Appendix — Christianson v. Colt Industries Operating Corp.
Supreme Court brief1989
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IN THE
Supreme Court of the United States
OCTOBER TERM, 1988
CHARLES R. CHRISTIANSON and
INTERNATIONAL TRADE SERVICES, INC.,
Petitioners,
VS.
COLT INDUSTRIES OPERATING CORP.,
Respondent.
APPENDIX TO THE PETITION FOR WRIT
OF CERTIORARI TO THE UNITED STATES COURT
OF APPEALS FOR THE SEVENTH CIRCUIT
JOHN C. MCNETT
Counsel of Record
SPIRO BEREVESKOS
WooparRD, EMHARDT, NAUGHTON, |
MORIARTY & MCNETT
One Indiana Square, Suite 2000
Indianapolis, Indiana 46204
(317) 634-3456
and |
STUART R. LEFSTEIN |
KATZ, MCANDREWS, BALCH,
LEFSTEIN & FIEWEGER, P.C.
200 Plaza Office Building |
1705 Second Avenue |
P.O. Box 3250 |
Rock Island, Illinois 61204-3250
(309) 788-5661
Counsel for Petitioners
Midwest Law Printing Co., Chicago 60611, (312) 321-0220 \ \
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APPENDIX INDEX
Decisions on the merits of courts
having jurisdiction:
A— Seventh Circuit Opinion on the merits, March
OR Re ee ores oe Ee oe
B— District Court Judgment on the merits, July
RR eens eee ee ee ee
C— District Court Opinion on the merits, May 24,
walk sae hoe ae CAA le Cee Oe ns
Decisions pertaining to jurisdiction:
D— U.S. Supreme Court Opinion vacating Federal
Circuit decision, June 17, 1988 ............
E— Federal Circuit Opinion responding to Seventh
Circuit opinion, June 25, 1987 ............
F— Seventh Circuit Opinion declining jurisdiction,
EE CB a a a oaks ae Se SEO
G— Federal Circuit Opinion declining jurisdiction,
RES Sioa a vedere wee a
Judgment below:
H—Judgment of the Seventh Circuit, March 22,
a Lg Bae Rede dn Ree MaRS pe EE LG a Meg Sate ge
Other appendix items:
I— Colt memo re: captive market in the M-16
aS SERRE BRON ki oe eae aan
PA
PAGE
27
46
72
112
134
136
138
il
J— Colt Letter, April 10, 1984 ...............
K—Colt Letter, September 14, 1984 ..........
L— Affidavit of Seth Bredbury ...............
M—Affidavit of Radford W. Luther ...........
Documents relating to one of Colt’s patents
aS an example:
N—Inventor’s description of invention referencing
MIG parte ..6.ceccs seu eee eee
O— Inventor’s January 31, 1964 summary of ac-
complishments ... . «sie. >: kee eee
P— Colt Engineering change order to insure inter-
changeability .. 0... J0éssseaeeee ee
Q— Colt’s Synopsis of M-16A1 Forward Assist
Device ...kcees deena se nee ee
Statutes:
S— Statutes:
15 U.S.C. $1 Sherman Ac 72...
15 U.S.C. $2 Sherman Ace (.
5 U.S.C. $15 Antitrust Law 2
15 U.S.C. §26 Antitrust Law...
35 U.S.C. § 112 Patent Disclosure
requirements. ....4:s..+s.08 45 eee
36 U.S.C. § 154 Patent Term specified
139
141
144
148
152
155
160
162
163
180
180
181
183
183
184
IN THE
Supreme Court of the United States
OCTOBER TERM, 1988
CHARLES R. CHRISTIANSON and
INTERNATIONAL TRADE SERVICES, INC.,
Petitioners,
V8.
COLT INDUSTRIES OPERATING CORP.,
Respondent.
APPENDIX TO THE PETITION FOR WRIT
OF CERTIORARI TO THE UNITED STATES COURT
OF APPEALS FOR THE SEVENTH CIRCUIT
PA-1
APPENDIX A
IN THE
UNITED STATES COURT OF APPEALS
FOR THE SEVENTH CIRCUIT
No. 88-2492
CHARLES R. CHRISTIANSON and
INTERNATIONAL TRADE SERVICES INC.,
Plaintiffs-Appellees,
v.
Co_t INDUSTRIES OPERATING CorP.,
Defendant-Appellant.
Appeal from the United States District Court
for the Central District of Illinois, Rock Island Division.
Nos. 83-4072 and 84-4056—Robert D. Morgan, Judge.
ARGUED NOVEMBER 28, 1988—DEcIDED MARCH 22, 1989
Before CUMMINGS and FLAUM, Circuit Judges and FaIr-
CHILD, Senior Circuit Judge.
FLAUM, Circuit Judge. Charles Christianson and his
company, International Trade Services (together herein-
after referred to as “Christianson’’), filed a two-count com-
plaint against Colt Industries Operating Corp. (“Colt”) al-
leging, in Count I, that Colt had illegally monopolized the
market in M-16 parts and had successfully organized a group
boycott of Christianson, an M-16 parts supplier, in viola-
tion of Sections 1 and 2 of the Sherman Act and Sections
4 and 16 of the Clayton Act. Count II alleged that Colt
PA-2
had tortiously interfered, under Illinois law, with Chris-
tianson’s business opportunities.
Colt has defended the suit by claiming that any actions
it took were justified by its interest in not divulging the
information which would permit the parts to be used com-
mercially in connection with the M-16, information which
it claims was subject to state trade secret law protection.
Colt also counterclaimed against Christianson, who was
a former Colt employee, alleging breach of contract and
a variety of other state and federal law trade violations
based on Colt’s proprietary interests in the parts. Chris-
tianson countered Colt’s defense, and its counterclaims,
by alleging that Colt no longer had any proprietary in-
terest in the parts at issue since the patents on the parts
had expired and Colt had no protectible trade secrets in
the parts. According to Christianson, Colt could not claim
any trade secret protection relating to the parts because
the information Colt claimed to be subject to trade secret
protection should have been included in Colt’s patent dis-
closures for the parts. Specifically, Christianson alleged
that Colt should have included the specifications and tol-
erances that would permit those parts to be interchange-
able with all of the other M-16s ever produced.! Alter-
natively, Christianson’s complaint alleges that Colt lost
its proprietary interests in the parts when it granted
Christianson permission to sell the parts in 1976.
Both sides filed motions for partial summary judyment.
Christianson moved for a declaration that Colt’s trade
secrets were invalid because those secrets—the specifica-
1 Interchangeability refers to the ability to use a part in every
M-16 currently in existence. Interchangeability is a requirement
for all M-16 parts because it often becomes necessary on the bat-
tlefield to use parts from one rifle to repair another rifle. To
achieve interchangeability, the parts must all be manufactured with
dimensions falling within specified tolerances. If the tolerances are
exceeded, the part will not be interchangeable with M-16 rifles
already in existence. Thus, to successfully manufacture a market-
able replacement part for the M-16, it is crucial to know those
specifications and tolerances which permit interchangeability.
PA-3
tions and tolerances for interchangeability—should have
been disclosed in the patent applications and also moved
for judgment in its favor on the tortious interference
count. Colt asked for a declaration that its patent dis-
closures were adequate and also asked for dismissal of
count II, the tortious interference count.
The district court agreed that the patents were invalid
for nondisclosure. The court then found, based solely on
its finding of patent invalidity, that Colt had no protecti-
ble trade secrets in the parts and granted Christianson’s
motion for partial summary judgment and denied Colt’s
motion. The district court also, swa sponte, entered sum-
mary judgment for Christianson on both counts of the
complaint.
Colt appealed the district court’s decision to the Court
of Appeals for the Federal Circuit, touching off a juris-
dictional exchange between the Federal Circuit and the
Seventh Circuit. The Supreme Court eventually settled
the jurisdictional dispute by holding that the Seventh Cir-
cuit is the proper forum for Colt’s appeal. Christianson
v. Colt Industries Operating Corp., 108 S. Ct. 2166 (1988).
Finally reaching the merits of this appeal, we reverse the
district court’s grant of summary judgment, find that sum-
mary judgment should be entered for Colt on the issue
of the adequacy of Colt’s patent disclosures, and remand
for further proceedings.
I
The basic patents which protect the M-16 were first
issued to the Armalite Division of Fairchild Hiller Cor-
poration for its “AR-10” and “AR-15” rifles. In 1959, Colt
received a license from Fairchild to develop those patents
and, by 1962, had successfully developed a mass-production
rifle. Shortly thereafter, the United States Army adopted
that rifle as its principal battlefield rifle and designated
it the M-16.
Over time, Colt made improvements to various parts
of the rifle and patented those improvements, although
it did not always use the improvements in actual produc-
PA-4
tion of the rifle. Christianson contends that nine of those
improvement patents,? five of which actually found their
way into production, were invalid from conception because
they failed to divulge the requisite information regarding
their manufacture and use.
Charles Christianson, a former Colt employee, formed
International Trade Services (“ITS’’) and went into busi-
ness selling replacement parts for the M-16. These parts
were obtained from Colt’s suppliers, all of whom had pre-
viously agreed with Colt not to supply anyone other than
Colt or Colt’s licensees.* In 1976, Christianson received
permission from Colt to sell replacement parts, but the
parties strongly disagree about whether that permission
was of a continuing or a limited nature.
Springtield Armory (‘Springfield’), an Illinois corpora-
tion, also entered into the business of selling M-16 replace-
ment parts. Those replacement parts were manufactured
within tolerances permitting interchangeability of the
2 The patents at issue are: (1) Firearm Having an Auxiliary Bolt
Closure Mechanism, Patent No. 3,236,155 (issued 2/22/66); (2) Trig-
ger Mechanism, Patent No. 3,292,492 (issued 12/20/56); (3) Mech-
anism for Changing Rate of Automatic Fire, Patent No. 3,301,133
(issued 1/31/67); (4) Buffer Assembly Having a Plurality of Iner-
tial Masses Acting in Delayed Sequence To Oppose Bolt Rebound,
Patent No. 3,366,011 (issued 1/30/68); (5) Firearm Book Magazine
with Straight End and Intermediate Arcuate Positions, Patent No.
3,440,751 (issued 4/29/69}; (6) Disposable Magazine Having a Pro-
tective Cover and Follower Retaining Means, Patent No. 3,453,762
(issued 7/08/69); (7) Magazine with Anti-Double Feed Indentations
in the Side Walls, Patent No. 3,619,929 (issued 11/16/71); (8) Blank
Firing Adaptor for Gas Operated Firearm, Patent No. 3,766,822
(issued 10/23/73); Rifle Conversion Assembly, Patent No. 3,771,415
(issued 11/13/73). =
3 Colt licenses various manufacturers to produce replacement
parts for the M-16. The licenses allow the manufacturers to sell
the parts only to Colt or to a government which has contracted
with Colt for supply of M-16 rifles. Colt places proprietary legends
on all drawings given to the manufacturers and expressly prohibits
the manufacturers from supplying information on the parts to third
parties.
PA-5
parts with existing M-16 rifles. Colt became aware of
Springfield’s endeavors and, in August 1983, commenced
an action based on misappropriation of trade secrets and
patent infringement seeking to enjoin Springfield’s ac-
tivities. Springfield denied that it had misappropriated
Colt’s trade secrets in the specifications and tolerances
necessary to make the replacement parts interchangeable
with existing M-16 rifles claiming instead that it had “‘re-
verse engineered’’4 the parts. Colt contended that to re-
verse engineer the parts so as to make them interchange-
able with every M-16 ever produced would be a “‘massive
task”’ and thus the information had to have been taken from
Colt’s proprietary drawings. The district court agreed
with Colt and granted a preliminary injunction against
Springfield. Colt sent letters to its suppliers informing
them of the result and reminding them of their contrac-
tual obligation to refrain from selling M-16 parts to anyone
other than Colt or Colt’s licensees.
In the course of discovery in the Springfield case, Colt
learned that Christianson. had been among those who sup-
plied Springfield with M-16 parts. Colt joined Christian-
son and ITS as defendants in the case but, after failing
to receive a preliminary injunction against them, volun-
tarily dismissed them from the case.
Shortly after that dismissal, on May 14, 1984, Christian-
son filed the instant suit against Colt claiming that Colt’s
actions in protecting its alleged trade secrets violated Sec-
tions 1 and 2 of the Sherman Act and Sections 4 and 16
of the Clayton Act. Although the complaint was inartful-
ly drawn, it apparently alleged that Colt—through its re-
strictive agreements with suppliers, the bad faith joinder
of Christianson in the Springfield case, the letters Colt
subsequently sent to suppliers informing them of the out-
come of the Springfield case, and other specified and
4 Reverse engineering is the process by which a completed prod-
uct is systematically broken down to its component parts to dis-
cover the properties of the product with the goal of gaining the
expertise to reproduce the product.
PA-6
unspecified conduct—had monopolized the market for M-16
replacement parts and had organized a group boycott against
Christianson. Christianson later added a second count al-
leging a state law claim of tortious interference with
Christianson’s business opportunities. Colt answered the
complaint by denying that the actions it took to protect
its trade secrets violated either the antitrust laws or the
state laws against tortious interference and also cross-
claimed against Christianson alleging tortious interference
with its own business opportunities as well as various
other trade practice violations by Christianson. Christian-
. son countered that defense by asserting that Colt had no
valid trade secrets to defend because the information al-
leged to be secret should have been disclosed in Colt’s
patent disclosures for the improvement parts in question.
Both sides filed motions for partial summary judgment.
Christianson moved that Colt’s trade secrets be declared
invalid and asked for summary judgment on its tortious
interference claim and two of Colt’s counterclaims that
were premised on the alleged trade secrets. Colt, in its
cross-motion for summary judgment, asked the court to
find that its patent disclosures were sufficient, and fur-
ther asked that Christianson’s tortious interference claim
be dismissed.
The district court granted summary judgment for Chris-
tianson, not only as to trade secret invalidity and tortious
interference, but as to all counts of the complaint. The
court found that Colt’s patents in the improvements at
issue were invalid for failure to meet both the enablement
and best mode requirements for patent validity found in
35 U.S.C. § 112.5 According to the district court, the pat-
5 35 U.S.C. § 112 states, in pertinent part, that:
[A patent] specification shall contain a written description
of the invention, and of the manner and process of making
and using it, in such full, clear, concise, and‘exact terms as
to enable any person skilled in the art to, which it pertains,
or with which it is most nearly connected, to make and use
the same, and shall set forth the best mode contemplated by
the inventor of carrying out his invention.
PA-7
ents failed to meet the enablement requirement because,
given the information contained in the patents, it would
still be a massive undertaking-to construct the inventions
so that they would be interchangeable in the M-16. Chris-
tianson v. Colt Industries Operating Corp., 609 F. Supp.
1174, 1178-79 (C.D. Ill. 1985). Moreover, the court found
no evidence demonstrating that the patent. disclosures
were sufficient to permit one skilled in the art to make
the inventions for use in any rifle. Id. at 1179.
The district court also held that the patents failed to
meet the best mode requirement of § 112. The court be-
lieved that, given the standardization of the M-16 as the
battlefieid rifle of this country’s armed forces and the need
for perfect interchangeability among the parts of the rifle,
the best mode of the improvement parts was for use in
an M-16. However, because the patents failed to disclose
the specifications and tolerances within which the parts
would be interchangeable with other M-16s, the court found
that best mode disclosure was not made. In addition, the
court rejected any suggestion that, even assuming the
best mode was for use in a rifle, Colt had disclosed its
preferred method of carrying out the inventions.
The district court next decided that Colt could not claim
trade secret protection for the information that should
have been disclosed. According to the court, the vindica-
tion of the policies underlying federal patent law require
that state trade secret law be preempted to the extent
that state law would protect information that should have
been the subject of patent disclosure. Christianson, 609
F. Supp. at 1183. The court stated that ‘{a] state may
not apply its own laws in such a way as would extend
the monopoly of an expired or invalid patent or afford
any protection which is inconsistent with the objectives
of the federal patent laws.” Jd. The district court did not
stop at trade secret invalidation, however, but continued
on to grant relief to Christianson which had neither been
sought nor briefed in the motions for summary judgment.
First, the district court ordered Colt to disgorge all of
its trade secrets relating to the M-16, whether those trade
PA-8
secrets were related to the patents at issue or not. Chris-
tianson v. Colt Industries Operating Corp., 613 F. Supp.
330, 331 (C.D. Ill. 1985). Second, the court granted sum-
mary judgment to Christianson on both count I, the anti-
trust count, and count II, the tortious interference count.
Christianson, 609 F. Supp. at 1185.
Colt appealed the district court’s decision to the Court
of Appeals for the Federal Circuit. Jurisdiction in that
court was premised on the theory that this case turned
almost completely on a matter of patent law. In an unpub-
lished order, the Federal Circuit granted Christianson’s
motion to transfer the case to the Seventh Circuit on the
ground that the Federal Circuit lacked jurisdiction. The
Seventh Circuit, sua sponte, transferred the appeal back
to the Federal Circuit. A panel of this court held that
the case arose under the patent laws of the United States,
for which appellate jurisdiction was lodged exclusively in
the Federal Circuit. Christianson v. Colt Industries Op-
erating Corp., 798 F.2d 1051 (7th Cir. 1986).
A panel of the Federal Circuit reaffirmed its original
decision that only the Seventh Circuit had jurisdiction
over the appeal. Nevertheless, Chief Judge Markey, the
author of the Federal Circuit decision, recognized that
without a decision on the merits, this appeal could volley
back and forth between the circuits ad infinitum. Thus,
“in the interests of justice,” the Federal Circuit reached
the merits of the appeal and reversed. Christianson v.
