# Zenith Radio Corp. v. Matsushita Electric Industrial Co.

> District Court, E.D. Pennsylvania · May 7, 1975 · 402 F. Supp. 262

URL: https://www.frixlaw.com/law-library/cases/1413649

## Case

- **Full name:** ZENITH RADIO CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., Et Al.; NATIONAL UNION ELECTRIC CORPORATION v. MATSUSHITA ELECTRIC INDUSTRIAL CO., LTD., Et Al. in Re JAPANESE ELECTRONIC PRODUCTS ANTITRUST LITIGATION
- **Court:** District Court, E.D. Pennsylvania
- **Decided:** May 7, 1975
- **Citations:** 402 F. Supp. 262; 1975 U.S. Dist. LEXIS 12479
- **Precedential status:** Published
- **Opinion:** Opinion by Higginbotham
- **Judges:** Higginbotham
- **Cited by:** 36 later opinions in the Frix Law Library

## Citator (automated)

- No negative treatment found by the automated citator. That is not the same as a confirmation that the case is good law; read the citing cases.
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/1413649

## How later opinions describe it (automated extraction)

- applying pendent venue in a ease involving both the Anti-Dumping Act of 1916 and federal antitrust law because it would be “senseless ... to bifurcate these two exceedingly complex antitrust cases by dismissing or transferring the antidumping counts while retaining the antitru…
- finding of proper venue under the Clayton Act

## Opinion text

OPINION
HIGGINBOTHAM, District Judge.
INDEX
Pages INTRODUCTION ________________________________________ 266-268
I. HISTORY OF THE ZENITH ACTION, C. A. NO.
74-2451 ___________________________________________ 266-267
II. HISTORY OF THE NUE ACTION, C.A. NO. 74-3247 267-268
FINDINGS OF FACT____________________________________ 268-284
I. PRELIMINARY CONSIDERATIONS________________ 268
II. DEFENDANTS’ RESPONSES IN THE ZENITH ACTION AS ADOPTED BY THE COURT______ 268-284
A. HITACHI LIMITED AND HITACHI KADEN -- 268-272
1. Corporate Relationships for 1965-1974 ------ 268-270
a. Stock Ownership ------------------------ 268-269
b. Interlocking Directors and/or Officers -- 269-270
2. Sales________________________________________ 270
3. Contacts ------------------------------------ 270-271
a. Trademark Use-------------------------- 270-271
b. Presence in Pennsylvania---------------- 271
c. Corporate Agreements ------------------ 271-272
B. SANYO ELECTRIC CO., LTD. (DENKI) ------ 272-274
1. Corporate Relationships---------------------- 272-273
a. Stock Ownership ------------------------ 272
b. Interlocking Directors and/or Executive Officers for the period 1971-1974 ------ 272-273
2. Sales________________________________________ 273
3. Contacts ------------------------------------ 274
a. Trademarks ----------------------------- 274
b. Presence in Pennsylvania---------------- 274
c. Agreements ----------------------------- 274
*265
Pages C. THE MATSUSHITA GROUP (MET, MEC, MET) 274-279
1. Corporate Relationships -------------------- 274-276
a. Stock Ownership ------------------------ 274-275
b. Interlocking Directors and/or Executive
Officers ------------------------------ 275-276
2. Sales________________________________________ 276-277
3. Contacts ____________________________________ 277-279
a. Trademarks ----------------------------- 277
b. Presence in Pennsylvania-------- 277-278
c. Agreements ----------------------------- 278-279
1. MEI______________,__________________ 278-279
2. MEC ________________________________ 279
3. MET ________________________________ 279
4. Other Jurisdictional Information------------ 279
D. MELCO ________________________________________ 279-283
1. Corporate Relationships -------------------- 279-280
a. Stock Ownership ------------------------ 279-280
b. Interlocking Directors and/or Executive Officers-------------------------------- 280
2. Sales________________________________________ 280-281
3. Contacts ------------------------------------ 281-283
a. Trademark ------------------------------■ 281-282
b. Presence in Pennsylvania---------------- 282-283
c. Agreements ----------------------------- 283
E. SHARP CORPORATION ______________________ 283-284
1. Corporate Relationships --------------------- 283
a. Stock Ownership ------------------------ 283
b. Interlocking Directors and/or Executive Officers------------------------------- 283
2. Sales________________________________________ 284
3. Contacts ------------------------------------ 284
a. Trademarks ----------------------------- 284
b. Presence in Pennsylvania---------------- 284
c. Agreements ----------------------------- 284
III. DEFENDANTS’ RESPONSES IN THE NUE ACTION AS ADOPTED BY THE COURT------ 285-288
A. HITACHI KADEN _____________________________ 285
1. Corporate Relationships for 1965-1970 ------ 285
2. Sales________________________________________ 285
3. Contacts ------------------------------------ 285
a. Trademark ------------------------------ 285
b. Presence in New Jersey for 1965-1970 285
e. Agreements ----------------------------- 285
B. MELCO_________________________________________ 285-286
1. Corporate Relationships --------------------- 285
a. Stock Ownership ------------------------ 285
b. Interlocking Directors and/or Executive
Officers------------ 285
*266
Pages 2. Sales---------------------------------------- 285-286
3. Contacts ------------------------------------ 286
a. Trademark ------------------------------ 286
b. Presence in New Jersey------------------ 286
c. Agreements ----------------------------- 286
C. DENKI _________________________________________ 286-288
1. Corporate Relationships --------------------- 286-287
a. Stock Ownership ------------------------ 286
b. Interlocking Directors and/or Executive Officers------------------------------- 286-287
2. Sales---------------------------------------- 287
3. Contacts ------------------------------------ 287
a. Trademark ------------------------------ 287
b. Presence in New Jersey------------------ 287-288
c. Agreements ----------------------------- 288
IV. PLAINTIFF'S PROPOSED FINDINGS OF FACT IN THE NUE ACTION AS ADOPTED BY THE COURT --------------------- 288-309
A. HITACHI KADEN ________ 288-295
B. MELCO_________________________________________ 295-303
. C. DENKI _________________________________________ 303-309
V. ADDITIONAL FACTUAL FINDINGS ADOPTED BY THE COURT ________________________________ 309-317
A. HITACHI LIMITED AND HITACHI KADEN-- 309
B. DENKI _________________________________________ 309-310
C. MEI, MEC AND MET __________________________ 310-312
D. MELCO_________________________________________ 312-317
E. THE MOVING DEFENDANTS GENERALLY - 317
DISCUSSION ____________________________________________ 317-330
I. VENUE_____________________________________________ 317-328
II. JURISDICTION: THE CONSTITUTIONAL TEST .. 328-329
III. SERVICE OF PROCESS____________________________ 329-330
CONCLUSION____________________________________________ 330
INTRODUCTION
I.
HISTORY OF THE ZENITH ACTION, CIVIL ACTION NO. 7h-H51.
On September 20, 1974, plaintiff Zenith Radio Corporation filed this antitrust action in the Eastern District of Pennsylvania, naming twenty-one Japanese an(* American corporations as defendants. On October 29, 1974, certain of the defendants moved, pursuant to 28 U.S.C. § 1407 , to transfer this action to the District of New Jersey for consoli
*267
dated pretrial proceedings with the previously filed case of
National Union Electric Corporation v. Matsushita Electric Industrial Co., Ltd., et al.,
Civil No. 1706/70. On November 25, 1974, the Judicial Panel on Multidistrict Litigation transferred the
NUE
action to this Court. That same day, ‘this Court directed the defendants to file whatever pleadings they intended to file with respect to the complaint on or before January 2, 1975. On that date, eight defendants herein — Matsushita Electric Industrial Co., Ltd. (“MEI”), Matsushita Electronics Corporation (“MEC”), Matsushita Electric Trading Co., Ltd. (“MET”), Sharp Corporation (“Sharp”), Hitachi, Ltd. (“Limited”), Hitachi Kaden Hanbai Kabushiki Kaisha (“Kaden”), Mitsubishi Electric Corporation (“MEL-CO”), and Sanyo Electric Co., Ltd. (“DENKI”) — moved this Court pursuant to Rule 12(b) of the Federal Rules of Civil Procedure to dismiss the action as to them for lack of personal jurisdiction, improper venue, and insufficient service of process. These issues were briefed, then argued for four days, from February 3, 1975 to February 6,1975. In addition, the Court propounded to the moving defendants interrogatories designed to elicit facts that were not yet of record but were relevant to the determination of the issues of venue, jurisdiction and process. The defendants having answered these interrogatories, the issues are now ripe for decision. I have examined these answers, as well as the affidavits and exhibits submitted by the plaintiff and the defendants in support of their respective positions.
1
On the basis of my examination of this extensive factual record, I have concluded that this Court may exercise jurisdiction over each of the moving defendants, that venue is proper for each of them in this district, and that each of them has been adequately served with process. Accordingly, their motions to dismiss will be denied.
II.
HISTORY OF THE NUE ACTION CIVIL ACTION NO. 7A-3U7.
Plaintiff National Union Electric Corporation filed this antitrust action in the District of New Jersey on December 21, 1970. The complaint named as defendants seven Japanese manufacturing corporations and seven United States sales subsidiaries or affiliates of those Japanese manufacturing corporations. An amended complaint added three other Japanese corporations as defendants. In their responses to the NUE complaint, six defendants raised defenses related to venue, jurisdiction and service of process. Three of those defendants have since withdrawn those defenses, so that presently only Hitachi Kaden Hanbai Kabushiki Kaisha (“Kaden”), Mitsubishi Electric Corporation (“MELCO”), and Sanyo Electric Company, Ltd. (“DENKI”) contest venue, jurisdiction and service of process.
After extensive discovery related to these issues, NUE .moved in June, 1973, pursuant to Rule 12(d) of the Federal Rules of Civil Procedure, for a hearing and final determination prior to trial of the defenses of improper venue, lack of personal jurisdiction and insufficiency of service of process. As of November 25,1974, however, when the Judicial Panel on Multidistrict Litigation, pursuant to 28 U.S.C. § 1407 , transferred the action to this Court for consolidated pretrial proceedings, no determination of the validity of these defenses had been made.
In February, 1975, during oral argument on other issues in this multidistrict litigation, counsel for both sides waived argument on these defenses and submitted the issues to the Court on briefs, as supported by the affidavits and exhibits filed by the respective parties, and as supplemented by the answers of the contesting defendants to interrogatories propounded by the Court at the oral argument. The issues are now ripe for de
*268
cisión, and for the sake of procedural consistency with the parallel
Zenith
action, I shall treat them as raised by motions to dismiss made by Kaden, MELCO and DENKI pursuant to Rule 12(b) of the Federal Rules of Civil Procedure.
2
My examination of the voluminous factual record of this action leads me inexorably to the conclusion that the three moving defendants are amenable to jurisdiction and venue in the District of New Jersey, and have been adequately served with process. Their motions to dismiss will therefore be denied.
FINDINGS OF FACT
1.
PRELIMINARY CONSIDERATIONS.
In support of their defenses based on lack of personal jurisdiction, improper venue, and insufficient service of process, the various defendants have filed numerous affidavits, some of them sworn to by defense counsel, others by officers of the defendant corporations. In large part, these affidavits recite a litany of non-contacts with the Eastern District of Pennsylvania in the
Zenith
action, and with the District of New Jersey in the
NÜE
action and a similar litany of non-control over the day-to-day operations of their subsidiary or affiliated corporations. Each of the affidavits is offered to bolster one or both of the moving defendants’ two basic contentions: (1) that their non-transaction of business in the relevant forums immunizes them from jurisdiction, venue and process; and/or (2) that they do not exercise day-to-day control of their subsidiaries who do transact business in the relevant forums, and therefore may not be reached through these subsidiaries for purposes of jurisdiction, venue and process. In both actions, however, plaintiffs introduced evidence sufficient to make me hesitate to render a decision on the basis of defendants’ often conclusory affidavits. Accordingly, I propounded interrogatories to the appropriate defendants in both the
Zenith
and
NUE
actions, seeking more detailed information about their corporate relationships, their sales and their contacts with the two districts where the plaintiffs attempt to establish jurisdiction and venue. In order to make the factual basis for my decisions on the instant matters clear, I now set forth and find as facts (1) defendants' answers to the Court’s interrogatories in the
Zenith
and
NUE
actions; (2) those of plaintiff's proposed findings of fact in the
NUE
action that are reasonably supported by the evidence ;
3
and (3) other factual submissions of the plaintiffs that are relevant to the issues raised by the moving defendants.
II.
DEFENDANTS’ RESPONSES IN THE ZENITH ACTION AS ADOPTED BY THE COURT
A.
Hitachi Limited and Hitachi Kaden.
1. Corporate Relationships for 1965-1974.
a. Stock Ownership.
Until 1973, Kaden was a wholly-owned subsidiary of Limited, a Japanese manufacturing corporation. In April, 1973, Limited sold 21.8% of Kaden’s stock to the public, retaining the remaining 78.2%. Kaden wholesales consumer products, purchased from Limited and others, throughout Japan and the world. Prior to 1969, Kaden had confined its wholesaling activities to the domestic Japanese market.
Hitachi Sales Corporation of America (“HSCA”) has been a wholly-owned subsidiary of Kaden
*269
since 1969, when Kaden purchased all of HSCA’s stock from Limited for more than $1 million cash. HSCA distributes consumer products, purchased from Kaden and others, throughout the mainland United States. Since January, 1973, HSCA has been manufacturing in California and these products now account for approximately 10% of HSCA’s sales.
b. Interlocking Directors and/or Officers.
Mr. M. Naito was general manager of Limited’s Second Export Sales office from January, 1965 to August, 1965, and deputy general manager of Limited’s Consumer Electronics Division from August, 1965 to November, 1967. He was executive managing director of Kaden from November, 1967 to November, 1973, and has been senior executive managing director of Kaden from November, 1973 to the present. He was a director of HSCA from January, 1965 to July, 1968.
Mr. T. Shoubouchi was deputy general manager of Limited’s Consumer Electronics Division from February, 1965 to August, 1965, general manager of Limited’s Yokohama Works from August, 1965 until February, 1969, and deputy general manager of Limited’s Consumer Products Group from February, 1969 to November, 1969. He was a director of Kaden from May, 1968 to May, 1970. He was a director of HSCA from January, 1965 to July, 1968.
