Antitrust and Free Markets

“Antitrust and Free Markets”
(By William Markham, © 2022)

References

References
1See generally Ramsey, George (1936) “The Historical Background of Patents,” Journal of the Patent Office Society. Patent and Trademark Office Society; Pila, Justine (2001). “The common law invention in its original form,” Intellectual Property Quarterly.
2See id.
3See id.
4See id.
5See id.
6See Hostettler, John (1997). Sir Edward Coke: A Force for Freedom. Barry Rose Law Publishers.
7See id. The different court systems were the ecclesiastical courts (which decided religious questions), courts of common law (which decided legal claims), and courts of chancery (which decided equitable claims).
8See “Wagner, Coke and the Rise of Economic Liberalism,” 6 Econ. Hist. Rev. 30 (1935).
9See Hostettler, John (1997). Sir Edward Coke: A Force for Freedom. Barry Rose Law Publishers.
10See Coke, Against Monopolists, Propounders, and Projectors, Trin. 44 Eliz. lib. 11, f. 84, 85; le case de monopolies, 3 Inst. 181 (Subject to limited exceptions, “all grants of monopolies are against the ancient and fundamentall laws of this kingdome.”); see also Williams, Ian (2006), “Dr. Bonham’s Case and ‘void’ statutes,” Journal of Legal History; Boyer, Allen D. (2003); Sir Edward Coke and the Elizabethan Age. Stanford University Press.
11See generally Butchers’ Union Slaughter-House & Live-Stock Landing Co. v. Crescent City Live-Stock Landing & Slaughter-House Co., 111 U.S. 746, 763–64 (1884) (“I do not mean to say that there are no exclusive rights which can be granted, or that there are not many regulative restraints on civil action which may be imposed by law. There are such. The granting of patents for inventions, and copyrights for books, is one instance already referred to. This is done upon a fair consideration, and upon grounds of public policy…. So, an exclusive right to use franchises, which could not be exercised without legislative grant, may be given; such as that of constructing and operating public works, railroads, ferries, etc…. So, licenses may be properly required in the pursuit of many professions and avocations which require peculiar skill or supervision for the public welfare…. But this concession does not in the slightest degree affect the proposition … that the ordinary pursuits of life, forming the large mass of industrial avocations, are and ought to be free and open to all, subject only to such general regulations, applying equally to all, as the general good may demand; and the grant to a favored few of a monopoly in any of these common callings is necessarily an outrage upon the liberty of the citizen as exhibited in one of its most important aspects, – the liberty of pursuit. [S]uch a grant [is] beyond the legislative power, and contrary to the constitution….”).
12See United States v. Addyston Pipe & Steel Co., 85 F. 271, 279 (6th Cir. 1898), aff’d after modification on other ground, 175 U.S. 211 (1899) (“From early times it was the policy of Englishmen to encourage trade in England, and to discourage those voluntary restraints which tradesmen were often induced to impose on themselves by contract. Courts recognized this public policy by refusing to enforce stipulations of this character. The objections to such restraints were mainly two. One was that by such contracts a man disabled himself from earning a livelihood with the risk of becoming a public charge, and deprived the community of the benefit of his labor. The other was that such restraints tended to give the covenantee, the beneficiary of such restraints, a monopoly of the trade, from which he had thus excluded one competitor, and by the same mean might exclude others.”); id. 85 F. at 280 (the principal objection to contracts was that covenantees used them to “reduce competition and create monopolies”); see also Alger v. Thacher, 19 Pick. 51, 54 (Mass., 1837) (“The unreasonableness of contracts in restraint of trade and business is very apparent from several obvious considerations: (1) Such contracts injure the parties making them, because they diminish their means of procuring livelihoods and a competency for their families. They tempt improvident persons, for the sake of present gain, to deprive themselves of the power to make future acquisitions; and they expose such persons to imposition and oppression. (2) They tend to deprive the public of the services of men in the employments and capacities in which they may be most useful to the community as well as themselves. (3) They discourage industry and enterprise, and diminish the products of ingenuity and skill. (4) They prevent competition and enhance prices. (5) They expose the public to all the evils of monopoly; and this especially is applicable to wealthy companies and large corporations, who have the means, unless restrained by law, to exclude rivalry, monopolize business, and engross the market. Against evils like these, wise laws protect individuals and the public by declaring all such contracts void.”); Mitchel v. Reynolds, 1 P.Wms. 181, 190 (1711) (Parker, C.J.) (“The mischief which may arise from [such restraints of trade are] (1) to the party by the loss of his livelihood and the subsistence of his family; (2) to the public by depriving it of an useful member. Another reason is the great abuses these voluntary restraints are liable to; as, for instance, from corporations who are perpetually laboring for exclusive advantages in trade, and to reduce it into as few hands as possible.”).