Colt Industries Operating Corp., 822 F.2d 1544 (Fed. Cir.
1987). The reasons relied upon by the Federal Circuit in
reversing the judgment of the district court will be dis-
cussed below.
The Supreme Court, in order to settle the jurisdictional
question in the case, granted certiorari and held that the
Seventh Circuit has jurisdiction over this appeal. Chris-
tianson v. Colt Industries Operating Corp., 108 S. Ct.
2166 (1988). According to the Court, the proper jurisdic-
tional inquiry is whether patent law either creates the
cause of action or is a necessary element to each of the
PA-9
claims set out in the complaint, in which case the Federal
Circuit would have exclusive jurisdiction, or whether some
claim in the complaint relies on theories outside the pat-
ent law, in which case the regional circuits would have
jurisdiction. Jd. at 2174.
In this case, the Court found that patent law was not
a necessary component of some of the theories support-
ing the claims arguably raised by the complaint:
Examination of the complaint reveals that the monop-
olization theory that Colt singles out (and on which
the petitioners ultimately prevailed in the District
Court) is only one of several, and the only one for
which the patent law is even arguably essential. So
far as appears from the complaint, for example, peti-
tioners might have attempted to prove that Colt’s
accusations of trade-secret infringement were false
not because Colt had no trade secrets, but because
Colt authorized petitioners to use them... . In fact,
most of the conduct alleged in the complaint could
be deemed wrongful quite apart from the truth or
falsity of Colt’s accusations [against Christianson in
the letters sent to suppliers]. According to the com-
plaint, Colt’s letters also (1) contained “‘copies of in-
applicable court orders” and “suggest{ed] that these
court orders prohibited [the recipients] from doing
business with” petitioners; and (2) “falsely stat[ed]
that ‘Coit’s right” to proprietary data had been ‘con-
sistently upheld in various courts.’”’ Similarly the
complaint alleges that [Colt pursued the Springfield
case against Christianson for] “ sasons completely un-
i to the provisions and purposes” of federal pat-
ent law.
Id. at 2175. The Court went on to state that the same
analysis could be applied to Christianson’s group boycott
claim:
Whether or not the patent-law issue was an “essen-
tial’”’ element of th[e] group-boycott theory [that was
actually litigated iin the motion for summary judgment],
PA-10
however, petitioners could have supported their group-
boycott claim with any of several theories having
nothing to do with the validity of Colt’s patents.
Equally prominent in the complaint, for example, is
a theory that the alleged agreement was unreason-
able not because Colt had no trade secrets to pro-
tect, but because Colt authorized petitioners to use
them.
Id. at 2175-76 (emphasis in original). Thus, because the
antitrust claims made in Christianson’s complaint could
be supported with theories having nothing to do with pat-
ent law, jurisdiction over the appeal should have been
taken by the Seventh Circuit. The Court, without com-
menting on the underlying reasoning of the Federal Cir-
cuit, concluded that the court’s lack of jurisdiction com-
pelled it ‘‘to disapprove of [the] decision to reach the
merits anyway” and vacated the merits decision. Jd. at
2178.
Secure in the knowledge that this court has jurisdiction,
we finally reach the merits of Colt’s appeal and find that
we must (1) reverse the district court’s judgment grant-
ing summary judgment to Christianson, and (2) remand
the case to the district court for (a) entry of summary
judgment for Colt on the issue of the adequacy of its pat-
ent disclosures, (b) disposition of the remaining summary
judgment issues, and (c) proceedings on the non-patent
based theories contained in Christianson’s complaint.
II.
Initially, we determine what weight, if any, to give to
the merits decision of the Federal Circuit. As we dis-
cussed above, the Supreme Court vacated the Federal
Circuit’s decision on the ground that it was inappropriate
for the Federal Circuit, in the interests of justice, to
decide the merits of a case over which it did not have
jurisdiction. Nevertheless, there is no indication that the
Supreme Court found any error in the Federal Circuit’s
decision. Thus, although vacated, the decision stands as
al hl
PA-11
the most comprehensive source of guidance available on
the patent law questions at issue in this case. See Coun-
ty of Los Angeles v. Davis, 440 U.S. 625, 646 n.10 (1979)
(Powell, J., dissenting) (‘‘Although a decision vacating a
judgment neccesarily prevents the opinion of the lower
court from being the law of the case, the expression of
the court below on the merits, if not reversed, will con-
tinue to have precedential weight .. . .’’) (citations omit-
ted); U.S. ex rel Espinoza v. Fairman, 813 F.2d 117, 125
(7th Cir.), cert. denied, 107 S. Ct. 3240 (1987) (decision
vacated by Supreme Court remains persuasive precedent
where Court did not reject the decision’s underlying
reasoning). Although we recognize that the Federal Cir-
cuit’s decision does not bind us, the comprehensive nature
of the decision, along with the recognition that Congress
created the Federal Circuit with the goal of achieving
uniformity and coherence in the patent laws, see Chris-
tianson v. Colt Industries Operating Corp., 822 F.2d 1544,
1551 (Fed. Cir. 1987), counsel us against straying far from
the court’s thorough analysis of the difficult issues pre-
sented by this case.
With that in mind, the first substantive issues we must
decide are whether the district court erred in finding that
Colt failed to meet the enablement and best mode require-
ments of § 112. We review de novo the district court’s
determination of a summary judgment motion, Commer-
cial Union Ins. v. Ramada Hotel Operating Co., 852 F.2d
298, 300 (7th Cir. 1988), and use the same standard of
decisionmaking as that employed by the district court. Jd.
Thus, we will affirm the grant of summary judgment only
where there are no genuine issues of material fact and
the moving party is entitled to judgment as a matter of
law. Fed. R. Civ. P. 56(c). The burden is on the moving
party to support the motion for summary judgment and,
where that has been achieved, the adverse party must
then ‘‘set forth specific facts showing that there is a gen-
uine issue for trial.’”’ Fed. R. Civ. P. 56(e). If we deter-
mine that the district court did err, under these stan-
dards, with respect to the validity of Colt’s patents, we
PA-12
must then determine if there is any reason to return this
case to the district court for further proceedings.
A. Enablement
A patent is enabling when the disclosures made in the
patent application are sufficient to allow a person skilled
in the art to make and use the claimed invention. Spectra-
Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1532 (Fed.
Cir.), cert. denied, 108 S. Ct. 346 (1987). The requirement
is designed to ensure that the subject matter of the claimed
invention is generally in the possession of the public and
ready to be reproduced following the expiration of the pat-
ent period. Jd. To determine whether the disclosure is
enabling, a two-part analysis is employed. First, we must
delimit the scope of the claimed invention. DeGeorge v.
Bernier, 768 F.2d 1318, 1323-24 (Fed. Cir. 1985); Plastic
Container Corp. v. Continental Plastics, 607 F.2d 885,
897 (10th Cir. 1979), cert. denied, 444 U.S. 1018 (1980).
Second, we must look to the disclosures made in the pat-
ent to ascertain whether, given that level of disclosure,
a person skilled in the art could sucessfully reproduce the
claimed invention in its entire scope. DeGeorge, 768 F.2d
at 1324. Because only the claimed invention receives pat-
ent law protection, the disclosures need generally be no
greater than the claim. Technicon Instruments v. Alpkem
Corp., 2 USPQ 2d 1729, 1742 (D. Or. 1986). If the inven-
tion can be reproduced in its entire scope, then the pat-
ent specifications are enabling.
In this case, the parties hotly contest the issue of the
scope of the inventions. Christianson alleges that the in-
ventions are improvements to parts specifically made for
an M-16 rifle. As such, Christianson believes that the scope
of the inventions includes the ability to use the inventions
with every M-16 in existence—i.e., to make the parts “‘in-
terchangeable.”’ To make the parts in each patent inter-
changeable, Colt would have had to have disclosed the
specifications and tolerances which permit interchangeabil-
ity. The district court, in granting summary judgment to
Christianson, expressly adopted this analysis.
PA-13
Colt, on the other hand, takes the position that the in-
ventions have nothing to do with the M-16. Colt points
out that the patent claims mention neither the M-16 nor
interchangability as features of the inventions. Thus, Colt
believes the claims are simply for rifle parts and would
delimit the scope of the invention without regard to the
ability of the invention to interact with the M-16.
Christianson answers Colt’s argument by pointing out
that the Federal Circuit has held that the scope of the
invention can sometimes exceed the claim actually made
in the patent. White Consolidated Industries, Inc. v. Vega
Servo-Control, 713 F.2d 788 (Fed. Cir. 1983). In White,
the invention at issue was for a system which controlled
the operations performed by automated machinery through
the use of a computer program. A key problem for the
invention was to translate the language of the computer
into a language that the machinery would understand and
respond to. At the time the invention was patented, the
only language translator available was a computer pro-
gram called SPLIT, which was a trade secret of the Sund-
strand Corporation, White’s predecessor in interest. The
Federal Circuit, while recognizing that the language trans-
lator was not claimed as part of the invention, neverthe-
less held that the failure to disclose its identity violated
the enablement requirement of § 112. According to the
court, the translator should have been disclosed since ‘“‘it
[was] an integral part of the disclosure necessary to enable
those skilled in the art to ‘make and use the same.’ ”’ Jd.
at 791 (emphasis added); compare International Telephone
and Telegraph Corp. v. Raychem Corp., 538 F.2d 453, 460
(1st Cir. 1976), cert. denied, 429 U.S. 886 (1976) (no need
to disclose compound which was not claimed to be part
of the invention and was not “essential to the production
of the patented” invention).
We think that White is inapposite to the facts of this
case. The disclosure of SPLIT was required because it
was an “integral part’”’ of the invention—the invention
would not work, even if all other information was disclosed,
without disclosure of the program. In the instant case,
PA-14
the specifications and tolerances are not an “integral part”’
of the inventions. The inventions will work in a rifle, as-
suming all the other information about the inventions is
disclosed, without any data regarding the specifications
and tolerances required for commercial utilization of the
inventions in the M-16. See DeGeorge, 768 F.2d at 1324
(claim as to circuitry to be interfaced with word processor
was enabling where there was disclosure of “detailed,
claimed circuitry without requiring detailed disclosure of
all related, wnclaimed circuitry [in the word processor]
with which TCCPI might be interfaced’’) (emphasis in orig-
inal). Thus, the scope of Colt’s inventions cover only the
claims actually made, claims involving rifle parts, and do
not cover the specifications and tolerances required to in-
terchange the inventions with M-16s already in existence.
We now reach the second step of the enablement in-
quiry, which requires us to determine, given the scope
of the inventions, whether sufficient information has been
disclosed to allow a person skilled in the art to make and
utilize the inventions. Christianson claims, in regard to
this part of the analysis, that there is no evidence that
enough information was supplied to enable one skilled in
the art to use the inventions in any weapon. Christian-
son argues that the deposition testimony of Colt’s own
witnesses support this contention. First, Christianson points
to the testimony of Harold Waterman, Colt’s Manager of
Product Engineering for the Firearms Division, to the ef-
fect that at least one of the inventions, the bolt assist,
could not have been used in any rifle given the informa-
tion provided in the patent. Second, Christianson recites
the testimony of Seth Bredbury, Colt’s expert witness,
who testified in the context of the Springfield case that it
would be a “massive task” to reverse engineer the inven-
tions at issue to make them interchangeable with M-16s
already in existence. Christianson admits that Bredbury
later testified that the inventions could be incorporated
into firearms without undue experimentation, but claims
that that testimony has no factual support and is refuted
by his earlier testimony.
PA-15
The district court also pointed to this testimony from
Waterman and Bredbury to support its conclusion that
the patent disclosures were non-enabling. The district
court found that Bredbury’s statement that “ ‘undue ex-
perimentation’ would not be required is not substantiated
by any statement of fact.” Christianson v. Colt Industries
Operating Corp., 609 F. Supp. 1174, 1179 (C.D. Ill. 19865).
The district court went on to find that “[t]here is no evi-
dence that any weapon other than the Colt weapons could
or do use any of the inventions.” Jd. (emphasis added).
The federal circuit found, and we agree, that the district
court’s finding in regard to use in weapons other than
the M-16 was unsupported by the record. Christianson,
822 F.2d at 1561. First, and most important, Christian-
son’s counsel acknowledged at oral argument that these
inventions could be made for use in rifles; counsel’s only
claim was that they could not be made for use in the
M-16. Second, the plaintiff has misconstrued the testimony
of Waterman. Waterman did not testify that the bolt as-
sist could not be used in a weapon, given the informa-
tion provided in the patent, but instead simply opined, that
even one skilled in the art could not build an entire
weapon given only the information about one part.® Third,
6 The complete exchange between Mr. Waterman and Christian-
son’s attorney was as follows:
Q: Let me ask, would it be possible to make an M16 by
reference to this patent 3,236,155 [the bolt assist]?
A: No.
Q: Do you think you could make a weapon that would have
incorporated the bolt assist simply by the use of these draw-
ings and this text and the exercise of ordinary skill?
A: By the use of this only? No.
Q: Would your answer be the same to the question if you
had tools that would be available to people of ordinary skill
in this field, but if you didn’t have any of Colt’s proprietary,
alleged proprietary tools or gauges?
(Footnote continued on following page)
PA-16
there is no inconsistency between Bredbury’s statements
in the Springfield case and his deposition statement here.
It is undisputed that it would be a massive task to re-
verse engineer the parts so that they would be inter-
changable with all other M-16s. But that is not inconsis-
tent with Bredbury’s testimony that the patent disclosures
enable one skilled in the art to put the inventions to use
in some other rifle that does not require interchangeable
parts. Thus, no evidence in the record supports the plain-
tiffs assertion, accepted by the district court, that the
information provided by Colt in the patents was non-
enabling with respect to the claimed inventions. Instead,
we agree with Colt that the unrebutted evidence shows
that the patent disclosures for the claimed inventions were
enabling.
6 continued
A: Let me ask this. You’re going to use this document [the
patent disclosures for the bolt assist]?
Q: Yes.
A: No other document?
Q: No, but you will have available to you everything that a
gun manufacturer of ordinary skill in the gun manufacturing
business would have, but that wouldn’t include any secret, pro-
prietary gauges that we have been talking about that Colt may
have or drawings that Colt may have.
It isn’t interchangeable?
The question wouldn’t require interchangeability.
It isn’t functional or it is functional?
It would have to be a functional weapon.
meee
A: Well, for example, this document does not refer to caliber.
This document does not refer to a cartridge. If one was to
take this document and I have no idea that the document is
to scale or what caliber or anything about it, I would have
to say that the use of this document, no, you could not. You
could get an idea of the mechanism, and that would just about
be it.
PA-17
B. Best Mode
Section 112 requires that “the specifieation . . . set forth
the best mode contemplated by the inventor of carrying
out the invention.” Thus, if the applicant develops specific
instrumentalities or techniques which are recognized as
the best way to carry out the invention, then the best
mode requirement obliges the applicant to disclose that
information. Spectra-Physics, 827 F.2d at 1537. The re-
quirement contains a subjective standard; we will find non-
compliance only if the patentee has concealed, whether
knowingly or unwittingly, his or her preferred embodi-
ment of the claimed invention. DeGeorge, 768 F.2d at
1324; Spectra-Physics, 827 F.2d at 1535. Again, the focus
of the best mode requirement, as it was with the enable-
ment requirement, is on the claimed invention. Randomex
Inc. v. Scopus Corp., 849 F.2d 585, 588 (Fed. Cir. 1988);
Plastic Container Corp., 607 F.2d at 897.7 Thus, before
determining whether there is evidence of concealment, the
scope of the invention must be delimited.
The district court in this case, again adopting the plain-
tiff: analysis, determined that the scope of the claims in-
volve inventions which are “fully interchangeable with the
corresponding part in every M-16 ever produced.” Chris-
7 In Plastic Container Corp., the defendant in a patent infringe-
ment action alleged that the plaintiff's disclosures in its patents
for prescription drug containers were inadequate for failure to
meet the best mode requirement. In a previous action involving
the plaintiff, a court had determined that the plaintiff's disclosures
did not satisfy the best mode requirement with respect to the con-
tainer and the defendant claimed that that determination should be
given collateral estoppel effect. Following the court’s oviginal deter-
mination, the plaintiff reapplied for a patent for the container and
a patent was issued. The Tenth Circuit refused to give collateral
estoppel effect to the previous decision because the defendant over-
looked the fact that in reapplying for a patent, the plaintiff
changed the scope of the invention. Since the features the defen-
dant claimed should have been disclosed were features only of the
original claim, and not of the invention at issue in the case at bar,
the court found that the best mode requirement was fulfilled.
PA-18
tianson, 609 F. Supp. at 1181. The district court then
went on to find that Colt failed to disclose the best mode
of using those inventions because it omitted the specifica-
tions and tolerances necessary to make the parts inter-
changeable with M-16 rifles already in existence. However,
as we discussed above in relation to the enablement re-
quirement, the district court erred in its definition of the
scope of the inventions. Nowhere in the claims is it stated
that these inventions purport to be interchangeable with
every M-16 ever produced or that the inventions have
anything to do with the M-16 at all. The inventions are
improvements to parts used in a rifle, any rifle, and we
will look to those inventions to determine if the inventor
has concealed his or her preferred embodiment.
