# Appendix — Yoder Bros. v. California-Florida Plant Corp. > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_0963%3A2 ## Record - **Collection:** Supreme Court brief - **Document type:** Appendix - **Published:** January 1, 1977 - **Citation:** 429 U.S. 1094 ## Text Supreme Court, U. S, FILED APPENDIX NEC R 1976 | MICHAEL RODAK, JR., CLERK IN THE Supreme Court of the United States October Term, 1976 x t6- 766 ' YODER BROTHERS, INC., Petitioner, v. CALIFORNIA-FLORIDA PLANT CORPORATION and CALIFORNIA-FLORIDA PLANT CORPORATION OF FLORIDA, Respondents. PETITION FOR A WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT a HowarpD C. BUSCHMAN III Davin L. FosTerR FREDERICK L. MCKNIGHT 1 Chase Manhattan Plaza ROBERT E. BARTKUS New York, New York 10005 WILLKIE FARR & GALLAGHER Attorney for Petitioner, Of Counsel Yoder Brothers, Inc. INDEX TO APPENDIX PAGE Opinion of the United States Court of Appeals for the Fifth Circuit, September 7, 1976 ............ la Judgment of the United States Court of Appeals for the Fifth Circuit, September 7, 1976 ............ 126a Judgment Reflecting Decisions of Court and Jury in the United States District Court for the Southern District of Florida, August 28, 1974 ............. 128a Testimony of Mr. Jack Neckar, Trial Transcript pp. 4810-4812, Appeal Appendix pp. 1862a-1864a .... 132a Pretrial Stipulation, 15(m), Appeal Appendix p. DD 517 F.2d 1059 ° denied, 1976, U.S. ° ’ cert , 96 S.Ct. 1466, 47 L.Bd.2d 736. (footnote continued) -74a- Kestenbaum v. Falstaff Brewing Corp., 5 Cir. 1975, 514 F.2d 690, cert. denied, 1976, U.S. , 96 §.ct. 1412, 47 L.Ed.2d 349; see also Cinema-Tex Enter- rises, Inc. v. Santikos Theatres, Inc., Cir. 1976, 535 F.2d [1976], att'd, 414 F.Supp. 640. In a similar situation, this Court said in Kestenbaum v. Falstaff Brewing Corp., supra, 514 F.2d at 695: (footnote continued) With regard to the kind of evidence that would be material, the M.C. Mfg. court, in rejecting plaintiff's contention that it too should have enjoyed a predatorily low price for a camponent part, offered several comments relevant to the case before us: The avowed purpose of the Sherman Act is the preservation of the open, campetitive market. . - - [D])amages are recoverable only upon a showing that absent the anticompetitive practice plaintiff would not have suf- fered the loss. 517 F.2d at 1064. Antitrust plaintiffs are not entitled to the utter elimination of campetition or competitors. Thus, they cannot prove fact of injury by pointing only to the effects of normal competition. Rather, they -75a- If the jury calculated any part of its damage award on the {impermissibly speculative] sum of Falstaff's price increases to Kestenbaum, it was error. Under the enigmatic general verdict we cannot know whether they did or not, so the verdict cannot stand. Since we too have no idea whether or not the jury relied on the price dif- ferential theory, we reluctantly reverse and remand this length case for further proceedings on the damages issue. 2. Royalty Pavments Theory Since the case must be retried on damages, we think it appropriate to reach the complex issues with regard to the royalty payments theory at this time. As indicated above, this theory presumed that Cal-Florida suffered monetary injury in the precise amount of the BGA and GRA royalties charged on its cutting sales. Over Yoder's objection, the court submitted this theory to the jury, together with the question whether a "passing on" defense should be allowed as it was recognized in Hanover Shoe, Inc. v. United Shoe Mach. Corp., 1968, 392 U.S: 401, 88 S.Ct. 2224, 30 L.Ed. 2d 1231. must prove that the actions in violation of The evidence showed that Cal-Florida pre ming sy laws were a material factor in of Florida had paid a total of $35,574.52 a pm gee camplained of. See in BGA royalties from May 1969 to Dec- generally Areeda, supra note 5. ember 1971, when BGA ended, and it had -76a- paid a total of $6,731.95 in GRA royalt- ies until that program ended, for a grand total of $42,306.47. Cal-Florida of California had paid $194,230.60 in BGA royalties and $21,209.23 in GRA royalties over the same time period, for a grand total of $215,439.83. Total BGA and GRA royalties paid by both companies equalled $257,746.30. The pretrial stipulation, which the court specifi- cally ordered would govern at trial, provided that [t]he parties stipulate that the amounts of BGA royalties paid by defendants [CFPC and CFPCF] to BGA were the same as the amounts collected by defendants from defendants' customers. On the basis of the instructions and the evidence of royalties paid, the jury awarded $129,000 in damages, to be split evenly between CFPC and CFPCF. Yoder's central point regarding the royalty payments made by Cal-Florida, a propagator-distributor, to BGA and Yoder is that the very structure of the BGA and GRA programs ensured that no propagator-distributor would be in fact injured. In this connection it argues tht it was error to submit the theory to the jury in the absence of evidence showing that CFPC and CFPCF were ac- tually injured by either program and that it was error to use the general Soon -77a- rule precluding a "passing on" defense articulated in Hanover Shoe to circum- vent the evidentiary problem. If the passing on concept was applicable at all, Yoder asserts that it was entitled to invoke the defense under pre-existing cost plus contract exception of Hanover Shoe. In Hanover Shoe, Inc. v. United Shoe Mach. Corp., 1 , 3292 U.S. 481, 88 S.Ct. 2224, L.Ed.2d 1231, Hanover Shoe, a manufacturer of shoes, charged that defendant United Shoe Machinery Corp. [United], a manufacturer and dis- tributor of shoe machinery, had mono- polized the shoe machinery industry through its practice of leasing and refusing to sell its more complicated machinery. As damages, Hanover asked for the difference between what it paid United in shoe machine rentals and what it would have paid if United had sold machines to it instead. Hanover had prevailed in the district court and had been awarded trebled damages; the Third Circuit affirmed. In the Supreme Court, United argued that Hanover had suffered no legally cognizable injury, since the illegal overcharge under the leasing system was reflected in the price at 26. Yoder also advances a variety of complaints concerning the instructions on passing on actually given to the jury which we do not reach. -78a- which Hanover sold shoes to its cus- tomers, and since Hanover would have charged less if its costs were less and thereby would have made no more profit. Rejecting that argument, the Court held that when a buyer shows that the price paid by him for materials purchased for use in his business is illegally high and also shows the amount of the overcharge, he has made out a prima facie case of injury and damage within the meaning of § 4 [of the Clayton Act]. 392 U.S. at 489, 88 S.Ct. at 2229, 20 L.Ed.2d at 1239. In the normal case, according to the Court, it was of no legal consequence that the buyer might have left his prices unchanged and absorbed the loss, made adjustments in volume or other costs, or raised his prices. Unwilling to adopt United's proposed analysis the Court explained itself as follows: We are not impressed with the argument that sound laws of economics require recognizing this defense. A wide range of factors influence a company's pricing policies. Normally the impact of a single change in the relevant conditions can- not be measured after the fact; ~_———— > — -79a- indeed a businessman may be unable to state whether, had one fact been different (a single supply less expensive, general economic conditions more buoyant, or the labor market tighter, for example), he would have chosen a dif- ferent price. Equally dif- ficult to determine, in the real economic world rather than an economist's hypo- thetical model, is what effect a change in a company's price will have on its total sales. Finally, costs per unit for a different volume of total sales are hard to estimate. Even if it could be shown that the buyer raised his price in response to, and in the amount of, the overcharge and that his margin of profit and total sales had not thereafter declined, there would remain the nearly insuperable dif- ficulty of demonstrating that the particular plaintiff could not or would not have raised his prices absent the over- charge or maintained the higher price had the over- charge been discontinued. Since establishing the ap- plicability of the passing-on defense would require a con- vincing showing of each of these virtually unascertain- -80a- able figures, the task would normally prove insurmountable. On the other hand, it is not unlikely that if the existence of the defense is generally confirmed, antitrust defend- ants will frequently seek to establish its applicability. Treble-damage actions would often require additional long and complicated proceedings involving massive evidence and complicated theories. In addition, if buyers are subjected to the passing- on defense, those who buy from them would also have to meet the challenge