Petition for Writ of Certiorari — Bourns, Inc. v. Allen-Bradley Co.

LIBRARY

SUPREME COURT, VU. 8:

Supreme Court of the Unites states

Ocroszr Term, 1973

IN THE MICHAEL ROBAX. 3

DRUM Fire

No. 73- 644

ALLEN-BRADLEY COMPANY,

BECKMAN INSTRUMENTS, INC.,

THE BUNKER-RAMO CORPORATION,

FAIRCHILD CAMERA & INSTRUMENT CORP.,

TRW INC., and

WESTON INSTRUMENTS, INC.,

¥,

BOURNS, INC. and MARLAN E. BOURNS,

Petitioners

Respondents

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

SEVENTH CIRCUIT AND APPENDIX

Of Counsel

MASON, KOLEHMAINEN,

RATHBURN & Wyss

20 North Wacker Drive

Chicago, Illinois 60606

Of Counsel

ARTHUR H. SEIDEL

QUARLES, HERRIOT, CLEMONS,

TESCHNER & NOELK=

780 N. Water Street

Milwaukee, Wisconsin 53202 4!len-Bradley Company

TWENTIETH CENTURY PRESS, CHICAGO 60606

RICHARD D. MASON

REGINALD K. BAILey

CLEMENS HUFMANN

20 North Wacker Drive

Chicago, Illinois 60606

Attorneys for Petitioner Beckman

Instruments, Inc.

DonaLp J. Smmpson

Lewis T. STEADMAN

HILL, SHERMAN, MERONI, Gross & SIMPSON

53 West Jackson Boulevard

Chicago, Illinois 60604

Attorneys for Petitioners TRW Inc.,

Bunker-Ramo Corporation, Weston

Instruments, Inc., and

Fairchild Camera § Instrument Corp.

