned of record by Eckert and Mauchly, not EMCC. Remington Rand finally acquired full legal control of the ENIAC patent application on February 13, 1950 when Eckert and Mauchly assigned it to EMCC, then under Remington Rand control.
    4. Prior to February 1950, Remington Rand had been engaged in the tabulating business but not EDP.
    5. Honeywell had proven that there was an EDP line of commerce in 1950.
  4. Plaintiff makes inconsequential reference to the asset acquisitions from IBM and BTL.
  5. Plaintiff's specific request is that the ENIAC and 30A patents acquisition be declared unenforceable.
  6. I find that the acquisition by defendants of the ENIAC and 30A patents did not violate Section 7.
    1. Honeywell has not proven that Remington Rand's 1950 acquisition of the ENIAC patent application might have had the effect of, or had the effect of, substantially lessening competition or tending to create a monopoly in any line of commerce in any section of the country.
    2. Honeywell has not proven that Remington Rand's 1950 acquisition of EMCC might have had the effect of, or had the effect of, substantially lessening competition or tending to create a monopoly in any line of commerce in any section of the country.
    3. Honeywell has not proven that the record transfers of the ENIAC patent or patent application from EMCC to Remington Rand in 1952, from Remington Rand to SR in 1955, and from SR to ISD in1964, might have had the effect of, or had that effect of, substantially lessening competition or tending to create a monopoly in any line of commerce in any section of the country.
    4. Honeywell has not proven that the 1965 IBM-SR Agreement and the 1961 SR-Western Electric Agreement might have had the effect of, or had the effect of, substantially lessening competition of tending to create a monopoly in any line of commerce in any section of the country.
    5. Section 7 of the Clayton Act prohibits the acquisition of the whole or any part of the stock or assets of another corporation "where in any line of commerce in any section of the country, the effect of such acquisition may be substantially to lessen competition, or to create a monopoly".
    6. Section 7 of the Clayton Act in effect in February 1950 applied to the acquisition of stock not to the acquisition of assets. Accordingly, Remington Rand's February 13, 1950 acquisition of the ENIAC patent application could not have violated Section 7 of the Clayton Act.
    7. Even after its amendment in December 1950 to apply to the acquisition of assets, Section 7 of the Clayton Act has applied only to the acquisition of assets from corporations, not individuals. Since Remington Rand acquired, for record, the ENIAC patent application on February 13, 1950 from Eckert and Mauchly, individuals, that record acquisition could not have violated Section 7 of the Clayton Act.
    8. Honeywell, a private party, has no standing to sue for any alleged violations of Section 7 of the Clayton Act.
    9. Honeywell has not proven that it has suffered any actual or threatened injury to its business or property as a result of any of the acquisitions or transactions it has challenged under Section 7 of the Clayton Act with the exception of the 1956 SR-IBM Agreement.

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