Mr. K. Nishi was executive managing director of Limited from January, 1965 to March, 1965, senior executive managing director from March, 1965 to November, 1969, and a director of Limited from November, 1969 to November, 1971. He was president of Kaden from January, 1965 to November, 1973, and has been chairman of Kaden from November, 1973 to the present. He was a director of HSCA from May, 1966 to June, 1973.
Mr. B. Hayashi has been general manager of Limited’s Subsidiaries Office from January, 1965 to the present. He was a director of HSCA from August, 1965 to July, 1968.
Mr. N. Takahashi was executive managing director of Kaden from January, 1965 to December, 1968, and senior executive managing director from December, 1968 to November, 1973, and has been vice president and director of Kaden from November, 1973 to the present. He was a director of HSCA from July, 1968 to June, 1973.
Mr. T. Komoriya has been a director of HSCA from January, 1965 to the present, and was vice president of HSCA from May, 1966 to April, 1971. Though he has not held any positions with Limited or Kaden, he has been president of Hitachi America, Ltd., a wholly-owned subsidiary of Limited, from 1965 to the present.
Mr. I. Kawamato has been a director of Kaden from May, 1969 to the present. He has been a director of HSCA from June, 1973 to the present.
Mr. T. Yoshida was a director of Limited from January, 1965 to November, 1968, executive managing director of Limited from November, 1968 to November, 1971, and senior executive managing director of Limited from November, 1970 to November, 1973. He was a director of Kaden from January, 1965 to August, 1965, executive managing director of Kaden from August, 1965 to December, 1968, vice president and director of Kaden from December, 1968 to November, 1973, and
*270
has been president and director of Kaden from November, 1973 to the present. He has been a director of HSCA from June, 1973 to the present.
Mr. T. Takahashi has been executive managing director of Limited from November, 1973 to the present. He has been a director of Kaden from November, 1973 to the present.
Mr. H. Arinobu was deputy general manager of Limited’s Consumer Products Division from May, 1968 to February, 1969, and deputy general manager of Limited’s Consumer Products Group from February, 1969 to November, 1969. He was a director of Kaden from May, 1968 to May, 1970.
Limited’s total number of directors has varied from a low of 19 in 1967 to a high of 25 in 1973. Presently Limited has 24 directors. Kaden’s total number of directors has varied from a low of 12 in 1971 to a high of 16 in 1969. Presently Kaden has 15 directors. HSCA had a total of 5 directors prior to 1968; from 1968 to date, 6 directors.
2. Sales.
The approximate volume of Limited’s and Kaden’s sales that were destined for ultimate export to the United States during the relevant time period are listed in the table below. Both Limited and Kaden concede that because HSCA and Hitachi America Limited (“HAL”)
4
sell throughout the United States a significant amount of their products ultimately arrive in Pennsylvania and in the Eastern District of Pennsylvania. Both Limited and Kaden deny that they have sold any goods directly to customers in Pennsylvania during the five years preceding the date of the Zenith complaint.
Approximate Sales of Products Ultimately Destined For United States (millions of dollars)
Fiscal Year Limited Kaden
1965 17 0
1966 31 0
1967 45 0
1968 55 0
1969 76 12
1970 87 13
1971 88 15
1972 109 28
1973 70 24
1974 (First Half) 21 10
Both HSCA and HAL concede that they have made substantial sales into Pennsylvania and the Eastern District of Pennsylvania. Total sales in the United States by both HSCA and HAL are listed in the following table.
Total Sales (in millions of dollars)
Fiscal Year HSCA HAL
1965 4.7 0.3
1966 4.1 1.0
1967 5.6 3.5
1968 11.3 5.8
1969 20.6 8.1
1970 31.7 8.2
1971 47.4 25.1
1972 52.1 39.7
1973 56.6
5
79.9
1974 (First Half) 27.3 N.A.
3. Contacts.
Trademark Use.
Limited and Kaden concede that the “Hitachi” trademark was used in advertisements, publications and brochures which were distributed in Pennsylvania between 1965 and 1974.
*271
Institutional-type advertisements were placed by Limited in the following publications:
Wall Street Journal (1969-1972, 4 times per year)
Fortune (1965-1974, 4 times per year)
Time (1965-1974, 5 times per year) Business Week (1968-1974, 4-5 times per year)
Scientific American (1974, 4 times per year)
Playboy (1969-1974, 2 times per year)
Reader’s Digest (1967-1973, 2 times per year)
Life (1965-1972, 4 times a year) Life (Special Edition) (1974, 1 time per year)
Electronics Magazine (1965-1974, 1-2 times per year)
Telephony Magazine (1965-1974, 1-2 times per year)
No advertising placed by Kaden circulated anywhere in the United States.
Substantial advertising, brochures, promotional literature, etc., placed, distributed or generated by HSCA and HAL were distributed and circulated throughout the entire United States, including Pennsylvania, during the 1965-1974 period and most, if not all, of this material carried the “Hitachi” trademark or logo.
b. Presence in Pennsylvania.
According to Limited’s own estimate, there have been approximately 50 or more visits per year by Limited employees to Pennsylvania during the past 5 years. The visits have been one or two days in length, except for employees who have come to Pennsylvania as students at a university or seminar and have no business purpose. The students visits are included in the estimated number of visits given above. Limited estimates that fewer than 10% of its visitors to Pennsylvania have any sales purpose, the remainder being engineers or technicians seeking technical information (estimated 65% of visitors) or concerned with patent licenses (estimated 25% of visitors).
Approximately seven employees of Kaden have visited Pennsylvania since 1969. In 1970, Mr. H. Horiguchi, Department Manager, First Sales Department, International Division, visited Philadelphia. Mr. N. Miyazaki, First Sales Department, International Division, visited Pittsburgh to discuss possible business with Westinghouse. Mr. S. Suzuki, Manager, North America Sec., International Division, visited Pennsylvania for research purposes.
In 1971, Mr. K. Tsukino, North America Sec., International Division, visited Pittsburgh to attend an search purposes.
In 1972, Mr. K. Sugiyama, North America Sec., International Division, visited Pittsburgh to attend an HSCA regional show.
In 1973, Mr. T. Sato, North America See., International Division, visited Pittsburgh to attend an HSCA regional show. Mr. J. Ino, First Sales Department, International Division, visited Philadelphia to purchase samples at Proeter-Silex Inc., Philadelphia.
Kaden estimates that each visit has been one or two days in length,
c. Corporate Agreements.
Limited has entered into patent licensing agreements with seven corporations having their principal places of business in Pennsylvania. These are:
Licensor: Selas Corporation of America (Dresher, Pa. 19025)
Licensee: Hitachi, Ltd.
Executed: August 1, 1974 (Renewal) (Former agreement remained effective from December, 1966 until this agreement was made.)
Effective: November 15, 1974-November 14, 1984.
*272
Licensor: The Benfield Corporation (640 Spruce Lane, Berwyn, Pa. 19142). ,
Licensee: Hitachi, Ltd.
Executed: December 20, 1968.
Effective: February 18, 1969-February 17, 1979.
Licensor: Westinghouse Electric Corporation (Westinghouse Building, Gateway Center, Pittsburgh, Pa. 15222).
Licensee: Hitachi, Ltd.
Executed: August 16, 1970.
Effective: December 7, 1970-Sep-tember 29, 1976.
Licensor: Philco-Ford Corporation (Tioga and C Streets, Philadelphia, Pa. 19134).
Licensee: Hitachi, Ltd.
Three Licenses:
Executed: January, 1972; August 8, 1973; February 25, 1974.
Effective: March 21, 1972-July 8, 1975; October 16, 1973-October 17, 1983; April 16, 1974-Septem-ber 27, 1982, respectively.
Licensor: Blaw-Knox Foundry & Mill Machinery, Inc. (One Olive Plaza, Pittsburgh, Pa. 15222).
Licensee: Hitachi, Ltd.
Executed: April 27, 1967.
Effective: August 29, 1967-August 28, 1977.
Licensor: Hitachi, Ltd.
Licensee: Blaw-Knox
Executed: June 11, 1969
Effective: June 11, 1969-June 10, 1979.
Licensor: Hitachi, Ltd.
Licensee: Westinghouse
Executed: December 27, 1973
Effective: December 27, 1973-
December 26, 1983.
Limited has agreements with other corporations having their principal place of business outside of Pennsylvania, but which may or may not have “business facilities” in the Commonwealth of Pennsylvania. For example, Limited has a major licensing agreement with RCA Corporation, a large New York corporation which probably has some facility in Pennsylvania. Limited has a patent licensing agreement with Zenith, an Illinois-based company that has a recently acquired plant in Pennsylvania, and Limited has an agreement with General Electric Corp., New York, which also has facilities in Pennsylvania.
Kaden has no agreements with any corporation having any facilities in Pennsylvania.
B. Sanyo Electric Co., Ltd. (Denki).
1. Corporate Relationships
a. Stock Ownership.
DENKI, a Japanese manufacturing corporation, owns 83% of the stock of Sanyo Electric Trading Co., Ltd. (“TRADING”) and owned that same percentage of TRADING’S stock throughout the period 1965-1974. The other 17% of TRADING'S stock is owned by third persons. Since 1972 DENKI and TRADING have each owned 50% of the stock of Sanyo Electric, Inc. (“INCO”). During the period 1965 to 1972 DENKI owned 100% of the stock in INCO. In 1972 DENKI sold 50% of its stock holdings in INCO to TRADING.
b. Interlocking Directors and/or Executive Officers for the Period 1971-1974.
6
Mr. Y. Iue was director and chairman of the Board of DENKI. He was director and chairman of the board of TRADING.
Mr. K. Iue was a director of DENKI, TRADING and INCO. He was president and chief executive officer of DENKI, and president of TRADING. In 1971, he was chairman of
*273
the board of INCO, and in 1970 and prior years he was president of INCO."
Mr. Komuro was a director of DENKI, TRADING and INCO.
7
He was executive managing director and chief executive officer of TRADING.
Mr. Yanase was a director of DENKI and TRADING.
8
He was managing director of DENKI, and executive managing director of TRADING.
Mr. Nakai was a director of DENKI and INCO, and managing director of DENKI.
DENKI’s Board of Directors consists of 27 members, several of whom are outside directors and four of whom are on the twelve-man Board of TRADING. Of those four on the Board of TRADING, two are on the nine-man Board of INCO. One other director of DENKI is also a director of INCO.
2. Sales
Sales by TRADING to United States customers, including INCO, were as follows (converted to dollars and rounded):
1965 $18,306,000 1970 $ 94,144,000
1966 36,950,000 1971 109,564,000
1967 36,892,000 1972 128,890,000
1968 62,161,000 1973 117,214,000
1969 87,858,000 1974 128,050,000
The above sales figures are for fiscal years ending in November. Since most of TRADING’S United States customers sell nation-wide, such as INCO, Sears and Magnavox, a percentage of its customers’ sales undoubtedly were made to ultimate consumers in Pennsylvania.
Counsel for DENKI have informed the Court that, on the average, approximately 99 percent of TRADING’S dollar sales figures for the 1965-1974 period were of DENKI manufactured products. This 99 percent figure represents the known sales of all DENKI manufactured products to United States customers in each of the fiscal years indicated. DENKI does sell its products to Japanese trading companies other than TRADING, and these companies may in turn resell and export these DENKI products to customers in the United States. DENKI’s counsel have informed the Court that these sales are “small and sporadic” when compared with TRADING’S sales to United States customers.
INCO’s dollar sales in the United States, and in Pennsylvania separately, during the calendar years 1972, 1973 and 1974, were as follows:
1972 Penna. $ 2,130,087
1972 U. S. 63 ,607,749
1973 Penna. 2,579,646
1973 U. S. 88 ,924,411
1974 Penna. 3,740,598
1974 U. S. 95 ,706,611
Although figures on INCO sales in Pennsylvania for years prior to 1972 are not available, the following figures represent INCO’s total sales in the United States for the fiscal years ending March 31:
1965 $ 5,905,980 1969 $24,072,124
1966 5,546,736 1970 17,901,270
1967 9,978,257 1971 31,976,125
1968 11,059,891
All sales by INCO from 1965 through 1970 were sales to private label customers. For the years 1972, 1973 and 1974, where INCO does have data on sales by its private label department to customers by state, the records show that there were no sales to Pennsylvania-based customers.
*274
3. Contacts
a. Trademarks.
Prior to 1971, no Sanyo brand name products were marketed in the United States. Between 1971 and 1974, the Sanyo trademark was used in advertisements that appeared in national magazines such as
Home Furnishings Daily.
Most such publications are distributed in Pennsylvania. INCO places the advertisements for Sanyo brand name products in nationally distributed United States publications, but was not able to list the national publications in which such advertisements appeared or the issue dates thereof in the time allotted to answer the Court’s interrogatories.
Local retailers regularly use trademarks of their suppliers in advertisements which the retailers place in local newspapers. Thus the Sanyo trademark has appeared in various advertisements of local retailers in most of Pennsylvania’s metropolitan area newspapers. INCO, in the years 1971 to 1974, also has distributed sales brochures utilizing the Sanyo trademark to wholesalers and retailers in Pennsylvania. These brochures are generally printed and distributed annually.
b. Presence in Pennsylvania.
In September and October, 1971, Mr. T. Naitoh visited Sears in Philadelphia to supervise the repair of television receivers.
In March, 1972, Mr. T. Shigematsu visited Lancaster to view facilities of the Hamilton Watch Company.
In July, 1972, Messrs. M. Satoh and R. Kozuki visited West Chester to view facilities of Lasko Metal Parts, Inc.
In November, 1972, Mr. H. Doi visited West Chester to view the same facilities.
In April, 1973, Mr. S. Nakamura visited West Chester to view the same facilities.
In June, 1973, Messrs. S. Furushita and T. Mizutani visited West Chester to view the same facilities.
In June, 1973, Messrs. T. Yamano and H. Ozu visited Lancaster, Montgomeryville and Conshohoeken to view the facilities of the Hamilton Watch Company, the Solid State Scientific Company and Sunstein Engineering Corporation respectively. Mr. M. Watanabe also visited Sunstein in June, 1973, for the same purpose.
In November, 1973, Mr. T. Kameyama visited West Chester to view the facilities of Lasko Metal Parts, Inc.