RotF O. STADHEIM

HAIGHT, Horetpr & Davis

141 West Jackson Boulevard

Chicago, Illinois 60604

Attorneys for Petitioner

Bee SMES Sw , Vo ARAN ENE LI AMAT ON ORS NN a

TABLE OF CONTENTS

PETITION

PAGE

Grlmtons Below .ncccccccnscccecccsesccvevesevesss 2

DUI 6 0 0.0.0.6: 6.0.0.0:60046000600000 000050000006 2

Questions Presented .....ccccccccccccccccccccccece 3

Bhatomont of the Case ..ccccccvccccescccccccccccece 3

Reasons for Granting the Writ ..............eeee0e 7

CIE o dsccccdceccesndeccsececseccenasaccetcce 18

APPENDIX

PAGE

Bourns, Inc. and Marlan E. Bourns v. Allen-Bradley

Co., 480 F.2d 128 (7th Cir. 1978) ....ccceccccccces Al

Bourns, Inc. and Marlan E. Bourns v. Allen-Bradley

Co., 348 F. Supp. 554 (N.D. Ill. 1972) .............. A17

Bourns, Inc. and Marlan E. Bourns v. Dale Electron-

ics, Inc., 308 F. Supp. 501 (D. Neb. 1969) .......... A23

Certified Judgment of the District Court of the South-

ern District of Iowa dated June 26, 1969 in The Uni-

versity of Illinois Foundation v. Winegard Company,

De: GOED 6. 6-06 05 6064600 50560000655 00s Kae cies A56

Certified Judgment of the Eighth Circuit Court of

Appeals dated September 30, 1968 in University of

Illinois Foundation v. Winegard Company, Appeal

Wit DME 66 iin i510 060 Ors cin sevdeswencetereees A57

Opinion of the Seventh Circuit Court of Appeals in

Technograph Printed Circuits, Ltd. v. Methode Elec-

tronics, Inc., Nos. 72-1741, 72-1742, 72-1743, 72-1744,

72-1745 (Aug. 27, 1978) ...cccccccccsccccccccccecs A59

U.S. Constitution, Art. I, See. 8, Clause 8 ............ A68

SS UG Bee. RAGES ois vccccsvievesccessscciccesins A68

Be Cee ORs TNS 6 nc cncsecevenuseeecnssesesiesseetes A68

REP LEO ARIE RW RATE I By AY AENEAN OE TINT IL POU oF WAR ORLOD LIAS ERE LYRE IRI SAVE RRL,

(ad nlm 9

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SF EMS gt SO Ie pI D

PAGE

Ts cincbesesersssseccsvsccsensduces A68

Th den chsh snbaes bo raed cease edsesaves A69

ie. ide ccunks es bbees enon’ A69

eae ie es hknsedes4enensesedenees A70

Rule 141, Rules of Practice in Patent Cases ........... A70

Rule 142, Rules of Practice in Patent Cases ........... A70

Manual of Patent Examining Procedure (3rd ed. rev.

April 1973) Sec. 706.03(1) par. 1 ...........seeeees A71

TaBLe or Cases Crrep

Allegheny Steel & Brass Corp. v. Elting, 141 F.2d 148

DA ENED 3.600 scevsdcedbacccncceccsasecsens 18

Altvater v. Freeman, 319 U.S. 359, 63 8S. Ct. 1115

DE cGhscesutdceaebasihaexaseeeeecaseeatiae 15, 18

Blonder-Tongue Labs., Inc. v. Univ. of Illinois Foun-

dation, 402 U.S. 313, 91 S.Ct. 1434 (1971), remand-

_ ing, 422 F.2d 769 (7th Cir. 1970), on remand, 465

F.2d 380 (7th Cir. 1972), affirming per curiam, 334

F. Supp. 47 (N.D. Il. 1971), cert. den., 93 S.Ct. 559

re 2, 3, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 18

Blumcraft of Pittsburgh v. Architectural Art. Mfq.,

Inc., 337 F. Supp. 853 (D. Kan. 1972), aff’d per

curiam, 459 F.2d 482 (10th Cir. 1972) ....... 9, 10, 13,17

Blumcraft of Pittsburgh v. Kawneer, 178 USPQ 513

DR EE Gln OC ee Gel eb aweuteeoebes on 7

Bourns, Inc. v. Allen-Bradley Co., 480 F.2d 123 (7th

MEN ce cue cual eius Gu lugeseeaawievae ceenen 2

Bourns, Inc. v. Allen-Bradley Co., 348 F. Supp. 554

Se Oe EE noo on Vi casees seedktencaadteteueens 2,3

Bourns, Inc. v. Dale Electronics, Inc., 308 F. Supp. 501

Se EE -cveuwis veunanees 2, 4, 5, 6, 7, 13, 15, 16, 18

Bresnick v. United States Vitamin Corp., 139 F.2d 239

(2nd Cir. 1943)

In re Flint, 411 F.2d 1353 (CCPA 1969) ............ 16

mR Di a ERLE LIMOS EUR FR PIN LE | FS ROR ALY BY, RAR

— - entaatnd as

ee a v7

iii

PAGE

Hale v. General Motors Corp., 147 F.2d 383 (1st Cir.

PE ETC Te Tee TT TT rer rer 17

Illinois Tool Works, Inc. v. Brunsing, 378 F.2d 234

Se EK CD Stag ddccceneinbesvetouscssecueans 18

Kalo Inoculant Co. v. Funk Bros. Seed Co., 161 F.2d

981 (7th Cir. 1947), rev’d on other grounds, 333 U.S.

es Oe es I CED 0.66 sh bb ccooveruceesaaceas 18

| Kawneer v. Pittsburgh Plate Glass Co., 103 F. Supp.

See COU SA MND 060k cos cncaviasiciacssacse 18

M.O.S. Corp. v. John I. Haas Co., 375 F.2d 614 (9th

gee eas 17

Shatterproof Glass Corp. v. Guardian Glass Co., 462

ee Re GT CO BUD kn oc css cevnss covesacees 17

Sinclair & Carroll Co. v. Interchemical Corp., 325 U.S.