that they passed on the higher price to their customers. These ultimate consumers, in today's case the buyers of single pairs of shoes, would have only a tiny stake in a lawsuit and little interest in attempting a class action. In consequence, those who violate the antitrust laws by price fixing or monopoliz- ing would retain the fruits of ' their illegality because no one was available who would bring suit against them. Treble-damage actions, the im- portance of which the Court has many times emphasized, would be substantially reduced in effectiveness. ' -8la- 392 U.S. at 492-94, 88 S.Ct. at 2231-32, 20 L.Ed.2d at 1241. (Footnotes omit- ted.) The Court did not sanction an iron rejection of the defense, however. On the contrary, it indicated that the above-quoted policy factors had impelled it to reject the defense for most cases, but that where those factors were absent, the defense would be allowed: We recognize that there might be situations--for instance, when an overcharged buyer has ¢« pre-existing “cost-plus' contract, thus making it easy to prove that he has not been damaged--where the considerations requiring that the passing-on defense not be permitted in this case would not be present. We also recognize that where no dif- ferential can be proved between the price unlawfully charged and some price that the seller was required by law to charge, establishing dam- ages might require a showing of loss of profits to the buyer. 392 U.S. at 494, 88 S.Ct. at 2232, 20 L.Ed.2d at 1242. See generally Pollock, Automatic Treble Damages and the Pas- the Hanover Shoe Sectsion. I3 Antitrust Bull. L183 (1968). -82a- Post-Hanover Shoe cases dealing with the passing on concept fall into two categories: so-called offensive use of passing on, and defensive use. Typical of the offensive use cases is In re Western Liguid Asphalt Cases, 9 Cir. 1973, 487 F.2d I9i, cert. denied sub nom. Standard Oil Co. v. Alaska, 415 U.S. 919, 94 S.Ct. 1415, 39 L.Ed. 2a 474. In that group of cases, the pas- sing on issue arose in the context of the question whether the remote pur chaser would have standing to sue. 7 27. Some Courts had held that the remote purchaser would not have stand- ing unless he could prove that the overcharge was passed on to him under something analogous to a cost plus contract, turning Hanover S Shoe ae its head. E.g. Albertson's, Inc. v. Amalgamated Sugar Co., D. Utah 1973, 62 F.R.D. 43, mo ed on other grounds, 503 F.2d 459; Philadelphia Housing Auth. v. American Radiator & Std. Sanitary Corp., L.D.Pa. 1970, 50 F.R.D. 13, aff'd sub nom. Mangano v. American Radiator & Std. Sanitary Corp., 438 F.2d 1187. Fortunately for the jurisprudence, the Liguid Asphalt court recognized that the policies underlying Hanover Shoe required a different approach if the question was plaintiff's access to a forum instead of defeating a treble damage award. See Comment, Standing to Sue in Antitrust Cases: The Offensive Use of Passing-On, 123 U.Pa.L.Rev. 976 (1975). -83a- Hanover Shoe itself exemplified defen- Sive use of passing on, where the ques- tion is whether the defendant can avoid liability for damages because the plain- tiff passed on the overcharge. Since Yoder is asserting that the burden of the BGA and GRA royalties passed from the propagator-distributors to the growers or self-propagators, to the extent that the passing on concept ap- plies, it is defensive passing on. Although none of the cases since Hanover Shoe have discussed defensive passing on in great detail, we have distilled some general guidelines from the Hanover Shoe decision itself and other cases that we believe should direct the inquiry. First, we believe that the ultimate question of availa- bility of the defense vel non is a legal one for the court. ee Obron v. Union care Corp. 6 Cir. 1973, 477 ; ate of Minnesota v. United States Steel Co 8 Cir. I9571, 438 F.2d 1380. But see Suenteré Teieeurien Inc. v. Mobil O Corp., 10 Cir., 475 F.2d 220, cert. Xenter 1973, 414 U.S. 829, 94 S. Ct. 55, 61, 38 L.Ed.2d 63 ("passing on" issue submitted to jury, but no discussion of judge-jury al- location point). It was therefore error for the court here to submit the issue to the jury. -84a- At the U.S. Steel court recognized, a number of evidentiary questions will often have to be answered before the final legal issue is resolved. Those questions, which might usefully be the subject of special interrogatories in an appropriate case, might inquire as to the evidence on the impact on the price and volume after the alleged overcharge is dis- continued, the evidence on how easily ascertainable the amount of the over- charge is, the evidence on the extent of the pass-on, and the evidence as to the nature of the scheme if that is not clear from written documents. Never- theless, once all those inquiries are resolved, the court must direct whether or not the defense will stand. Secondly, we believe that a flex- ible, policy-oriented approach should be taken to the application of the limited defense still available. See Obron v. Union Camp Corp., supra; State of West Virginia v. as. zer & Co., 2 Cir., 440 F.2d 1079, cert. denied sub nom. Colter Drugs, Inc. v. Chas. Pfizer & Co., T971, 404 U.S. 871, 92 S.Ct. BI, 30 L.Ed.2d 115; State of Minnesota v. United States Steel Corp., supra. Particularly, the overriding importance of the private treble damage action in the antitrust enforcement scheme should be kept in mind. Because the critical facts for the passing-on defense were either stipulated or are contained within the BGA or GRA contracts, we can proceed immediately to an application of the law to this case. Cal-Florida, it seems clear, succeeded in the first instance in establishing a prima facie case of damage: it showed that the final price at which it sold chrysanthe- mum cuttings was illegally high,¢8 and it showed that the amount of the over- charge was $.006 per cutting. On the basis of this showing, Cal-Florida was entitled to have the fact of damage pre- sumed, unless Yoder could bring itself within_the Hanover Shoe pre-existing cost plus contract exception or rebut the prima facie case in some other way. 28. A few observations here are in order. We have been careful to describe the overcharge as one affecting Cal- Florida's sales price to its cutomers, rather than as a cost in Gal-Florida's business in the same sense as fertilizer was a cost. The fact that the alleged overcharge was @nominated a royalty is not enought to negate the possibility of overcharge. Yoder's entitlement to the cost plus exception depends on its overcoming the almost “insurmountable” burden of showing that the factors that led the Supreme Court to reject the pass~-on de- fense do not apply to the BGA and GRA programs. We have decided that it failed to meet that burden and thereby to qual- ify itself for the pre-existing cost plus contract exception. Even if we as~ sume that Yoder had adequately demon- strated that (1) the impact of a single change in the conditions and factors in- fluencing the pricing decision could be measured after the fact, (2) Cal-Florida would not have raised its price and did not maintain the higher price, and (3) persons to vindicate the antitrust laws would be readily available to do so, we ’ think that it did not show the effect of a change in price on total sales and costs per unit for a different volume of total sales. The impact of the higher illegal price on total sales is extremely dif- ficult to measure. Yoder argues that since the only difference between sales pursuant to Cal-Florida's March 1971 price list and the list a year later was the elimination of the illegal royalty, a simple comparison of sales volume for the two years would suffice. However, other economic data, such as the general state of the economy at both times, the -87a- entry of a new competitor, or an unex- pected external event such as the Arab oil boycott migh skew this measurement. Yoder introduced no evidence attempting to adjust for these variables. Yoder also argues that the fact that Cal-Florida suffered no sales de- cline during the BGA and GRA programs helps to negate this factor. Yet we have no way of knowing whether sales to growers would have increased even more if the cuttings had been available at a lower price. Simple economics suggests that sales would have increased at lower prices. The evidence indicated that growers looked to the total cost of a cutting in deciding what to buy; when that cost became prohibitively high, some growers turned to self-propagation. Each move to self-propagation removed one customer from Cal-Florida's universe of potential customers. The uncertain- ties surrounding this factor are simply too great, and we conclude that Yoder failed to meet its high burden of dispelling them. The difficulty of estimating the cost per unit for a different volume of sales suffers from the same infirmity. Since the difference in total sales is an uncertain figure, the breakdown of that figure into cost per unit plus profit is equally uncertain. Adminis- _ tration of BGA may have affected cost per