In December, 1973, Mr. T. Yokota visited West Chester to view the same facilities.
In February, 1974, Messrs. M. Takuma, H. Doi and I. Morimoto visited West Chester to view the same facilities.
In April, 1974, Mr. I. Odaki visited West Chester to view the same facilities.
In July, 1974, Messrs. Y. Miyake and Mr. Naba visited West Chester to view the same facilities.
Each of these visits was at most a few days in duration.
c. Agreements.
DENKI did not enter into any contracts or agreements with corporations that have business facilities located in Pennsylvania.
C.
The Matsushita Group (MEI, MEC, MET).
1. Corporate Relationships,
a. Stock Ownership
As of Noveñiber 20, 1974,
9
MEI, a Japanese manufacturing eorpora
*275
tion, owned 65% of MEC’s stock (N. V. Philips Gloeilampen-fabrieken owned the remaining 35%). On the same date, MEI owned 54.4% of MET’s stock (the public owned the remainder). On the same date, MEI owned 100% of the stock of Matsushita Electric Corporation of America (“MECA”), and MECA in turn owned 100% of the stock of Quasar Electronics Corporation (“QEC”).
MEI’s stock ownership of MET and MEC for the period 1965-1974 was:
YEAR MET MEC
1965 57.4% 70%
1966 52.4 70
1967 52.4 70
1968 52.4 65
1969 52.4 65
1970 52.2 65
1971 53 65
1972 53 65
1973 54.4 65
1974 54.4 65
MEI’s 100% stock ownership of MECA has existed since 1959.
MECA’s 100% stock ownership of QEC has existed since 1974.
MET owned about 0.2% of MEI’s stock in 1973-74, and about 0.1% in 1969-72.
MEC owned about 0.4% of MEI’s stock in 1973-74, and about 0.3% in 1969-72.
b. Interlocking Directors and/or Executive Officers.
Mr. K. Matsushita was chairman of MEI from 1965 to 1972, and a director of MEI as of 1974. He was chairman of MECA from 1965 to 1974. He was a director of MET from 1965 to 1973. He was president of MEC in 1965, chairman of MEC from 1966 to 1970, and a director of MEC as of 1974.
Mr. M. Matsushita was president of MEI from 1965 to 1974. He was a director of MECA from 1965 to 1974, and chairman of MECA .in 1974. He was a director of MET from 1965 to 1974. He was a director of MEC from 1965 to 1971, and chairman of MEC from 1972 to 1974. He was a director of QEC in 1974.
Mr. T. Nakao was senior managing director of MEI from 1965 to 1967, and executive vice president of MEI from 1967 to 1974. He was a director of MECA and MEC from 1967 to 1974.
Mr. A. Takahashi was executive vice president of MEI from 1965 to 1972, and chairman of MEI in 1973 and 1974. He was a director of both MECA and MEC from 1965 to 1974. He was chairman of MET from 1965 to 1974.
Mr. H. Tanimura was a managing director of MEI in 1965 and 1966, senior managing director of MEI from 1967 to 1970, and executive vice president of MEI from 1972 to 1974. He was a director of MET from 1965 to 1970. He was a director of both MECA and MEC from 1965 to 1974.
Mr. M. Hino was a managing director of MEI from 1965 to 1974. He was auditor of MET from 1965 to 1974, and auditor of MEC from 1966 to 1974.
Mr. K. Matsuno was a director of MEI from 1965 to 1969, and a managing director of MEI from 1967 to 1972. He was a director of MET from 1965 to 1972.
Mr. K. Takeoka was senior managing director of MEI in 1974. He was vice chairman and a director of MECA in 1974. He was chairman and chief executive officer of QEC in 1974.
Mr. K. Isomura was a director of MEI in 1969 and 1970, and managing director of MEI from 1971 to 1974. He was president of MECA from 1965 to 1972, and a director of MET from 1971 to 1974. He was a director of QEC in 1974.
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Mr. A. Harada was a director of MEI from 1972 to 1974. He was president of MECA during those years and a board member and director of MECA from 1971 to 1974. He was also vice chairman of QEC in 1974.
Mr. T. Inai was a director of MEI from 1966 to 1970, managing director of MEI in 1971 and 1972, and senior managing director of MEI in 1973 and 1974. He was also a director of MECA from 1970 to 1974.
Mr. K. Ogawa was a managing director of MEI from 1965 to 1974, and a director of MEC during the same years.
Mr. M. Miyoshi was a director of MEI from 1965 to 1974. He was senior managing director of MEC from 1965 to 1969, executive vice president of MEC in 1970, and president of MEC from 1971 to 1974.
Mr. S. Matsumoto was a director of MEC from 1965 to 1967. He was executive vice president of MEC in 1965, and president of MEC in 1966 and 1967.
Mr. T. Fujio was a managing director of MEI in 1965 and 1966, and senior managing director of MEI from 1967 to 1970. He was also a director of MEC from 1965 to 1970.
Mr. H. Saeki was a director of MEI from 1967 to 1970, a managing director of MEI in 1971 and 1972, and a senior managing director of MEI in 1973 and 1974. He was also a director of MEC from 1968 to 1974.
2. Sales.
MEI, MEC and MECA have requested that the figures for their sales of goods in the United States (for MECA) or destined for the United States (for MEI and MEC) be kept confidential. Though I see little need for such a request, I will honor it. The sales figures submitted by these three corporations have therefore been impounded. They will, of course, be available for review by an appellate court.
In round figures, MEI’s sales of goods destined for the United States during the years 1965-1974 ranged from a low of $31,100,000 to a high of $288,000,000. During the same period, MEC’s sales of goods destined for the United States ranged from a low' of approximately $430,000 to a high of approximately $6,425,000. For the years 1970-1974, MECA’s sales of goods in the United States ranged from a low of about $200,000,000 to a high of about $400,000,000.
MET has made no request for confidentiality. Its sales of goods destined for the United States during the relevant time period were as follows:
1965 $ 33,354,000
1966 56.332.000
1967 87.660.000
1968 126.519.000
1969 178.337.000
1970 221.070.000
1971 282.142.000
1972 327.430.000
1973 303.602.000
1974 322.010.000
MEI, MET and MEC could not trace the amount of their merchandise which ultimately arrived in Pennsylvania or the Eastern District of Pennsylvania, with the exception of $424,000 worth of MET goods which was shipped to the port of Philadelphia in 1973. (Affidavit of S. Cteaki, |f4.)
Sales from MECA’s warehouses into Pennsylvania were approximately $15 million in 1974; $14.4 million in 1973; and $12.1 million in 1972. These figures may include sales of MECA to Leeds-Fox, an independent distributor headquartered in New Jersey responsible for distribution of Panasonic products for the eastern half of Pennsylvania including the Philadelphia area, as well as New Jersey and the Wilmington, Delaware area, in those years. At all events, Leeds-Fox’s sales of Panasonic
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merchandise into Pennsylvania would be substantial in 1972, 1973 and 1974.
3. Contacts.
a. Trademarks.
The Panasonic trademark is owned by MEI. MECA frequently places advertisements in national magazines, such as
Time, Newsweek, Business Week, Fortune, Playboy, Sports Illustrated,
and the like in which the Panasonic trademark is used. These magazines are, of course, distributed in Pennsylvania, including the Eastern District. In addition, MECA’s products under the Panasonic mark are advertised on either national or local television programs, including local ads in the Philadelphia and Pittsburgh areas. Similarly, MECA’s Panasonic products are advertised on the radio, in national trade journals and in local dealer advertisements. In the late 1960’s MEI also placed some national ads in the United States.
b. Presence in Pennsylvania.
MEI.
On three occasions in 1974, MEI personnel participated in one-day seminars conducted by MECA in Philadelphia in connection with distributor shows and in Pittsburgh. One took place in May, one in October and one in November. On October 29, 1974, the Panasonic •Caravan was in Pittsburgh where another presentation was made. The May visit involved a orie-day presentation by MECA personnel in Philadelphia, assisted with respect to technical matters by Messrs. Takaobushi, Tatsumi and Uemuta, MEI employees visiting from Japan. Also in 1974, there were visits by certain MEI-salaried engineers to the Philco-Ford plant in Lansdale, Pa., once every two or three months. Those engineers are located in either New York or Chicago. Although paid by MEI, they are employed by MECA to provide technological assistance and assist MECA in the sale of components. The visits to the Philco-Ford plant were made by one (or possibly two) of these engineers for the purpose of soliciting business on behalf of MECA. These visits resulted in sales of products by MECA in Pennsylvania.
In 1974, Mr. Y. Yoshida, an MEI employee, made two visits to the United States from Japan, accompanied by Mr. K. Uegaki, an employee of an MEI subsidiary, National Tire Co., Ltd. In April and in October, 1974, these gentlemen visited Pennsylvania with Mr. Stewart Silbaugh, Assistant Sales Manager of MECA’s Bicycle Department, to be present at the opening of new MECA bicycle accounts. These trips lasted about three days and some 10-15 dealers were visited in such towns as Pittsburgh, Harrisburg and Philadelphia.
In 1973, there were three one-day visits by Messrs. Silbaugh and Yoshida to Pittsburgh, Greenville and Lancaster, Pennsylvania. These visits were for the same purpose as the 1974 visits previously described.
In 1973, Mr. Tom Hiroki, an MEI-salaried employee on loan to MECA as a trainee, visited dealers and checked to see that televisions in their stores were functioning and properly displayed. Although the majority of his visits were in Ohio, Mr. Hiroki also visited dealers’ stores located in the western part of Pennsylvania. Also in 1973, an MEI employee made a one-day visit to Harrisburg, Pa., to investigate the price and availability of motors for certain other home appliances.
In November, 1973, Mr. K. Kato, an employee of MEI’s television products division, accompanied Mr. C. Toda, an MECA employee, on a one-day trip to the Philco-Ford cabi
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net factory located in Watsontown, Pennsylvania to investigate the availability and price of parts for cabinets. He also went with Mr. Toda to Cabinet Industry, a company located in Danville, Pennsylvania for the same purpose.
In 1972, one (possibly two) MEI employees from Japan visited, Harrisburg, Pa., in connection with electric motors for vacuum cleaners.
In 1970, there were two visits by MEI employees from Japan to Philadelphia to attend a video demonstration show and to visit certain dealers in the area.
In 1969, Mr. M. Higuchi, MEI’s general manager for the manufacture of electric motors, visited the United States. On one day, he visited Schick Electric Company in Lancaster, Pennsylvania.
In 1964-66, Mr. Yamamoto, an MEI employee, lived in Philadelphia while he worked with the PhilcoFord plant in Lansdale in connection with the latter’s purchase of black and white television picture tubes from Japan.
MEC.
In 1974, Mr. Tatashi Suyama, an MEC-salaried engineer working for MECA in Chicago, visited the Philco-Ford plant in Lansdale, Pa., two or three times for one day each. These visits were for the purpose of soliciting sales of electronic components on behalf of MECA. Mr. Suyama made a similar visit to Lutron Electronics in Coopersburg, Pa. in 1974.
In 1973, Mr. Suyama made one or two visits to the Philco-Ford plant in Lansdale, Pa., for a similar purpose. Also, there were one or two courtesy visits by one or two MEC employees from Japan to the Philco-Ford plant in 1973.
MET.
In May, 1974, Mr. Tazuke visited McDanel Refractory Porcelain Co. of Beaver Falls, Pennsylvania. In February, 1974, Mr. Shimamura visited the offices of Ajax International Corp. of Erie, Pennsylvania.
In May, 1969, Mr. R. Yanagiuchi, an MET employee working for MECA, escorted two employees of a Japanese subsidiary of MEI, to Bluebell, Pennsylvania for a courtesy visit to Philco-Ford.
In either January or February, 1968, Mr. S. Iimura of MET made a courtesy visit to Philco-Ford’s Bluebell plant, accompanied by Mr Yanagiuchi.
c. Agreements
1.
MEI
MEI has over sixty license agreements with U. S. companies still in effect where MEI is the licensee. Although MEI cannot say with certainty whether any of those companies are Pennsylvania corporations, or have their headquarters in Pennsylvania, this seems not to be the case. At all events, approximately sixteen of those companies appear to have facilities in Pennsylvania, including such companies as General Electric, Dynamics Corp., Philco-Ford, CBS, Honeywell, RCA, Aireo, Inc., Magnavox, Scovill Manufacturing Co., Singer, and Zenith. MEI has approximately six agreements with U. S. companies as licensor, none of which appear to be Pennsylvania corporations or headquartered in Pennsylvania. Those companies are Data Technology Corp. of California, Minnesota Mining of St. Paul, Minnesota, P. R. Mallory & Co. of Indiana, Carborundum Company of Niagara Falls, New York, SCM Corp. of New York and General Electric Co. of New York. There were some twelve license agreements between MEI and U. S. companies that have been terminated, but again, those compa
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nies appear to be located outside of Pennsylvania, although they may have facilities in Pennsylvania. These include agreements with Admiral, Bell & Howell, Bendix Westinghouse, Corning Glass, Globe Union, Kelvinator International, McGraw Edison, Singer and Standard Kollman Industries.
2.
MEC
MEC has one license agreement in the United States, with Texas Instruments of Dallas, Texas. MEC does not know whether that company has any Pennsylvania facilities.
3.
MET
MET has some twenty-four distributorship agreements with U. S. companies under which MET sells those companies’ products in Japan. Including in this group are three companies with Pennsylvania addresses: Ajax International Corp. of Erie, Pa.; McDanel Refractory Porcelain Co. of Pennsylvania; and Palmer Products, Inc. of Worcester, Pa. MET could not ascertain whether these or the other companies have facilities in Pennsylvania. MET also has an agreement with Vivitar Corp. of Los Angeles, Calif.
4.
Other Jurisdictional Information.
On February 5, plaintiff’s counsel provided the Court with copies of two newspaper articles, one captioned “TV Sets Made by Matsushita Ordered Recalled by the F. D. A.”
(New York Times,
January 12, 1975) and the other headlined “Japanese Recall 407,000 TVs for Radiation Woe”
(Philadelphia Bulletin,
January 14, 1975). Defendants have supplied the Court with the following information about the substance of those articles.