Given that the claimed inventions involve parts for
rifles, without specifying any particular brand of rifle, the
district court’s determination that Colt failed to disclose
the best mode for using these inventions was unsupported
by the record. The Federal Circuit succinctly outlined the
district court’s error as follows:
The best mode requirement assures that inventors
do not conceal the best mode known to them when
they file a patent application, but the ‘“‘best mode’”’
is that of practicing the claimed invention. Jt has
nothing to do with mass production or sales to cus-
tomers having particular requirements. (emphasis
added) [See Indecor, Inc. v. Fox-Wells, Inc., 642 F.
Supp. 1478, 1490 (S.D.N.Y. 1986)]. In this case, inter-
changability with M-16 parts appears nowhere as a
limitation in any claim, and as Christianson concedes,
the patents make no reference whatever to the M-16
rifle. Thus the best mode for making and using and
carrying out the claimed inventions does not entail
or involve either the M-16 rifle or interchangeability.
The ‘best mode” for making and using the claimed
parts relates to their use in a rifle, any rifle. There
is nothing anywhere in the present record indicating
that any of the patents fail to meet that requirement.
PA-19
Christianson, 822 F.2d at 1563 (emphasis in original ex-
cept where otherwise noted). Thus, because this case is
unlike cases where the best mode requirement has not
been fulfilled because of some sort of concealment—e.g.,
Union Carbide Corp. v. Borg-Warner Corp., 550 F.2d 355
(6th Cir. 1977); Dana Corp. v. IPC Limited Partnership,
860 F.2d 415 (Fed. Cir. 1988) (disclosure in patent for
valve stem seal inadequate where flouride surface treat-
ment not disclosed; tests showed that the surface treat-
ment was “necessary”’ to satisfactory performance of the
seal)—we ‘find no evidence in the record to support the
district court’s determination that Colt failed to disclose
its preferred embodiment of these inventions.§ Again, the
evidence of record shows that Colt did disclose the best
mode of carrying out its inventions.
ITI.
The district court held that Colt could claim no protec-
tion under state trade secret law for the specifications
and tolerances necessary to make the improvement parts
interchangeable with existing M-16 rifles. The only ground
cited by the district court for the invalidation of the trade
secrets was that Colt should have disclosed those specifica-
tions and tolerances in its patent applications pursuant
8 Christianson objects, quite understandably, that if Colt can val-
idly claim trade secret protection, it will be able to protect its
commercial products from competition even after the expiration
of its patents. Christianson points out, and we agree, that the best
mode requirement is intended to allow the public to compete fair-
ly with the patentee following the expiration of the patents. See
Phillips Petroleum Co. v. Sid Richardson Carbon & oline Co.,
293 F. Supp. 555, 558 n.2 (N.D. Tex. 1968) (‘{TJhe price an inventor
must pay for his seventeen year patent monopoly is a disclosure
of the invention which would enable persons skilled in the perti-
nent art to practice it.’’). While we sympathize with Christianson’s
frustration in being unable to compete with Colt, and Christian-
son may yet prove that Colt has violated the antitrust laws, for
the reasons discussed we cannot vindicate its attempt to rectify
the situation through an attack on Colt’s patent disclosures.
PA-20
to the enablement and best mode requirements. Yet, as
we discussed above, the district court erred if finding that
Colt failed to meet the enablement and best mode require-
ments. Thus, the district court erred in granting summary
judgment to Christianson on the issue of trade secret in-
validity. Moreover, everything that followed from the dis-
trict court’s trade secret decision, including the require-
ment that Colt disgorge all of its trade secrets in the M-16
and the grant of summary judgment on the antitrust and
tortious interference claims, must be vacated.
The district court also erred in denying that part of Colt’s
motion for summary judgment asking the court to declare
that its patent disclosures were adequate. As discussed
above, the non-moving party, to avoid summary judgment,
must set forth specific facts to show that there is genuine
dispute about a material fact. Anderson v. Liberty Lobby,
106 S. Ct. 2510, 2511 (1986). In this case, Christianson
has set forth no facts to exhibit a dispute about whether
the enablement and best mode requirements, properly
understood, were fulfilled by Colt’s patents. Thus, because
there are no genuine issues of material fact remaining on
the issue of patent validity, summary judgment should be
entered for Colt on that issue.
The case does not end there, however, for the district
court must still determine whether Colt, Christianson, or
neither is entitled to summary judgment on count II of
Christianson’s complaint. Christianson’s complaint states
that even if the patents are valid, Colt still cammot claim
trade secret protection because Colt gave Christianson
permission to make the parts.® If the district court should
determine that Colt’s 1976 permission did not extend to
8 Christianson’s complaint states that: “In 1976, prior to the ex-
piration of said patents, ITS [International Trade Services] ex-
pended funds to have manufactured certain tooling to be used for
the manufacture of M-16 parts and accessories . . . . Colt gave
ITS permission to use the tooling for which it had expended funds
in 1976 to the end that suppliers . . . could make M-16 parts to
sell to customers... .”
PA-21
Christianson’s actions at issue in this case, assuming that
that issue is susceptible to determination on summary
judgment, then the district court should enter summary
judgment for Colt on Count IT. If the district court deter-
mines that the permission does cover Christianson’s ac-
tions, then the district court must decide if the other de-
fenses Colt raises to the tortious interference claim, such
as its good faith reliance on what it thought were valid
trade secrets, have merit. It will be up to the district
court to assess all of these issues, and any other issues
properly raised in the summary judgment motions and not
disposed of by this case, on remand.
IV.
For all the reasons discussed above, we REVERSE the
decision of the district court and REMAND for further pro-
ceedings not inconsistent with this opinion.
A true Copy:
Teste:
Clerk of the United States Court of
Appeals for the Seventh Circuit
q
PA-22
APPENDIX B
——————
United States District Court
Central District of Illinois
ae
CHARLES R. CHRISTIANSON AND )
INTERNATIONAL TRADE SERVICES, )
INC., )
)
Plaintiffs, )
)
v. ) Consolidated Civil
) Action
Cot INDUSTRIES OPERATING CORP., ) Nos. 84-4056 and
a Delaware corporation, ) and 83-4072
)
)
Defendant.
FINAL JUDGMENT ON LIABILITY
This case was before this court on the pleadings, including
cross-motions for summary judgment. Plaintiffs, Charles R.
Christianson and essentially his corporation, International
Trade Services, Inc., led a complaint against Colt Industries
Operating Corp. (Colt Industries) for damages, injunctive and
equitable relief, for injuries resulting from Colt Industries
violations of the antitrust laws (Count I) and amended it to
include a count for intentional wrongful interference with busi-
ness relations by Colt Industries and requesting actual and
punitive damages (Count IT). Colt Industries denied violations
and asserted numerous counterclaims and affirmative
defenses. Plaintiffs denied Colt Industries counterclaims and
asserted affirmative defenses. Patent infringement is not an
issue in this case. This court has jurisdiction over the subject
matter of this action and the parties before it under 28 U.S.C.
PA-23
$1332 and 15 U.S.C. §§4, 15 and 26. Venue in this district is
proper under 28 U.S.C. §1391(b) and (c) and 15 U.S.C. §15.
Based on the motion papers and accompanying briefs and
the representations of counsel at a hearing, all matters alleged
in plaintiffs complaint and those matters in defendant’s coun-
terclaims raised in the motion papers were considered by the
court to be placed before it for ruling, and therefore the court
has considered and has duly ruled upon the same as a matter of
summary judgment upon undisputed material facts.
This court’s decision is based upon the pleadings, the deposi-
tions, answers to interrogatories and admissions on file,
together with the affidavits and other evidence presented, the
briefs, arguments, and this court's interrogation of counsel at a
hearing. Among the material considered was live testiraony
before this court in Colt Industries v. Springfield Armory,
Inc., et al., Civil Docket No. 83-4072, with which this cause
was heretofore consolidated. That testimony was identified by
the transcript portions provided as exhibits to the instant
motion.
This court has determined that summary judgment is appro-
priate as indicated in this court's Memorandum Decision and
Order entered on May 24, 1985, which Memorandum is incorpo-
rated herein.
IT IS THEREFORE ORDERED AND ADJUDGED that:
1. There having been injury to plaintiffs’ business and prop-
erty, a trial shall be held, as subsequently scheduled by this
court, to determine the amount and types of damages to which
plaintiffs may be entitled, and such other matters as may
remain to be resolved by trial.
2. A hearing shall be held after such trial to determine the
amount of attorneys fees and interest and costs to which plain-
tiffs may be entitled.
3. The disclosures made in Colt’s M-16 patents are insuffi-
cient to satisfy either the enablement or best mode require-
ments of 35 U.S.C. $112. Accordingly, the following patents
were invalid from their inception:
PA-24
3,236, 155; 3,292,492; 3,301,133; 3,336,011, 3,440,751;
3,453,762; 3,619,929; 3,771,415; 3,977,296.
4. In view of Colt Industries wrongful retention as its
trade secrets of information that it should have disclosed,
under 35 U.S.C. §112, Ist paragraph, in its M-16 patents, so
that others could have made and used the M- 16 inventions for
use with the M-16 (all references herein to M-16 are intended to
include its various versions such as the M-16A1 and the
M-16A2, where the context permits), such information is
hereby declared void and unenforceable as trade secrets. Colt
Industries monopolization of the M-16 market and sub-mar-
kets and agreements in restraint of trade in connection with its
suppliers and distributors require injunctive relief for an ade-
quate remedy.
5. Though some of the M-16 trade secrets did not directly
have to be disclosed in the patents for various reasons of timing
and subject matter, in order to best place the public in a
position it would have been in but for the wrongful acts of Colt
Industries, and provide for proper competition, it is hereby
declared that all trade secrets in technical information relating
to the M-16, which came into existence prior to the entry of this
order, are hereby declared void and unenforceable.
6. To the extent that any of the counterclaims in the action
remain unresolved, and in accordance with Rule 56(d) of the
Federal Rules of Civil Procedure, it is determined that the
invalidity and unenforceability of any and all of Colt Industries
trade secrets in technical information relating to the M-16
which were in existence prior to the entry of this order, is taken
as conclusively established with respect to all subsequent pro-
ceedings in this case.
7. Colt Industries, its officers, agents, servants, employ-
ees, attorneys, and those entities in active concert or participa-
tion with them (who receive actual notice of the order by
personal service or otherwise) are hereby enjoined from
asserting or seeking to enforce, in any manner which would
impede or interfere with plaintiffs in their businesses or
PA-25
employment, any form of trade secret right in any technical
information relating to the M-16 wherein such information was
in existence prior to the entry of this order.
8. Colt Industries is directed to preserve until June 1, 1989,
such technical information relating to the manufacture of the
M-16 which was in existence prior to the entry of this order, and
to provide it to either plaintiff upon request within 30 days of
such request. Colt Industries may charge a reasonable and
customary fee for copying charges for handling of any such
request.
9. On documents or drawings which Colt Industries here-
after distributes bearing technical information in existence
prior to the date of this order and relating to the M-16, Colt
Industries shall insure that no proprietary stickers and/or Colt
Industries confidentiality designations shall be used in connec-
tion with potential customers or suppliers of plaintiffs in a
fashion which would indicate that any such technical informa-
tion could be protectible as a trade secret.
10. Colt Industries shall serve a copy of this Order upon all
potential customers or suppliers of plaintiffs which Colt Indus-
tries has within the past four years:
a. licensed M-16 trade secrets,
b. threatened enforcement of M-16 trade secrets, or
ce. sent letters claiming rights in M-16 trade secrets for
the past four years.
11. Colt Industries’ Fifth and Sixth counterclaims are
hereby dismissed with prejudice. Pursuant to Rule 54(b), this
court determines there is no just reason for delay and directs
the entry of final judgment in favor of Christianson and ITS art?
against Colt Industries on said claims, and judgment is hereby
entered accordingly.
12. Final judgment is hereby entered as to plaintiffs’ claims
for liability on Counts I and II of plaintiffs’ complaint in favor of
plaintiffs against defendant.
PA-26
13. The court is of the opinion that this judgment involves a
controlling question of law as to which there is substantial
ground for difference of opinion, and that an immediate appeal
from this entire judgment may materially advance the ultimate
termination of the litigation.
/s/ Robert D. Morgan
United States District Judge
Entered: July 19, 1985
ee
3
PA-27
APPENDIX C
United States District Court
Central District of Illinois
CHARLES R. CHRISTIANSON, AND
INTERNATIONAL TRADE SERVICES,
INC.,
Plaintiffs,
v. No. 84-4056
)
)
)
)
)
)
)
)
Cott INDUSTRIES OPERATING CorpP., )
)
)
Defendant.
MEMORANDUM DECISION AND ORDER
Plaintiffs, Charles R. Christianson and essentially his corpo-
ration, filed this complaint against Colt for damages, injunctive
and equitable relief, under §§4 and 16 of the Clayton act (15
U.S.C. §§15 and 26), upon their allegations that Colt has vio-
lated Sections 1 and 2 of the Sherman Act (15 U.S.C. §8§1 and 2).
Colt has answered denying violation and asserting numerous
affirmative defenses and counterclaims. Venue exists in this
district under 15 U.S.C. §15 and 28 U.S.C. §1391(b) and (c).
The complaint is grounded on allegations that Colt achieved
and now attempts to maintain an unlawful monopoly on the
manufacture and sale of parts for the M-16 standard military
rifle. In the 1950's Colt obtained a patent for a gas-operated,
automatic rifle which was adopted in 1964 by the United States
as its standard military firearm. The Government designated it
as the M-16. In ensuing years, Colt obtained several other
patents on improvements of parts for that weapon. With a few
PA-28
exceptions, not critical to this decision, all such patents have
now expired. Over the years, Colt entered into a licensing
agreement with the Government for Government production of
the M-16 for its use and for sale to foreign governments under
the patents and drawings and technical data supplied by Colt.
It also entered into agreements with the government of the
Philippines, and with certain other foreign governments.
authorizing the manufacture of the rifles to arm each such
nation’s military forces. It further entered into contracts with
various suppliers in the United States for the manufacture and
sale of component parts for the rifle. Those licenses restricted
the sale of such parts to Colt and the United States Govern-
ment only. With each such agreement, defendant supplied
drawings and technical data for use by the various licensees.
All agreements contained restrictive clauses which prohibited
the sale of parts to all except the authorized clients, and which
prohibited the disclosure of defendant’s drawings and technical
data to anyone not specifically authorized by the agreement to
see them. As to domestic licenses, the proscription excluded
only defendant and the Government. The proscription in the
foreign licenses limited sale vo each nation’s own military force
and disclosure only to appropriate government officials. The
complaint alleges that Colt has employed those restrictive
clauses in an attempt to deny to any others the right to man-
ufacture such rifles and parts notwithstanding the fact that
Colt’s patents have been expired for several years. It is alleged
that Colt attempts, by such practices, to foster and maintain its
monopoly position in the manufacture and merchandising of
the products as if its patents still remained in force.
In 1983, Colt filed in this court a suit against Springfield
Armory, Inc., and others, under docket no. 83-4072, to enjoin
the performance of a contract of those named defendants for
the sale of M-16-type rifles to a Central American government.
A preliminary injunction was issued following a hearing. These
plaintiffs were ultimately joined, and that decision was
affirmed by the Court of Appeals for the Federal Circuit.
Further discussion of the latter decision appears in a later
PA-29
context. The ground for complaint in-that case was that Colt
would be irreparably damaged by the unauthorized use of
Colt’s drawings and proprietary information which Colt
claimed were trade secrets and its exclusive property. That
case has heretofore been settled by the parties and closed.
Plaintiffs filed the pending complaint against Colt in 1984.
The cause was scheduled for trial late in that year. That sched-
ule was cancelled on the representation by the parties that
cross motions for summary judgment would be filed. Those
motions are now before the court for decision.
The thrust of plaintiffs’ motion is the position that Colt
cannot assert its claims of trade secrecy against plaintiffs
because it had, in its now-expired patents, failed to make the
full disclosures of its claims of invention as required by 35
U.S.C. §112.
Plaintiff Christianson has been marketing M-16 components
for approximately eight years. Initially, Colt acquiesced to his
use of drawings obtained from a Colt foreign licensee. It also
appears that during that period other suppliers advertised for
the sale of M-16 parts, as well as some M-16 drawings. It
further appears that significant M-16 manufacturing not autho-
rized by Colt licenses was conducted by Colt’s foreign licensees
and domestic suppliers, all without serious objection from
Colt. Plaintiffs argue, not implausibly, that Colt was not con-
cerned with such activities so long as its U.S. position was
protected by its basic patents. Plaintiffs assert that Colt
resorted to legal action to try to restore its monopoly position
only after its basic patents had expired.
A critical factor here clearly is the unique character of the
product involved. A key criterion of a military weapon is that
there be complete interchangeability of parts between all
weapons of the same general kind which have ever been pro-
duced for use by a military force. Critical to that requirement is
the ability to scavenge weapons from a battlefield for parts
replacement in all other like weapons. That critical factor was
emphasized by Colt before this court in the hearing for a
preliminary injunction in the Springfield case. Colt took the
re
PA-30
position that the M-16 had an absolutely essential feature of
parts interchangeability which was critical to the use of the
rifle on the battlefield, and that that feature could be satisfied
only by the use of Colt’s drawings and trade secrets. It asserted
that the M-16 was not reverse enginerable. In that context
plaintiffs assert:
“Thus [Colt] avoided Syntex Ophthalmics, Inc. v.
Novicky, 591 F.Supp. 28, 991 U.S.P.Q. 860 (N.D. Ill. 1983),
aff d 28 Pat. Trademark and Copyright J. (BNA) 717 (Fed.
Thus, to extend its exclusive position well beyond the
expiration of its patents, Colt had to argue that the M-16
was not reverse enginerable.”