unit on those varieties. Because it was Yoder's burden to negate this factor, we attach no significance to Cal-Florida's failure to introduce evidence on administrative costs. Ad- ditionally, we know nothing about Cal- Florida's unused capacity. If volume of sales had increased at the lower price, it may have been able to cut down somewhat on marginal cost. The long, complex proceedings feared by the Supreme Court would have been necessary in order adequately to deal with the two factors we have singled out. Until the policy considerations that led the Court to reject the passing on defense are rebutted, a litigant cannot take advantage of the pre-existing cost plus contract exception. Because Yoder did not show the inapplicability of those factors, we hold that the lower court should have ruled that Yoder was not entitled to assert a passing on defense. We note that the BGA and GRA pro- grams do not fit the model of a pre- existing cost plus contract in any case. Two characteristics are essential to such a contract, only one of which was met here: first, the buyer must have his contract with a particular customer for a particular sale before the illegal overcharge is imposed on the buyer, and -89a- second, the contractual arrangement must assure that whatever the cost of the product was to the buyer, it is the same to the customer. Unquestionably, the BGA and GRA systems satisfied the latter criterion. They were not pre-existing contracts, however, in the former sense. Volume was indefinite; identity of customer was indefinite. The uncer- taininty in those terms was exactly the flaw in Yoder's arguments purporting directly to meet the Hanover Shoe policy considerations. Thus whether the problem is ap- proached by attempting to refute the Court's reasons for disallowing the de- fense or by trying to come within the exception, Yoder fails. On remand, the fact-finder must be permitted to con- sider the full amount of the overcharge-- i.e. the total amount of royalties Ppaid--as evidence of damages. 29. Even if the comparative price data had not been fatally defective, we note that the amount of the jury's verdict might have required a remand in any event. Cal-Florida suggests that the jury arrived at its figure by taking the total royalties paid by both campanies, rounding that amount up to $258,000, deciding that damages were one-half that amount, and giving each company $64,000 prior to the court's with this explanation: for example, no evidence of a “reasonable” royalty amount was introduced, thus casting doubt on the jury's license to split the royalties in half; and Cal-Florida of Florida paid only $42,306.47 in royalties, which leaves $22,193.53 of its award unaccounted for unless the two companies are treated as one. -90a- To summarize the antitrust part of this case, then, we have held that Cal- Florida did have standing to sue Yoder, that Cal-Florida was not entitled to the benefits of the tolling provision of the statute of limitations, that BGA and GRA were per se violations of section l, that the relevant market was ornamental plants, that Yoder neither monopolized nor attempted to monopolize that market, and finally, that a remand is necessary on the damages issue. IV. Plant Patents A. Introduction With the antitrust issues decided, we return to the problem that initially gave rise to this lawsuit--Yoder's allegation that Cal-Florida was infring- ing its plant patents and its consequent demand for damages. Cal-Florida re- sponded with the predictable assertions of patent invalidity and noninfringe- ment, among others. As discussed above, the only issues before this Court con- cern the seven patents that the district court ruled valid and infringed as a matter of law:39 Red Torch, Gold Marble, 30. An eighth plant vatent, Deep Conquest, was found valid and infringed by the jury. Cal-Florida's only point regarding that patent goes to the court's trepling of the damages for infringement. See Part IV. E., infra. -9la- Morocco, Promenade, Southern Gold, Moun- tain Snow, and Mountain Sun.31 After considerable thought, we have decided that the district court correctly ruled that Cal-Florida failed to rebut the statutory presumption of validity with sufficient relevant evidence. Never- theless, we hold that the court should not have trebled the damages found for the infringement, in light of the dif- ficulty and novelty of the issues pre- sented and the good faith defense of invalidity. B. Constitutional and Statutory Background Article I, section 8, clause 8 of the Constitution provided that Con- gress shall have the power: 31. The U.S. Plant Patent numbers for those varieties were as follows: Red Torch, U.S. Plant Patent 3,262; Gold Marble, U.S. Plant Patent 3,220; Morocco, U.S. Plant Patent 3,191; Promenade, U.S. Plant Patent 3,221; Southern Gold, U.S. Plant Patent 3,257; Mountain Snow, U.S. Plant Patent 3,215; Mountain Sun, U.S. Plant Patent 3,250. -92a- To promote the Progress of Science and useful Arts, by secur- ing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries; ... Although the first legislation implement- ing this provision for mechanical inven- tions was passed in 1790 by the first Congress, 1 Stat. 109, see 1 Deller's Walker on Patents § 12, at 93 (2d ed. 1964), Congress did not include plants within the clause's protection until 1930. Act of May 23, 1930, 46 Stat. 376. In its present form, the principal statute allowing patents on plants reads: Whoever invents or discovers and sexually reproduces any dis- tinct and new variety of plant, including cultivated sports, mutants, hybrids, and newly found seedlings, other than an tuberpropagated pliant or a plant found in an uncultivated state, may obtain a patent therefor, subject to the conditions and re- quirements of this title. The provision of this title relating to patents for inventions shall apply to patents for plants, except as otherwise provided. -93a- 35. U.S.C. § 161. Since section 161 makes the general patent law applicable to plant getents except as otherwise provided,32 we take as our starting point the general requisites for patentability, and then apply them as well as we can to plants. See Application of LeGrice, Ct. Cust. & Pat.App.1962, 301 F.2d 929. Normally, the three requirements for pe ten tabs sity are novelty, utility, and obviousness.33 See, e.g., Graham 32. The only express provision modify- ing the applicability of the invention patent statutes for plant patents is contained in 35 U.S.C. § 162, which says that no plant patent will be in- validated for noncompliance with § 112 (description) if the description is as complete as is reasonably possible. No description issue is before us. 33. These factors are taken from 35 U.S.C. § 101 ("any new and useful pro- cess, machine, manufacture, or composi- tion of matter, or .. . improvement thereof") and 35 U.S.C. § 103 ("the differences between the subject matter sought to be patented and the prior act are such that the subject matter as a whole would [not] have been obvious"). -94a- v. John Deere Co., 1966, 383 U.S. 1, 86 S.Ct. 004, 666, 15 L.Ed.2d 545; Van Gorp Mf Inc. v. Townley Indus. Plas- ’ . ’ 17; Ramirez v. Perez, 5 Cir. 1972, 457 F.2d 267, 209. For plant patents, the requirement of distinctiness replaces that of utility, and the additional re- quirement of asexual reproduction is introduced. The concept of novelty refers to novelty of conception, rather than novelty of use; no single prior art structure can exist in which all of the elements serve substantially the same function. See Van Gorp Mfg., Inc. v. Townley Indus. astics nc., supra, In Beckman Instruments, Inc. v. an tronics, inc., 5 Cir. 535 F.2d 1369 . ’ T375, cert. denied, 1970, 400 U.S. 956, 91 S.ct. 353-54, 27 L.Ed.2d 264, this Court said: [S)ection 102, which pertains to novelty, requires that the patentee be the original inventor of the object claimed in his patent, and also that the invention not have been known or used by others before his discover of it. . . Furthermore the prior art is to be considered as covering all uses to which it could have been put. -95a- As applied to plants, the Patent Office Board of Appeals held that a “new" plant had to be one that literally had not existed before, rather than one that had existed in nature but was newly found, such as an exotic pant from a remote part of the earth.34 Ex parte Foster, 90 U.S.P.Q. 16 (1951). n pplication of Greer, Ct.Cust. & Pat. App. , 484 ° , the court indicated that the Board believed that novelty was to be determined by a detailed comparison with other known varieties. The legislative history of the Plant Patent Act is of considerable assistance in defining "distinctness." The Senate Report said: [I]n order for the new variety to be distinct it must have char- acteristics clearly distinguishable from those of existing varieties and it is immaterial whether in the judgment of the Patent Office the new characteristics are inferior or superior to those of existing varieties. Experience has shown the absurdity of many views held as to the value of new varieties at the time of their creation. The characteristics that may distinguish a new variety would in- clude, among others, those of habit; -immunity from disease; or soil conditions; color of flower, leaf, fruit or stems; flavor; productiv- ity, including ever-bearing qual- ities in case of fruits; storage qualities; perfume; form; and ease of asexual reproduction. Within any one of the above or other classes of characteristics the differences which would suf- fice to make the variety a dis- tinct variety, will necessarily be differences of degree. S.Rep. 315, 7lst Cong. 2d Sess. (1930). (Emphasis omitted.) A definition of "distinctness" as the aggregate of the plant's distinguishing characteristics seems to us a sensible and workable one. The third requirement, nonobvi- ousness, is the hardest to apply to plants, though we are bound to do so to the best of our ability. The traditional three part test for obviousness, as set out in John Deere, supra, inquires as to (1) the scope and content of the prior art, (2) the differences between the prior art and the claims at issue, and (3) the level of ordinary skill in the prior art. 383 U.S. at 17, 86 §.Ct. at 694, 15 L.Ed.2d at 556. Accord, Sakraida v. Ao Pro, Inc., 1976, U.S. , 96 “S.Ct. 1532, 47 L.Eav2a 784; Dann cP Johnston, 1976, U.S. . 