Beery GP Te BUM CID 0 concen sunencacnsceessi 15, 17

Sterling Aluminum Prods., Inc. v. Bohn Aluminum &

Brass Corp., 298 F.2d 538 (6th Cir. 1962) ......... 18

Technograph Printed Circuits, Ltd. v. Bendix Aviation

Corp., 218 F. Supp. 1 (D. Md. 1963), aff’d 327 F.2d

497 (4th Cir. 1964), cert. den. 379 U.S. 826, 85 S.Ct.

SP SUD -ceuk seudaunwebaausesecaceoecednesiea st 10

Technograph Printed Circuits, Ltd. v. Martin-Marietta

Corp., 474 F.2d 798 (4th Cir. 1973) ............. 3, 8, 11 :

Technograph Printed Circuits, Ltd. v. Methode Elec- h

tronics, Inc., (7th Cir. 1973), affirming, 174 USPQ t

St NE 0 cGA Ng CdC cand Cea ssed sn cahacucetnaass 12 ;

Technograph Printed Circuits, Ltd. v. Packard Bell

Electronics Corp., 290 F. Supp. 308 (C.D. Cal. 1968) i

fevansdenadee snes i kusds¥ashens as deb eeresweeon: 9, 11 ‘

Univ. of Illinois Foundation v. Winegard Co., 271 F.

Supp. 412 (S.D. Iowa 1967), aff’d., 402 F.2d 125 (8th

Cir. 1968), cert. den., 394 U.S. 917, 89 S.Ct. 1191

RE RE eRe AA ES rate Aam snen ir mE mp mee 9, 10, 16

Young v. John McShain, Inc., 130 F.2d 31 (4th Cir.

SEE hat aGceak Ci ceUssbueccs bectedneen bonus seks 18

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Supreme Court of the Gnited States

Ocroser Term, 1973

No.

ALLEN-BRADLEY COMPANY,

BECKMAN INSTRUMENTS, INC.,

THE BUNKER-RAMO CORPORATION,

FATRCHILD CAMERA & INSTRUMENT CORP.,

TRW INC., and

WESTON INSTRUMENTS, INC.,

Petitioners

v.

BOURNS, INC. and MARLAN E. BOURNS,

Respondents

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

SEVENTH CIRCUIT AND APPENDIX

Petitioner, Beckman Instruments, Inc., prays that a writ

of certiorari issue to review the decision of the United

States Court of Appeals for the Seventh Circuit, entered

June 14, 1973.

Petitioner, Beckman Instruments, Inc., files this petition

on its own behalf and as a representative Defendant. Peti-

tioners Allen-Bradley Company, The Bunker-Ramo Corpo-

ration, Fairchild Camera & Instrument Corp., TRW Ine. and

Weston Instruments, Inc. concur in this petition.

a a Sai er ie Se ee ee ee ei oe eee

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OPINIONS BELOW

The opinion of the Seventh Circuit (Al)' with respect

to which review is sought is reported at 480 F2d 123 (7th

Cir. 1973).

The district court’s decision (A17) from which the

appeal was taken is reported at 348 F.Supp. 554 (N.D. IIl.

1971).

Petitioners’ defense of Blonder-Tongue?® estoppel is based

on the opinion in Bourns, Inc. v. Dale Electronics, Inc., 308

F.Supp. 501 (D. Neb. 1969) (A23) and on the judgment

(App 86) in that case.

JURISDICTION

Jurisdiction is based on 28 USC See. 1254(1). The deci-

sion of the Court of Appeals sought to be reviewed was

entered June 14, 1973. Plaintiff’s timely petition for re-

hearing was denied July 17, 1973. Federal subject matter

jurisdiction derives from 28 USC 1338(a).

1“A” refers to the pagination of the appendix which forms part

of this petition. “App” refers to the pagination of the appendix

in the Court of Appeals for the Seventh Circuit in Appeals Nos.

72-1222 and 72-1223.

“Ex p.” refers to the page of the book of exhibits in the Court

of Appeals for the Seventh Circuit in Appeals Nos. 72-1222 and

72-1223.