To a degree, as plaintiffs argue, Section 112 places Colt on the
horns of a dilemma. To sustain its claim for an injunction in case
93-4072, Colt had to take the position that interchangeability of
parts was a must, and that such interchangeability could be
fully obtained only by the use of Colt’s drawings and other
claimed trade secrets. In that context, a Colt expert testified
that it would be possible from the base patents for a person
skilled in the art to make a rifle similar to that claimed by the
patent and by use of reverse engineering of a Colt firearm, but
that would be a “massive” task. Inthe context of these motions,
that same expert has executed an affidavit which asserts that
the making of an M-16, using the patents by a person skilled in
the art, would not entail undue experimentation.
A review of Colt Industries Operating Corp. v. Springfield
Armory, Inc., et al., (Fed. Cir., April 19, 1984, unpublished), in
which this court’s issuance of a preliminary injunction was
affirmed, seems appropriate in this context. The single issue
before that court was the appropriateness of the preliminary
injunction upon the record made in that hearing. It did affirm
the judgment of this court. Pertinent to these motions now, the
there court said:
PA-31
“Although Springfield’s 35 USC 112 arguments, particu-
larly related to best mode, have an appearance of validity
(See White Consolidated Industries, Inc. v. Vega Servo-
Control, Inc., 713 F.2d 788, * * * (Fed. Cir. 1983), the
evidence of record is totally lacking in specifics. * * *”
Although obviously that statement cannot be read as a pre-
determination by the Federal Circuit of the issues now before
this court, it can and should be accepted as the statement of a
recognition by that court that possibly serious issues of Coit’s
compliance with Section 112 could exist, subject to substantia-
tion by adequate evidence. To that extent, and to that extent
only, that statement does have a bearing on the issues now
before this court.
The crux of the issues presented by these motions is the
language of 35 U.S.C. §112, which provides that a patent to be
valid must:
“* * * contain a written description of the invention, and
of the manner and process of making it, in such full, clear,
concise, and exact terms as to enable any person skilled in
the art to which it pertains, or with which it is most nearly
connected, to make and use the same, and shall set forth
the best mode contemplated by the inventor of carrying
out his invention.”
In re Gay, 309 F.2d 769 (CCPA 1962), said that Section 112
imposed both an enabling requirement and a best mode
requirement to sustain the validity of a patent. The court there
said that the enabling requirement was designed to ensure that
the printed patent disclose an invention in sufficient detail to
enable persons skilled in the art to make and utilize the
invention, and that the best mode requirement was designed to
preclude inventors from applying for patents while at the same
time concealing from the public the preferred embodiment of
the inventive concept. The “enablement” requirement of the
statute is satisfied if a person of ordinary skill in the art is able
to make and use, without undue experimentation, a function-
ing version of the invention from the disclosures of the patent
coupled with information which is already publicly known.
White Consolidated Industries, Inc., v. Vega Servo-Control,
Inc., 713 F.2d 788 (Fed. Cir. 1983).
PA-32
Thus Section 112 provides the quid pro quo for the grant of a
patent monopoly under the Act. The Patent Act was designed
to foster and enhance the development and disclosure of new
ideas and the technical advancement of knowledge. Upon a
determination that a patent claim does contain the elements of
inventive novelty, the claimant becomes entitled to a monopoly
on the right to practice and exploit the patented invention fora
substantial but limited period of time. At the same time, the
issued patent becomes a part of the public domain, subject only
to the patentee’s exclusive right to exploit the patented
invention as defined by him during the limited monopoly
period. Others are free during the period of that monopoly to
devise improvements upon the patented concept, without
redress to the patentee, so long as those improvements do
advance the state of the art and public knowledge. Yet the
patentee can assert his monopoly rights against those who
adopt only superficial modifications which fall short of a true
advancement of the art. In exchange for his limited monopoly
position, the patentee must disclose in his patent sufficient
information to enable others skilled in the art to employ and
profit from the invention after the period of limited monopoly
has expired. Section 112 simply delineates the scope of the
disclosures which are necessary to accomplish and protect
those public purposes by requiring that the patent applicant
fully describe the subject matter as to which he is asserting a
claim to a statutory right to a monopoly.
CONCLUSION
It is necessary here to conclude, from the voluminous exhib-
its, pertinent patents, affidavits, depositions and other mate-
rials submitted to the court, and in keeping with the patent
concept, that plaintiffs are entitled to judgment in their favor.
The disclosures made by Colt in obtaining its patents satisfied
neither the enablement nor best mode requirements of 35
U.S.C. §112.
~
PA-53
DISCUSSION
The enablement requirement is fulfilled if a person of
ordinary skill in the art is able, without undue experimenta-
tion, to make and use some mode of the invention from the
disclosures of the patent and from what was previously publicly
known. White, supra; Engelhard Industries, Inc. v. Sel-Rex
Corp., 253 F.Supp. 832 (D.N.J.1966), aff'd 384 F.2d 877 (3d
Cir. 1967). Engelhard points up the distinction between enable-
ment and best mode by its holding that the enabling require-
ment was satisfied, but that there had been‘a failure to disclose
the best mode for carrying out the invention.
To a large degree, Colt, in opposition to the plaintiffs’
motion, has attempted to create a question of fact from conflict-
ing sworn statements of its own expert witnesses. It employed
a Seth Bredbury who now states in his affidavit as to the bolt
assist patent (No. 3,236,155) that a person of ordinary skill in
the firearms art could design and produce a gas-operated fire-
arm of the type shown, incorporating the invention defined in
the patent, without undue experimentation. Yet, Mr. Bred-
bury, in his prior testimony based upon his review of the Colt
patents, stated that a person skilled in the art could design a
rifle very much like the M-16, which could perhaps function as
well, but that that would be a massive undertaking. While he
did not define the word “massive,” it must be recognized that
that term means unusually large, or, as defined in Webster's
New Collegiate Dictionary, “large in comparison to what is
typical.” The use of the word “massive” must imply the use of
undue experimentation before any practical result could be
achieved.
Harold Waterman, the head of Colt’s firearm product
engineering, testified, in reviewing the same bolt assist patent,
that “you could not” make a weapon by the use of that patent.
“You could get an idea of the mechanism, and that would just
about be it.” The question presumed a person skilled in the field
of manufacturing firearms who had available all tools and
equipment for firearms manufacture, but not including any
gauges in which Colt claims a proprietary interest as trade
secrets.
a eae ee
PA-34
Mr. Bredbury’s current statement that no “undue experi-
mentation” would be required is not substantiated by any
statement of fact. There is no evidence that any weapon other
than the Colt weapons could or do use any of the inventions. It
seems both reasonable and unavoidable to presume that those
skilled in the art would have devised a weapon to compete with
the Colt product in the 20 years elapsed since the M-16 became
the adopted weapon of the United States military, if a compara-
ble weapon could be made without undue experimentation and
without access to Colt drawings and technical information. The
bare statement of the conclusion that it could, without any
factual substantiation, cannot create an issue of fact. The ques-
tion of enablement has been held to be a question of law. |
Raytheon Co. v. Roper Corp., 724 F.2d 951, (Fed. Cir. 1983). An |
issue of fact is not created by the statement of an unsubstanti-
ated legal conclusion. £.9., Application of Brandstadter, 434
F.2d 1395 (CCPA 1973).
Consideration of the best mode requirement of $112 should
begin with the distinction between the two requirements of the
statute. The enablement requirement is designed to allow the
public to practice the invention in a generalized fashion. The
concern of the best mode requirement is the prevention of
abuse of the patent monopoly by its extension beyond the
limited period which the statute permits. Jn re Gay, supra,
failure of disclosure of the best mode for practicing the
invention could have that effect when the patentee fails to
disclose essential information. Upon expiration of the limited
patent monopoly, the public is entitled to practice the invention
without restriction, including the nght to produce and market
the patentee’s commercial product without modification. The
patent statute contemplates that, in exchange for the grant of a
limited monopoly, the patentee will make a full disclosure of the
patented idea to such extent that it may be fully utilized by
those skilled in the art once the patent monopoly has expired.
Whether or not the best mode contemplated by the inventor for
carrying out his invention was disclosed, is a question of fact.
McGill Incorporated v. John Zink Company, 221 U.S.P.Q. 944,
951 (Fed. Cir. 1984).
|
PA-35
The disclosures required by §112 can impose a burdensome
task on both the patent applicant and the patent examiner, but
that does not excuse, as Colt tends to argue, the necessity for
disclosure of whatever information is required to satisfy the
statutory command. A party is free to disclose whatever it
wishes and in any suitable manner, provided that the dis-
closures made are sufficient to satisfy the statutory require-
ment. Weil v. Freitz, Evans and Cooke, 202 U.S.P.Q. 447, 450
(CCPA 1979). The courts must be vigilant, in consideration of
$112 issues, against the, perhaps natural, desire of patentees to
disclose as little as possible. Flick-Reedy Corp. v. Hydro-Line
Mfg. Co., 351 F.2d 546, 550-51 (7th Cir. 1965), cert. denied, 383
U.S. 958. Satisfaction of §112 may require voluminous dis-
closures as demonstrated in Honeywell, Inc. v. Sperry Rand
Corp., 180 U.S.P.Q. 673 (D.Minn.1973), in which a computer
patent contained 91 sheets of drawings and 232 columns of
printed text.
There is no objective standard by which to judge the ade-
quacy of a best mode disclosure. Application of Sherwood, 613
F.2d 809 (CCPA 1980), cert. denied, 450 U.S. 994. The scope
and magnitude of what must be disclosed is also influenced by
the character of the particular art involved. The disclosures
required in a patent related to an internal combustion engine,
for example, are limited by the fact that such would deal with a
standardized product which is well known to practitioners in
the art. By contrast, there is no standardization of military
weaponry since each weapon is unique unto itself. Though
weapons are characterized by certain conventional details
which are well known to those in the weapons art, there is much
which is unique to every particular weapon. Bearing that dis-
tinction in mind, it is plaintiffs’ position that it was incumbent
on Colt to fully disclose the interchangeability specifications for
the M-16 and its component parts to satisfy the best mode
requirement of §112.
Of the many reported cases, the following are deemed to
articulate the application of the best mode requirement. In the
absence of countervailing evidence, the best mode for carrying
PA-36
out the claimed invention can be presumed to be the existing
commercial embodiment. Union Carbide Corp. v. Borg-
Warner Corp., 550 F.2d 355 (6th Cir. 1977).
In Phillips Petroleum Co. v. R ichardson Carbon Co., 293
F.Supp. 555 (W.D. Tex. 1968), the best mode of practicing the
claimed invention was embodied in Phillips’ commercial prod-
uct which could not be produced from information disclosed in
its patent. That finding was fortified by the existence of licens-
ing agreements negotiated by Phillips, which required the
licensees to keep the process for manufacturing its commercial
product a closely guarded secret. To that degree, the factual
background of Phillips closely parallels what the evidence in
this cause reveals.
A patent which only mentioned a critical material by com-
mingling it with other materials failed, by that commingling, to
disclose the best mode for practicing the invention. Dale Elec-
tronics, Inc. v. R.C.L. Electronics, Inc., 488 F.2d 382 (st Cir.
1973).
There is a failure of the best mode requirement if information
which is essential to production of the product is not disclosed.
Flick-Reedy Corp. v. Hydro-Line Mfg. Co., 351 F.2d 546,
550-51 (7th Cir. 1965), cert. denied, 383 U.S. 958 (1966).
There was a failure to disclose the best mode when, even
though, as the patentee argued, other programs were avail-
able, it had retained as a trade secret that which it employed in
its commercial product. White Consol idated Industries, Inc. v.
Vega Servo-Control, Inc., 214 U.S.P.Q. (S.D. Mich. 1982), aff'd
713 F.2d 788 (Fed. Cir. 1983).
The disclosure of the second best embodiment, where the
patentee had a better embodiment, failed to disclose the best
mode. Engelhard Industries, Inc. v. Sel-Rex Corp., 256
F.Supp. 832 (D.N.J. 1966), aff'd 384 F.2d 877 (3d Cir. 1967).
‘The cases principally relied on by Colt arose when $112 was
pleaded as a defense to a suit for patent infringement by
defendants who had copied and were competing in the sale of
the patented product. The argument in In re Gay, supra, was
PA-37 = __
that there was no best mode disclosure because the patent
failed to specify the number, size and placement of perforations
in a rice cooker. The court said that, despite that omission, any
person skilled in the art would know that a number of perfora-
tions were necessary, and that the patented product could be
produced by following the patent without undue experimenta-
tion, or perhaps with no experimentation. The court in Jn re
Strahilevitz, 668 F.2d 1229 (CCPA 1982), found that the
undisclosed information was already known in the prior art.
The accused infringer in Trio Process Corp. v. L. Goldstein’s
Sons, Inc., 461 F.2d 66 (3d Cir. 1972), cert. denied, 409 U.S.
997, had employed a metal worker to copy the patentee’s
patented product.
The court in Standard Oil Co. v. Montedison S.p.A., 494
F.Supp. 370(D. Del. 1980), aff'd 664 F.2d 356 (3d Cir. 1981), cert.
denied, 456 U.S. 915, said that the best mode requirement is
satisfied if the specification is sufficient to guide one skilled in
the art to its successful application. The accused infringer
argued in [nternational Telephone and Telegraph Corp. v.
Raychem Corp., 538 F.2d 453 (1st Cir. 1976), cert. denied, 429
U.S. 886, that the best mode for production of an improved
type of wire designed for use in the F-111 military fighter plane
was not disclosed because the patentee had failed to disclose a
secret compound employed in production of the patented wire.
Apparently accepting the findings of the trial court in /nter-
national Telephone and Telegraph Corp. v. Raychem Corp.,
183 U.S.P.Q. (D. Mass. 1975), that the accused infringer had
obtained a sample of the patentee’s wire through which, after
an analysis of its structure, it had been able to produce the
patented product with “no difficulty,” the court held that §112
disclosures were sufficient. Illinois Tool Works, Inc. v. Solo
Cup Co., 179 U.S.P.Q. 322(N.D. Ill. 1973), presents a situation
comparable to that in Raychem. Similarly, the court in Atlas
Powder Co. v. E.I. Du Pont de Nemours & Co., 588 F.Supp.
1455, (N.D. Tex. 1983), said that the ease with which the
infringer had formulated the patented product was an indica-
tion that the patent disclosures were sufficient.
PA-38
None of those cases derogates at all from the determinative
inquiries of, what did the inventor know? what did he consider
the preferred embodiment for using his invention? and did he
withhold information known to him which would enable the
public to reap the full benefits of competition upon the expira-
tion of the patent?
The preferred embodiment of the invention in each of Colt’s
patents was the improvement of the M-16 military weapon,
with the essential requirement that each of the parts modifica-
tions be fully interchangeable with the corresponding part in
every M-16 ever produced. Plaintiffs assert the position that
the mandate of $112 could be satisfied only by the disclosure of
the critical interchangeability specifications. This court has
expressly recognized the criticality of interchangeability in its
preliminary injunction issued in the Springfield case, when it
said:
“2 The evidence-is clear and convincing that the use of
the designation ‘M-16’ in Springfield’s contract with the
government of E] Salvadore amounts to a representation
that the Springfield XM-15 rifle is in all respects the
equivalent and fully interchangeable with the U.S. Army
M-16, with full parts interchangeability, when none of
such is now shown by the evidence to be the case in any
important respect.”
There appears a sharp contrast between Colt’s position,
taken in pursuit of the Springfield preliminary injunction, that
complete interchangeability was the one factor of extreme
importance, and that failure of full interchangeability could be
fatal to the combat infantryman, and its present position that
parts interchangeability is a common feature of all mass pro-
duced products. Of Colt’s present position, plaintiffs observe
that, “What Colt Industries assiduously avoids is the fact that
interchangeability is not a means for maintaining a monopoly in
those other industries as it is for the standard U.S. military
rifles.” Colt’s present position ignores the fact that the firearms
industry is not standardized, as, for example, the automobile
industry. Mr. Waterman recognized that distinction when he
testified:
PA-39
“I think one of the things that has happened over a period
of time in the firearms business is you normally try and
utilize, if possible, standard parts, and almost 100 percent
of the time it’s not possible.”
Thus Colt’s present position that M-16 parts can be produced
without undue experimentation is rejected by statements by
its own experts in Springfield and in the posture of the present
case. M-16 parts might be produced through reverse engineer-
ing, but, if so, that would entail a massive undertaking. Use of
reverse engineering is also hindered by provisions in Colt’s
contracts with the Government, that no scrap parts be sold to
unauthorized persons unless such parts are damaged and unre-
pairable.
The situation in Wilden Pump & E ngineering v. Pressed &
Welded Products, 199 U.S.P.Q. (N.D.Cal.1978), aff'd 213
U.S.P.Q. 282 (9th Cir. 1981), is interesting. The patent involved
had omitted disclosure of dimensions and tolerances for an
activator valve employed in the patentee’s pump. The court
rejected a §112 defense upon its findings that the accused
infringers had been able to mass produce that valve by using
ordinary engineering practices to supply that information and
permit the mass production of the part. That accused infringer
had no substantial difficulty in duplicating the patented item by
reverse engineering. That same consideration is doubtless pre-
sent in almost all situations which deal with standardized prod-
ucts. Standardization tends to produce a field of prior knowl-
edge essential to permit the copying of the patentee’s
commercial product with little effort by the application of
reverse engineering. The totality of the undisputed evidence
indicates that that is not true in the art of military weaponry.
As plaintiffs argue, this is a unique situation which must be
resolved independently by this court, guided, however. by the
precedent of decided and controlling decisions.
