## Facts

- The United States brought civil antitrust actions under § 1 of the Sherman Act against Loew’s Incorporated and other major distributors licensing pre-1948 copyrighted feature films for television exhibition.
- The government challenged the distributors’ practice of “block booking,” in which a television station could obtain one or more desirable films only if it also accepted a package that included unwanted or inferior films.
- The government alleged the arrangements forced stations to take films they did not want and foreclosed competing sellers from marketing the tied films separately.
- The district court found that defendants engaged in block booking and treated each package of copyrighted films as a unique product, concluding the distributors had sufficient economic power stemming from their copyrights.
- Despite finding illegality, the district court limited injunctive relief, citing, among other things, that each defendant had entered only a comparatively small number of illegal contracts.
- The cases were consolidated for Supreme Court review, and the United States sought more complete relief.

## Issues

1. Whether block booking of copyrighted feature films for television constitutes a per se unlawful tying arrangement violating Sherman Act § 1, even without proof of conspiracy among distributors or monopolization under § 2.
2. Whether the district court erred by limiting injunctive relief based on the comparatively small number of illegal contracts.
3. Whether block booking can be excused by “business necessity” arising from contractual obligations to a third party.

## Decision

- The Court held that § 1 was violated when individual distributors block booked copyrighted films to television stations by conditioning access to desirable films on acceptance of unwanted films, even absent any conspiracy among distributors and absent monopolization or attempted monopolization.
- The Court rejected the limitation of injunctive relief based on the comparatively small number of illegal contracts.
- The Court rejected a business-necessity justification; contractual obligations to third parties did not excuse otherwise unlawful tying conduct.
- The Court vacated the judgments and remanded with instructions to amend the decrees to provide more complete injunctive relief.

## Legal Principles

- A tying arrangement is per se unreasonable under § 1 when a seller conditions sale or license of a tying product on purchase of a tied product, the seller has sufficient economic power in the tying product to restrain competition in the tied product, and a not insubstantial amount of commerce in the tied product is affected.
- Copyright ownership and the “uniqueness” of copyrighted works can supply the economic power necessary to sustain per se condemnation of a tie-in.
- Sherman Act § 1 liability for tying does not require proof of a conspiracy among multiple sellers; unilateral tying conduct by an individual seller can violate § 1.
- Limited frequency of illegal contracts does not, by itself, justify narrowing injunctive relief where the practice is unlawful and capable of repetition.
- Private contractual commitments to third parties do not provide a defense to conduct that violates the antitrust laws.

## Conclusion

The Court treated television film block booking as a per se unlawful tying practice under Sherman Act § 1, held that copyright-based control over unique films can provide the requisite economic power, rejected attempts to limit relief based on contract volume or business necessity, and required broader injunctive decrees on remand.


United States v. Loew's, Inc., 371 U.S. 38 (1962)