2 Blonder-Tongue Labs., Inc. v. Univ. of Illinois Foundation,

402 U.S. 313, 91 S.Ct. 1434 (1971), remanding, 422 F2d 769 (7th

Cir. 1970), on remand, 465 F2d 380 (7th Cir. 1972), affirming per

curiam 334 F.Supp. 47 (N.D. Ill. 1971), cert. den. 93 S.Ct. 559

(1972), hereinafter referred to as Blonder-Tongue.

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3

QUESTIONS PRESENTED’

1. In a patent infringement action should the scope of

the estoppel resulting from a prior decision adverse to the

patentee be limited by the narrow technicalities of the

common law doctrine of collateral estoppel in accordance

with the Seventh Circuit’s ruling in this case, or should the

Blonder-Tongue estoppel rule have a broader scope as

declared by the Fourth and Tenth Circuits, two other

rulings of the Seventh Circuit, and the rulings of the Dis-

trict Court below and the District Court for the Central

District of California?

2. Under Blonder-Tongue does the owner of a patent

have the right to try as many patent infringement actions

as there are claims in the patent, even though the patent

owner had previously lost a patent infringement action in

which all of the patent claims had been put in issue, none

had been held valid and none had been reserved for future

adjudication?

STATEMENT OF THE CASE

On January 15, 1957, U.S. Patent No. 2,777,926 entitled

“Variable Resistor” and containing 21 claims was issued to

Marlan EF. Bourns,’ the individual Plaintiff in this litiga-

tion. Plaintiffs promptly charged many of their competitors

with infringement of this patent and eventually instituted

seven actions for infringement of the 926 patent. Five of

these actions were dismissed on terms satisfactory to

Bourns (App. 64-68). One of the two remaining actions,

namely Bourns, Inc. v. Dale Electronics, Inc., 308 F.Supp.

1 The questions here presented deal with the same legal problems

posed in questions 1 and 2 of the Petition for a Writ of Certiorari

in Technograph Printed Circuits Ltd, y. Martin-Marrietta Corp.,

No. 73-147 October Term 1973.

2 This patent is reproduced at Ex. pp. 1-6 and will hereinafter

be referred to as the 926 patent.

4

501 (D. Neb. 1969), was tried and decided with finality

against the plaintiffs (A23).

The Dale litigation commenced in 1962 and put the valid-

ity of the entire ’926 patent in issue by complaint (Ex

p. 149), answer and counterclaim (Ex p. 160). On May

29, 1967, after many years of pretrial discovery, the parties

filed amended pleadings which re-asserted that the validity

of all claims of the 926 patent were in issue (Ex pp. 173,

179, 126). In the Dale trial the evidence included 610 pages

of transcript and 522 exhibits. Bourns testified that “. . .

all those potentiometers [including those made by peti-

tioners] utilize the basic construction of the 926 patent...”

(Ex p. 190). The opinion of Judge Robinson, the trial judge,

states inter alia:

“. . . the statements of the inventor himself should

further show beyond doubt that the device! was not

patentable.” (A29)

“Plaintiff relies upon claims 1, 2, 11, 14, 15, 16 and 20

of the 926 patent. Defendant’s primary thrust centers

upon the validity of the ’926 patent. Defendant’s con-

tention, among others, is that this patent is obvious.”

(A25)

“In determining the validity of the patent this Court

must ascertain the essence and scope of the patent as

stated in the above mentioned claims.” (A25)

“The first question is then, what is the essence of the

patent.” (A26)

“From a reading of the allowed claims and the history

of the patent as it passed through the Patent Office it

seems apparent that the mounting holes are the ele-

ments [excepting claim 16] of the patent which the

Patent Examiner believed to be the essential fea-

ture... .” (A28)

1 Throughout this petition emphasis is added, unless otherwise

indicated.

IE MELE SIDR ONDE ALLL SAAR AA IDA ES TRIBE AE 0 wt PE EA

“This Court believes both interpretations require a

decision rendering the patent invalid.” (A28)

“Once having reached a conceptual rather than a math-

ematical formula type understanding of the nature of

the patent, ... this patent could not be declared valid.”