On December 12, 1974, MECA, not MEI, was directed by the Bureau of Radiological Health (part of the Food and Drug Administration) to present a plan for the repair of certain color television sets manufactured by MEI and some of its affiliated companies so as to bring them into compliance with the applicable federal radiation standards, and to notify consumers, dealers and distributors of how their sets can be corrected. Those sets are sold under the brand name Panasonic. The approximate number involved is 300,000. A similar direction was sent to the J. C. Penney and W. T. Grant companies, not MEI, with respect to certain of their color television sets which were manufactured by MEI and some of its affiliated companies, which sets are sold under the private brand names of those companies. The approximate number of sets involved for those two companies was between 65,000 and 100,000. Insofar as the articles suggest that MEI, as distinguished from MECA, J. C. Penney or W. T. Grant, must submit a plan for correction, etc., those articles are incorrect.
D.
MELCO.
1. Corporate Relationships,
a. Stock Ownership.
Both MELCO, a Japanese manufacturing corporation, and Mitsubishi Corporation (a/k/a Mitsubishi Shoji Kaisha and hereinafter referred to as “MSK”) are both publicly held companies whose stocks are exchanged on the Tokyo Stock Exchange and other principal Japanese stock exchanges. There is no stock ownership between MELCO and Mitsubishi International Corporation (“MIC”). MELCO has provided the following information
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about the stock ownership between MELCO and MSK:
a. The total number of outstanding shares of MELCO is 1,175,447,-918.
b. The highest price of a single share of MELCO stock on the Tokyo Stock Exchange during the calender year 1974 was 155 Yen (U.S. $0.52) and the lowest price was 97 Yen (U.S. $0.32). At present, a single share of MELCO stock trades for approximately 113 Yen (U.S. $0.38).
c. The total current value of all outstanding shares of MELCO is 126,948,375,144 Yen (U.S. $423,-161,250).
d. MSK owns 19,981,000 shares of MELCO’s stock. Accordingly, the total value of the shares of MELCO stock owned by MSK is 2,124,468,-000 Yen (U.S. $7,081,560).
e. The total number of shares outstanding of MSK’s stock is 697,-943,722 shares.
f. The highest price of a single share of MSK’s stock on the Tokyo Stock Exchange during the calender year 1974 was 490 Yen (U.S. $1.63) and lowest price was 265 Yen (U.S. $0.88).
g. The total current value of all the outstanding shares of MSK’s stock is 222,415,259,426 Yen (U.S. $741,384,198).
h. The total amount of shares of MSK’s stock owned by MELCO is 13,671,000 shares. Accordingly, the total value of MELCO’s ownership of MSK’s stock is 4,552,443,000 Yen (U.S. $15,174,810).
i. As of December 31, 1974, MELCO owned 2.0% of MSK’s stock and MSK owned 1.71% of MELCO’s stock.
j. The respective percentages of ownership in the stock of MELCO
and MSK, as described above, have been substantially the same for the years 1964-1974.
k. As of September 30, 1974, there were 159,082 shareholders of MELCO’s stock.
b. Interlocking Directors and/or Executive Officers.
Mr. Ken Okubo, president and managing director of MELCO, was a nominal director of MSK during the period 1964 to May, 1974. In May, 1974, Mr. Okubo resigned his position as a nominal director of MSK and was replaced by Mr. Sadakazu Shindo who is the current president of MELCO and a director of MELCO.
Mr. Chujiro Fuino, a managing director of MSK, was also a nominal director of MELCO during the period 1964 through 1974.
Other than these two individuals, there are no other directors of MELCO who are also directors of MSK and vice versa.
There are no officers of MELCO who are also officers of MSK and vice versa.
With respect of MIC, there are neither directors nor officers of MELCO who are also directors or officers of MIC and vice versa.
2. Sales.
At oral argument on MELCO’s jurisdictional motion, counsel for MELCO represented that MELCO and MSK are totally independent and unrelated corporations. In response to the Court’s interrogatories, MELCO’s counsel further averred that MELCO had no idea of the transactions that may have occurred between MSK and MIC involving customer electronic products sold in Japan by MELCO to MSK. MELCO has, however, reconstructed records
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with respect to consumer electronic products sold to MSK which MELCO believes were intended for export to the United States by MIC, the U. S. subsidiary of MSK. Additionally, MELCO has reconstructed records of consumer electronic products sold to U. S. companies other than MIC, said products being imported by the other U. S. companies to the United States. Accordingly, for such sales to these U. S. companies, or to MSK, MELCO has provided the following sales figures for consumer electronic products:
BLACK AND WHITE TELEVISION SETS
Year No. of Units Value in Dollars
1964 41,846 (U.S. ?) 2.047.000
1965 23,292 1.294.000
1966 22,751 1.264.000
1967 12,150 675,000
1968 18,306 1.017.000
1969 77,094 4.283.000
1970 75,402 4.189.000
1971 78,506 4.618.000
1972 18,636 1.167.000
1973 1,536 77,000
1974 No Record No Record
COLOR TELEVISION SETS
Year No. of Units Value in Dollars
1970
10
27,501 (U.S. $) 4.278.000
1971 60,289 11,200,000
1972 39,810 8.597.000
1973 1974 49,786 No Record 9.460.000 No Record
With respect to consumer electronic products other than black and white television sets and color television sets, the quantities which may have been imported to the United States are, according to MELCO, de minimis and MELCO does not have any record of these figures.
MELCO is unable to determine what portion of the quantities of black and white and color TV sets manufactured by MELCO and imported to the United States were sold in either the State of Pennsylvania or in the Eastern District of Pennsylvania.
3. Contacts.
a. Trademark.
MELCO owns the three-diamond logo trademark. Throughout the relevant time period, MELCO licensed the trademark to MIC.
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MIC sold TV sets manufactured by MELCO under the trade name “MGA” which is not trademarked. Because MIC desired to utilize the trade name “MGA” which MELCO owns, MELCO licensed MIC to utilize the trade name “MGA” in connection with consumer electronic products which MIC purchased from MELCO and imported from Japan. Television sets which MELCO manufactures and sells in Japan are sold in the Japanese market under the “Mitsubishi Electric” trade name only, and not “MGA,” which is the trade name utilized exclusively by MIC in the United States market. Many of the -products sold by MIC which were not manufactured by MELCO also contained the trade name “MGA.” Among such suppliers of MIC other than MELCO, to which MIC affixed the trade name “MGA,” are the following companies: Tensho Denki of Japan; Shodensha of Japan; Technisound of Chicago, Illinois; Lucasey Manufacturing of Oakland, California; Dura-Tube Bending Company of Chicago, Illinois; O’Sullivan Manufacturing Company of Lamar, Missouri ; BSR McDonald Ltd., of Worley, England; and Wells Gardner Electronics of Chicago, Illinois. Upon the organization of MELCO SALES, INC. and MELCO SALES INC.’s acquisition of the MGA Division of MIC, the license to utilize the trade name “MGA” was transferred to MELCO SALES, INC., as of October 1, 1974.
With respect to the use of the trade name “MGA” and the three diamond trademark in advertising or publications distributed in Pennsylvania between 1964-1974, because MELCO has no knowledge of the marketing practices of the MGA Division of MIC, MELCO was unable to answer this interrogatory. MELCO believes, however, that some advertising of MIC containing the trade name “MGA” and the three diamond trademark might have found its way into the State of Pennsylvania between 1964-1974 as the MGA Division of MIC was engaged in marketing its products, a substantial number of which were manufactured by MELCO and imported from Japan, throughout the northeast region of the United States.
b. Presence in Pennsylvania.
In connection with MELCO’s license agreement with Westinghouse Electric Corporation, representatives of MELCO occasionally visit the head office of Westinghouse at Pittsburgh, Pennsylvania for technical discussions and related matters. MELCO has not retained a record of these visits by its representatives to Pittsburgh during the period 1964-1974 other than technical liaison representatives who remained in Pittsburgh for extended periods of time pursuant to the license agreement. The following list includes all of the technical liaison representatives who have visited Westinghouse’s facilities at Pittsburgh, Pennsylvania in connection with the aforesaid license agreement during the period 1964-1974. After each year is set forth the individual’s name and his particular engineering designation:
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1964: Keizo Takagi (Communications Engineer)
1965: Toshiya Shiraoka (Communications Engineer)
1966: Toshiya Shiraoka (Communications Engineer)
Sanpei Kameyama (Switchgear Engineer)
Masatoshi Kawasaki (Assistant Engineer)
1967: Sanpei Kameyama (Switchgear Engineer)
Masatoshi Kawasaki (Assistant Engineer)
1968: Hiroshi Yokohama (Control Board Engineer)
Shiichi Hirose (Assistant Engineer)
1969: Hiroshi Yokohama (Control Board Engineer)
Shiichi Hirose (Assistant Engineer)
Takeshi Mori (Relay Engineer)
1970: Takeshi Mori (Relay Engineer)
Tatsuo Torii (Assistant Engineer)
1971: Shigeo Aida (Railway Engineer)
1972: Shigeo Aida (Railway Engineer)
Masao Nogami (Manufacturing Engineer)
Shiichi Ibuki (Assistant Engineer)
Gai Kobayashi (Rectifier Engineer)
1973: Masao Nogami (Manufacturing Engineer)
Shiichi Ibuki (Assistant Engineer)
Gai Kobayashi (Rectifier Engineer)
1974: Masao Nogami (Manufacturing Engineer)
Shiichi Ibuki (Assistant Engineer)
Gai Kobayashi (Rectifier Engineer)
c. Agreements.
MELCO entered into a license agreement with Westinghouse Electric Corporation which is headquartered in Pittsburgh, Pennsylvania. The agreement in question, dated April 1, 1966, remained in effect through 1974.
E.
Sharp Corporation
1. Corporate Relationships.
a. Stock Ownership.
Sharp owned 100 percent of the stock of Sharp Electronics Corporation (SEC), its American subsidiary.
b. Interlocking Directors and/or Executive Officers.
Mr. T. Hayakawa was president of Sharp from 1965 to 1970, and chairman of Sharp’s board from 1970 to 1974. He was also chairman of SEC from 1965 to 1971.
Mr. A. Saeki was executive director of Sharp from 1965 to 1974, and president of Sharp from 1970 to 1974. He was a director of SEC from 1965 to 1974, and SEC’s president from 1965 to 1971.
Mr. K. Saitoh was a director of Sharp from 1970 to 1974. He was a director of SEC from 1965 to 1974, executive vice president of SEC from 1966 to 1971, and president of SEC from 1972 to 1974.
Mr. M. Furubayu was executive director of Sharp from 1965 to 1970. He was a director of SEC from 1965 to 1971, and vice president of SEC during the same years.
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2. Sales.
Like MEI, MEC and MECA, Sharp and SEC have requested that their sales data be kept confidential. Again, I see no need for such a request, but I will honor it. The data will be impounded and will be available for review by an appellate court. It suffices to say that both corporations have made substantial sales of goods, either for export to the United States (in Sharp’s case), or in the United States itself (in SEC’s case). For the period 1965-1974, Sharp’s annual sales of such goods ranged from roughly 1% billion Yen in value to almost 34 billion Yen in value. During the same time, SEC’s annual sales ranged in value from roughly $5,000,000 to roughly $93,000,000. Approximately 4% of SEC’s dollar sales figures represent sales in Pennsylvania, and approximately 2% of those figures represent sales in the Eastern District of Pennsylvania.
3. Contacts.
a. Trademarks.
SEC has used trademarks owned by Sharp in advertisements, publications and brochures in connection with the sale of goods by SEC. SEC has distributed such advertisements, publications and brochures continuously in Pennsylvania throughout the period of 1965-1974. An exact list of the publications and brochures with dates is presently unavailable, advertisements appeared in national except that throughout this period advertisements appeared in national trade publications such as
Home Furnishings Daily,
and other national publications such as
Time, Fortune
and
Good Housekeeping
magazines.
b. Presence in Pennsylvania.
During the period 1965-1974, SEC had no.employees who resided and worked in Pennsylvania. However, in that same period of time, employees of SEC visited Pennsylvania on a regular basis. Such visits were made in order to contact persons, firms and corporations who either engaged in purchasing products offered for sale by SEC or who were potential purchasers of such products, and in order to attend trade shows. The purpose was to promote SEC’s products, to advise concerning after-sales service, to solicit orders for SEC’s products, and to attend to collection of SEC’s accounts receivable from customers.
During the period from 1965-1974 Sharp had no employees who resided and worked in Pennsylvania. However, in that same period two employees of Sharp visited Pennsylvania. In 1973, Mr. T. Sasaki spent two days in Pennsylvania and met with a Mr. Kopp of AMP Incorporated for the purpose of discussing an exchange of technology. In 1974, Mr. T. Ebiike spent two days in Pennsylvania and visited with Fogel Commercial Refrigerator Company in Pennsylvania concerning possible importation into Japan of that company’s products.
c. Agreements.
SEC has had numerous agreements from 1965-1974 with businesses located in Pennsylvania concerning distribution and service of its products. Many such agreements continue in effect, while others have terminated from time to time during the period 1965-1974.
Sharp has no agreements with Pennsylvania businesses. Sharp does not have knowledge as to whether corporations with whom it has agreements have any facilities in Pennsylvania except: (1) plaintiff has represented on the record herein that Zenith, with whom Sharp has a license agreement which is a part of the record in this action, had a facility in Pennsylvania; and (2) AMP, Inc., a New Jersey corporation with which Sharp has an agreement relating to technology, has a facility in Pennsylvania.
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III.
DEPENDANTS’ RESPONSES IN THE NUE ACTION AS ADOPTED BY THE COURT.
A.
HITACHI KADEN.
1. Corporate Relationships for 1965-1970.
In answer to these interrogatories of the Court, Kaden adopted its joint response with Limited in the
Zenith
case without change. For that response, see
supra,
at 5-8.
2. Sales.
In answer to these interrogatories as well, Kaden adopted its joint response with Limited in the
Zenith
case without change. For that response, see
supra,
at 8-9.
3. Contacts.
a. Trademark.
Advertisements, publications and brochures in which the “Hitachi” trademark or logo was used have been distributed in New Jersey. Kaden did not place any of these. Limited has placed institutional-type advertising which has circulated in New Jersey (see earlier response), but has not advertised in local New Jersey publications. HSCA and HAL have placed locally circulated advertisements and brochures bearing the “Hitachi” trademark or logo.
b. Presence in New Jersey for 1965-1970.