47 L.Ed.2d 692. Secondary characteristics such as com- mercial success, long felt but unsolved -97a- needs, and failure of others can be used to illuminate the circumstances surround- ing the subject matter sought to be patented. Graham v. John Deere Co., supra, 383 U.S. at 17-18, 86 S.Ct. at 15 L.Ed.2d at 556. The Supreme Court has viewed the obviousness requirement of section 103 as Congress’ articulation of the con- stitutional standard of invention. Dann v. Johnston, supra, U.S. at 56 S.Ct. at 1 47 L.Ed.24 at 658. ‘See Sakraida v. A Pro, Inc., supra. In Dann, the Saet eemen te that {aJs a judicial test, "“invention"-- i.e. "an exercise of the inventive Faculty,". . .--has long been re- | garded as an absolute prerequisite to patentability. U.S. at , 96 S.Ct. at 1397, 47 L.Ed.2d at 697-98 (citation omitted). Accord, Sakraida v. Ag Pro, Inc., supra, U.S. at 96 S.ct. at 1535, a7 T..Ra.2a at “7859. An “invention” is characterized by a degree of skill and ingenuity greater than that possessed by an ordinary mechanic acquainted ,with the business. Hotchkiss v. Greenwood, 52 U.S. (11 How.) 248, 267, I3° L.Ed. 683, at 691. The obviousness requirement appears to presume that if the gap be- tween the prior art and the claimed im- provement is small, then an ordinary me- chanic skilled in the art would have been able to create the improvement, thus -98a- leading to the conclusion that the im- provement was obvious and a patentable invention not present. Section 103 re- quires the determination of obviousness vel non to be made with reference to the time the invention was made. See Jacobson Bros., Inc. v. United States, Ct.cl. 1975, S12 F.2d 1065, 1068. Obviousness, like the general question of patent validity, is ultimately a question of law, though factual inquiries are often necessary to its resolution. Sakraida v. Pro, Inc., supra; Graham v. John Deere Co., supra. Rephrasing the John Deere tests for the plant world, we might ask about (1) the characteristics of prior plants of the same general type, both patented and nonpatented, and (2) the differences between the prior plants and the claims at issue. We see no meaningful way to apply the third criterion to plants-- i.e. the level of ordinary skill in the prior art. Criteria one and two are reminiscent of the “distinctness” re- quirement already in the Plant Patent Act. Thus, it we are to give obviousness an independent meaning, it must refer to —- other than observable character- istics. We think that the most promising ap- proach toward the obviousness require- ment for plant patents is reference to the underlying constitutional standard that it codifies--namely, invention. -99a- The general thrust of the "“inven- tion” requirement is to ensure that minor improvements will not be granted the protection of a seventeen year monopoly by the state, In the case of plants, to develop or discover a new variety that retains the desirable qualities of the parent stock and adds significant improvements, and to preserve the new specimen by asexually re it constitutes no small eat. This Court's case dealing with the patent on the chemical compound commonly known as the drug "Darvon," Eli Lill & Co. v. Generix Dru Sales Inc., 5 E. , . , Provides some insight into the problem of how to apply the “invention” requirement to a new and esoteric subject matter. The court first noted that {a]nalogical reasoning is neces- sarily restricted in many chemical patent cases because of the neces- sity for physiological experimen- tation before any use can be de- termined. In fact, such lack of predictability of useful result from the making of even the slightest variation in the atomic structure or spatial -100a- arrangement of a complex molecule . . + deprives the instant claims of most of their vitality .. .. 460 F.2d at 1101. The court resolved the apparent dilemma by looking to the therapeutic value of the new drug in- stead of to its chemical composition; [R)eason compels us to agree that novelty, usefulness and non-ob- viousness inhere in the true discovery that a chemical compund exhibits a new needed medicinal capability, even though it be closely related in structure to a known or patented drug. 460 F.2d at 1103. The same kind of shift in focus would lead us to a more productive in- quiry for plant patents. If the plant is a source of food, the ultimate ques- tion might be its nutritive content or its prolificacy. A medicinal plant might be judged by its increased or changed therapeutic value. Similarly, an ornamental plant would be judged by its increased beauty and desirability in relation to the other plants of its type, its usefulness in the industry, and how much of an improvement it repre- sents over prior ornamental plants, -l10la- taking all of its characteristics to- gether. 35 Before reaching the issues on appeal, we make a final comment about the rgquirement of asexual reproduc- tion. It has been described as the “very essence" of the patent. lLangrock, Plant Patents --Biological Necessities n Infringements Suits, 41 J.Pat.Off.Soc. 787 (1555) Asexual reproduction is literally the only way that a breeder can be sure he has reproduced a plant identical in every respect to the parent. It is quite possible that infringement of a plant patent would 35. We suspect that part of our problem in applying patent concepts to the facts before us lies in the fact that we are dealing with ornamental plants. Beauty for its own sake is not often a goal of inventors--indeed, even ornamental plant breeders might be more aptly described as seekers of beauty for prefit. Never- theless, the statute does not exempt ornamental plants, and so we are bound to treat them on a par with more “use- ful" botanical creations. 36. Lest the reader fear that Congress neglected to make adequate provision for reproduction of the sexual type, we has- ten to note that the Plant Variety Pro- tection statute, 7 U.S.C. §§ 2321-2583, applies only to sexually reproducing plants. -102a- occur only if stock obtained from one of the patented plants is used, given the extreme unlikelihood that any other plant could actually infringe. See Cole Nursery Co. v. Youdath Perennial “Inc F.Supp. Gardens, inc., N.D.Ohio . 159, 160; Ex parte Weiss, Bd.App.1967, 159 U.S.P.Q. (dictum); Langrock, supra, at 788-89. If the alleged infringer could somehow prove that he had de- veloped the plant in question indepen- dently, then he would not be liable in damages or subject to an injunction for infringement.3/ This example illustrates the extreme extent to which asexual re- production is the heart of the present plant patent system; the whole key to the “invention” of a new plant is the discovery of new traits plus the fore- sight and appreciation to take the step of asexual reproduction. See Nicholson v. Bailey, $.D.Fla.1960, 182 F.Supp. 509; Ex parte Moore, 115 U.S.P.Q. 145 (1957); Dunn v. Ragin v. Carlile, 50 U.S.P.Q. 472 (1941). C. Yoder's Plant Patents--Validity During the trial, Cal-Florida of- fered as evidence certain documents showing that growers had found mutations on the Mandalay variety that were the same as the patented variety Glowing 37. Whether he might also be entitled to a patent on his plant is more prob- lematic, although we would not want to rule out the possibility. -103a- Mandalay~--i.e. evidence that the s r Glowing Mandalay had recurred. Although Glowing Mandalay is no longer in the case, Cal-Plorida later proffered simi- lar evidence with respect to Gold Marble Promenade, and Red Torch, which are : three of the patents whose validity is challenged on appeal. Gold Marble, Promenade, and Red Torch are all sport patents, meaning that they first ap- peared as a sport of another plant, in ‘contrast to seedling patents, which de- velop from seeds. Of the remaining four