(A33)

“There is therefore no validity to claim 16 and the

926 patent is held to be invalid.” (A34)

The final decree in Dale reads in part as follows: (App 86)

“2, Claims 1, 2, 11, 14, 15, 16 and 20 of the United

States Patent No. 2,777,926 are invalid.”

“7, The Amended Complaint is dismissed with preju-

dice, and the Amended Counterclaim is sustained to

the extent indicated.”

Plaintiff’s seventh litigation on the 926 patent, C.A. No.

70-C-1992 in the Northern District of Illinois was instituted

under 28 USC 1338(a) on August 11, 1970 as a class action

naming petitioner and five other corporations as represen-

tative defendants. No class action order has yet been en-

tered. The complaint alleged infringement of the ’926

patent without specifying particular patent claims (App 4).

Petitioner Beckman answered on November 4th, 1970 that

the entire patent was invalid (App 9) and further alleged

in paragraph 30:

“Plaintiffs are barred and estopped from prosecuting

this action under the principles of res judicata and

estoppel by judgment because U.S. Patent No. 2,777,926

has been held invalid after a full trial on the merits in

a final decision as a result of a patent infringement

action instituted by Plaintiffs, said final decision being

reported as Bourns, Inc. and Marlan E. Bourns v. Dale

Electronics, Inc., 308 F.Supp. 501 (D. Neb. 1969).””

1 The other petitioners added an estoppel defense to their plead-

ings on May 28, 1971 (App. 30).

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On May 3, 1971 this Court decided Blonder-Tongue. In

June and July 1971 petitioners filed their motions for sum-

mary judgment based on Blonder-Tongue. Plaintiffs op-

posed this motion in its entirety and submitted a compre-

hensive brief and affidavits (App 90-149). Plaintiffs did

not oppose the summary judgment motion on the ground

that the 926 patent disclosed any inventive concept which

was not adjudicated in the Dale litigation.

Summary judgment was granted in an opinion which

emphasized the comprehensiveness of the patent validity

issue pleaded and tried in the Dale case as shown by the

following excerpts (A19,20) :

“Among other things, the court’s decision [in the Dale

case] says with respect to Patent No. 2,777,926: ‘...

the ’926 patent is held to be invalid.’ 308 F.Supp. at 507.

The pleadings in the Nebraska suit demonstrate that

both the plaintiffs and the defendant were litigating

the validity of the patent, not merely part of it... .”

“... they [Plaintiffs in the present action] have never

amended their complaint to allege that they were rely-

ing on the validity of those claims not specified by the

Nebraska court. We conclude that the Nebraska judg-

ment order is explained by the same procedures as

explains this particular defense raised by the plain-

tiffs: the court was referring to the claims alleged to

be infringed by a defendant’s product but had no inten-

tion of changing its decision of invalidity.”

Plaintiffs appealed from the summary judgment. With

respect to the 14 claims of the 926 patent not expressly

invalidated by the decree in the Dale case the appeal suc-

ceeded for two reasons. Firstly, the Seventh Circuit ap-

plied what it regarded as the strict common law require-

ments of collateral estoppel as follows (A3):

“...As Professor Moore teaches:

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[A prior judgment] operates as a collateral estoppel

as to, but only as to, those matters or points which

were in issue or controverted and upon the determina-

tion of which the initial judgment necessarily depended.

1B Moore’s Federal Practice 3777 (2d. ed. 1965) .. .”

(Parenthesis and emphasis by Seventh Circuit)

Secondly, the Seventh Circuit interpreted the opinion in

the Dale case by focusing on the statement therein that

“Plaintiff relies upon claims 1, 2, 11, 14, 15, 16 and 20”

(A2,3). From this and three other fairly similar state-

ments in the Dale opinion the Seventh Circuit concluded

(A3):

“. . . that where the court [for the District of Ne-

braska] referred to the ’926 patent as being invalid,

it was referring only to those claims specifically desig-

nated at the outset and restated in the final judgment.”