Plaintiffs’ statement is deemed to fully and clearly present
the issue of “best mole” involved here, and the conclusion.
Framed in their language, it is:
ee
PA-40
To consider the issue [of best mode] in proper perspective,
we must look to the facts to clearly sort out the unique fact
situation we have here:
1. First, we have here the uncommon situation where the
critical dimensions and tolerances cannot be reverse
engineered;
2. Second, we also have here the uncommon situation
where interchangeability is an absolutely essential require-
ment of the customers, amounting to a situation of life and
death on occasion;
3. Third, we have the uncommon situation that this abso-
lutely essential requirement must be maintained for produc-
tion extending of (sic) a period of very many years,
4. Fourth, we also have here the situation where the
dimension and tolerances necessary for interchangeability
were known by the inventor to be important at the time of filing
the patent applications; and
5. Fifth, we have the situation where the patent applica-
tions are on an improved component which is interchangeable
with and serves as a replacement for a corresponding compo-
nent of a much larger standard U.S. product, which even more
uniquely has the U.S. standards privately and secretly owned
by the patent applicant.
Applying the above facts under the standard of Section 112
must [lead to] the conclusion that at least the crucial inter-
changeability specifications should have been in the patent.
There can be no question that the preferred embodiment of
each of the patents is the incorporation of the patented struc-
ture into the standard M-16 military rifle. That is the only mode
for practicing the invention since it seems clear that the parts
could not be employed in any other existing weapon. That
finding and conclusion merely fortifies the uniqueness of this
situation, which was previously noted. As also previously
noted, a Colt expert said that the arms manufacturer seeks a
standardized embodiment for general use which is unattaina-
ble almost 100 percent of the time.
PA-41
Plaintiffs careful analysis of Colt’s receiver and bolt assist
patent (No. 3,236,155), trigger mechanism patent (No.
3,292,492), and magazine patent (No. 3,619,929) is seen to
apply to all of the patents in issue. Each describes the claimed
~ invention in a generalized way, without disclosing the critical
details of construction and, most importantly, the elements of
structural detail and tolerances required to achieve the para-
mount requirement of full interchangeability of parts among all
M-16 weapons produced over more than 20 years. That informa-
tion was essential if the patent disclosures were to satisfy the
§112 requirement that the best mode for practicing the
invention be disclosed. There can be no doubt that all of this
critical information was known to Colt’s patent applicants when
the patent applications were processed.
A consistent pattern emerges when the several patents are
compared. In each, Colt failed to disclose that information
which was essential to disclosure of the best mode then known
to the patentee for practicing the claimed invention. Colt
obviously sought to insulate its position by the provisions in its
licensing agreements which were designed to forestall dis-
closure of such concealed information which Colt claimed as its
proprietary property under the laws related to trade secrecy.
To that end, it has transmitted threatening correspondence to
some of its licensees to further insulate that information from
disclosure to other persons. It seems obvious that such actions
were designed to perpetuate Colt’s monopoly on the production
of the M-16 rifle and its component replacement parts. The
picture which emerges is that Colt reaped the benefits of its
limited monopoly under the patents and seeks to extend it by
means of planned subterfuge and a near total failure of com-
pliance with the requirements imposed by §112.
Plaintiffs rely on both equity and the doctrine of federal
supremacy as supporting their position that the claimed trade
secrets are invalid and unsupportable. Colt’s response to that
argument is its assertion, in effect, that if there was non-
compliance with §112, the only available remedy is the invalida-
tion of its patents, most of which have already expired. Its
OE
PA-42
corollary argument is that its misuse of the patent laws cannot
affect its proprietary interest in its claimed trade secrets under
state law. That argument is unsound.
Under the doctrine of federal supremacy, the patent laws do
preempt application of state trade secrecy laws whenever
enforcement of the state law would conflict with the accom-
plishment and execution of the full purpose and objectives of
the patent laws as enacted by Congress. Hines v. Davidowntz,
312 U.S. 52, 67, (1941). The patent laws enacted under the
Constitution are the supreme law of the land which cannot be
set at naught and the benefits thereof denied by the application
of state law. Sears, Roebuck & Co. v. Stiffel Co., 376 U.S. 225,
229, (1964). A state may not apply its own laws in such a way as
would extend the monopoly of an expired or invalid patent or
afford any protection which is inconsistent with the objectives
of the federal patent laws. /bid. at 231. The nature and extent of
the legal consequences of the expiration or invalidation of a
patent are federal questions which must be answered by the
application of the patent laws and the policy which they adopt.
Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249, 259-256,
(1945). “Hence any attempted reservation or continuation in
the patentee * * * of the patent monopoly, after the patent
expires, whatever the legal device employed, runs counter to
the policy and purpose of the patent law.”
Both Aronson v. Quick Point Pencil Co., 440 U.S. 257 (1979),
and Kewanee Oil Co. v. Bicron Corp., 416 U.S. 470 (1974), upon
which Colt relies, are inapposite. In Aronson, no patent had
been issued although a patent application had been filed. while
in Kewanee there had been no application for a patent. Thus,
the court was not dealing with any potential conflict between
the patent laws and the state laws of trade secrecy. !
| In this context, plaintiffs assert that the opinion in Colt /ndustnes v.
Springfield Armory, supra, should be accepted as the law of the case,
citing Gindes v. United States, 740 F.2d 947 (Fed. Cir. 1984). The reference
is to language in that opinion that courts generally refuse to reopen what
has already been decided. See Messenger v. Anderson, 225 U.S. 436, 444
(1912). Previous discussion of Springfield herein delimints this court’s
interpretation of that opinion, which clearly indicated that it will not be
presumed that the Federal Circuit did decide an issue which was not before
it. Plaintiffs’ reliance on the doctrine of the law of the case is this misplaced.
PA-43
As stated above, the court finds that the disclosures made in
Colt’s several M-16 parts patents are insufficient to satisfy
either the enablement or best mode requirements of §112. It
follows that each of those patents was invalid from its inception
and that any claim of trade secrecy as to the nondisclosed
information is likewise invalid.
REMEDY
The remaining issues devolve into a determination as to the
appropriate remedy. Plaintiffs assert that Colt should be
required to disgorge its claimed trade secrets. Its argument is
not limited to those items which were required to be disclosed.
It also argues that Colt should disgorge all material which it
claims as its trade secrets, because of its misuse of the patent
system and because of its unjust enrichment by use of the
invalid patents for which it had wholly failed to provide the
consideration which the patent laws require. Reiterating, that
consideration is full and complete disclosure which would
enable the public to freely practice the invention once a patent
has expired.
That position is supported by Dow Chemical Co. v. Ameri-
can Bromine Co., 210 Mich. 262, 177 N.W. 996 (1920), which
held that a patentee cannot, in equity, claim trade secrecy for
conventional information which could readily have been dis-
covered had the required disclosures been made in its patent.
The trade secrecy laws cannot be invoked to protect production
specifications which could have been reverse engineered had
the critical interchangeability specifications been properly dis-
closed. See Rototron Corp. v. Lake Shore Burial Vault Co.,
Inc., 712 F.2d 1214 (7th Cir. 1983); /LG Industries, Inc. v. Scott,
49 Ill.2d 88, 273 N.E.2d 393 (1971). Moreover, the period for the
enforcement of the claimed trade secrets, which could have
been discovered by reverse engineering, would doubtless have
ended years ago had the essential specifications been disclosed.
See Syntex Ophthalmics, Inc. v. Novicky, 591 F.Supp. 28 (N.D.
Ill. 1983), aff'd 28 Patent, Trademark & Copyright J. (BNA) 717
(Fed. Cir. 1984).
PA-44
The clean hands doctrine also bears upon this phase of the
case. As stated by the Court in Precision Instrument Man-
ufacturing Co. v. Automotive Machinery Co., 324 U.S. 806,
814, 815 (1945):
“Thus while equity does not demand that its suitors shall
have led blameless lives, as to other matters, it does
require that they shall have acted fairly and without fraud
or deceit as to the controversy in issue.”
Colt must bear the consequences of its flagrant abuse of the
patent laws.
Colt’s assertion that Christianson is guilty of having induced
the breach of its licensing agreements, both as a defense to
plaintiffs’ motion and as the basis for its counterclaims, is not
sustained. Although Christianson is a former Colt employee, it
is not alleged that he has been guilty of corporate espionage,
theft, bribery, or deception in his obtaining the Colt specifica-
tions which he has used. They were supplied to him by the
governments of the Philippines and Singapore.
Moreover, the license agreements themselves are tainted by
Colt’s misuse and evasion of the patent laws. As plaintiffs
suggest, had the required disclosures been made in the pat-
ents, the supplementary information would probably have
been discovered by others long before the now-elapsed time of
about twenty years. Secrecy would thus have evaporated with
the issuance of the patents. Forest Laboratories v. Pillsbury
Co., 452 F.2d 621, 624 (7th Cir. 1971). Colt’s failure to make the
required disclosures not only invalidates its patents but alsoits
present claims of trade secrecy. The licensing agreements
themselves can stand in no better stead without undermining
the purposes of the patent laws.
The cases cited by Colt are deemed inapposite. &.g., Amen-
can Can Co. v. Mansukhani, 728 F.2d 818 (7th Cir. 1984);
Syntex Ophthalmics, Inc. v. Tsuetaki, 701 F.2d 677 (7th Cir.
1983): E.1.M. Co. v. Philadelphia Gear Works, Inc., 102
F.Supp. 14 (S.D. Tex. 1951), affd 205 F.2d 28 (5th Cir. 1953).
None of those cases involved a situation such as this in which
PA-45
the claimed trade secrecy information had been withheld from
disclosure by the patentee in violation of $112.
Little need be said about Colt’s cross-motion for summary
judgment. As the court said in First National Bank v. Insur-
ance Company of North America, 606 F.2d 760, 766 (7th Cir.
1979), the moving party must present admissible evidence
showing its entitlement to judgment, not just contentions,
assertions of counsel, or hearsay. It cannot be found that Colt
has met that burden.
Plaintiffs’ motion for summary judgment must be allowed as
to liability on Counts I and II, and Colt’s cross-motion for
summary judgment must be denied.
IT ISORDERED, therefore, that plaintiffs’ motion for sum-
mary judgment is ALLOWED as to liability on Counts I and II
of the Complaint, and defendant's motion for summary judg-
ment is DENIED.
IT IS FURTHER ORDERED that plaintiffs shall submit to
the court and serve on defendant, within 30 days hereafter, its
proposed final judgment order on liability, which shall be con-
sistent with this opinion, on which the defendant shall file and
serve any comments as to form within 10 days after service.
/s/ Robert D. Morgan
United States District Judge
Entered: May 24, 1985
PA-46
APPENDIX D
NOTE: Where it is feasible, a syllabus (headnote) will be released, as is
being done in connection with this case, at the time the opinion is issued.
The syllabus constitutes no part of the opinion of the Court but has been pre-
pared by the Reporter of Decisions for the convenience of the reader. See
United States v. Detrout Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES
Syllabus
CHRISTIANSON ET AL. v. COLT INDUSTRIES
OPERATING CORP.
CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR
THE FEDERAL CIRCUIT
No. 87-499. Argued April 18, 1988— Decided June 17, 1988
The principal statutes involved in this case, which arises from a jurisdic-
tional dispute between Courts of Appeals, are 28 U. S. C. § 1295(a)(1)—
granting the Federal Circuit exclusive jurisdiction over an appeal from a
final decision of a federal district court “if the jurisdiction of that court
was based, in whole or in part, on” 28 U. S. C. §1338—and § 1338(a),
which grants the district courts original jurisdiction of any civil action
“arising under” any federal statute relating to patents. Respondent
(Colt), which is the leading manufacturer, seller, and marketer of “M16"
rifles and their parts and accessories, held and developed patents relat-
ing to the rifle, and has maintained the secrecy as to specifications essen-
tial to the mass production of interchangeable M16 parts. Petitioner
Christianson, a former Colt employee, established a corporation (also a
petitioner), and began selling M16 parts. Colt joined petitioners with:
other defendants in a patent-infringement lawsuit, but ultimately volun-
tarily dismissed its claims against petitioners. In the meantime, Coit
notified several of petitioners’ current and potential customers that peti-
tioners were illegally misappropriating Colt’s trade secrets, and urged
them to refrain from doing business with petitioners. Petitioners then
brought this antitrust action against Colt in Federal District Court for
violations of §§ 1 and 2 of the Sherman Act. The complaint alleged, :”-
ter alia, that Colt’s letters, litigation tactics, and other conduct drove
petitioners out of business. Petitioners later amended the complaint to
assert a second cause of action under state law for tortious interference
with their business relationships. Colt asserted a defense that its con-
duct was justified by a need to protect its trade secrets and countersued
on a variety of claims arising out of petitioners’ alleged misappropriation
of M16 patent specifications. - Petitioners filed a motion for summary
PA-47
Syllabus
judgment raising a patent-law issue—related to the validity of Colt’s pat-
ents —to which the complaint only obliquely hinted. The District Court
awarded petitioners summary judgment as to liability on both the anti-
trust and the tortious-interference claims. On Colt’s appeal, the Court
of Appeals for the Federal Circuit held that it lacked jurisdiction and
-~ transferred the appeai to the Court of Appeals for the Seventh Circuit.
The Seventh Circuit, however, raising the jurisdictional issue sua
sponte, concluded that the Federal Circuit was “clearly wrong” and
transferred the case back. The Federal Circuit, although concluding
that the Seventh Circuit’s jurisdictional decision was “clearly wrong,”
addressed the merits in the “interest of justice,” and reversed the Dis-
trict Court.
Held:
l. The Court of Appeais for the Federal Circuit would not have juris-
diction of the appeal of a final judgment in this case under 28 U. S. C.
§ 1295(a)(1), since the action is not one “arising under” the patent stat-
utes for purposes of § 1338(a). Pp. 4-10.
(a) In order to demonstrate that a case is one “arising under” fed-
eral patent law the plaintiff must set up some right, title, or interest
under the patent laws, or at least make it appear that some right or priv-
ilege will be defeated by one construction, or sustained by the opposite
construction, of those laws. Section 1338 jurisdiction extends only to
those cases in which a well-pleaded complaint establishes either: that fed-
eral patent law creates the cause of action or that the plaintiff’s right to
relief necessarily depends on resolution of a substantial question of fed-
eral patent law, in that patent law is a necessary element of one of the
well-pleaded claims. A case raising a federal patent-law defense does
not, for that reason alone, “arise under” patent law, even if the defense
is anticipated in the complaint, and even if both parties admit that the
defense is the only question truly at issue in the case. Nor is it neces-
sarily sufficient that a well-pleaded claim alleges a single theory under
which resolution of a patent-law question is essential. If on the face ofa
well-pleaded complaint there are reasons completely unrelated to the
provisions and purposes of the patent laws why the plaintiff may or may
not be entitled to the relief it seeks, then the claim does not “arise under”
those laws. Pp. 5-7.
(b) Petitioners’ antitrust count can readily be understood to encom-
pass both a monopolization claim under §2 of the Sherman Act and a
group-boycott claim under §1. The patent-law issue, while arguably
necessary to at least one theory under each claim, is not necessary to the
overall success of either claim. Even assuming, without deciding, that
the validity of Colt’s patents is an essential element of petitioners’
monopolization theory rather than merely an argument in anticipation of
PA-48
Syllabus
a defense, the weill-pleaded complaint rule focuses on claims, not theo-
ries, and just because an element that is essential to a particular theory
might be governed by federal patent law does not mean that the entire
monopolization claim “arises under” patent law. Examination of the
complaint reveals that the monopolization theory (on which petitioners
ultimately prevailed in the District Court) is only one of several in-
volved, and the only one for which the patent law issue is even arguably
essential. Since there are reasons completely unrelated to the provi-
sions and purposes of federal patent law why petitioners may or may not
be entitled to the relief sought under their monopolization claim, the
claim does not “arise under” federal patent law. The same analysis ob-
tains as to petitioners’ group-boycott claim under § 1 of the Sherman Act.
Pp. 7-10.
2. Nor does reference to congressional policy compel a finding of Fed-
eral Circuit jurisdiction. One of Congress’ objectives in creating the
Federal Circuit was to reduce the lack of uniformity and uncertainty of
legal doctrine in the administration of patent law. Although arguably
Congress’ goals might be better served if the Federal Circuit’s juris-
diction were to be fixed by reference to the case actually litigated, never-
theless, Congress determined the relevant focus when it granted Fed-
eral Circuit jurisdiction on the basis of the district courts’ jurisdiction.
Since the latter courts’ jurisdiction is determined by reference to the
well-pleaded complaint, not the well-tried case, the referent for the Fed-
eral Circuit’s jurisdiction must be the same. The legislative history
of the Federal Circuit’s jurisdictional provisions confirms that focus.
Pr. ae
3. Federal Circuit jurisdiction here cannot be based on Federal Rule
of Civil Procedure 15(b) by deeming the complaint amended to encom-
pass a new and independent cause of action—an implied cause of action
under the patent laws. Even assuming that a court of appeals could fur-
nish itseif a jurisdictional basis under such theory, there is simply no
evidence of any “express or implied consent” among the parties, as re-
quired by the Rule, to litigate a new patent-law claim. Although the
summary judgment papers focused almost entirely on patent-law issues
that petitioners deemed fundamental to the lawsuit, those issues fell
squarely within the purview of the theories of recovery, defenses, and
counterciaims that the pleadings already encompassed. Pp. 11-13.