Three Kaden employees visited New Jersey during the relevant time period. All of their visits took place in 1970. Mr. H. Takakua, manager, First Export Department, visited New Jersey to discuss the sale of radios to Nissan Motors and to NUE. Mr. M. Misu, assistant manager, First Export Department, visited New Jersey to discuss the sale of radios „to RCA Corporation. And Mr. M. Watanabe, of the First Export Department, also visited New Jersey to discuss radio sales to RCA.
c. Agreements.
Kaden has not, to its knowledge, entered into any agreements with a corporation having business facilities located in New Jersey.
B.
MELCO.
1. Corporate Relationships.
a. Stock Ownership.
During the years 1965-1970, MELCO owned approximately 2.0 percent of MSK’s stock, and MSK owned 1.71 percent of MELCO’s stock. There was no stock ownership between MELCO and MIC.
b. Interlocking Directors and/or Executive Officers.
Mr. Ken Okubo, president and managing director of MELCO was a director of MSK during the years 1965-1970. Mr. Chujiro Fujino, a managing director of MSK, was a director of MELCO during the years 1965-1970. There was no corporate interlock between MELCO and MIC during 1965-1970.
2. Sales.
MELCO produced the following figures for sales of black and white television receivers destined for export to the United States during 1964-1970:
1964 $2,047,000
1965 1.294.000
1966 1.264.000
1967 675,000
1968 1.017.000
1969 4.283.000
1970 4.189.000
Color television receivers manufactured by MELCO in Japan were not imported to the United States by MELCO’s customers until 1970. In that year, sales of MELCO manufactured color-television receivers intended for export to the United States totaled $4,278,000.
MELCO professes ignorance about other MELCO manufactured consumer electronic products which ma”
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have been imported into the United States during 1965-1970. It also professes ignorance about the quantities of MELCO manufactured television receivers sold in New Jersey during 1965-1970.
3. Contacts.
a. Trademark.
MELCO owns both the tradename “MGA” and the three diamond trademark. During the years 1965-1970, it licensed both to MIC. MELCO asserts that its ignorance of MIC’s marketing practices prevents it from furnishing the Court with detailed information about the use of either the tradename or the trademark in advertisements or publications that circulated in New Jersey during the relevant time period. It admits, however, that some MIC advertising using the tradename and/or the trademark may have found its way into New Jersey during 1965-1970, for the MGA Division of MIC was then marketing its products throughout the northeastern United States.
b. Presence in New Jersey.
MELCO denies that any MELCO representatives worked in New Jersey during the years 1965-1970. It believes that some MELCO representatives may have visited Westinghouse facilities in New Jersey during those years for technical discussions. It also believes that a Mr. M. Ichimura, a fluorescent lamp engineer from MELCO, may have visited the fluorescent lamp facility of Westinghouse in Bloomfield, New Jersey in 1967. Additionally, a number of MELCO engineers visited the RCA Research Laboratory in Princeton, New Jersey, during the relevant time period.
c. Agreements.
During the relevant time period, MELCO had technical agreements with Westinghouse, RCA Corporation, Western Electric Co., Ltd., Aircraft Radio Corporation, Plessey Airborn Corporation, and AIRCO, Inc., all of which are either headquartered in New Jersey or have facilities there.
C.
DENKI
1. Corporate Relationships.
a. Stock Ownership.
Sanyo Electric Co., Ltd. (“DENKI”), is a Japanese corporation which- manufactures electrical and electronics products and sells only in Japan to various purchasers, including TRADING. Sanyo Electric Trading Co., Ltd. (TRADING), is a Japanese corporation which purchases products in Japan from DENKI and others, and exports them to various countries, including the United States. Sanyo Electric, Inc. (INCO), is a New York corporation which purchases products from TRADING and imports them into the United States. During the years 1965-1970, DENKI owned 83 percent of TRADING’S stock (third persons owned the remaining 17 percent) and 100 percent of INCO’s stock.
b. Interlocking Directors and/or Executive Officers.
At the time the
NUE
action began, in December, 1970, the following individuals held positions of responsibility with DENKI and/or TRADING and/or INCO.
11
. Mr. Y. Iue was a director of DENKI and chairman of its board. Mr. K. Iue was a director of all three corporations, president of all three corporations, and chief executive officer of DENKI. Mr. Nakai was a director of DENKI and INCO, and managing director of DENKI.
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In addition to the directors named above, DENKI had 21 other directors, none of whom was a director or officer of TRADING or INCO. TRADING had six other directors, one of whom was a director and officer of INCO, and one other who was a directoi of INCO. INCO also had six other directors, two of whom were directors of TRADING.
2. Sales.
TRADING’S sales to customers in the United States, including INCO, were as follows for the years 1965-1970:
1965 $18,306,000
1966 36.950.000
1967 36.892.000
1968 62.161.000
1969 87.858.000
1970 94.144.000
These sales figures are for fiscal years ending in November. TRADING does not know precisely in which states of the United States its products were sold to ultimate consumers. Since most of its United States customers, including INCO, do sell nation-wide, a percentage of its customers’ sales were undoubtedly made in New Jersey.
Though DENKI does not sell directly to the United States, in the
Zenith
action DENKI’s counsel informed the Court that approximately 99 percent of TRADING’S sales to United States customers during the 1965-1974 period were of DENKI manufactured products. See,
swpra,
at 272. Obviously, the same percentage would apply during the relevant time period of 1965-1970 in this, the
NUE
action.
INCO does not have figures for sales in New Jersey during 1965-1970. Its total sales in the United States during those years were as follows for fiscal years ending March 31:
1965 $ 5,905,980
1966 5,546,736
1967 9,978,257
1968 11,059,891
1969 24,072,124
1970 17,901,270
All INCO and TRADING sales during 1965-1970 were to private label customers. Neither had direct customers for private label television receivers in New Jersey during that time period. In 1967-1969, however, TRADING did sell color television receivers to a Japanese trading company, C. Itoh & Co., Ltd., which in turn sold them to the Emerson Television Sales Corporation whose warehouse was located in New Jersey.
3. Contacts.
a. Trademark.
No Sanyo brand-name products were marketed in the United States during the relevant time period. DENKI has never placed product or corporate advertising in the United States.
b. Presence in New Jersey.
Mr. K. Iue visited INCO’s offices in Moonachie, New Jersey in 1969 and 1970. He also visited facilities of Emerson Radio & Television Corporation in 1969. Numerous other DENKI employees visited INCO’s offices in Moonachie during the relevant time period.
12
* In 1967, DENKI employees visited New Jersey to repair approximately 3,700 DENKI manufactured television receivers sold by TRADING to C. Itoh & Co., Ltd., and in turn sold to Emerson Radio & Television Company. Mr. S. Iue, a DENKI director, also visited INCO in New Jersey in October, 1969 and September, 1970. Finally, nine other DENKI employees visited
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the United States during the relevant time period. Their precise destination in the United States was not known, so they may have visited New Jersey. None of the visits by DENKI employees was more than a few days in duration, c. Agreements.
DENKI did not enter into any contracts or agreements with firms having business facilities located in New Jersey.
IY.
PLAINTIFF’S PROPOSED FINDINGS OF FACT IN THE NUE ACTION AS ADOPTED BY THE COURT.
13
A.
Hitachi Kaden.
14
1. Defendant Hitachi Limited is a corporation organized under the laws of Japan and has its principal of business in Tokyo, Japan. Hitachi Ltd: is engaged in the manufacture and sale of a wide variety of products including electrical machinery, appliances and consumer electronic products (App. B-l, Answer #1).
2. Hitachi Ltd. is one of Japan’s largest industrial enterprises having net sales in fiscal 1970 of over $2.8 billion and employing over 144,000 persons. In 1970, Hitachi Ltd. had 62 consolidated subsidiaries and 256 non-consolidated subsidiaries (App. B-21, pp. 7, 18 and 20.
3. Counted among Hitachi Ltd.’s 62 consolidated subsidiaries is defendant Hitachi Sales Corporation of Japan (known in Japan as Hitachi Kaden Hanbai Kabushiki Haisha and referred to hereinafter as “Hitachi Kaden”) which ís a wholly-owned subsidiary of Hitachi Ltd. Hitachi Kaden is a Japanese corporation with its principal place of business in Toyko, Japan, and is engaged in the sale, distribution and export of household electric appliances manufactured by Hitachi Ltd. and two of Hitachi Ltd.’s manufacturing subsidiaries (App. B-l, Answer #3; App. B-3, Answers 1 and 3).
4. Hitachi Kaden was incorporated on May 2, 1955 by Hitachi Ltd. as a sales company for household electric appliances manufactured by Hitachi Ltd. Until the latter 1960’s, Hitachi Kaden carried on these sales activities solely in the Japanese domestic market. At that time, Hitachi Ltd. transferred its export trade business in household electric appliances to Hitachi Kaden (App. B-3, Answer #1; App. B-8, p. 35; App. B-48, pp. J00010-J00011).
5. Until 1969, defendant Hitachi Sales Corporation of America, then known simply as Hitachi Sales Corporation (“Hitachi Sales”), was a wholly-owned subsidiary of Hitachi Ltd. At that time stock ownership of Hitachi’ Sales was transferred to Hitachi Kaden, so that the affairs of Hitachi Sales could be properly looked after by another sales company (Hitachi Kaden) rather than by a large manufacturer (Hitachi Ltd.) (App. B-8, pp. 35-36). Thus, Hitachi Kaden became “the nucleus of the sales activities of Hitachi household electric appliances” (App. B-48, p. J00010).
6. Hitachi Sales is a corporation organized under the laws of the State of California and has its principal place of business in Long Island City, New York.
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Hitachi Sales has been engaged, since its incorporation by Hitachi Ltd. on February 11, 1964, in the sale and distribution in the United States and New Jersey of household electric appliances manufactured by Hitachi Ltd. (App. B-4, Answers #1 and 58; App. B-8, p. 35; App. B-48, p. J00011).
7. Hitachi Ltd. also owns 100 percent of another Hitachi company (not a defendant herein), Hitachi America, Ltd. (“Hitachi America”), which has its principal place of business in New York City. Hitachi America is engaged in the sale and distribution in the United States of industrial electric products manufactured by Hitachi Ltd. (App. B-l, Answer #3.b).
8. In 1970, approximately 11 percent (or $314,270,000) of Hitachi Ltd.’s net sales were accounted for by products exported to markets throughput the world. Approximately 39 percent of its export sales was to the United States (App. B-21, p. 19). Thus the value of export sales of Hitachi Ltd. manufactured products exceeded $122,500,000 in 1970. Hitachi Ltd. views its future development and success as dependent upon its export sales. In its 1968 Annual Report, Hitachi Ltd. states (App. B-13, at 17):
“Hitachi has traditionally placed great emphasis on the promotion of exports. The future development of the company’s business is based squarely on export, and this policy is in accord with the requirements of the nation as a whole.”
9. Hitachi Ltd. employs different methods for selling and distributing its products in the United States and in New Jersey. One method is by direct sales of its products to customers located in the United States and in New Jersey (App. B-l and B-2, Answer #10). The direct sales consist of private label sales or sales to original equipment manufacturer (“OEM”) customers. (App. B-8 at 57-59). Hitachi Sales usually plays no role in these sales and the function performed by Kaden is merely clerical. (App. B-8, at 58-59, 61).
10. Hitachi brand household electric appliances, including consumer electronic products, manufactured by Hitachi Ltd. are sold and distributed to numerous dealers and distributors located throughout the United States by Hitachi Sales. The export of these items to the United States had been accomplished by Hitachi Ltd. until 1969, and thereafter was accomplishad by Hitachi Kaden. (App. B-l, Answers #3 and #83; App. B-2, Answer #19; App. B-3, Answer #83; App. B-8 at 57-58). But see App. B-48 at J00010 in which it is stated that responsibility for exportation of Hitachi Ltd. household electric products was transferred to Hitachi Kaden in November, 1967.
11. Industrial electric products manufactured by Hitachi Ltd. are sold and distrubuted to customers located throughout the United States and New Jersey, in part through Hitachi Ltd’s wholly-owned New York subsidiary, Hitachi America. The export of industrial products to Hitachi America in the United States is accomplished by Hitachi Ltd. (App. B-2, Answer #19).
12. In connection with the sale and distribution of Hitachi brand household electric appliances and consumer electronic products, Hitachi Sales contracts with sales representatives, each of whom is responsible for a specified geographic area. Hitachi Sales had such a sales representative located in New Jersy in 1966 (App. B-50 and B-51). Within New Jersey are a number of service agencies authorized by Hitachi Sales to perform service repairs on Hitachi products (App. B-52; and B-53).
13. Sales and shipments to customers located in New Jersey of various products manufactured by Hitachi Ltd. have been and continue to be accomplished directly by Hitachi Ltd. Such direct sales and shipments to customers in New Jersey amounted to over $1,000,000 in each qf the years 1969 and 1970. In ad
*290
dition, Hitachi Ltd.’s 1967 direct sales to customers in New Jersey amounted to over $620,000, and in 1968 to over $645,000. Thus, Hitachi Ltd. has been transacting business of a substantial and continuous nature within New Jersey for at least the four years preceding the filing of this action (Limited, App. B-l, Answer #10; App. B-2, Answer #10; App. B-55).
14. In connection with Hitachi Ltd.’s sales of its products directly to customers in the State of New Jersey, Hitachi Ltd. has been in communication with those customers and has solicited potential customers in the State of New Jersey (App. B-l, Answer #14).
15. Hitachi Ltd. advertises its products in newspapers and magazines that are distributed throughout the United States and, in all probability, in the State of New Jersey as well (App. B-l, Answers #11 and 12). In addition, Hitachi Sales (and Hitachi America as well) advertises Hitachi Ltd.-manufactured products in the United States and in New Jersey. Hitachi Ltd. contributes to the advertising expenses incurred by Hitachi Sales in the United States, including advertising by Hitachi Sales in New Jersey (App. B-l, Answer #13).