REASONS FOR GRANTING THE WRIT

Question 1

In Blonder-Tongue this Court concluded (402 U.S. 334, 91

S.Ct. 1445) that the patentee should be estopped if he “had

a full and fair chance to litigate the validity of his patent

in an earlier case.” Blonder-Tongue’s objective of prevent-

ing the “misallocation of resources” (402 U.S. 330, 91 S.Ct.

1443) by reducing the number of trials involving the same

patent was paraphrased as follows in Blumcraft of Pitts-

burgh v. Kawneer, 178 USPQ 513 (5th Cir. 1973) :

“Blonder-Tongue did not throw merely a jab at the

multiplicity of patent litigation; rather, it imtended a

knockout blow through the doctrine of collateral estop-

pel so that any time a patent was found invalid in a

fair fight with a knowledgeable referee, the courts .

could count ten and the patent holder could no longer 5

maintain that he was champion .. .”

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“Tf litigation were costless, both to the litigants and to

society, it might be desirable never to allow collateral

estoppel to preclude a new lawsuit. But as with most

mortal endeavors, litigation is not so blessed. Collateral

estoppel is a rule of response and as such it is not

always pure or just or even cognitive. Efficiency and

economy in judicial administration have their places in

our judicial schema. Blonder-Tongue does require as

a condition precedent to its invocation at least one

round of pristine purity. In our case we cannot say that

such an encounter has not taken place. Blumcraft had

a full and fair opportunity to litigate the validity of its

patent in a forum of its own choosing, and the patent

was declared invalid. Under both the letter and spirit

of the Supreme Court’s ruling in Blonder-Tongue, the

district court was correct in applying collateral estoppel

and in granting defendant’s motion for summary judg-

ment.”

The opinion sought to be reviewed reduces the effect of

Blonder-Tongue from a “knock-out blow” to a gentle jab

at the multiplicity of patent litigation. The Seventh Circuit

ruled (A3):

“..as Judge Learned Hand explained almost forty

years before, ‘.. . [collateral] estoppel extends only to

facts decided and necessary to the decision’ Irving Nat.

Bank v. Law, 10 F2d 721, 724 (1926). Since the Dale

Court’s judgment by its terms did not depend on the

invalidity of claims not specified in that judgment, ap-

pellants are not collaterally estopped from asserting the

remaining claims of the 926 patent.” (Parenthesis by

Seventh Circuit)

The Seventh Circuit’s above quoted narrow definition of

the subject matter expressly and necessarily adjudicated in

the earlier case conflicts with 1ecent decisions of the Fourth’,

1 Technograph Printed Circuits, Ltd. v. Martin-Marietta Corp.,

474 F2d 798, 801 (4th Cir. 1973).

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Seventh,’ and Tenth? Circuits and the Central District of

California? The conflict referred to appears from the

following summaries.

A. The Seventh Circuit’s Own Blonder-Tongue Decision

Broadly Defines The Subject Matter Of The Estoppel

Resulting From A Prior Holding Of Invalidity

In Univ. of Illinois Foundation v. Blonder-Tongue Labs.,

Inc., 465 F2d 380, 381 (7th Cir. 1972), cert. den., 93 S.Ct.

559 (1972) the court affirmed per curiam a dismissal of a

patent infringement action predicated on the defense of

collateral estoppel and adopted the opinion of the district

court reported at 334 F.Supp. 47 (N.D. Tl. 1971). In that

decision Judge Hoffman had ruled as follows (p. 51):

“Finally, plaintiff asserts that the Winegard decision ;

is not dispositive because plaintiff did not allege in

that case the infringement of claims numbered 6, 7, and

8 of the Isbell patent. The defendant in that case, how- :

ever, put the whole patent in issue by praying for a

decree adjudging the patent to be null and void, and the

District Court and Court of Appeals for the Eighth

Circuit so adjudged.”