4. There is no merit to the contention that the Federal Circuit was
obliged to adopt the Seventh Circuit’s analysis of the jurisdictional issue
as the law of the case. The law-of-the-case doctrine applies as much
to the decisions of a coordinate court in the same case as to a court's
own decisions, and the policies supporting the doctrine apply with even
greater force to transfer decisions than to decisions of substantive law.
PA-49
Syllabus
However, the Federal Circuit, in transferring the case to the Seventh
Circuit, was the first to decide the jurisdictional issue. That the Fed-
eral Circuit did not explain its rationale is irrelevant. Thus, the law of
the case was that the Seventh Circuit had jurisdiction, and it was the
Seventh Circuit that departed from the law of the case. Moreover, the
doctrine merely expresses the practice of courts generally to refuse to
reopen what has been decided, not a limit on their power. Thus, even if
the Seventh Circuit’s decision was law of the case, the Federal Circuit
did not exceed its power in revisiting the jurisdictional issue, and once it
concluded that the prior decision was “clearly wrong” it was obliged to
decline jurisdiction. Most importantly, law of the case cannot bind this
Court in reviewing decisions below. Pp. 13-15.
5. The Federal Circuit, after concluding that it lacked jurisdiction,
erred in deciding to reach the merits anyway “in the interest of justice.”
Courts created by statute only have such jurisdiction as the statute con-
fers. Upon concluding that it lacked jurisdiction, the Federal Circuit
had authority, under 28 U. S. C. § 1631, to make a single decision—
whether to dismiss the case or, “in the interest of justice,” to transfer
it to a court of appeals that has jurisdiction. The rule that a court niay
not in any case, even in the interest of justice, extend its jurisdiction
where none exists has always worked injustice in particular cases —espe-
cially in the situation where, as here, the litigants are bandied back and
forth between two courts, each of which insists that the other has juris-
diction. Such situations inhere in the very nature of jurisdictional lines.
for few jurisdictional lines can. be so finely drawn as to leave no room for
disagreement on close cases. However, the courts of appeals should
achieve the end of quick settlement of questions of transfer by adhering
strictly to principles of law of the case. Under those principles, if the
transferee court can find the transfer decision plausible, its jurisdictional
inquiry is at anend. Pp. 15-17.
822 F. 2d 1544, vacated and remanded.
BRENNAN, .J., delivered the opinion for a unanimous Court. STEVENS,
J., filed a concurring opinion, in which BLACKMUN, J., joined.
PA-50
NOTICE: This opinion is subject to formal revision before publication in the
preliminary print of the United States Reports. Readers are requested to
notify the Reporter of Decisions, Supreme Court of the United States, Wash-
ington, D. C. 20543, of any typographical or other formal errors, in order
that corrections may be made before the preliminary print goes to press.
SUPREME COURT OF THE UNITED STATES
No. 87-499
CHARLES R. CHRISTIANSON, ET AL., PETITIONERS
v. COLT INDUSTRIES OPERATING CORP.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
(June 17, 1988]
JUSTICE BRENNAN delivered the opinion of the Court.
This case requires that we decide a peculiar jurisdictional
battle between the Court of Appeals for the Federal Circuit
and the Court of Appeals for the Seventh Circuit. Each
court has adamantly disavowed jurisdiction over this case.
Each has transferred the case to the other. And each insists
that the other’s jurisdictional decision is “clearly wrong.”
798 F. 2d 1051, 1056-1057 (CAT 1986); 822 F. 2d 1544, 1551,
n. 7(CA Fed. 1987). The parties therefore have been forced
to shuttle their_appeal back and forth between Chicago and
the District of Columbia in search of a hospitable forum, ulti-
mately to have the merits decided, after two years, by a
Court of Appeals that still insists it lacks jurisdiction to do so.
I
Respondent Colt Industries Operating Corp. is the leading
manufacturer, seller, and marketer of “M16” rifles and their
parts and accessories. Colt’s dominant market position
dates back to 1959, when it acquired a license for 16 patents
to manufacture the M16’s precursor. Colt continued to de-
velop the rifle, which the United States Army adopted as its
standard assault rifle, and patented additional improve-
ments. Through various devices, Colt has also maintained a
shroud of secrecy around certain specifications essential to
the mass production of interchangeable M16 parts. For ex-
PA-51
ample, Colt’s paterits conceal many of the manufacturing
specifications_that might otherwise be revealed by its engi-
neering drawings, and when Colt licenses others to manufac-
ture M16 parts or hires employees with access to proprietary
information, it contractually obligates them not to disclose
specifications.
Petitioner Christianson is a former Colt employee who
acceded to such a nondisclosure agreement. Upon leaving
respondent’s employ in 1975, Christianson established peti-
tioner International Trade Services, Inc. (ITS), and began
selling M16 parts to various customers domestically and
abroad. Petitioners’ business depended on information that
Colt considers proprietary. Colt expressly waived its pro-
prietary rights at least as to some of petitioners’ early trans-
actions. The precise scope of Colt’s waiver is a matter of
considerable dispute. In 1983, however, Colt joined peti-
tioners as defendants in a patent-infringement lawsuit
against two companies that had arranged a sale of M1é6s to El
Salvador. Evidence suggested that petitioners supplied the
companies with certain M16 specifications, and Colt sought a
court order enjoining petitioners from any further disclo-
sures. When the District Court declined the motion, Colt
voluntarily dismissed its claims against petitioners. In the
meantime, Colt notified several of petitioners’ current and
potential customers that petitioners were illegally misappro-
priating Colt’s trade secrets, and urged them to refrain from
doing business with petitioners.
Three days after their dismissal from the lawsuit, petition-
ers brought this lawsuit in the District Court against Colt
“pursuant to Section 4... (15 U. S. C. $15) and Section 16
of the Clayton Act (15 U. S. C. §26) for damages, injunctive
and equitable relief by reason of its violations of Sections 1
and 2 of the Sherman Act (15 U. S. C. §§1&2)....” App.
7. The complaint alleged that Colt’s letters, litigation tac-
tics, and “fo]the{r]. . . conduct” drove petitioners out of busi-
PA-52
ness. In that context, petitioners included the following ob-
scure passage:
“18. The validity of the Colt patents had been assumed
throughout the life of the Colt patents through 1980.
Unless such patents were invalid through the wrongful
retention of proprietary information in contravention of
United States Patent Law (35 U. S. C. $112), in 1980,
when such patents expired, anyone ‘who has ordinary
skill in the rifle-making art’ is able to use the technology
of such expired patents for which Colt earlier had a mo-
nopely position for 17 years.
“19, ITS and anyone else has the right to manufacture,
contract for the manufacture, supply, market and sell
the M-16 and M-16 parts and accessories thereof at the
present time.” App. 9.
Petitioners later amended their complaint to assert a second
cause of action under state law for tortious interference with
their business relationships. Colt interposed a defense that
its conduct was justified by a need to protect its trade secrets
and countersued on a variety of claims arising out of petition-
ers’ alleged misappropriation of M16 specifications.
Petitioners’ motion for summary judgment raised only a
patent-law issue obliquely hinted at in the above-o joted
paragraphs —that Colt’s patents were invalid from their in-
ception for failure to disclose sufficient information to “enable
any person skilled in the art . . . to make and use the same”
as well as a description of “the best mode contemplated by
the inventor of carrying out his invention.” 35 U.S. C.
§112. Since Colt benefited from the protection of the invalid
patents, the argument continues, the “trade secrets” that the
patents should have disclosed lost any state-law protection.
Petitioners therefore argued that the District Court should
hold that “Colt’s trade secrets are invalid and that [their]
claim of invalidity shall be taken as established with respect
to all claims and counterclaims to which said issue is mate-
rial.” App. 58.
The District Court awarded petitioners summary judg-
ment as to liability on both the antitrust and the tortious-
interference claims, essentially relying on the §112 theory
articulated above. In the process, the District Court invali-
dated nine of Colt’s already-expired patents, declared all
trade secrets relating to the M16 unenforceable, enjoined
Colt from enforcing “any form of trade secret right in any
technical information relating to the M16,” and ordered Colt
to disgorge to petitioners all such information. 613 F. Supp.
330, 332 (CD Il. 1985).
Respondent appealed to the Court of Appeals for the Fed-
eral Circuit, which, after full briefing and argument, con-
cluded that it lacked jurisdiction and issued an unpublished
order transferring the appeal to the Court of Appeals for the
Seventh Circuit. See 28 U. S. C. §1631. The Seventh Cir-
cult, however, raising the jurisdictional issue sua sponte,
concluded that the Federal Circuit was “clearly wrong” and
transferred the case back. 798 F. 2d, at 1056-1057, 1062.
The Federal Circuit, for its part, adhered to its prior jurisdic-
tional ruling, concluding that the Seventh Circuit exhibited
“a monumental misunderstanding of the patent jurisdiction
granted this court,” 822 F. 2d, at 1547, and was “clearly
wrong,” id., at 1551, n. 7. Nevertheless, the Federal Cir-
cuit proceeded to address the merits in the “interest of jus-
tice,” id., at 1559-1560, and reversed the District Court.
We granted certiorari, 484 U. S. —— (1987), and now vacate
the judgment of the Federal Circuit.
II
As relevant here, 28 U. S. C. § 1295(a)(1) grants the Court
of Appeals for the Federal Circuit exclusive jurisdiction over
“an appeal from a final decision of a district court of the
United States . . . if the jurisdiction of that court was based.
in whole or in part, on (28 U. S. C.] section 1338 ....”!
‘Colt’s appeal to the Federal Circuit actually invoked 28 U.S. C.
3§ 1292(a)(1) and (¢)(1), which together grant the Federal Circuit exclusive
PA-54
Section 1338(a), in turn, provides in relevant part that “{t]he
district courts shall have original jurisdiction of any civil ac-
tion arising under any Act of Congress relating to patents
_...” Thus, the jurisdictional issue before us turns on
whether this is a case “arising under” a federal patent stat-
ute, for if it is then the jurisdiction of the District Court was
based at least “in part” on section 13288.
A
In interpreting § 1338’s precursor, we held long ago that in
order to demonstrate that a case is one “arising under” fed-
eral patent law “the plaintiff must set up some right, title or
interest under the patent laws, or at least make it appear
that some right or privilege will be defeated by one construc-
tion, or sustained by the opposite construction of these laws.”
Pratt v. Paris Gas Light & Coke Co., 168 U.S. 255, 259
(1897). See Henry v. A.B. Dick Co., 224 U.S. 1, 16 (1912).
Our cases interpreting identical language in other jurisdic-
tional provisions, particularly the general federal-question
provision, 28 U. S. C. $1831 (“The district courts shall have
original jurisdiction of all civil actions arising under the Con-
stitution, laws, or treaties of the United States”), have quite
naturally applied the same test.* See Gully v. First Na-
jurisdiction over appeals from interlocutory orders “granting, continuing,
modifying, refusing or dissolving [an] injunctio(n],” § 1292(a(1), “in any
case over which the court would have jurisdiction over an appeal under sec-
tion 1295,” § 1292(c)(1).
*Colt correctly points out that in this case our interpretation of $ 1338's
“arising under” language will merely determine which of two federal appel-
late courts will decide the appeal, and suggests that our “arising under”
jurisprudence might therefore be inapposite. Since, however, § 1338 de-
lineates the jurisdiction of the federal and state courts over cases involving
patent issues, the phrase (like the identical phrase in § 1331) “masks a wel-
ter of issues regarding the interrelation of federal and state authority and
the proper management of the federal judicial system.” See Franchise
Tax Board of California v. Construction Laborers Vacation Trust, 463
U. S. 1, 8 (1983) (footnote omitted). See also Merretl Dov Pharmaceuti-
cals Inc. v. Thompson, 478 U. S. 804, 810 (1986) (“{D]Jeterminations about
PA-55
tional Bank in Meridian, 299 U. S. 109, 112 (1936) (the claim
alleged in the complaint “must be such that it will be sup-
ported if the Constitution or laws of the United States are
given one construction or effect, and defeated if they receive
another”) (citations omitted). A district court’s federal-
question jurisdiction, we recently explained, extends over
“only those cases in which a well-pleaded complaint estab-
lishes either that federal law creates the cause of action or
that the plaintiff’s right to relief necessarily depends on reso-
lution of a substantial question of federal law,” Franchise
Tax Board of California v. Construction Laborers Vacation
Trust, 463 U. S. 1, 27-28 (1988), in that “federal law is a nec-
essary element of one of the well-pleaded . . . claims,” id., at
13. Linguistic consistency, to which we have historically ad-
hered, demands that § 1338 jurisdiction likewise extend only
to those cases in which a well-pleaded complaint establishes
either that federal patent law creates the cause of action or
that the plaintiff’s right to relief necessarily depends on
resolution of a substantial question of federal patent law, in
that patent law is a necessary element of one of the well-
pleaded claims. See 822 F. 2d, at 1553-1556; 798 F. 2d, at
1059-1061.
The most superficial perusal of petitioners’ complaint es-
tablishes, and no one disputes, that patent law did not in any
sense create petitioners’ antitrust or intentional-interference
claims. Since no one asserts that federal jurisdiction rests
on petitioners’ state-law claims, the dispute centers around
whether patent law “is a necessary element of one of the well-
pleaded [antitrust] claims.” See Merrell Dow Pharmaceuti-
cals Inc. v. Thompson, 478 U.S. 804, 813 (1986). Our
cases, again mostly in the § 1331 context, establish principles
for both defining the “well-pleaded . . . claims” and discern-
ing which elements are “necessary” or “essential” to them.
Under the well-pleaded complaint rule, as appropriately
federal jurisdiction require sensitive judgments about congressional intent,
judicial power, and the federal system”).
PA-56
adapted to § 1338, whether a claim “arises under” patent law
“must be determined from what necessarily appears in the
plaintiff’s statement of his own claim in the bill or declaration,
unaided by anything alleged in anticipation or avoidance of
defenses which it is thought the defendant may interpose.’”
Franchise Tax Board, supra, at 10 (quoting Taylor v. An-
derson, 234 U. S. 74, 75-76 (1914)). See Louisville & Nash-
ville R. Co. v. Mottley, 211 U. S. 149 (1908). Thus, a case
raising a federal patent-law defense does not, for that reason
alone, “arise under” patent law, “even if the defense is antici-
pated in the plaintiff’s complaint, and even if both parties
admit that the defense is the only question truly at issue in
the case.” Franchise Tax Board, supra, at 14.° See also
Merrell Dow, supra, at 808.
Nor is it necessarily sufficient that a well-pleaded claim al-
leges a single theory under which resolution of a patent-law
question is essential. If “on the face of a well-pleaded com-
plaint there are . . . reasons completely unrelated to the pro-
visions and purposes of [the patent laws] why the [plaintiff]
may or may not be entitled to the relief it seeks,” Franchise
Tax Board, 463 U.S., at 26 (footnote omitted), then the
claim does not “arise under” those laws. See id., at 26,
n. 29. Thus, a claim supported by alternative theories in the
complaint may not form the basis for § 1338 jurisdiction un-
less patent law is essential to each of those theories.
B
Framed in these terms, our resolution of the jurisdictional
issue in this case is straightforward. Petitioners’ antitrust
On the other hand, merely because a claim makes no reference to fed-
eral patent law does not necessarily mean the claim does not “arise under”
patent law. Just as “a plaintiff may not defeat removal by omitting to
plead necessary federal questions in a complaint,” Franchise Tax Board,
supra, at 22 (citations omitted); see Federated Department Stores, Inc. v.
Moitie, 452 U. S. 394, 397, n. 2 (1981); id., at 408, n. 3 (BRENNAN, J., dis-
senting), so a plaintiff may not defeat § 1338 jurisdiction by omitting to
plead necessary federal patent law questions.
PA-57
count can readily be understood to encompass both a monop-
olization claim under §2 of the Sherman Act and a group-
boycott claim under §1. The patent-law issue, while argu-
ably necessary to at least one theory under each claim, is not
necessary to the overall success of either claim.
Section 2 of the Sherman Act condemns “{e]very person
who shall monopolize, or attempt to monopolize ....” 15
U.S. C. $2. The thrust of petitioners’ monopolization claim
is that Colt has “embarked on a course of conduct to illegally
extend its monopoly position with respect to the described
patents and to prevent ITS from engaging in any business
with respect to parts and accessories of the M-6.” App. 10.
The complaint specifies several acts, most of which relate
either to Colt’s prosecution of the lawsuit against petitioners
or to letters Colt sent to petitioners’ potential and existing
customers. To make out a §2 claim, petitioners would have
to present a theory under which the identified conduct
amounted to a “willful acquisition or maintenance of [monop-
oly] power as distinguished from growth or development as a
consequence of a superior product, business acumen, or his-
toric accident.” United States v. Grinnell Corp., 384 U. S.
063, 570-571 (1966). Both the Seventh Circuit and Colt
focus entirely on what they perceive to be “the only basis
Christianson asserted in the complaint for the alleged anti-
trust violation,” 798 F’. 2d, at 1061; see Brief for Respondent
32—namely that Colt made false assertions in its letters and
pleadings that petitioners were violating its trade secrets,
when those trade secrets were not protected under state law
because Colt’s patents were invalid under §112. Thus, Colt
concludes, the validity of the patents is an essential element
of petitioners’ prima facie monopolization theory and the case
“arises under” patent law.
We can assume without deciding that the invalidity of
Colt’s patents is an essential element of the foregoing monop-
olization theory rather than merely an argument in anticipa-
tion of a defense. But see 822 F. 2d, at 1547. The well-
PA-58
pleaded complaint rule, however, focuses on claims, not
theories, see Franchise Tax Board, 463 U.S., at 26, and
n. 29; Gully, 299 U. S., at 117, and just because an element
that is essential to a particular theory might be governed by
federal patent law does not mean that the entire monopoliza-
tion claim “arises under” patent law.