13See Addyston Pipe & Steel, 85 F. at 280-282 (offering extended explanation of these points and concluding that “no conventional restraint of trade can be enforced unless the covenant embodying it is merely ancillary to the main purpose of a lawful contract, and necessary to protect the covenantee in the full enjoyment of the legitimate fruits of the contract, or to protect him from the dangers of an unjust use of those fruits by the other party.”); see also Horner v. Graves, 7 Bing. 735, 743, 131 Eng. Rep. 284 (1831) (“An agreement in general restraint of trade is illegal and void; but an agreement which operates merely in partial restraint of trade is good, provided it be not unreasonable, and there be a consideration to support it. In order that it may not be unreasonable, the restraint imposed must not be larger than is required for the necessary protection of the party with whom the contract is made. A contract, even on good consideration, not to use a trade anywhere in England is held void in that country as being too general a restraint of trade.”).
14See N. Sec. Co. v. United States, 193 U.S. 197, 404 (1904) (“Combinations or conspiracies in restraint of trade … were combinations to keep strangers to the agreement out of the business. The objection to them was not an objection to their effect upon the parties making the contract, the members of the combination or firm, but an objection to their intended effect upon strangers to the firm and their supposed consequent effect upon the public at large. In other words, they were regarded as contrary to public policy because they monopolized, or attempted to monopolize, some portion of the trade or commerce of the realm.”) (Holmes, J., dissenting on other grounds); United States v. E. C. Knight Co., 156 U.S. 1, 25 (1895) (“[A] general restraint of trade has often resulted from combinations formed for the purpose of controlling prices by destroying the opportunity of buyers and sellers to deal with each other upon the basis of fair, open, free competition. Combinations of this character … have always been condemned as illegal because of their necessary tendency to restrain trade. Such combinations are against common right, and are crimes against the public.”) (Harlan, J., dissenting on other grounds); Sir William Erle, Chief Judge of Court of Common Pleas, Law Relating to Trade Unions 5-7 (1869) (“Restraint of trade, according to a general principle of the common law, is unlawful…. [A]t common law every person has individually, and the public also have collectively, a right to require that the course of trade should be kept free from unreasonable obstruction…. “[T]he right to a free course for trade is of great importance to commerce and productive industry, and has been carefully maintained by those who have administered the common law.”).
15See 36 Cong. Rec. 522 (Jan. 6, 1903) (“We undertook by law to clothe the courts with the power and impose on them and the Department of Justice the duty of preventing all combinations in restraint of trade. It was believed that the phrase ‘in restraint of trade’ had a technical and well-understood meaning in the law.”) (statement of Senator Hoar, co-drafter of the Sherman Act); Albert H. Walker, History of the Sherman Law of the United States of America  (1910) (digitized by Google) at 14 (“[W]hat is this bill? A remedial statute to enforce, by civil process in the courts of the United States, the common law against monopolies. How is such a law to be construed ? Liberally, with a view to promote its object.”) (Senator Sherman, co-drafter and principal sponsor, addressing Congress); Apex Hosiery Co. v. Leader, 310 U.S. 469, 497 (1940) (“The common law doctrines relating to contracts and combinations in restraint of trade were well understood long before the enactment of the Sherman law. They were contracts for the restriction or suppression of competition in the market, agreements to fix prices, divide marketing territories, apportion customers, restrict production and the like practices, which tend to raise prices or otherwise take from buyers or consumers the advantages which accrue to them from free competition in the market. Such contracts were deemed illegal and were unenforcible [sic] at common law. But the resulting restraints of trade were not penalized and gave rise to no actionable wrong. Certain classes of restraints were not outlawed when deemed reasonable, usually because they served to preserve or protect legitimate interests, previously existing, of one or more parties to the contract.”).