16. Technical employees and engineers of Hitachi Ltd. have visited the offices of RCA Corporation located in the State of New Jersey in connection with licensing agreements between Hitachi Ltd. and RCA Corporation. The frequency of these visits amounted to over 10 occasions in each year during 1969-1970 (App. B-l, Answers #16 and 25). In addition, technical employees of Hitachi Ltd. have visited plaintiff’s plant in Jersey City, New Jersey, in connection with the sale by Hitachi Ltd. to plaintiff of certain consumer electronic products (App. B-l, Answer to #16; App. B-9 at V. II, 87-90, V. Ill, 83-84).
17. In connection with Hitachi Ltd.’s sales of products to plaintiff for shipment to Jersey City, New Jersey, and in addition to meetings in Jersey City of Hitachi Ltd. technical personnel, meetings between officers and management personnel of Hitachi, Ltd., and of plaintiff's representatives in Jersey City, New Jersey, have occurred in Tokyo, Japan (App. B-9, Vol. II at 87-90, Vol. Ill at 83-84; App. B-28; App. B-29; App. B-33 through App. B-35; App. B-47).
18. Officers and other management personnel of Hitachi Ltd. have visited plaintiff’s Jersey City, New Jersey, plant and have communicated by letter directly with plaintiff in Jersey City in furtherance of Hitachi Ltd.’s business relations with plaintiff as a customer (App. B-8, at 19-22; App. B-28 through App. B-30; App. B-32; App. B-35; App. B-37 through App. B-40). The meetings referred to above and those meetings occurring in Tokyo, Japan, were part of the business relationship between Hitachi Ltd. and plaintiff.
19. Hitachi Ltd. has entered into a patent license agreement with Esso Research & Engineering Co., Linden, New Jersey. In addition, Hitachi Ltd. and RCA Corporation have entered into patent license agreements and technical assistance agreements involving electronic data processing equipment, programming semi-conductors, camera pick-up tubes, and other products and components. While RCA’s headquarters are in New York, the agreements contemplate employees of Hitachi Ltd. coming to RCA’s New Jersey facilities on a regular basis for purposes connected with such agreements. (App. B-l Answer to #25). In fiscal 1970 approximately 14.7% ($411 million) of Hitachi Ltd.’s net sales consisted of products covered by these agreements with RCA (App. B — 21 at 20).
20. As shown above, Hitachi Ltd. owns all of the outstanding shares of Hitachi Kaden, which, in turn, owns all of the shares of Hitachi Sales. Of course, until 1969, Hitachi Ltd. owned directly all the shares of Hitachi Sales. In addition, Hitachi Ltd. has another
*291
wholly-owned subsidiary in the United States — Hitachi America.
21. The transfer of stock ownership from Hitachi Ltd. to Hitachi Kaden was suggested shortly prior to March 1969 by K. Komai, President of Hitachi Ltd., to K. Nishi, who at that time was both the President of Hitachi Kaden and Senior Executive Managing Director of Hitachi Ltd. (App. B-8 at 33; App. B-l Answer :#8). The reasons for the transfer were twofold. First, since Hitachi Kaden, like Hitachi Sales, was engaged in the sale of Hitachi Ltd. manufactured and branded household appliances, except solely in the Japanese domestic market, it was felt by Mr. Komai that it would be better that Hitachi Kaden, a sales company, own the stock of another sales company, Hitachi Sales. Second, Hitachi Ltd. being a very large corporate entity was felt not to be in a position adequately to “look after another coloration which was engaged in the field of sales.” (App. B-8, at 35-36). The Board of Directors of Hitachi Kaden was not consulted but was merely informed of the transfer at or after the time of the actual transaction (App. B-8 at 34).
22. The financial operating results of these three subsidiaries, Kaden, HSCA and HAL, are included in the consolidated financial statements of Hitachi Ltd. (App. B-l, Answer #74), and included in the 62 consolidated subsidiaries referred to in the June 18, 1970 Prospectus for Hitachi Ltd. common stock (App. B-21).
23. There has been considerable exchange and transfer of employees between and among the three companies (App. B-l, Answer #64(3); App. B-3, Answer #64(e)). Mr. K. Nishi testified that Hitachi Ltd. sends individuals to work at subsidiaries of Hitachi Ltd. (App. B-8, at 106). For instance, Mr. H. Yamada was, until August 1967, a Vice-President of Hitachi Sales. At that time he returned to the “head office,” was employed by Hitachi Ltd. in the Consumer Products Division, and from there went to Hitachi Kaden as the Department Manager, 1st Export Department (App. B-3, Answer #74 (e); App. B-42). Similar transfers have frequently been made by other employees. Indeed, it would appear that the entire Export Department, Consumer Products Division of Hitachi Ltd. was transferred to Hitachi Kaden when Hitachi Ltd. transferred responsibility for exporting consumer products to Hitachi Kaden in November, 1967 (App. B-42; App. B-54). Kaden did take Limited’s place in the same kind of agreement Limited had previously negotiated with HSCA (Id.).
24. Mr. B. Hayashi was in June, 1973 the General Manager of the Subsidiaries Coordination Office of Hitachi Ltd., a position for which Mr. Hayashi may be particularly suited having been a former director of Hitachi Sales (App. B-l, Answer #69). In this connection it is worthy of note that the literal translation of the Japanese name for the Subsidiaries Coordination Office of Hitachi Ltd. is “office in charge of aligned companies”, and that no similar or comparable office exists within Hitachi Kaden (App. B-8 at 121-122).
25. Mr. M. Naito, in June, 1973 the Executive Managing Director of Hitachi Kaden (App. B-l, Answer #64(b)), was for the period 1966-1968 “affiliated with” and a director of Hitachi Sales (App. B-8, Answer #64(e); App. B-56), and also at the same time the General Manager, Export Department, Consumer Products Division, of Hitachi Ltd. (App. B-54 at J00025, J00026-J00029). Mr. Naito, despite his dual role in Hitachi Sales and Hitachi Ltd., entered into at least three agreements on behalf of Hitachi Ltd. with Hitachi Sales regarding the payment of commissions to Hitachi Sales in connection with OEM sales made directly to United States customers by Hitachi Ltd. Thus, Mr. Naito was in the position of contracting with his own company on behalf of Hitachi Ltd. (App. B-54, at J00025, J00026-J00029).
*292
26. Moreover, at or about the time that responsibility for handling the export business of Hitachi Ltd. was transferred by Hitachi Ltd. to Hitachi Kaden, Mr. Naito was transferred from Hitachi Ltd. to Hitachi Kaden and became the Executive Managing Director of Hitachi Kaden (App. 8-1, Answer #64(b)). In that capacity, and on behalf of Hitachi Kaden, rather than Hitachi Ltd., Mr. Naito contracted with Hitachi Sales for the payment of commissions to Hitachi Sales in connection with OEM customers in the United States (App. B-54 at J00020-J00022).
27. Hitachi Sales has reported to Hitachi Ltd. or to Hitachi Kaden regarding many of its activities, including (1) hiring of key employees, (2) dismissal or termination of employment of key employees, (3) promotion of key employees, (4) wages or salaries of key employees, (5) transfer of key employees, (6) sales, (7) distribution, (8) warehousing, (9) solicitation of customers, (10) selection of relatively large customers, (11) resale prices of Hitachi Ltd. products, (12) terms or conditions of sale of Hitachi Ltd. products, (13) discounts, rebates and advertising or promotional allowances, (14) advertising or promotional activities, (15) collection of accounts receivable, (16) leasing or purchasing of real property, (17) inventory, (18) change in office or other facility location, (19) capital expenditures and commitments, and (20) acquisitions or sales out of the ordinary course of business (App. B-6).
28. During the time that Hitachi Ltd. owned' directly the stock of Hitachi Sales, at least one meeting of Hitachi Sales’ Board of Directors was conducted at Hitachi Ltd. headquarters in Toyko, Japan (App. B-57). At that time 3 of the 6 members of Hitachi Sales’ Board of Directors were residents of Japan (App. B-56).
29. In connection with the private label sales and sales to OEM customers made directly by Hitachi Ltd. in the United States and New Jersey, Hitachi Sales acted as an “intermediary” (App. B-9, at Vol. II pp. 80-90). Hitachi Sales was compensated for so acting solely by Hitachi Ltd. (App. B-9, at Vol. II pp. 83r 84), and its obligation was and is to carry out the wishes of Hitachi Ltd. (App. B-9, at Vol. II p. 81). The function performed by Hitachi Sales in this capacity was to set up meetings, advise the customer of any problems encountered in production or shipment and to convey to Hitachi Ltd. the wishes of the customer with respect to various aspects of the transaction (App. B-9, at Vol. II pp. 80-90).
30. Despite defendants’ representation, Hitachi Sales, by Mr. E. Matsumura, President of Hitachi Sales, has sought at least on one occasion the approval of Mr. K. Nishi for the promotion of employees within Hitachi Sales (App. B-8, at 44-45). Mr. Nishi is the president of Hitachi Kaden and a director of Hitachi Ltd.
31. At the apex of a vast corporate enterprise stands Hitachi Ltd. with over 60 consolidated subsidiaries and over 250 nonconsolidated subsidiaries which “constitute the largest industrial enterprise in Japan” (App. B-21 at p. 7). That it is a single enterprise cannot be disputed by Hitachi Ltd. itself. For Hitachi Ltd. has not only represented itself and its 62 consolidated subsidiaries (including Hitachi Kaden and Hitachi Sales) to be one, but believes itself to be one enterprise.
32. In a prospectus dated June 18, 1970, for 25,000,000 shares of common stock of Hitachi Ltd., Hitachi Ltd. and its 62 consolidated subsidiaries are referred to herein as “the Company” (App. B-21 at p. 7).
33. In its English-language Annual Report for 1968, Hitachi Ltd. states (App. B-13 at p. 21):
“Hitachi has altogether 60 consolidated subsidiaries, as well as 175 nonconsolidated subsidiaries. All of these subsidiary enterprises work together in close cooperation as a single organization.”
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Mr. E. Matsumura, President of Hitachi Sales, conceded that Hitachi Ltd. and its subsidiaries work together in “close connection” (App. B-9, Yol. II at p. 60).
34. Hitachi, Ltd. (including its 62 consolidated subsidiaries) is represented, in the June 18, 1970 Prospectus for Hitachi Ltd. Common Stock, to have over 144,000 employees (App. B-21 at 20). However, in the Diamond, Japan Business Directory (App. B-ll, at 408), Hitachi Ltd. is reported to have only 93,577 employees as of September, 1970. Thus, the remaining 50-odd thousand employees must be employed by the consolidated subsidiaries, among which are Hitachi Sales, Hitachi Kaden and Hitachi America.
35. Mr. K. Komai, President of Hitachi Ltd., stated in the 1968 Annual Report for Hitachi Ltd. (B-13 at 5):
“Under these uncertain conditions, with the co-operation of our 141,450 employees, we intend to move boldly forward with our efforts to revitalize our corporate structure.”
In obvious reference to not only Hitachi Ltd., but its consolidated subsidiaries as well, the President of Hitachi, Ltd. himself views the Hitachi corporate structure as a single enterprise engaged in the common goal of the sale and promoting the sale of Hitachi products and views the employees of Hitachi Kaden and Hitachi Sales as employees of Hitachi, Ltd.
36. Persons employed within the Hitachi group of companies view the combine as one enterprise. Eizo Matsumura, Executive Vice-President of Hitachi Sales, when asked what “head office” was referred to in a letter (App. B-23) written by his subordinate within Hitachi Sales, replied (App. B-9, Vol. IV at 22):
“Hitachi has so many factories and branches and agencies, that within Hitachi, Ltd. it is customary to call Tokyo office as a head office. . . . ” and further:
“In this letter, it is implied that the head office means Hitachi, Ltd. ...”
37. In a letter dated April 12, 1967 from H. Yamada, Vice-President of Hitachi Sales, to Harvey A. Tullo of Emerson in Jersey City, New Jersey, Mr. Yamada states, in part (App. B-36):
“In order to comply with the agreement mentioned in your letter, as we have told you repeatedly, we need the approval from the head office. * * * be advised to talk directly with our head office.”
Mr. Yamada then goes on to identify Mr. T. Yoshida, an officer of Hitachi Ltd., as the individual with whom Mr. Tullo should meet in Tokyo.
38. In another letter dated August 16, 1967 written by Mr. H. Yamada, Vice-President of Hitachi Sales, to Mr. Tullo, Mr. Yamada states, in part (App. B-42):
“Early in September I am going back to Japan with my family to fill another post in our head office.
I believe that the head office needs someone who knows America well enough to improve the export business to this country.
If you come to Japan, please give me a call. You may contact me at Hitachi Ltd., Consumer Products Division,
39. Hitachi Ltd. states that it has 32 “overseas representative offices” selling the products it manufactures (App.' B-21, at 7 and 18). Included in these overseas offices are 4 United States offices of HSCA, which is characterized as a “major subsidiary” of Hitachi Ltd. (App. B-13 at 20-21). Under the heading “Overseas Offices” on page 20 of its 1968 Annual Report (App. B-31 at 20), Hitachi Ltd. lists six offices in the United States. Two of the six offices are office locations of Hitachi America, Ltd. (known in 1968 as Hitachi New York, Ltd.). The remaining
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four “overseas offices” of Hitachi Ltd. located in the United States and listed in the 1968 Annual Report are office locations of Hitachi Sales Corporation of America (known in 1968 simply as Hitachi Sales Corporation).
40. In the Manhattan Yellow Pages, 1972, under “Hitachi” the following listing appears (App. B-53):
“Hitachi Wide Range of Popular Priced Radios, Color & Black & White Television Cassette & Reel Tape Recorders
‘FOR INFORMATION CALL’ Hitachi Sales Corp. of America 48-50 34 L.I. City......361-3090”
Quality always comes first at
HITACHI
Japan’s largest manufacturer
In the Washington, D. C. Yellow Pages, May, 1971, under “Hitachi” the following listing appears (App. B-53):
“Hitachi Quality Always Comes First Japan’s Largest Manufacturer The New Revolution In Solid State Color — Black & White Televisions — Cassettes—Tape Recorders
Quality always comes first at
HITACHI
Japan’s largest manufacturer
‘FOR INFORMATION CALL’
No attempt is made to identify which Hitachi company is “Japan’s largest manufacturer.” In the Manhattan listing the representation is that Hitachi Sales Corporation of America is “Japan’s largest manufacturer.”
