August 26, 1981

Did the maker of America's most popular pain-killing pills buy up an innovative electronic pain-killing device in order to stifle the product's development and thereby protect its own drug business? That question lies at the heart of a court battle between Johnson & Johnson and three inventors from Minnesota who sold their young company and its electronic pain reliever to the health care giant seven years ago. Last July a Federal jury in Minneapolis ruled that Johnson & Johnson had fraudulently bought the electronic painkilling product in order to quietly suppress the device and head off new competition for its drug business. The court ordered the New Brunswick, N.J., company to pay $170.4 million in damages and antitrust fines. According to Judge Miles Lord of the United States District Court in Minneapolis, the evidence before the jury indicated that Johnson & Johnson had engaged in fraud of ''the most extreme and culpable nature.''

-------------------------------------------------------------------- Doris Funnye Innis is a freelance writer and researcher. By DORIS FUNNYE INNIS PRECISELY at 11 A.M., Bach's Prelude and Fugue in C major fills the stilled church. The ushers are at their posts, their white suits a dramatic contrast to the maroon-robed choir waiting for the start of the processional. Sunday morning worship service at Harlem's Mother African Methodist Episcopal Zion Church, founded in 1796, the oldest organized black church in New York City, has begun. In the lower-level kitchen, Roland Baker, his white shirt and trousers spotless despite the fact that he wears no apron, is sauteeing rice before putting it in the oven. Mr. Baker, who was born in Atlanta, has been a professional cook for 55 years. For more than 40 of those years he has cooked Sunday dinner at Mother Zion, at 140 West 137th Street. Moving with the agility of a man half his age, he is a study in kitchen choreography, stirring the cornbread mix, slicing, chopping, basting, tasting, checking on everything.

The Consumer Price Index jumped 1.2 percent in July, the fastest inflation pace in 16 months, the Labor Department said. For the three previous months the average advance was six-tenths of 1 percent. Analysts said the surge - 15.2 percent at an annual rate - hurt prospects for lower interest rates. (Page A1.) New-car sales by the Big 3 rose 20.3 percent in mid-August, helped by rebates and other sales incentives, the auto makers reported. The seasonally adjusted annual selling rate of 7.9 million domestic units was the highest since mid-March. (D1.)

THOUSANDS of people crowded into this city along the shores of Monterey Bay in central California last weekend to toast the squid, an ugly mollusk with an identity problem whose friends call it ''the food of the future.'' To show their admiration for squid, they ate thousands of pounds of it -baked, stuffed, sauteed, fried, minced and marinated. At less than $1 a pound wholesale, it was a relatively inexpensive testimonial. Reflecting the squid's image problem, the event was called the Second Annual Calamari Festival. The promoters used the Italian name for what is biologically related to clams and oysters and abalone but which, at least in America, has suffered from a reputation comparable to that of a being from a monster movie. The squid's tentacles and reservoir of dark ink used to conceal its retreat from predators have helped to foster its poor reputation. Its admirers say that if people would forget the image they would like squid by any other name.

''There is no doubt that the cause of world peace has been advanced by this Sino-American friendship.'' - Jimmy Carter. (A13:5.)