challenged patents. two were sport patents and two were seedling patents. Cal-Florida never proffered any sport recurrence evidence as to the other two Sport patents, Mountain Sun and Southern Gold, ner did it offer any specific evidence attacking the seedling patents Morocco and Mountain Snow. Since we j find that the district court's ruling on the sport recurrence evidence did not preclude Cal-Florida from introducing other types of evidence to attach the validity of the patents, and since no Sport recurrence evidence was introduced as to Mountain Sun and Southern Gold, we find no warrant on appeal to disturb the ruling that Mountain Sun, Southern Gold Morocco, and Mountain Snow were valid ‘ pon Rogge og Plant patents, like , enjoy a statuto re validity that was not sebusted os an ” those four. See 35 U.S.C. § 282; Kim Bros. v. Hagler 9 Cir. 1960, 276 F.2a , . -104a- At the time the court rejected the sport return evidence for Glowing Man- dalay, it made a ruling designed to apply to the rest of the trial with re- spect to that kind of evidence. That ruling is the focus of Cal-Florida's cross appeal on the plant patent val- idity point. Because of its importance, we set out the pertinent parts in some detail here: [I]t seems clear that it was the Congressional intent that a person who discovered an asexually re- produced variety of a new and dis- tinct plant was entitled to a patent. It was not contemplated, apparently, that he invent, in the term that is used, or in the sig- nificance of that term, as we understand it, traditional concept of inventing a machine... In any event, the issue pre- sented here is a rather narrow one and it has some practical over- tones. I am frank to confess that I think that Mr. Foster's [Yoder's counsel] presentation here ... is very persuasive. In all proba- bility, this will be, or may be, the ultimate result of this trial. It may not be, after we have -105a- listened to the testimony, of course, Of Mr. Boone's [Cal-Flor- ida's counsel] other witnesses who are coming in to testify on the genetics of this thing, but on this one narrow limited issue, it would seem that the plaintiffs [Yoder] were entitled to prevail. Therefore, the objection to the introduction of the various letters and documents from... the growers and plant propagators around the country, which were forwarded to Yoder Brothers over the years, is sustained. Cal-Florida consturues the above-quoted ruling as an all-encompassing holding that the constitutional standard of in- vention does not apply to plant patents. It further claims that since the ruling was admittedly intended to apply to the entire trial, it was precluded from offering evidence on the issues of newness, Ccistinctness, and obviousness by the court's action. In fact, it never even tried to introduce the ex- pected expert genetics testimony, al- though it did make a formal offer of more sport return evidence at a later time in the trial. -106a- Yoder disputes the breadth of the ruling and its effect on any other evi- dence Cal-Florida might have offered, and notes that the court's actual ruling on the issues of newness and distinct- ness did not come until some two weeks later. With regard to the ruling on the admissiblity of the evidence, Yoder argues that the documents would not have shown lack of distinctness, since the fact that a sport with particular traits recurs says nothing about what those traits are and how they differ from other plants. Furthermore, Yoder argues that the document would not have shown obviousness, because if sport recurrence were evidence of obviousness, then almost no mutations would be patentable, and that ,would be contary to Congress’ intent. We do not construe the district court's evidentiary ruling as anything 38. Yoder also argues that the pretrial stipulation did not include obviousness as an issue to be tried, and that we should ignore it for that reason. We prefer not to take that approach; while "invention" or obviousness was not ex~- plicitly listed as an issue, it was implicit in several issues. Further- more, it was discussed thoroughly by the district court and counsel for both parties. -~107a- more than that; in our opinion, it simply held that che euaee recurrence evidence was not relevant to any of the patent validity issues. We therefore confine our remarks accordingly, The only possible probative value of the sport recurrence evidence would be to show that a sport of that particu- lar size, shape color, or other trait is predictable from a given variety of parent plant. Thus, we must first de- termine whether Congress intended pre- dictability to negate the possibility of invention." Next, if Congress con- sidered that factor irrelevant, we must decide if the Constitution is offended by permitting patepts on the kinds of sports that recur. 9 39. In this discussion, we are con- cerned only. with the "invention" or obviousness issue. As we have defined novelty, supra, the recurrence of a sport of a particular color would be irrelevant. Similarly, sport recurrence says nothing about the new plant's particular characteristics. The testi- mony at the trial amply established that Yoder's patented chrysanthemums were distinct to those skilled in the field-- i.e. those in the breeding business. We note that there is a distinction between looking to the opinion of persons in the industry to prove a feature of patenta- bility and relying on commercial success to prove nonobviousness. Yoder's argu- ments relied on the former kind of evidence. -108a- Both the language of the statute and its legislative history persuade us that Congress did not intend to exclude the kind of mutation that migh recur from the Act's protection. Instead, both Senate Report 315, 7lst Cong. 2d Sess. (1930), on the original bill, and Senate Report 1937, 83d cong., 2d See (1954), on the 1954 amendment, speak generally about sports and mutations. The 1954 amendment was added to clarify Congress' intention that seedlings should be patentable, but in the process of describing the bill, the report states: The enactment of this legislation will remove any doubt that the legislative intent of the Congress Clearly means that sports, mutants, hybrids, and seedlings, discovered by persons engaged in agriculture or horticulture, should be patent- able .. « S.Rep. 1937, supra. Although we are willing to assume for purposes of this argument that some mutations may appear that would have been genetically impossible before-- i.e. that a fundamental change in the biochemical structure of the chromosome may take place-~by far the majority of mutations and sports of chrysanthemums are predictable to some extent for those skilled in the field. For example, the testimony at trial indicated that a yellow sport could be expected from a -109a- white chrysanthemum. Indeed, part of the skill required of a chrysanthemum breeder is to know what to look for and to take steps immediately to preseve it by asexual reproduction if the desire trait appears. Given that fact, we think that the purpose of the Plant Patent Act would be frustrated by a requirement that only those rare, never- before-seen, if not genetically im- possible sports or mutations would be patentable. That purpose was "to afford agriculture, so far as practicable, the same opportunity to participate in the benefits of the patent system as has been given industry, and thus assist in placing agriculture on a basis of economic equality with industry." S.Rep. 315, supra. To make it signifi- cantly more d icult to obtain a plant - patent than another type of patent would frustrate that purpose. We therefore find that Congress did not intend to exclude the kind of sport that recurs frequently from the Plant Patent Act. That being the case, the district court correctly ruled that the evidence pro-offered by Cal-Florida was irrelevant, as a matter of statutory law. The only way that the Constitution would be offended by permitting patents on recurring sports would be if such leniency indicated that no "invention" -1l10a- was present. 42 We do not think sport recurrence would negate invention, how- ever. An infinite number of a certain sized sport could appear on a plant, but until someone recognized its uniqueness and difference and found that the traits could be preserved by asexual reproduction in commercial quantities, no patentable plant would exist. An objective judgment of the value of the sport's new and different characteris- tics--i.e. nutritive value, ornamental value, hardiness, longevity, etc.