Carter-Wallace, Inc. v. The United States

NICHOLS, Judge,

concurring:

The plaintiff’s action against the United States, if maintainable, is one under the Fifth Amendment and 28 U.S.C. § 1498 , as amended, to recover just compensation for a taking under the power of Eminent Domain. Richmond Screw Anchor Co. v. United States, 275 U.S. 331 , 48 S.Ct. 194 , 72 L.Ed. 303 (1928); Irving Air Chute Co. v. United States, 93 F.Supp. 633 , 117 Ct.Cl. 799 (1950). The role of the United States is therefore entirely different from that of an ordinary infringer, which it is not.

The statute originally recited that the United States had a right to any general or special defense available to a defendant in a patent infringement suit. This was later omitted because the Code reviser had the impression it was unnecessary; however, this court has attached meaning to such a change despite the reviser’s belief he was effecting no change. Schmid v. United States, 436 F.2d 987 , 193 Ct.Cl. 780 (1971). The change, however, has but a minor part in my thinking, the major factor being the U. S. Constitution.

My question is, simply, this: can the doctrine that the infringer can have the use of the patent free of charge if the patentee has abused the patent, whether or not to the infringer’s detriment (see Greenberg, Unclean Hands as a Defense to Patent Infringement, 50 J. Pat. Off. Soc’y 12 (Jan. 1968)), be incorporated bodily into a suit such as this to main *1391 tain a constitutional right when the United States is a taker, not an in-fringer? This defense had its origin in the equitable doctrine of unclean hands and was invoked against patentees seeking equitable relief. E. g., Precision Instrument Mfg. Co. v. Automotive Maintenance Mach. Co., 324 U.S. 806 , 65 S.Ct. 993 , 89 L.Ed. 1381 (1945). I am not aware of any other situation where such an equitable doctrine is invoked to forfeit a claim for Fifth Amendment just compensation, which is, of course, on the law side of the court.

I note that in Richmond Screw Anchor Co. v. United States, supra,, defendant relied on the Assignment of Claims Act, then R.S. § 3477, but the court, to avoid serious doubts as to constitutionality, construed the present § 1498 as creating an exception to the Assignment of Claims Act. It appears to me that this part of the Richmond case raises a for-tiori a doubt as to the constitutionality of any supposed rule of law that forfeits a claim to just compensation on account of alleged misconduct by the claimant, not to the taker’s detriment.

It may be urged, I suppose, that however equitable in origin, the doctrine of patent misuse now reflects a flaw in the legal title of a misbehaving patentee, of a kind that any eminent domain taker of any other kind of property might invoke in resisting a claim for just compensation. The answer is, I think, that the flaw is not complete and properly should go only to quantum of recovery. As against a private infringer, as the court points out, the patentee can cease his misconduct and then have equitable relief by injunction. Since such relief is not available to the § 1498 claimant because the power of Eminent Domain has been used to take it away, the “reasonable and entire compensation,” if determined in light of the claimant’s title flaw should also be determined in light of the denial to him of relief available to other patentees.

This case reflects the usual division of practice in this court into watertight and sometimes ideatight compartments. Tried by patent lawyers, they put it in the, to them, familiar mold of an infringement action, though on principle it is different. It would have been interesting to have seen how lawyers with primarily eminent domain background would have handled this case. This court has in the past given effect to the defense of patent misuse in a § 1498 case and has totally forfeited the claim. Urquhart v. United States, 109 F.Supp. 409 , 124 Ct.Cl. 441 (1953). It does not appear that the constitutional problem was urged or considered.

Defendant invokes the equitable doctrine of unclean hands though its long quiescence in light of its knowledge of the Cyanamid and Merck contracts, and their involvement in the New York case, hardly constitute equitable behavior on its own part, even if not an estoppel. I would assume it could now only use the alleged patent misuse as a shield when it is sued, and not as a sword in any case brought by it. This has a bearing on the extent to which plaintiff’s title is in fact flawed. But for its act of Eminent Domain, defendant might not have been in a position to litigate the issue of alleged patent misuse anywhere at all.

In remanding the issues of patent misuse for trial so far as raised in paragraphs 31 and 32 of the amended answer, the court I believe should have indicated that if plaintiff did misuse its patent in those particulars, the issues of infringement and validity were not necessarily mooted, but that just compensation would have to be awarded or denied in light of all the circumstances, including the patent misuse, as well as infringement and validity.