Examination of the complaint reveals that the monopoliza-
tion theory that Colt singles out (and on which petitioners ul-
timately prevailed in the District Court) is only one of sev-
eral, and the only one for which the patent law issue is even
arguably essential. So far as appears from the complaint,
for example, petitioners might have attempted to prove that
Colt’s accusations of trade-secret infringement were false not
because Colt had no trade secrets, but because Colt author-
ized petitioners to use them. App. 9-10 (“Contrary to the
permission extended to ITS to'sell Colt parts and accessories
and in violation of the anti-trust laws . . . Colt has embarked
upon a course of conduct . . . to prevent ITS from engaging in
any business with respect to parts and accessories of the
M-16”). In fact, most of the conduct alleged in the complaint
could be deemed wrongful quite apart from the truth or fal-
sity of Colt’s accusations. According to the complaint, Colt’s
letters also (1) contained “copies of inapplicable court orders”
and “suggest{ed] that these court orders prohibited [the re-
cipients] from doing business with” petitioners; and (2)
“falsely stat(ed] that ‘Colt’s right’ to proprietary data had
been ‘consistently upheld in various courts.’” Jd., at 10.
Similarly, the complaint alleges that Colt’s lawsuit against
petitioners (1) was designed “to contravene the permission
previously given”; (2) was “{plursued . . . in bad faith by sub-
jecting [petitioners] to substantial expense in extended dis-
covery procedures”; and (3) was brought only to enable Colt
“to urge customers and potential customers of [petitioners] to
refrain from doing business with them.” /d., at 10-11.
Since there are “reasons completely unrelated to the provi-
sions and purposes” of federal patent law why petitioners
PA-59
“may or may not be entitled to the relief [they] see{k]” under
their monopolization claim, Franchise Tax Board, supra, at
26 (footnote omitted), the claim does not “arise under” fed-
eral patent law.
The same analysis obtains as to petitioners’ group-boycott
claim under §1 of the Sherman Act, which provides that
“{e]very contract, combination ... , or conspiracy, in re-
straint of trade or commerce . . . is declared to be illegal,” 15
U.S.C. $1. This claim is set forth in the allegation that
“virtually all suppliers of ITS and customers of ITS have
agreed with Colt to refrain from supplying and purchasing
M-16 parts and accessories to or from ITS, which has had the
effect. of requiring ITS to close its doors and no longer trans-
act business.” App. 11. As this case unfolded, petitioners
attempted to prove that the alleged agreement was unrea-
sonable because its purpose was to protect Colt’s trade se-
crets from petitioners’ infringement and, given the patents’
invalidity under § 112, Colt had no trade secrets to infringe.
Whether or not the patent-law issue was an “essential” ele-
ment of that group-boycott theory, however, petitioners
could have supported their group-boycott claim with any of
several theories having nothing to do with the validity of
Colt’s patents. Equally prominent in the complaint, for ex-
ample, is a theory that the alleged agreement was unreason-
able not because Colt had no trade secrets to protect, but be-
cause Colt authorized petitioners to use them. Once again,
the appearance on the complaint’s face of an alternative, non-
patent theory compels the conclusion that the group-boycott
claim does not “arise under” patent law.
ITI
Colt offers three arguments for finding jurisdiction in the
Federal Circuit, notwithstanding the well-pleaded complaint
rule. The first derives from congressional policy; the second
is based on Federal Rule of Civil Procedure 15(b): and the
PA-60
third is grounded in principles of the law of the case. We
find none of them persuasive.
A
Colt correctly observes that one of Congress’ objectives in
creating a Federal Circuit with exclusive jurisdiction over
certain patent cases was “to reduce the widespread lack of
uniformity and uncertainty of legal doctrine that exist(ed] in
the administration of patent law.” H. R. Rep. No. 97-312,
p. 23 (1981). Colt might be correct (although not clearly so)
that Congress’ goals would be better served if the Federal
Circuit’s jurisdiction were to be fixed “by reference to the
case actually litigated,” rather than by an ex ante hypotheti-
cal assessment of the elements of the complaint that might
have been dispositive. Brief for Respondent 31. Congress
determined the relevant focus, however, when it granted ju-
risdiction to the Federal Circuit over “an appeal from. ..a
district court .. . if the jurisdiction of that court was based
. on section 1338.” 28 U.S.C. §1295(a)(1) (emphasis
added). Since the district court’s jurisdiction is determined
by reference to the well-pleaded complaint, not the well-tried
case, the referent for the Federal Circuit’s jurisdiction must
be the same. The legislative history of the Federal Circuit's
jurisdictional provisions confirms that focus. See, e. g.,
H. R. Rep. No. 97-312, supra, at 41 (cases fall within the
Federal Circuit’s patent jurisdiction “in the same sense that
cases are said to ‘arise under’ federal law for purposes of fed-
eral question jurisdiction”). In view of that clear congres-
sional intent, we have no more authority to read § 1295(a)(1)
as granting the Federal Circuit jurisdiction over an appeal
where the well-pleaded complaint does not depend on patent
law, than to read § 1338 as granting a district court jurisdic-
tion over such a complaint. See Pratt, 168 U. S., at 259.
B
Colt suggests alternatively that under Federal Rule of
PA-61
Civil Procedure 15(b)* we should deem the complaint
amended to encompass a new and independent cause of ac-
tion—“an implied cause of action under section 112 of the pat-
ent laws.” Brief for Respondent 28. Such a cause of action,
which Colt finds in petitioners’ summary judgment papers,
would plainly “arise under” the patent laws, regardless of its
merit. See 822 F. 2d, at 1566 (Nichols, J., concurring and
dissenting).
We need not decide under what circumstances, if any, a
court of appeals could furnish itself a jurisdictional basis
unsupported by the pleadings by deeming the complaint
amended in light of the parties’ “express or implied consent”
to litigate aclaim. Fed. Rule Civ. Proc. 15(b). In this case
there is simply no evidence of any consent among the parties
to litigate the new patent-law claim that Coit imputes to peti-
tioners. Colt points to nothing in petitioners’ summary
judgment motion expressly raising such a new cause of ac-
tion, much less anything in its own motion papers suggesting
consent toone. See App. 57-58. True, the summary judg-
ment papers focused almost entirely on the patent-law issues,
which petitioners deemed “{bJasic and fundamental to the
subject lawsuit.” /d., at 57. But those issues fell squarely
within the purview of the theories of recovery, defenses, and
counterclaims that the pleadings already encompassed. Pe-
titioners recognized as much when they moved the District
Court to hold that their “claim of [patent] invalidity shall be
taken as established with respect to all claims and counter-
claims to which said issue is material.” Jd., at 58. Thus,
‘Rule 15(b) provides in relevant part:
“When issues not raised by the pleadings are tried by express or implied
consent of the parties, they shall be treated in all respects as if they had
been raised in the pleadings. Such amendment of the pleadings as may be
necessary to cause them to conform to the evidence and to raise these is-
sues may be made upon metion of any party at any time, even after judg-
ment; but failure to so amend does nct affect the result of the trial of these
issues.
————----__~——
PA-62
the patent-law focus of the summary judgment papers hardly
heralded the assertion of a new patent-law claim. See, e. 9.,
Quillen v. International Playtex, Inc., 789 F. 2d 1041, 1044
(CA4 1986); 6 C. Wright & A. Miller, Federal Practice and
Procedure § 1493, p. 466 (1971). Moreover, the District
Court never intimated that the patent issues were relevant
to any cause of action other than the antitrust and inten-
tional-interference claims raised expressly in the complaint;
the court four times linked its judgment to “liability on
Counts I and II,” without any reference to the hypothetical
Count III that Colt imputes to petitioners. 609 F. Supp.
1174, 1185 (CD Il. 1985) See also 613 F’. Supp., at 332.
C
Colt’s final argument is that the Federal Circuit was
obliged not to revisit the Seventh Circuit’s thorough analysis
of the jurisdictional issue, but merely to adopt it as the law of
the case. See also 822 F. 2d, at 1565 (Nichols, J., concurring
and dissenting). “As most commonly defined, the doctrine
[of the law of the case] posits that when a court decides upon
a rule of law, that decision should continue to govern the
same issues in subsequent stages in the same case.” Ar-
zona v. California, 460 U. S. 605, 618 (1983) (dictum). This
rule of practice promotes the finality and efficiency of the ju-
dicial process by “protecting against the agitation of settled
issues.” 1BJ. Moore, J. Lucas, & T. Currier, Moore’s Fed-
eral Practice 40.404{1], p. 118 (1984) (hereinafter Moore’s).
Colt is correct that the doctrine applies as much to the deci-
sions of a coordinate court in the same case as to a court’s
own decisions. See, e. g., Kort Corp. v. Wilco Marsh Bug-
gies & Draglines, Inc., 761 F. 2d 649, 657 (CA Fed.), cert.
denied, 474 U. S. 902 (1985); Perkin-Elmer Corp. v. Com-
putervision Corp., 732 F. 2d 888, 900-901 (CA Fed), cert. de-
nied, 469 U. S. 857 (1984). Federal courts routinely apply
law-of-the-case principles to transfer decisions of coordinate
courts. See, e. g., Hayman Cash Register Co. v. Sarokin,
PA-63
669 F. 2d 162, 164-170 (CA3 1982) (transfer under 28
U.S. C. §1406(a)); Skil Corp. v. Millers Falls Co., 541 F. 2d
554, 558-559 (CA6) (alternative holding) (transfer under 28
U.S. C. §1404(a)), cert. denied, 429 U_ S. 1029 (1976); 1B
Moore’s 94%0.404(4.-5], 0.404[8]. Compare Hoffman v.
Blaski, 363 U. S. 335, 340-341, n. 9 (1960) (res judicata prin-
ciples did not limit power of Court of Appeals to reconsider
transfer decision not upset by coordinate court). Indeed,
the policies supporting the doctrine apply with even greater
force to transfer decisions than to decisions of substantive
law; transferee courts that feel entirely free to revisit trans-
fer decisions of a coordinate court threaten to send litigants
into a vicious circle of litigation. See Hayman, supra, at
169; Chicago & N. W. Transp. Co. v. United States, 574 F.
2d 926, 930 (CA7 1978). Cf. Blaski, supra, at 348-349
(Frankfurter, J., dissenting).°
Colt’s conclusion that jurisdiction therefore lay in the Fed-
eral Circuit is flawed, however, for three reasons. First.
the Federal Circuit, in transferring the case to the Seventh
Circuit, was the first to decide the jurisdictional issue. That
the Federal Circuit did not explicate its rationale is irrele-
vant, for the law of the case turns on whether a court previ-
ously “decide(d] upon a rule of law” —which the Federal Cir-
cuit necessarily did—not on whether, or how well, it
explained the decision. Thus, the law of the case was that
the Seventh Circuit had jurisdiction, and it was the Seventh
Circuit, not the Federal Circuit, that departed from the law
of the case. Second, the law-of-the-case doctrine “merely
expresses the practice of courts generally to refuse to reopen
what has been decided, not a limit cn their power.” Messen-
* There is no reason to apply law-of-the-case principles less rigorously to
transfer decisions that implicate the transferee’s jurisdiction. Perpetual
litigation of any issue--jurisdictional or nonjurisdictional—-delays, and
therefore threatens to deny, justice. But cf. Potomac Passengers Assn.
v. Chesapeake & Ohio R. Co., 171 U. S. App. D. C. 359, 363, n. 22, 520 F.
24 91, 9, n. Zz (197%).
PA-64
ger v. Anderson, 225 U. S. 486, 444 (1912) (Holmes, J.) (cita-
tions omitted). A court has the power to revisit prior deci-
sions of its own or of a coordinate court in any circumstance,
although as a rule courts should be loathe to do so in the ab-
sence of extraordinary circumstances such as where the ini-
tial decision was “clearly erroneous and would work a mani-
fest injustice.” Arizona v. California, supra, at 618, n. 8
(citation omitted). Thus, even if the Seventh Circuit’s deci-
sion was law of the case, the Federal Circuit did not exceed
its power in revisiting the jurisdictional issue, and once it
concluded that the prior decision was “clearly wrong” it was
obliged to decline jurisdiction. Most importantly, law of the
case cannot bind this Court in reviewing decisions below. A
petition for writ of certiorari can expose the entire case to
review. Panama R. Co. v. Napier Shipping Co., 166 U. S.
280, 283-284 (1897). Just as a district court’s adherence to
law of the case cannot insulate an issue from appellate re-
view, a court of appeals’ adherence to the law of the case
cannot insulate an issue from this Court’s review. See Mes-
senger, supra, at 444; Hamilton-Brown Shoe Co. v. Wolf
Brothers & Co., 240 U. S. 251, 257-259 (1916).
IV
Our agreement with the Federal Circuit’s conclusion that it
lacked jurisdiction, compels us to disapprove of its decision to
reach the merits anyway “in the interest of justice.” 822 F.
2d, at 1559. “Courts created by statute can have no jurisdic-
tion but such as the statute confers.” Sheldon v. Sill, 8
How. 441, 449 (1850). See also Firestone Tire & Rubber Co.
v. Risjord, 449 U. S. 368, 379-380 (1981). The statute con-
fers on the Federal Circuit authority to make a single deci-
sion upon concluding that it lacks jurisdiction—whether to
dismiss the case or, “in the interest of justice,” to transfer it
to a court of appeals that has jurisdiction. 28 U.S.C.
§ 1631.
PA-65
The age-old rule that a court may not in any case, even in
the interest of justice, extend its jurisdiction where none ex-
ists has always worked injustice in particular cases. Parties
often spend years litigating claims only to learn that their ef-
forts and expense were wasted in a court that lacked jurisdic-
tion. Even more exasperating for the litigants (and wasteful
for all concerned) is a situation where, as here, the litigants
are bandied back and forth helplessly between two courts,
each of which insists the other has jurisdiction. Such situa-
tions inhere in the very nature of jurisdictional lines, for as
our cases aptly illustrate, few jurisdictional lines can be so
finely drawn as to leave no room for disagreement on close
cases. See, e. g., K mart Corp. v. Cariier, Inc., 485 U. S.
—— (1988); United States v. Hohri, 482 U. S. —— (1987).
That does not mean, however, that every borderline case
must inevitably culminate in a perpetual game of jurisdic-
tional ping pong until this Court intervenes to resolve the un-
derlying jurisdictional dispute, or (more likely) until one of
the parties surrenders to futility. Such a state of affairs
would undermine public confidence in our judiciary, squander
private and public resources, and commit far too much of this
Court’s calendar to the resolution of fact-specific jurisdic-
tional disputes that lack national importance. “Surely a
seemly system of judicial remedies ... regarding contro-
verted transfer provisions of the United States Code should
encourage, not discourage, quick settlement of questions of
transfer....” Blaski, supra, at 349 (Frankfurter, J., dis-
senting). The courts of appeals should achieve this end by
adhering strictly to principles of law of the case. See supra,
at ——. Situations might arise, of course, in which the
transferee court considers the transfer “clearly erroneous.”
Arizona v. California, 460 U. S., at 618, n. 8. But as “{t]he
doctrine of the law of the case is... a heavy deterrent to
vacillation on arguable issues,” 1B Moore’s 10.404{1], at 124,
such reversals should necessarily be exceptional; courts will
rarely transfer cases over which they have clear jurisdiction,
PA-66
and close questions, by definition, never have clearly correct
answers. Under law-of-the-case principles, if the transferee
court can find the transfer decision plausible, its jurisdic-
tional inquiry is at anend. See Fogel v. Chestnutt, 668 F. 2d
100, 109 (CA2 1981) (“The law of the case will be disregarded
only when the court has ‘a clear conviction of error’”) (cita-
tion omitted), cert. denied, 459 U. S. 828 (1982). While ad-
herence to the law of the case will not shield an incorrect ju-
risdictional decision should this Court choose to grant review,
see supra, at ——, it will obviate the necessity for us to re-
solve every marginal jurisdictional dispute.
We vacate the judgment of the Court of Appeals for the
Federal Circuit and remand with instructions to transfer the
case to the Court of Appeals for the Seventh Circuit. See 28
U.S. C. $1681.
It is so ordered.
PA-67
SUPREME COURT OF THE UNITED STATES
No. 87-499
CHARLES R. CHRISTIANSON, ET au., PETITIONERS
v. COLT INDUSTRIES OPERATING CORP.
ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF
APPEALS FOR THE FEDERAL CIRCUIT
[June 17, 1988]
JUSTICE STEVENS, with whom JUSTICE BLACKMUN joins,
concurring.
In a seminal case construing federal-question jurisdiction,
Justice Cardozo wrote that “{wJhat is needed is something of
that common-sense accommodation of judgment to kaleido-
scopic situations which characterizes the law in its treatment
of problems of causation . . . a selective process which picks
the substantial causes out of the web and lays the other ones
aside.” Gully v. First National Bank, 299 U.S. 109, 117-
118 (1936). Although I agree with the Court’s conclusion in
this case that appellate jurisdiction is in the Seventh Circuit
rather than the Federal Circuit, I write separately to empha-
size that a common-sense application of Justice Cardozo’s dic-
tum requires that the answer to the question whether a claim
arises under the patent laws may depend on the time when
the question is asked. More specifically, if the question is
asked at the end of a trial in order to decide whether the Fed-
eral Circuit has appellate jurisdiction, the answer may be dif-
ferent than if it had been asked at the outset to decide
whether a federal district court has jurisdiction to try the
case.