--would not depend in any way on whether a similar sport had appeared in the past, or whether that particular sport was predictable. We therefore find no reason to disturb our approval of the district court's evidentiary ruling based on the constitutional standard of invention. As that standard applies to plant patents, the proffered evidence was irrelevant. Viewing the evidence offered on the patent validity question as a whole, we 40. We do not regard this argument as one attacking the constitutionality of the Plant Patent Act; rather, it simply inquires how broadly the Act can he read consistent with the Constitution. -llla- find that Cal-Florida failed to rebut the statutory presumption of validity as to Gold Marble, Promenade, and Red Torck, as well as the other four dis- cussed above. Thus, the lower court's finding of validity must be affirmed on this record. D. Patent Infringement On cross appeal, Cal-Florida as- serts that the absence of flowering plants grown from the cuttings it had admittedly taken from Yoder's patented plants was fatal to Yoder's infringement counts. This is because the patent claim in each instance describes a mature flowering plant, and it is Cal- Florida's position that only another mature flowering plant could directly infringe. Yoder retorts that the Plant Patent Act provides that [iJn the case of a plant patent the grant shall be of the right to exclude others from asexually reproducing the plant or selling or using the plant so reproduced. 35 U.S.C. § 163. The district court ruled that the act of asexual repro- duction was complete at the time the cutting was taken. Finally, the pre- trial stipulations established that Cal- Florida had taken plant material, or cuttings, from Yoder's patented plants. We agree with Yoder that it was not necessary to prove that the cuttings -ll2a- actually matured into flowered plants to show infringement. Under such a rule, it would be virtually impossible for a propagator-distributor directly to infringe a patent, despite the vital role he plays in dissemination of plant material. Furthermore, we think section 163 is plain in its statement that a pattentee may exclude others from a- sexually reproducing, selling or using the plant. The negative inference to be drawn from this is that commission of one of those acts would constitute infringement. We therefore affirm the finding of infringement. E. Treble Damages for Infringement Section 284 of Title 35, U.S. Code, provides that the Court shall award damages to the claimant upon a finding for him, and further provides that [w]hen the damages are not found by a jury, the court shall assess them. In either event the court May increase the damages up to three times the amount found or assessed. Although a trial court has consid- erable discretion in assessing damages under this section, Maloney-Crawford Tank Corp. v. Sauder Tank Co., 10 Cir. 1975, 511 F.2d 10, 12, an appellate court can reverse the trebling of dama- ges if an abuse of discretion is shown. White v. Mar-Bel, Inc., 5 Cir. 1975, 509 -ll3a- F.2d 287; Dixie Cup Co. vy. Paper Con- tainer Mfg, Co., 7 Cir. 1948, 169 F.2d 645. Where the issue of patentability is close and litigated in good faith, the court should be more reluctant to impose punitive damages. See Wahl v, Carrier Mfg. Co., 7 Cir. 1975, 511 F.2d 209; Enterprise Mfg. Co. v. Shakespeare Co., 6 Cir, 1944, 141 F2d S16, Th this case the jury was instructed that the seven patents now on appeal were valid and infringed. In response to a special interrogatory inguiring about the amount of damages for each patent found valid and infringed by either the court or the jury, the jury entered figures as to those seven, and in addition, as to Deep Conquest. It then found that the infringement was willful as to the seven valid and infringed patents. It left blank, however, the space wherein it was to indicate by what factor the damage figure should be multiplied. The dis- trict court then trebled the damage amounts found by the jury, from which action Cal-Florida appeals. Cal-Florida's principal effort to avoid the district court's trebling of the damages rests on a recital of its conduct and on protestations of its good faith both before and after suit was filed. It correctly points out that this case presented difficult issues of impression on the Plant Patent Act and that it therefore had a good faith belief that the patents were invalid. -1l4a- The parties had extensive negotiations concerning the patents prior to the filing of the suit. Finally, Cal- Florida asserts that it did discontinue handling patented varieties after suit was filed. In light of the above factors, we believe the district court abused its discretion in trebling the damages here. The primary reason that impels us to reverse on this point is the novelty of the issues presented. Cal-Florida has argued its case against the validity of these patents forcefully, and it is no small task to decide how to fit plants into the niches normally used by me- chanical, design, or process inventions. The jury's finding that the infringement was willful was advisory only. gee White v. Mar-Bel, Inc., supra, 509, F.2d at 292. Although we have affirmed the district court's findings of validity and infringement, we direct that only actual damages should be awarded to Yoder, the successful claimant. The subleties of the chrysanthemum business heve given rise to a welter of legal issues in this case, both patent and antitrust. To summarize our holdings on the patent claims briefly, we have agreed with the lower court that evi- dence of sport recurrence is irrelevant to the patentability of plants, and that insufficient evidence was introduced to rebut the statutory presumption of patent validity. We have thus affirmed the court's holding that the seven plant -115a- patents were valid and infringed. Finally, we have held that the novelty and difficulty of the plant patent oe .- ae Case rendered the lower ourt'’s trebling of the jury's abuse of discretion. stad — V. CONCLUSION In light of our ruling on th differential theory of , Sel — es and remand the antitrust claims for re- trial of damages. We affirm the district court's ruling of patent validity and infringement; and finally, we direct that the patent damage award be reduced to actual damages. AFFIRMED IN PART, REVERSED AND REMANDED IN PART. JOHN R. BROWN, Chief Judge dis- senting in part and concurring in part: I concur in all of Judge Goldberg's excellent opinion and the result except those portions headed Monopol4 zation and Attempted Monopolization.41 41. For ease of reference, the footnotes in the dissent follow consecutivel of the Court. — -116a- I think the issues of monopoly or attempted monopoly called for a jury de- termination. The holding on no monopo- ly as a matter of law rests42 on the determination that the relevant market was ornamental plants generally, not just chrysanthemums in the infinite varieties. Because Judge Goldberg has with infinite patience and objectivity dis- cussed fully the factual and legal pros and cons I need not detail them here. 42. I fully approve the’ Court's construc- tion of our opinion in Cliff Food Stores, Inc. v. Kroger, Inc., 5 Cir. ’ F.2d 203, which in language looser than wie By discussed this in terms of 50% plus. That would be bad law, but worse bad economics. In non-§ 2 Sherman Act but highly analogous antitrust situa- tions, 14% and 34-36% of the relevant markets have been sufficient for anti- competitive purposes. United States v. Philadelphia National Bank, et al., 1963, 374 U.S. 321, 83 S.Ct. 1715, 10 L.Ed.24 915; compare United States v. First Cit National Bank of Houston, 1967, 386 U.S. s.Ct. L.Ed.2d 151, with United States v. Provident National Bank, E.D.Pa., 1968, 280 F.Supp. l. -l117a- It is enough for me to base this on my impressions. As I faced--in prepar- ation for the oral arguments of a case ~ all feared would produce an opus of the kind it did--the complex briefs of these skilled advocates, I thought that the whole thing turned on chrysanthemunms. That is all we talked about and heard on oral arguments.43 This was big busi- ness~-the business of the breeding, developing, propagating and everexpanding distribution and sales of chrysanthe- mums or cuttings which would produce chrysanthemums for a like cycle of pro- duction, distribution and sales of chrysanthemums. 43. I acknowledge, of course, that CFPC and CFPCF did, soto voce, urge the orna- mental flower relevant market theory. 