41. Trade directories and buyers’ guides distributed in the United States list Hitachi Sales and Hitachi America as overseas branches or agents of Hitachi Ltd. (App. B-19 and B-20).
42. In the Index of Japanese Electronic Manufacturers and Products, 1968, published by the Electronic Industries Association of Japan, of which Hitachi Ltd. is a prominent member, the following entry is made under the heading “Hitachi, Ltd.” (App. B-19):
“HITACHI, LTD.
Overseas
Branches:
U.S.A. HITACHI NEW YORK, LTD. 666 Fifth Avenue, New York, N. Y. 10019 U.S.A.
Tel. JUdson 6-4257.
Overseas Agents:
U.S.A. (New York)
Hitachi Sales Corporation, 48-50 34th Street, Long Island City,
N.Y. 11101, U.S.A.
Tel. 361-3090.”
43. On pages 179 and 180 of the Japan Electronic Buyers’ Guide, 1970/71, 100 Leaders in the Electric & Electronic Industries (App. B-20), under the entry
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for Hitachi, Ltd. there are listed, under the heading “Overseas Offices: U.S.A.,” 5 offices of Hitachi Sales and 5 offices of Hitachi America. In the same volume in an advertisement of Hitachi Ltd. products, there appears the following:
“Overseas Representatives: New York/San Francisco/Los Angeles/ Chicago/Indianapolis/Dallas/Honolulu
44. These representations have the potential to create in the minds of those who read them the conclusion that Hitachi Ltd., Hitachi Kaden, Hitachi Sales and Hitachi America are one enterprise, promoting the sale of Hitachi products throughout the world. This is irrefutaably confirmed by Hitachi Ltd. itself in its 1968 Annual Report, at 17 (App. Ills), in which it is stated:
“Together with the activities of our many overseas offices around the world, this program has led us to making extensive inroads into the world market.”
B.
MELCO
1. Defendant Mitsubishi Electric Corporation (“MELCO”) is a Japanese corporation with its principal place of business in Tokyo, Japan and is engaged in the manufacture and sale of a broad range of industrial and consumer electrical and electronic products (App. C-l, Answer #1).
2. MELCO in fiscal 1969 had net sales totalling over $812 million and as of September 30, 1969, employed over 63,000 persons (App. C-10, pp. 2 and 14).
3. Defendant Mitsubishi Shoji Kaisha, Ltd., now known as Mitsubishi Corporation (“MSK”), is a Japanese corporation with its principal place of business next door to MELCO’s headquarters in Tokyo, Japan, and is engaged in general importing, exporting, trading and other mercantile business (App. C-5, Ans, '■# 1; App. C-6, Vol. 1 at 15). As of May 31, 1972, MELCO owned 1.5% of the outstanding capital shares of MSK and MSK owned 0.72% of the outstanding capital shares of MELCO (App. C-5, Ans. '# 2).
4. MSK’s total volume of trading transactions in fiscal 1969 amounted to approximately $8.1 billion. It employs over 13,600 persons in Japan and 2,400 in 54 other countries (App. C-70, p. 2).
5. MSK owns 100% of the shares of defendant, Mitsubishi International Corporation (“MIC”), a New York corporation with its principal place of business at 277 Park Avenue, New York, New York (App. C-4, Ans. # 58; App; C-3, Ans. #1). MIC is engaged in the importation, sale and distribution in the United States of products, primarily supplied by MSK, but which MIC also obtains directly from other Japanese manufacturers, including MELCO (App. C-2, Ans. # 65(c) ).
6. Mitsubishi Electric Corporation was incorporated in Nagoya City under the laws of Japan on January 15, 1921 for an indefinite period as a result of the separation of the Electric Machinery Department from the Mitsubishi Shipbuilding Company (App. C-10, p. 2).
7. MELCO is engaged in the manufacture and sale of electric industrial equipment and consumer products, such as transformers, circuit breakers, electrical generators, instrumentation systems for atomic power plants, elevators and escalators, television sets, home fans, automotive electrical equipment, ground equipment for communication satellites, including radar and large scale antenna equipment, radio communication equipment for automobiles, semi-conductors, integrated circuits, motors, industrial hoists, stereo sets, home and industrial air conditioning units, missile defense systems and industrial process control computers (App. C-10, p. 2).
8. MELCO is generally regarded as one of the three largest producers of heavy electrical equipment and one of the four largest producers of electrical and electronic equipment in Japan although its relative position varies as to
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particular products (App. C-10, p. 2). The Report on Mitsubishi Electric Corporation (June, 1969) (App. C-ll, p. 2) describes MELCO as “today one of the three largest and most diversified electric and electronic companies along with Hitachi and Toshiba.”
9. In 1969, MELCO’s exports to world markets amounted to over $56,-000,000, or 7% of net sales (App. C-10, p. 2). In 1971, the value of exports by MELCO reached approximately $123,-928,000, 19% (or $23,446,000) of which was accounted for by exports to the United States (App. C-58). The exports to the United States have increased year after year since 1967 (App. C-6, Vol. 5, p. 332).
10. In addition to industrial electrical products, consumer electrical products manufactured by MELCO are sold in the United States and in New Jersey under the “MGA” brand and under the private labels of various United States firms (App. C — 1, C-2, C-3, C-4, Answers 3, 19 and 23).
11. United States private label customers of MELCO products include Westinghouse Electric Corporation (App. C-63), Trans-American Electronics Internationál Co., Inc. (App. C-49), Broad-moor Industries, Ltd. (App. C-50), Midland International Corp. (App. C-51), Gambles-Skogmo Company (App. C-47), and W. T. Grant (App. C-8, pp. 26-27).
12. Sales of MELCO products were, until March, 1969, limited to private label sales and sales to industrial customers. However, in March of 1969, the MGA Division of Mitsubishi International Corporation was established in the United States to develop a market for consumer electrical products manufactured by MELCO and to sell and distribute those products through independent retail dealers located throughout the United States (App. C-8, pp. 71-72; App. C-6, Vol. 4, pp. 250-256).
13. MELCO had anticipated, even as early as 1966, that it would be marketing its own products in the United States under its own brand (App. C-6, Vol. 4, pp. 255-256), and since MIC had existed within the United States and had an established sales organization, branch offices throughout the United States, a nationwide servicing organization, an outstanding degree of merchandising skill, and was well-financed, and because it would be difficult for MEL-CO to put itself in a similar position, MELCO decided to utilize MIC for that marketing task (App. C-6, Vol. 4, pp. 255-256; App. C-6, Vol. 6, pp. 412-419). Thus, MELCO began exporting its consumer electronic products bearing the “MGA” brand to the United States.
14. With respect to the sale of MGA brand products manufactured by MEL-CO within the United States, MIC was the sole, exclusive distributor (App. C-7, Vol. 3, pp. 131-132; App. C-8, p. 33). MIC, in turn, through its MGA Division, contracts with dealers throughout the country in connection with the retail sale of MGA products. As of June 2, 1971, MIC had sales agreements with 16 dealers in the State of New Jersey, and service agreements with 21 other dealers (App. C-3, Answers 18 and 19).
15. The “MGA” trade name is owned by MELCO (App. C-2, Ans. # 27), not by Mitsubishi International Corp.
16. Prior to May, 1970, products manufactured by MELCO for resale in the United States were distributed through MSK to MIC (App. C-5, Ans. # 2(b) ). These products included television receivers, radio receivers and other electrical appliances. After 1970, with the creation of the MGA Division of MIC, MELCO distributed those products directly to MIC (App. C-2, Ans. # 65(c) ).
17. “MGA” products manufactured by MELCO are sold to retail dealers in New Jersey for resale to consumers in the State. In 1970, the volume of sales of MGA products amounted to approximately $200,000 (App. C-63; but see App. C-8, pp. 23-24).
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18. Solicitation of retail customers in New Jersey is continuous and substantial. Sales personnel of the MGA Division meet regularly in New Jersey with New Jersey dealers (App. C-8, pp. 15-19, 22), advertising by trade publications and radio is conducted within New Jersey (App. C-8, pp. 48-49) and MGA salesmen visit New Jersey oh eight or more occasions per month (App. C-8, pp. 19-20).
19. In 1970, with the creation of the MGA Division, MELCO’s sales to MIC for resale throughout the United States and New Jersey amounted to over $8,-200,000 (App. C-2, Ans. ■# 65(c) ), whereas MELCO’s sales were previously made partially through MSK (App. C-10, p. 12). MELCO’s total sales of products in 1970 in the United States amounted to $11,073,000 (App. C-2, Ans. '# 3).
20. MELCO transacts business in the State of New Jersey through its agent, Mitsubishi International Corporation. As stated by MIC’s own counsel, MIC “fully admits it is present in New Jersey” (App. C-7, Vol. 2, p. 73).
21. MELCO has patent license or technical assistance agreements with United States corporations pursuant to which royalties are paid by MELCO to the United States licensors (App. C-10, p. 13). The most important of the various agreements are those MELCO has with Westinghouse and RCA Corporation. Indeed, MELCO views the arrangements for the provisions of technical know-how and patent licenses by Westinghouse and RCA to be “essential to the conduct of a significant part of Mitsubishi’s present business” (App. C-10, p. 13).
22. MELCO engineers have visited RCA’s Research Laboratory in Princeton, New Jersey, in connection with MELCO’s agreements with RCA Corporation (App. C-2, Ans.
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16). In late 1967, Mr. Ichimura, Manager of the Ofuna Works of MELCO, visited the Bloomfield, New Jersey plant of Westinghouse for MELCO’s business purposes (App. C-67).
23. Pursuant to an agreement dated April 22, 1964, Westinghouse agreed to purchase from MIC a minimum of 50,-000 12-inch portable black and white television receivers to be produced by MELCO and shipped to Westinghouse’s facilities in Metuchen, New Jersey. This agreement was fulfilled in 1964 and 1965 (App. C-72; App. C-63).
24. MELCO purchased in 1969 and 1970 products produced by Westinghouse in Bloomfield, New Jersey. The volume of purchases for those two years amount to $13,522 and $14,582 respectively. (App. C-2, Ans. ■# 17).
25. In May, 1970, after the creation of the MGA Division in MIC for the sale of MELCO products, MELCO played host in Japan to retail dealers of MGA products located throughout the United States and in the State of New Jersey. A number of New .Jersey dealers visited MELCO’s plant located in Kyoto, Japan (App. C-8, pp. 34-35; App. C-42). Moreover, a meeting of the retail dealers and MELCO personnel occurred in the MELCO office building in Tokyo, Japan, at which time a high-ranking official of MELCO delivered a message (App. C-8, at 34-35). As a result of this visit, the New Jersey dealers placed orders for MELCO products. (App. C-8, p. 45).
26. There exists a network of service agencies in New Jersey authorized by MIC to perform warranty repairs on MGA products manufactured by MEL-CO. Pursuant to the contracts between the service agencies and MIC, the service agencies are required to maintain an inventory of replacement parts manufactured by MELCO (App. C-8, pp. 73-77).
27. MELCO’s business success depends to a large extent upon its relations with a number of United States corporations, principally Westinghouse Electric Corporation and RCA Corporation. (App. C-10, p. 13). Indeed, the annual royalties paid by MELCO to
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Westinghouse under patent licenses granted by Westinghouse to MELCO increased from $4.5 million in 1967 to $7.-6 million in 1971. Royalties payable to Westinghouse are computed on the basis of MELCO’s annual dollar volume of sales of products covered by a Westinghouse patent license. Thus, MELCO’s annual sales of those licensed products amounted to approximately $454 million in 1970 and over $528 million in 1971 — (App. C-68) representing approximately one-half of MELCO’s total annual sales.
28. Exhibits appearing in appendices C-65 through C-69 detail the nature of the relationship between MELCO and Westinghouse and the scope of MEL-CO’s activities in the United States in connection with that relationship. MEL-CO maintains “Resident Representatives” in East Pittsburgh, Pennsylvania, who serve as liaison. (App. C-2, Ans. •# 56) Meetings of “top management” of MELCO and Westinghouse occur annually in the United States or Japan. These meetings are attended by, among others, Ken Okubo, Chairman of the Board of MELCO, H. Inoue, Vice-President of MELCO, S. Shindo, Managing Director of MELCO, T. Watabe, Manager of Planning Department of MELCO, and S. Abe, Manager of Overseas Survey & Licensing Department of MELCO (App. C-69). There is a continuous flow of communications between MELCO and Westinghouse (App. C-66 through App. C-69).
29. Many employees of MELCO annually visit the United States for business purposes on a regular basis (App. C-6, Vol. 2, pp. 28-29). Mr. M. Hasegawa, a MELCO employee who had an office at MIC’s headquarters at 277 Park Avenue, New York, had the function of assisting personnel of MELCO visiting the United States and accompanied these MELCO personnel on visits to MELCO customers in the United States (App. C-7, Vol. 3, pp. 149-152). A number of MELCO employees were located during the period at MIC’s offices in New York, including MELCO engineers who were in the United States to perform warranty repairs on products sold under private label. (App. C-7, Vol. 4, pp. 70, 73-74).
30. MELCO has entered into private label agreements with numerous United States firms for the sale of MELCO manufactured products to those firms in the United States (App. C-46 through C-51; Paragraph 11, supra).
31. As of March 15, 1970, MELCO entered into an agreement with Morgan Guaranty Trust Company of New York (“Morgan”), pursuant to which Morgan was to act as the indenture trustee in connection with the issuance by MEL-CO of $15,000,000, 7% Convertible Sinking Fund Debentures. That Indenture provided,
inter alia,
for the appointment by MELCO of Morgan as its agent for service of process and for the Indenture to be governed by the laws of New York. (App. C-71, Sections 15.09 and 15.10).