When Congress passed the Federal Courts Improvement
Act in 1982 and vested exclusive jurisdiction in the Court of
Appeals for the Federal Circuit to resolve appeals of claims
that had arisen under the patent laws in the federal district
—_
PA-68
courts, it was responding to concerns about both the lack of
uniformity in federal appellate construction of the patent
laws and the forum-shopping that such divergent appellate
views had generated. Nonetheless, its definition of the Fed-
eral Circuit’s jurisdiction did not embrace all cases in which a
district court had decided a patent-law question. Instead, it
adopted a standard that requires the appellate court to de-
cide whether the jurisdiction of the district court was based,
in whole or in part, on a claim “arising under” the patent
laws. '
The question whether a claim arises under the patent laws
is similar to the question whether a claim arises under federal
law. Although there is no single, precise, all-embracing def-
inition of either body of law, the “vast majority” of cases that
come within either “grant of jurisdiction are covered by Jus-
tice Holmes’ statement that a ‘suit arises under the law that
creates the cause of action.’ Thus, the vast majority of cases
brought under the general federal-question jurisdiction of the
federal courts are those in which federal law creates the
cause of action.” Merreii Dow Pharmaceuticals Inc. v.
Thompson, 478 U. S. 804, 808 (1986) (citation omitted). In
'Title 28 U. S. C. § 1295(a)(1) grants the Federal Circuit appellate juris-
diction over final decisions of federal district courts whose jurisdiction “was
based, in whole or in part, on section 1338 of this title.” Title 28 U. S. C.
§ 1338(a), in turn, grants the federal district courts “original jurisdiction of
any civil action arising under any Act of Congress relating to pat-
ents....” As the Court correctly states, ante, at 5-7, § 1338 jurisdic-
tion, like § 1331 jurisdiction, is over claims, not issues. See H. R. Rep.
No. 97-312, p. 41 (1981) (“Cases will be within the jurisdiction of the Court
of Appeals for the Federal Circuit in the same sense that cases are said to
‘arise under’ federal law for purposes of federal question jurisdiction.
Contrast, Coastal States Marketing, Inc. v. New England Petroleum
Corp., 604 F. 2d 179 (2d Cir., 1979) (Temporary Emergency Court of Ap-
peals properly has jurisdiction over issues, not claims, arising under the
Economic Stabilization Act}”).
In this context, it is important to note that the “well-pleaded complaint”
ruie helps ferret out claims from issues, and says nothing about whether
such separation should be made only on the basis of the omginal complaint.
PA-69
this case it is clear that the causes of action asserted by peti-
tioners were created by the antitrust laws and not the patent
laws. Congress did not create an express cause of action to
enforce §112 of the patent laws, and I find no merit in re-
spondent’s suggestion that we should recognize an implied
cause of action under §112. Accordingly, I agree with the
Court’s conclusion that the issue of wrongful retention of pro-
prietary information that became the focus of this case under
§ 112 of the patent laws could not confer appellate jurisdiction
in the Federal Circuit, because the issue arose as a defense
rather than as a claim.’
To the extent that Part IIIA of the Court’s opinion does
nothing more than abjure the notion that the Federal Circuit
has jurisdiction over patent-law issues as well as claims, I am
thus in complete agreement. However, in rejecting re-
"Indeed, since it seems plain that no implied cause of action exists
under § 112—which, after all, merely describes the nature of the specifica-
tions that must be included with a patent application—a plaintiff’s attempt
at gaining federal court jurisdiction through a claim arising under § 112
would be properly rejected under the “artful pleading” doctrine. See,
e. g., Skelly Oil Co. v. Phillips Petroleum Co., 389 U.S. 667, 673-674
(1950) (“To sanction suits for deciaratory relief as within the jurisdiction of
the District Courts merely because, as in this case, artful pleading antici-
pates a defense based on federal law would contravene the whole trend of
jurisdictional legislation by Congress, disregard the effective functioning of
the federal judicial system and distort the limited procedural purpose of
the Declaratory Judgment Act”); Federated Department Stores, Inc. v.
Montie, 452 U. S. 394, 397, n. 2 (1981) (District Court properly found that
respondents “had attempted to avoid removal jurisdiction by ‘artfulfly]’
casting their ‘essentially federal law claims’ as state-law claims”): Caterml-
lar Ine. v. Williams, 482 U. S. —~— , —— (1987) (“artful pleading” doc-
trine cannot be invoked by party attempting to justify removal on the basis
of facts not alleged in the compiaint); 14A C. Wright, A. Miller, & E. Coo-
per, Federal Practice and Procedure § 3722, pp. 266-276 (1985): see also
Merrell Dow Pharmaceuticals Inc. v. Thompson, 478 U. S. 804 (1986) (in-
corporation of federal standard in state-law private action, when no cause
of action, either express or implied, exists for violations of that federal
standard, does not make the action one “arising under the Constitution,
laws, or treaties of the United States”).
PA-70
spondent’s contention that “Congress’ goals would be better
served if the Federal Circuit’s jurisdiction were to be fixed
‘by reference to the case actually litigated,’ rather than by an
ex ante hypothetical assessment of the elements of the com-
plaint that might have been dispositive,” ante, at 11, the
Court’s opinion might be read as suggesting that whether
patent claims are properly before the Federal Circuit on ap-
peal should be determined by examining only the initial com-
plaint and not by ascertaining whether a patent claim in fact
was litigated in the case. Sucii an approach would assume
that whether a case “arises under” the patent laws turns on
the same considerations whether one is determining the Fed-
eral Circuit’s appellate jurisdiction or a federal district
court’s original jurisdiction. But although 28 U.S.C.
§ 1338(a) provides the basis for both types of jurisdictional
assessment, I think it clear that Congress could not have
intended precisely the same analysis in both instances. Two
simple examples will illustrate the point.
If a patentee should file a two-count complaint seeking
damages (1) under the antitrust laws and (2) for patent
infringement, the district court’s jurisdiction would unques-
tionably be based, at least in part, on $1338(a). If, however,
pretrial discovery convinced the plaintiff that no infringe-
ment had occurred, and count 2 was therefore dismissed vol-
untarily in advance of trial, the case that would actually be
litigated would certainly not arise under the patent laws for
purposes of appellate jurisdiction. Even though the district
court’s original jurisdiction when the complaint was filed had
been based, in part, on § 1338(a), the case would no longer be
one arising under the patent laws for purposes of Federal
Circuit review when the district court’s judgment was en-
tered. Conversely, if an original complaint alleging only an
antitrust violation should be amended after discovery to add
a patent-law claim, and if the plaintiff should be successful in
proving that its patent was valid and infringed but unsuccess-
ful in proving any basis for recovery under the antitrust laws,
the district court’s judgment would sustain a claim arising
PA-71
under the patent laws even though the complaint initially in-
voking its jurisdiction had not mentioned it, and an appeal
would properly lie in the Federal Circuit.
Whether the complaint is actually amended, as in the pre-
vious example, or constructively amended to conform to the
proof, see Fed. Rule Civ. Proc. 15(b),: Congress’ goal of en-
Suring that appeals of patent-law claims go to the Federal
Circuit would be thwarted by determining that court’s appel-
late jurisdiction only through an examination of the complaint
as initially filed. That appreach would enable an unscrv-
pulous plaintiff to manipulate appellate court jurisdiction by
the timing of the amendments to its complaint. The Court
expressly leaves open the question whether a constructive
amendment could provide the foundation for Federal Circuit
patent law jurisdiction, see ante, at 12,‘ and Says nothing on
the subject whether actual amendments to the complaint can
So suffice. But since respondent has asked us to rule in its
favor on the ground that petitioners’ complaint added a
patent-law claim through constructive amendment, I think
we should make it perfectly clear that even though respond-
ent’s approach to the jurisdictional question is sound, its
application of that approach to this case fails because the
claim that was actually litigated did not arise under the pat-
ent laws. Nevertheless, since what the Court has written is
not inconsistent with this view, I join its opinion.
*“Rule 15. Amended and Supplemental Pleadings.
“(b) Amendments to Conform to the Evidence. When issues not
raised by the pleadings are tried by express or implied consent of the par-
ties, they shall be treated in all respects as if they had been raised in the
pleadings. Such amendment of the pleadings as may be necessary to
cause them to conform to the evidence and to raise these issues may be
made upon motion of any party at any time, even after judgment; but fail-
ure so to amend does not affect the result of the trial of these issues. _ . As
‘“We need not decide under what circumstances, if any, a court of ap-
peals could furnish itself a jurisdictional basis unsupported by the plead-
ings by deeming the complaint amended in light of the parties’ ‘express or
implied consent’ to litigate a claim. Fed. Ruie Civ. Proc. 15(b).”
PA-72
APPENDIX E
United States Court of Appeals
for the Federal Circuit
Cott INDUSTRIES OPERATING CoRP.,
CHARLES R. CHRISTIANSON AND )
INTERNATIONAL TRADE SERVICES, )
Inc., Etc., )
)
Appellee, ) |
) |
v. ) Appeal No. 85-2644
)
)
)
)
Appellant.
DECIDED: June 25, 1987
>
Before MARKEY, Chief Judge, NICHOLS, Senior Cirewit
Judge, and BISSELL, Cirewit Judge.
MARKEY, Chief Judge.
Appeal from a summary judgment of the United States
District Court for the Central District of Illinois in favor of
Charles R. Christianson and International Trade Services,
Inc. (ITS) (Christianson). The court held Colt Industries Oper-
ating Corp. (Colt) liable under: (1) sections 4 and 16 of the
Clayton Act (15 U.S.C. $§ 15, 26) and sections 1 and 2 of the
Sherman Act (15 U.S.C. §§ 1, 2), because Colt asserted trade
secrets the court deemed “invalid” for failure of Colt to disciose
- i
PA-73
them in nine U.S. patents the district court declared invalid for
noncompliance with best mode and enablement provisions of 35
U.S.C. § 112;! and (2) the theory of tortious interference with
contract. Christianson v. Colt Industries Operating Corp., 609
Supp. 1174, 227 USPQ 361, final judgment on liability, 613
F.Supp. 330 (C.D. I11.1985), We reverse in part, vacate in part,
and remand.
Introduction
The present appeal reflects a monumental misunderstanding
of the patent jurisdiction granted this court. An appeal in a
pure and simple antitrust case is here solely because an issue of
patent law appears in an argument against a defense. Chris-
tianson asserted rights that arise under, and only under, anti-
trust law. Colt’s defense is its trade-secret rights under state
law. Christianson’s argument against that defense is that Colt
lost its secrets because it did not disclose them in its patent
applications. The district court's opinion said Colt’s patents
were invalid. Colt requested inclusion of that view in the final
judgment and brought its appeal here.
' The nine U.S. patents declared invalid are: (1) No. 3,236,155 issued Febru-
ary 22, 1966, entitled “Firearm Having an Auxiliary Bolt Closure Mecha-
nism"; (2) No, 3,292,492 issued December 20, 1966, entitled “Trigger
Mechanism”, (3) No, 3,301,133 issued January 31, 1967, entitled “Mecha-
nism For Changing Rate of Automatic Fire’; (4) No. 3.366.011 issued
January 30, 1968, entitled “Buffer Assembly Having a Plurality of Inertial
Masses Acting in Delayed Sequence to Oppose Bolt Rebound”: (5) No.
3,440,751 issued April 29, 1969, entitled “Firearm Box Magazine With
Straightend and Intermediate Arcuate Portions”; (6) No. 3,453,762 issued
July 8, 1969, entitled “Disposable Magazine Having a Protective Cover and
Follower Retaining Means”; (7) No. 3,619,929 issued November 16, 1971.
entitled “Magazine With Anti-Double-Feed Indentations in the Side
Walls”; (8) No. 3,771,415 issued November 13, 1973, entitled “Rifle Conver-
sion Assembly”; and (9) No. 3,977,296 issued August 31, 1976, entitled
“Hydraulic Buffer Assembly For Automatic or Semiautomatic Firearm”.
PA-74
Background
(a) The Earlier Patent Suit
On September 2, 1983, Colt sued Springfield Armory, Inc.
and Rock Island Armory, Inc. (Springfield) for patent infringe-
ment2 and other activities. Colt sought to preliminarily enjoin
performance of Springfield's contract to sell M-16-type rifles to
El Salvador, alleging unauthorized use of Colt’s production
trade secrets. Springtield said it copied the weapon by reverse
engineering. Finding that Springfield had copied Colt’s produc-
tion secrets, the district court granted a preliminary injunction
on October 7, 1983.
Convinced that former Colt employee Christianson disclosed
its secrets to Springfield, Colt added him and his company,
ITS, as parties on November 23, 1983. When the court denied a
preliminary injunction against Christianson and ITS, Colt dis-
missed its complaint against them.
On October 17, 1983, Springfield appealed to this court, but
abandoned its reverse engineering theory, saying the weapon
could not be reverse engineered. Springfield then presented
the novel theory that its inability to mass produce a particular
type (M-16) of rife established a failure of€olt’s patents on rifle
parts to comply with 35 U.S.C. § M2 "1.
On March 20, 1984, this court affirmed, Colt /ndustries
Operating Corp. 0 Springneld Armory, [ne., 732 F.2d 168
(Fed. Cir, 1984) (unpublished opinion), but noted in dicta that,
“Although Springfield's 35 U.S.C. § 112 arguments, particu
larly relating to best mode, have an appearance of validity, . .
the evidence of record is totally lacking in specifies.” This court
noted a distinction between a rifle and rifle parts and listed the
“specifics” of evidence required (none of which appears of
record here).
,
2 Colt's allegations of patent infringement were based on U.S. Patent No
3 618.248 issued November 9, 1971, entitled “Buttstock Assembly With a
Latchable Door For a Compartment Formed Therein”, and three patents
listed in note 1, supra, as numbers (4), (5), and (7).
————————
PA-75
(b) This Antitrust Suit®
On May 14, 1984, Christianson filed an inartful complaint
against Colt “pursuant to Section 4... (15 U.S.C. § 15) and
Section 16 of the Clayton Act (15 U.S.C. § 26) for damages,
injunctive and equitable relief by reason of its violation of
Sections 1 and 2 of the Sherman Act (15 U.S.C. §§ 1 & 2), as
hereinafter alleged.” (Complaint 4 1, JA at 39).
After alleging that Colt controlled “nearly 100%” of the mar-
ket for M-16 rifles and parts, acquired patents in “the late
1950’s” and “early 1960's,” and granted licenses extending
beyond the life of its patents, Christianson inserted this dis-
jointed statement in Count I of the complaint:
18. The validity of the Colt patents had been assumed
throughout the life of the Colt patents through 1980.
Unless such patents were invalid through the wrongful
retention of proprietary information in contravention of
United States Patent Law (35 U.S.C. $112), in 1980, when
such patents expired, anyone “who has ordinary skill in
the rifle-making art” is able to use the technology of such
expired patents for which Colt earlier had a monopoly
position for 17 years.
Count I continued with allegations that Colt gave and with-
drew permission for ITS to make and sell M-16 parts, and drove
[TS out of business by threats to suppliers and customers and
by joinder and dismissal of ITS in Springfield.
' On June 27, 1984, the district court consolidated the patent and antitrust
suits for discovery and trial under Fed. R.Civ.P. 42(a). On August 1, 1984,
the district court ordered that discovery in the former could be used in the
latter. On September 5, 1984, the patent suit was settled on terms set forth
ina Consent Judgment and an ancillary agreement. Under that judgment,
Springfield was permanently enjoined from selling M-16 rifles to El Sav-
ador and from using Colt’s proprietary drawings and information in the
manufacture or sale of M-16 rifles, un/ess Colt were later determined to
have lost its trade secret nights.
PA-76
On October 19, 1984, Christianson added a count I], alleging
tortious interference with Christianson’s business rela-
tionships.
In its answer to paragraph 18, Colt said it “admits that Colt’s
patents are valid until the end of their respective lifetimes’ and
admitted that “anyone with ordinary skill in the art is entitled
to and is able to use any and all of Colt’s expired patents for any
legitimate purpose.”4
Colt counterclaimed, alleging jurisdiction under 28 U.S.C.
§§1331, 13832(a), 1838 (trademark infringement), 15 U.S.C.
§1121, Fed. R. Civ. P. 13, pendent and ancillary jurisdiction, and
that Christianson: (a) improperly obtained and used Colt’s
confidential information, proprietary drawings, and other
trade secrets pertaining tc its production of M-16 rifles; (b)
breached contractual duties; (c) tortiously interfered with
Colt’s contracts; and (d) willfully violated section 43(a) of the
Lanham Act (15 U.S.C. §1125(a)) and Illinois state law by
falsely designating its products.
Christianson answered Colt’s counterclaims, substantially
repeating paragraph 18, supra, of Count I, and alleging that
Colt fraudulently procured its patents by concealing “patent
technology” and is now asserting that “technology” as trade
secrets and thereby extending the patent grant.
Christianson’s motion for summary judgment sought only a
declaration that Colt’s trade secrets were invalid. It stated,
“(b)asic and fundamental to the subject lawsuit is whether or
not at any of the times described in the complaint and coun-
terclaims (Colt) possessed and was entitled to maintain as
exclusive proprietary rights its claimed trade secrets with
respect to the M-16 rifle and rifle parts,” and that “none of these
trade secrets were (sic) valid (sic) as a matter of law.”
‘ Colt apparently meant that its patents “had been” valid (patents issued in
the “late 1950's” and “early 1960’s” were expired in 1984 when Christianson'’s
complaint was filed), and that anyone is entitled to use the information in
its expired patents (the important but sole purpose of an expired patent,
w
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