44. The Court recognizes. this (see p. 1351.): 23 states 2,134 growers 145 million standard plant blooms 129 million standard plants 34.5 million pompom blooms 136 million pompom plants 475 varieties $83.5 wholesale value -118a- Equally significant, what we hold unanimously as to § 1 of the Sherman Act is that CFPC and CFPCF were hurt, not in whatever business they might have had in general ornamental plants, but in the business of chrysanthemums. The pricing, distribution and exclusion- ary practices condemned related to chry- santhemums, because the record shows (see my note 45, supra) that no matter how much sale of particular flowers may vary from time to time because of rela- tive availability, price and demand, chrysanthemums are a large and signifi- cant factor in the total ornamental plant trade. The "relevant market" then even on the Court's analysis is not just ornamental flowers generally, but ornamental flowers including, as a significant element, chrysanthemums. The power to exclude CFPC-CFPCF from chrysanthemums implies the possi- bility of exclusion of others to the point even of ultimate actual monopoly. And what has happened in this process? It is that one having an overwhelming posi- tion in an essential product has forced a competitor or potential competitors to abandon a significant legitimate phase of its general business so that no longer can it offer to the trade popular items without which service and market accepta- bility is incomplete. And all of this is accomplished, not because the predator -119a- has a dominant position in all plants, but because it has dominance‘5 as ab an in- F dispensable element. In more traditional language cryptic analysis bears eukerony a accurately--flowers. When the practical result of the BGA is realized, it becomes apparent that he relevant market is the chrysanthemum market. The agreements effectively gave Yoder control over existing new and future, as yet non- existent, new chrysanthemum varieties. This was accomplished in a manner which affected two groups, not just boycott victims. To receive the newer varieties, the boycott victims were required to agree to the BGA terms. Likewise, those who had already agreed to these terms had to continue to adhere to them or risk becoming a boycott victim. Thus, reciept by anyone of the BGA covered never varieties depended on acceptance of or continued following of the BGA. Since BGA was composed only of breeders, since a breeder member's vot- ing strength was proportional to the ex- penses which that member bore, and since 45. The Court points out that Yoder's share of chrysanthemum cuttings went from 61.4% in 1969 to 58.1% in 1972 (see note 20, supra and appended text). -120a- the expenses borne were determined in proportion to the amount of royalties collected on the breeder's new variet- ies, Yoder controlled BGA. The record indicates that Yoder's share of chrysan- themum cuttings varied from 61.4% in 1969 to 58.1% in 1972. Furthermore, although not legally significant with respect to relief, the fact that in the pre-statute of limitations period Yoder had almost 100% of the newer varieties of chrysanthemums registered with BGA has great historical significance. Control of the BGA is tantamount to control of the sale of any chrysanthemum cutting registered with BGA. In econ- omic terms, Yoder controlled the market supply of BGA chrysanthemum cuttings. Indeed, the structure of BGA for voting purposes was such that Yoder could control this cutting supply without necessarily retaining ownership of a ma- jority of BGA chrysanthemum varieties. Not satisfied with this control, Yoder supplemented the BGA with the GRA pro- gram (with similar restrictions to the BGA) which was designed to extend its control over non-BGA covered new chry- santhemum varieties. The intended ef- fect was expansion of Yoder's control over the tctal market supply of chry- santhemum cuttings. The success of this combined BGA-GRA program is partly demonstrated by the increasing percent~ age of CFPC's and CFPCF's sales which -l2la- Yoder controlled varieties claimed: 1963, 0.19%; 1969, 17.59%; 1971, 41.22%. In light of Yoder's control of BGA, the increased percentage of Yoder con- trolled varieties in CFPC and CFPCF sales, and the indicated responsiveness _ Of grower demand for cuttings to changes in ultimate consumer demand, any refusal by CFPC and CPFCF to abide by the terms of the respective agreements would have made them unable to service growers, partly or perhaps totally, when the con- sumer demand switched from other flowers in the ornamental flower bouquet to chrysanthemums. Anytime discussion of the relevant market arises, basic economic tools are used. Often use of these tools tends to make one forget the explicit underlying assumptions on which these analytical devices are based. Explicit in all supply and demand analysis is time. Similarly, relevant market determina- tions necessarily entail supply and demand considerations. Thus, time is a mandatory consideration when the rele- vant market is being determined. Over a time span, the responsiveness of grower demand for different flowers to shifting consumer demand does not, a fortiori, indicate that the ornamental flower market per se is composed of ", .. commodities reasonably interchangeable by consumers for the same purpose . . -122a- at a given time. If the bundle of flowers described as the ornamental flower market is perceived as a changing composition of certain flowers over a time span, at any given moment that market is one for a specific flower or for specific flowers. Thus, the time frame under consideration is a variable which must be controlled when the rele- vant flower market is being determined. 4® Consequently, when a supplier cannot sell growers a specific flower demanded at a set time, he is effective- ly excluded from the ornamental flower market at that time. Alternatively, when the demand for a specific combina- tion of flowers includes chrysanthemums, one who cannot supply all parts of that singular bundle is excluded from the market for that bundle of flowers at that time. At any given moment when CFPC-CFPCF was faced with grower demand for chrysan- themum cuttings or a flower cutting bundle which included significant amounts of chrysanthemum cuttings, the relevant market was chrysanthemum cuttings: either chrysanthemum cuttings were synonymous to the ornamental flower market or monopolization of the chrysan- themum market carried with it the power a6. Cc. Ferguson, Microeconomic Theory, -123a- to control the ornamental market analog- ous to the Standard Oil Co. v. United States, 1911, 221 U.S. 1, 77, 31 S.Ct. 502, 55 L.Ed. 619, and United States v. Aluminum Company of America, 2 Cir., , 148 F.2d 416, 424, rationale. As any propagator-distributor who desired to supply growers with the flower cut- tings they required at the iustant, any failure to adhere to the BG?. system by CFPC-CFPCF risked the inability to meet demand at the instant when Yoder control- led varieties were requested. In simpler terms, at specific times through the BGA and GRA arrangement Yoder possessed the power to exclude CFPC and CFPCF from the Ornamental flower market by monope}iza- tion of the chrysanthemum market. A stronger plant will not immediate- ly take over an entire garden. However, failure to control its relentless growth into various portions secures its even- tual elimination of weaker varieties. So too in the ornamental flower-chrysan- themum market. Operating on what I hope is not a dubious notion that a Judge should have at least the common sense--although not encased in Seventh Amendment armor--of 47. See generally R. Posner, An Econ- omic Analysis of Law, at 124-27 (1974); see also R. Posner, Antitrust Cases, Economic Notes and Other Materials, at 612-18 (1974). -124a- a jury I cannot escape the conviction that these competing factors called for fact-finder resolution, not a deliver- ance of law from our non-horticulture hothouse. When one wants a Yellow Rose of Texas he is not satisfied with a Mrs. Miniver, no matter how cheap, available or beautiful in some other beholder's eye. A camellia for a hair dress offset to olive skin and a black gown is not filled by a carnation, or for that matter, a chrysanthemum. To each his own. And here David and Goliath are struggling over a single thing--chrysanthemums. Survival of one in this business depends on whether the other can be curbed. I respectfully dissent as 58 this feature of the Court's holding. 48. I can't resist the temptation to express a regret that having gone all the way through an extended evidentiary jury trial the Trial Court did not submit this issue to the jury under appropriate general instructions and a special verdict. F.R.Civ.P. 49(a). Jamison Co. Inc. v. Westvaco, Corp., 5 Cir., 1976, 526 F.2d 922, reh. Led, F.2d 34. Then we could have disposed of the issue once and for all, without--assuming I am right and the Court wrong--a new trial on substantially the same evidence. (footnote continued) -125a- (footnote continued) This comment goes also to the Trial J . failure to use, is Gl aie Genie os cae : issues-—an alternative 49(a) special issue Submission on the two "fact of damage" theories, one Of which we find to be faulty but which in ‘the inscrutable mystery of a general verdict may damage award. Now all agree that this must back for a limited retrial wending its way " between what we have said, what we have not said and what perhaps we meant to say. 126a Judgment in the Court of Appeals UNITED STATES COURT OF APPEALS For the Fifth Circuit October Term, 1975 No. 75-2141 st —_ D. C. Docket Nos. CA 73-392 & 74-9JLK (Consolidated in D.C.) Yopver BroruHess, Inc., Plaintiff-Appellant Cross-Appellee, versus Catirognis-F'Lorma Piant Corporation, Et al., Plaintiffs-A ppellees Cross-Appellants. Cauirornia-F'Lorma Piant Corporation, Et al., Plaintiffs-Appeliees Cross-Appellants, versus Yoper Broruers, Inc., Defendant-Appellant Cross-Appellee. APPEALS FROM THE Unitep States District Court FoR THE SouTHern District or FLorma 4s “ Before Brown, Chief Judge, and Jones and GoupBeERe, Cir- cuit Judges. 