32. MELCO, in its answers to interrogatories (App. C-l, Ans.
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1), listed no offices in the United States at anytime during 1966 through 1970 and this representation was reiterated by Mr. S. Abe of MELCO in his deposition (App. C-6, Vol. 1, pp. 94-96). However, MELCO’s corporate name appeared on the entrance to an office at 277 Park Avenue, New York (App. C-8, pp. 30-31). In its Offering Circular dated March 12, 1970, MELCO states (App. C-10, p. 12): “Mitsubishi [MELCO], has 13 representative offices in such cities as New York, Chicago and Los Angeles.” Two letters (App. C-44 and C-48) written by an MIC assistant manager show carbon copies going to “MELCO Chicago” or “MELCO/Chicago Office.” Three private label agreements to which MELCO is a party provide that all notices or other communication in connection with the agreement shall be sent to MELCO at the following
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addresses (App. C-49, p. 8; C-50, p. 8; C-51, p. 12):
“130 East Randolph Drive Chicago, Illinois 60611 or
“119 East Lake Street Chicago, Illinois 60601”
The business card of Mr. M. Hasegawa reads, in part, as follows (App. C-56):
“Masaru Hasegawa
■ Manager
New York Office
Mitsubishi Electric Corporation
277 Park Avenue
New York, New York 10017”
33. MELCO products are sold and distributed on a continuous and substantial basis in New Jersey by the MGA Division of MIC which carries on all those activities in New Jersey that are normally necessary and incidental to such sales (See Paragraphs 14, 17, 18 and 20, supra).
34. MIC is the principal marketing outlet for MELCO products in the United States, and has been since 1965 (App. C-6, Vol. 4, p. 382). The MGA Division deals primarily in products manufactured by MELCO (App. C-8, p. 33).
35. The MGA tradename, utilized widely by MIC in advertising, letterheads, brochures, and even in the name of the division, is owned by MELCO.
36. MIC is a “trader of commodities” (App. C-65) and, as such, acts as an agent in most transactions. In an Offering Circular of MSK, a Japanese trading company that owns 100% of the shares of MIC, it is stated (App. C — 70, p. 10):
“Mitsubishi Shoji acts either as principal or agent in its trading transactions. In substance, the majority of MSK’s purchases and sales as principal are more nearly agency transactions . . . .”
(For a discussion of the general functions of a Japanese trading company, see App. C-24, an article by M. Emori, a Managing Director of MSK).
37. In connection with MELCO’s dealings with Westinghouse, MIC is used on frequent occasions as liaison or as a go-between, normally looking out for the interests of MELCO. (App. C-65; App. C-69). This is also true with respect to the private label arrangements for supplying MELCO products to United States customers. In the private label agreements themselves there is a recitation that MIC is “authorized” by MELCO to sell the products in the United States. (App. C-46 through App. C-51).
38. MELCO holds out MIC as its agent and representative in the United States. In its Annual Report for 1971 filed with the Securities and Exchange Commission on February 16, 1972, MELCO lists its “overseas representatives” and the following appears there (App. C-13, last page):
“U.S.A. c/o MIC MGA, 7045 North Ridgeway Avenue, Lincoln-wood, Illinois 60645 (312) 973-2000”
Lincolnwood, Illinois is the headquarters of the MGA Division of MIC. (App. C-8, p. 11). In its Offering Circular dated March 12, 1970, MELCO states it has representative offices in New York, Chicago and Los Angeles. In each of those cities there is or was a branch office of MIC. (App. C-10, p. 12; App. C-7, Vol. 2, pp. 53-54, Vol. 4, pp. 39-45).
39. In the case of
United States v. Westinghouse Electric Corporation,
No. C-70-852 SAW (N.D.Cal.) the returns of service indicate that service on MEL-CO was made upon MELCO by serving the manager of MELCO’s Los Angeles office (App. C-55) and also by serving Mr. T. Tomabechi, Vice-President and General Manager, Mitsubishi International Corporation, “Authorized to receive service for Mitsubishi Heavy Industries, Mitsubishi Electric, and Mitsubishi International” (App. C-54).
40. Appendices C-25 through C-39 are advertisements placed by MIC in trade papers, magazines and brochures
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that contain representations concerning the Mitsubishi corporate structure and sales network for MGA products manufactured by MELCO. The format for most of these ads was first circulated in or about July, 1970, and has been in continuous use since then. ■ (App. C-8, pp. 51-52).
41. The advertising and promotional material referred to in. paragraph 41 contain the representation that MGA products are sold “factory direct” to retail dealers with no middleman mark-up. Thus, the ads say that the MGA products are shipped directly from the factory in Japan to retail dealers throughout the United States and to the 37 MGA dealers located in New Jersey (e. g. App. C-28, C-31, C-35), MIC receiving only a commission. The ads also state that the MGA Division of MIC is the manufacturer of the MGA product line. Language such as “Next, MGA designs and builds all critical components,” “all critical solid-state devices are engineered and manufactured by MGA . . .,” “MGA produces over a million . . . TV sets,” “MGA is one of the few companies in the world with the resources to design and build its own color and black and white picture tubes . . . .” These representations are coupled with: “MGA 7045 North Ridgeway Lincolnwood, Illinois” which is, of course, the headquarters for the MGA Division of MIC. If these representations be true, then MIC is apparently manufacturing MGA products in Japan under the name MELCO.
42. The inevitable conclusion is that MELCO-MIC is a single enterprise manufacturing, selling and promoting MGA products throughout the world and in the United States. That this is true is further demonstrated by the following: The Electronics Industries Association of Japan (“EIAJ”), of which Ken Okubo, the Chairman of the Board of MELCO, is the chief officer, and of which MELCO is a member, reported in 1969 that MELCO had an “overseas branch or agent” at 119 East Lake Street, Chicago, Illinois, which in reality is an office of MIC (App. C-14; App. C-6, Vol. 2, pp. 84-85). In 1970, the EIAJ reported that MELCO had “overseas agents” in MIC, 277 Park Avenue, New York and MIC,. 130 East Randolph Drive, Chicago (App. C-15). The Japan Light Machinery Information Center reported in 1970 and in 1971 that MELCO had a “branch” at 277 Park Avenue, New York, the principal place of business of MIC (App. C-16 and C-,17). It also reported that MELCO had its United States office in 1970 at 119 East Lake Street, Chicago, and its United States office in 1971 at 7045 North Ridgeway, Lincolnwood, Illinois, the latter of which is- headquarters of the MGA Division of MIC.
43. MELCO, MSK and MIC are members of what they themselves describe as the “Mitsubishi Group” (App. C-10, pp. 8-9; App. C-70, pp. 9-10). A history and description of the Mitsubishi Group is included in MELCO’s Offering Circular (App. C-10):
“Mitsubishi Group
Prior to World War II, a distinctive feature of the Japanese economy was the existence of .large and powerful combinations of commercial and industrial companies, each under the control of a single family group (known as a ‘Zaibatsu’) and each including a broad range of banking, trading, shipping, mining and industrial manufacturing companies. The principal Zaibatsu combinations were the Mitsubishi, the Mitsui and the Sumitomo groups. In the case of the Mitsubishi group, the largest of the three, which was founded in' 1890, control over the companies included within the group was in the hands of the Iwasaki family, which exerted such control through large stockholding interests.
One of the principal purposes of the anti-monopoly laws passed in the immediate post-war years was to break up the Zaibatsu combinations. In ac
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cordance with these laws, the Iwasaki family holdings in the various Mitsubishi operating companies were to be distributed to the public, the family holding company was liquidated, and the Mitsubishi group was in effect dissolved.
In recent years there has been a trend toward renewed cooperation within the former Zaibatsu groups. However, the nature of the relationships among the companies within the groups today is basically different from the relationships existing prior to World War II. Whereas the prewar relationship within a particular group was one of common control by a single family, the relationship today is one of cooperation in areas of common interest within a group of publicly-owned companies, each operating under its own separate management. Despite this arrangement, most members of the group do business freely outside the group. Each member is in a different industry.
At present, there are about 44 companies which are members of the Mitsubishi group. These include, in addition to Mitsubishi Electric Corporation, Mitsubishi Heavy Industries, Ltd., The Mitsubishi Bank, Ltd., Mitsubishi Shoji Kaisha, Ltd. (a trading company), Mitsubishi Estate Co., Ltd., Tokio Marine and Fire Insurance Co., Ltd., Mitsubishi Chemical Industries Limited, Mitsubishi Rayon Company, Limited, Nippon Kogaku K. K., a life insurance company, a trust company, and a warehouse company, and a broad range of industrial manufacturing companies. With several exceptions, all of these companies carry the Mitsubishi name and use the Mitsubishi ‘Three Diamond’ trade mark.”
44. The MSK Offering Circular expounds upon the cooperation among the member companies of the Mitsubishi Group:
“In general, such cooperation is implemented through cross-holdings of shares, cross-directorships, and committees of executives of group companies.”
45. In an S-l Registration Statement filed with the Securities and Exchange Commission in 1962, the predecessor of Mitsubishi Heavy Industries stated (App. C-66):
“Within the Mitsubishi Group, the amounts of the cross-holdings of stock are generally small in each particular case, but such cross-holdings are widespread. In general, most of the Mitsubishi companies hold stock in most of the other Mitsubishi companies. The aggregate of the Mitsubishi-owned holding in each particular company ranges from a high of 36%/% (or, in the case of certain joint venture companies formed at the instance of other Mitsubishi companies, a high of 99.5%) to a low of 5.6% and in most cases exceeds 15%.
There are a number of cases within the Mitsubishi Group where a director of one company is a director or a statutory auditor of another company. These cases occur most frequently with respect to the Mitsubishi Bank and Mitsubishi Shoji.
Interchanges of personnel among the Mitsubishi companies, while not frequent by American standards, are fairly extensive by Japanese standards, the usual pattern in Japan being for an individual to spend his entire business career with the same company.
There are several informal groups of executives from different Mitsubishi companies which meet on more or less regular bases. The principal one of these groups is the Kinyokai, a group of the board chairmen and presidents of twenty-three Mitsubishi companies which meets monthly. In addition, regular meetings are held among the heads of the general affairs departments of a number of Mitsubishi companies and among the heads of the
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financial departments of a smaller number of such companies.
Substantially all of the Group companies have their principal banking connection with the Mitsubishi Bank. Most of them conduct a significant percentage of their selling and purchasing operations through Mitsubishi Shoji.”
46. Both MELCO and MIC represent that their business success and welfare is closely related to the growth and prosperity of the Mitsubishi Group. In “A Progress Report from the Mitsubishi Electric Corporation — 1969,” in characterizing the “corporate profile” of MELCO, it is stated (App. C-12):
“The Mitsubishi Group
The progress of Mitsubishi Electric has been closely linked to the growth of the Mitsubishi Group, whose 44 member companies are involved in virtually every sector of the Japanese economy. The leading position held by each of these companies in its respective field is responsible for the reputation of integrity enjoyed by Mitsubishi’s ‘three diamonds’, a trademark which in all comers of the world signifies quality products of every type.”
47. MIC, likewise, makes similar representations in its advertising. In an advertisement in New Yorker Magazine for MGA color television receivers, the MGA Division of MIC states (C-34):
“MGA is among the newest of the 50 companies that comprise the century-old, world-wide Mitsubishi Group. Any MGA TV you buy benefits from the combined expertise of over 350,-000 employees, in more than 1,000 laboratories and factories.
“The Mitsubishi Group’s rich background as a world leader in solid state electronics gives us the opportunity to put together many of the parts that put together our TV sets.
The Mitsubishi Group also manufactures quality lines of black and white TV sets, stereo systems and appliances.”
MIC also advertises in trade publications directed to retail dealers (App. C-31):
“We promised a competitively-priced profit line, backed by the world’s second largest industrial family: the century-old, world-wide Mitsubishi Group.”
The same and similar representations have been continuously made by MIC (See App. C-25, C-26, C-27, C-28, C-29, C-30, C-31, C-32, C-33, C-34, C-35, C-36, C-37, C-38 and C-39).
48. In a Fortune Magazine advertisement, the following language appears (C-25):
“Perhaps you've heard of the Dodge Colt, the MU-2 business man’s plane and MGA electrical appliances, Three Diamond's canned foods, as well as Kirin beer and the Nikon camera. They have all been imported from one of the Japanese companies belonging to the Mitsubishi Group.
As Japan’s largest complex of industrial enterprises with an employee roster of 350,000 the Mitsubishi Group is made up of 50 separate companies.
Each one is a leader in its own particular field, yet all are united by what Mitsubishi people call ‘family’ cooperation. Its rich supply of capital, technology and human resources plus 100 years of business experience have made it possible for the Mitsubishi Group to flourish as a multiple, integrated organization that operates on a worldwide scale.
For more information please contact Mitsubishi Corporation (Mitsubishi Shoji Kaisha, Ltd.) ... In U.S.A. please contact Mitsubishi International Corporation, 277 Park Avenue, New York . . . .”
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49. In the light of these repeated representations that MIC was part of a single integrated enterprise named the Mitsubishi Group, it was surprising that the Executive Vice-President of MIC, Mr. T. Kitayama, repeatedly claimed the term Mitsubishi Group was too “vague” for him to testify about its existence, including the fact that MIC is a member, MSK is a member, MEL-CO is a member or that any other company is a member. (App. C-7, Vol. 1, pp. 29-30, 41-50, Vol. 4, pp. 81 et seq.).
50. Mr. Kitayama himself referred to Ken Okubo, the Chairman of the Board of Directors of MELCO, as “our chairman” (App. C-7, Vol. 4, p. 18); MSK bears a part or all of MIC’s advertising expenses for MGA products manufactured by MELCO and shipped directly by MELCO to MIC (App. C-5, Answer # 13; App. C-7, Vol. 4, pp. 56-57); the “three diamonds” logo and trademark is in common use by scores of companies having the name Mitsubishi (App. C-10, p. 10); “MGA” stands for “Mitsubishi Group of America” (App. C-8, pp. 18, 68-69; App. C-9, p. 74); in the reception area of MIC’s offices in New York where Mr. Kitayama works is a plaque listing the member companies of the Mitsubishi Group (App. C-9, pp. 72-73); a Vice-President of MIC in a letter to Westinghouse Electric Corporation stated: “Westinghouse . . . and the Mitsubishi family has had a very close personal relationship for the past 30-40 years. Among the Mitsubishi family, the Mitsubishi Electric Corporation (MELCO) is a licensee of Westinghouse.” (App. C-65); MIC welcomes its new MGA dealers by stating: “I am confident that you made a wise and far-sighted decision when you joined forces with MGA ... a brand name backed by a major resource, The Mitsubishi Group, with a 100 year tradition of quality, service and integrity.” (App. C-59).
51. Mr. Abe testified that officers of Mitsubishi Group companies meet on a regular basis (App. C-

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/1413649. Public record. Not legal advice.