127a JUDGMENT This cause came on to be heard on the transcript of the record from the United States District Court for the Southern District of Florida, and was argued by counsel; On ConsIDERATION WHEREOF, It is now here ordered and adjudged by this Court that the judgment of the said Dis- trict Court in this cause be, and the same is hereby, affirmed in part, reversed and that this cause be and the same is hereby remanded in part to the said District Court in ac- cordance with the opinion of this Court; It is further ordered that Yoder Brothers, Inc. be con- demned to pay one-third of the costs on appeal to be taxed by the Clerk of this Court; and that California-Florida Plant Corporation, et al. be condemned to pay two-thirds of said costs. : September 7, 1976 Brown, Chief Judge, dissenting in part and concurring in part. Issued as Mandate: 128a Judgment Reflecting Decisions of Court and Jury UNITED STATES DISTRICT COURT Sovurnern Disrnict or Forma ra* —— Case No. 73-392-Civ-JLK Yopzs Broruess, Inc., Plaintiff, vs. CaturorNua-FLorma Piant Corporation and CaLirorni- Fiogmwa Puant Corporation oF F'Lorip, Defendants. Case No. 74-9-Civ-JLK CaLirornta-FLorma Piant Corporarion, Plaintiff, vs. Yoper Broruers, Inc., Defendant. — * VV This action came on for trial before the court and a jury. The jury, however, was unable to reach a verdict as to all of the issues. For the convenience of the parties and in the interest of delineating the issues which must be retried, the court enters the following judgment reflecting the decisions to date of the court and the jury. This judgment 129a shall not be deemed a determination and direction for entry of a judgment on less than all of the claims. See Fed. R. Civ. P. 54(b). It is therefore, ORDERED and ADJUDGED: 1. That United States Plant Patents, Deep Conquest, No. 3254, Morocco, No. 3191, Mountain Snow, No. 3215, Mountain Sun, No. 3250, Promenade, No. 3221, Red Torch, 3263, and Southern Gold, No. 3257, are valid and have been infringed, and the plaintiff, Yoder Brothers, Inc., recover of the defendant, Cziifornia-Florida Plant Corporation, the amount of $42,712.44, with interest thereon at the rate of 6% from the date of the entry of judgment; 2. That United States Plant Patents, Gold Marble, No. 3220, Morocco, No. 3191, Mountain Snow, No. 3215, Moun- tain Sun, No. 3250, Promenade, No. 3221, Red Torch, No. 3263, and Southern Gold, No. 3257, are valid, and have been infringed, and the plaintiff, Yoder Brothers, Inc., recover of the defendant, California-Florida Plant Corporation of Florida, the amount of $24,205.20 with interest thereon at the rate of 6% from the date of the entry of judgment; 3. That the defendants, California-Florida Plant Cor- poration and California-Florida Plant Corporation of Florida, and each of their officers, agents, servants, em- ployees, and attorneys, and all persons in active concert or participation with them who receive actual notice of this injunction, be and the same are hereby permanently en- joned from taking cuttings, or using or selling cuttings so assexually reproduced, of the patented varieties, Deep Conquest, No. 3254, Gold Marble, No. 3220 Morocco, No. 3191, Mountain Snow, No. 3215, Mountain Sun, No. 3250, 130a Promenade, No. 3221, Red Torch, No. 3263 and Southern Gold, No. 3257, unless and until such time in the future as they may be licensed by plaintiff under such patents; 4. That on its counterclaim under Section 1 of the Sherman Act, the defendant, California-Florida Plant Cor- poration, recover of the plaintiff, Yoder Brothers, Inc. treble damages in the amount of $193,500.00, with interest thereon at the rate of 6% from the date of the entry of judgment ; : 5. That, on its counterclaim under Section 1 of the Sherman Act, the defendant, California-Florida Plant Cor- poration of Florida, recover of the plaintiff, Yoder Brothers, Inc., treble damages in the amount of $193,500.00, with interest thereon at the rate of 6% from the date of the entry of judgment; 6. That, on its counterclaim under Section 2 of the Sherman Act, the defendant, California-Florida Plant Cor- poration, take nothing of the plaintiff, Yoder Brothers, Ine., and that the counterclaim be dismissed on the merits; 7. That, on its claim under Section 2 of the Sherman Act, the defendant, California-Florida Plant Corporation of Florida, take nothing of the plaintiff, Yoder Brothers, Inc. and that the counterclaim be dismissed on the merits. 8. That the claims of both defendants, California- Florida Plant Corporation and California-Florida Plant Corporation of Florida, that the plaintiff tortiously inter- fered with the defendants’ business relationship, defamed the defendants’ products, and violated Section 2 of the 13la Clayton Act as amended by the Robinson-Patman Act, be and the same are hereby dismissed with prejudice ; 9. That the court will reserve its rulings on the appor- tionment of costs and the award of attorneys’ fees until the resolution of the remaining issues. Downe and Orperep in chambers at Miami, Florida, this 28th day of August, 1974. /s/ James Lawrence Kine United States District Judge ee: Law Offices of Frederick P. Furth David L. Foster, Esq. Harold L. Ward, Esq. 132a Testimony of Mr. Jack Neckar Page 249, line six. ‘*Q. Are you aware of any respect in which the BGA program inhibited the sales growth of California-Florida in the years which you have been connected with California- Florida! A. No. We were a propagator-distributor for BGA, and I would say it did not inhibit our growth in any way. ‘*Q. You had full access to the varieties? A. Yes.’’ Page 252, line 14. ‘*Q. Does the fact that those royalties were changed keep you from raising your price during the time of the BGA program in a way that you might otherwise have wished to raise it? A. No, because royalties were shown on all of our competitor’s invoices. ‘*Q. So you charged what you felt was appropriate for your varieties and you would not have charged a different amount even in the absence of BGA? A. No. We charged what we telt was correct. **Q. And then added the royalty as a separate addi- tional item? A. Yes, that is right.’’ Go to page 260, line 18. ‘*Q. Now, the GRA royalty arrangement worked the same as BGA, did it not, except that your remission of royalties collected was directly to Yoder Brothers rather than BGA? A. Right. ‘*Q. It was your understanding of BGA, was it not, that BGA was to distribute the royalties which it received to the originator of the variety? A. Yes. ‘*Q. Did you ever have any difficulty getting access to GRA varieties? A. Never. 133a ‘*Q. Do you feel that the GRA program, in any way, hampered the growth of your cutting volume? A. No. ‘*Q. No, it did not? ‘*Q. And, again, since the royalty was charged as a separately stated item for GRA, I take it that the existence of that royalty did not affect your ordinary variety pricing and your volume discounts; is that right? A. That is right. ‘*Q. As in the case of BGA, you charged the price you felt was appropriate, and royalty was added to that? A. That is right.’’ Go down to page 452, which is in volume three. This examination is with reference to a list of Cal- Florida customers. This will be line 23, page 452. ‘*Q, John Lochner? A. I didn’t mention him. He is a St. Louis customer. ‘‘Q. How long has California-Florida been supplying Mr. Lochner? A. We supplied him up to last winter. ‘‘Q. You no longer supply Mr. Lochner? A. No, we do not. ‘*Q. Who has his business now? Pretrial Stipulation, {| 5(m) 5. A Concise Statement of Stipulated Facts which will require no proof at trial with reservation, if any: (m) The parties stipulate that the amounts of BGA royalties paid by defendants to BGA were the same as the amounts collected by defendants from defendants’ cus- tomers. 134a Answers to Interrogatories IN THE UNITED STATES DISTRICT COURT For rae Sournern District or Fiorma, Miami Division Civil No. 73-392 JLK = a Yoper Brotuers, Inc. Plaintiff, vs. CatirorNia-FLoripa PLant Corporation, aND CALIFORNIA- Fiorwa Piant Corporation or Fiorma, Defendants. CatirorniA-FLoripa PLant Corporation oF Fiorina, Counterclaimant, vs, Yover Broruers, Inc., Counterdefendant. s\. ae OBJECTIONS AND ANSWERS OF DEFENDANT CALIFORNIA- Frorma Piant Corporation oF FiLorma To PuaintirF’s INTERROGATORIES—SeEtT No. 1 Defendant California-Florida Plant Corporation of Florida (‘‘CFPCF’’), pursuant to Rule 33 of the Federal Rules of Civil Procedure submits these Objections and Answers to Plaintiff Yoder Brothers’ (‘‘Yoder’’) First Set of Interrogatories. 135a The General Objection applies to all of the Inter- rogatories, where relevant. [26. With regard to the alleged continuing con- tract, combination and conspiracy described in the first counterclaim of CFPCF’s answer and counter- claim : Se 6 eo (D) State whether the term ‘‘Co-conspirators and other persons,”’’ as used in the first counterclaim, includes CFPC or CFPCF and, if not, each and every fact which would tend to support such negative answer. | (D) Yes. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385004_0963%3A2. Public record. Not legal advice.