The Winegard decree referred to in the preceding quotation

had merely “dismissed on its merits” (A56) an action for

patent infringement in which the answer included a de-

fense of patent invalidity and in which the plaintiff had not

1 Univ. of Illinois Foundation v. Blonder-Tongue Labs., Inc., 465

F2d 380 (1972), affirming, 334 F.Supp. 47 (N.D. Ill. 1971); Tech-

nograph Printed Circuits, Ltd. vy. Methode Electromcs Inc. (A 59)

(7th Cir. 1973), affirming, 174 USPQ 297 (N.D. Ill. 1972).

2 Blumcraft of Pittsburgh v. Architectural Art Mfg., Inc. 337

F.Supp. 853 (D. Kan. 1972), aff'd per curiam, 459 F2d 482 (10th

Cir. 1972).

3 Technograph Printed Circuits, Ltd. v. Packard Bell Electronics

Corp., 290 F.Supp. 308 (C.D. Cal. 1968).

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charged infringement of claims 6, 7 and 8.1 Thus in Blon-

der-Tongue the Seventh Circuit without insisting on com-

pliance with the strict requirements of common law col-

lateral estoppel extended the preclusive effect of the prior

judgment to three patent claims which were admittedly not

infringed and had not been expressly and necessarily in-

validated in the decree of the prior case. The conflict be-

tween the decision sought to be reviewed and the earlier

Seventh Circuit’s affirmance of Judge Hoffman’s application

of Blonder-Tongue estoppel was virtually admitted by the

remark (465 F.2d p. 381):

“Recent decisions of other courts are consistent with

the decision of the district court in this case.®”

B. In The Technograph Cases A Holding Of Invalidity

Expressly Restricted To A Few Patent Claims Has

Been Held To Preclude Litigation Of The Other Patent

Claims In The Fourth And Seventh Circuits And In

The Central District Of California

Three decisions applying collateral estoppel to claims

not previously expressly invalidated are based on T'echno-

graph Printed Circuits, Ltd. v. Bendix Aviation Corp., 218

F.Supp. 1 (D. Md. 1963), aff’d, 327 F2d 497 (4th Cir.

1964), cert. den., 379 U.S. 826, 85 S.Ct. 53 (1964). In that

ease only a limited number of claims in each of the three

patents was “declared on” and a more limited number was

used as “example” claims. The Maryland district court

had declared invalid only the example claims of the patents

and had denied the declaratory judgment counterclaims

without prejudice (218 F.Supp. pp. 5, 58).

1 Univ. of Minois Foundation v. Winegard Co., 271 F.Supp. 412,

413, 415 (S.D. Iowa 1967), aff'd, 402 F2d 125 (8th Cir. 1968),

cert. den., 394 U.S. 917, 89 S.Ct. 1191 (1969).

“3 Bourns, Inc. et al. v. Allen Bradley Co., et al., No. 70 C 1992

N.D. Ill. (Feb. 7, 1972); Blumcraft of Pittsburgh v. Architectural

Art Mfg., Inc., 337 F.Supp. 853 (C.D. Kansas, 1972).”

SPT RETA AMI IER 6

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The estoppel effect of that decision was first examined

in Technograph Printed Circuits, Ltd. v. Packard Bell

Electronics Corp., 290 F.Supp. 308 (C.D. Calif. 1968) which

was an action generally charging infringement of the same

three patents. Anticipating the impending demise of the

mutuality requirement, the California district court dis-

missed the entire litigation inter alia because the plaintiff

had lost its test case against Bendix in Maryland and (290

F.Supp. p. 312):

“ .. the exhaustive record, and the long and meticu-

lous opinion of Judge Watkins, dispel any question but

that the Maryland case was tried diligently, was con-

sidered thoroughly and exhaustively by the trial court,

that the plaintiffs had their ‘days in court,’ and sug-

gest to the thoughtful reader that if there was anything

else in favor of validity roncerning any claim in any of

the patents in addition to what the plaintiffs produced,

counsel would have done so.”

Thus collateral estoppel was applied to claims which had

been deliberately and expressly left unadjudicated in the

first action.

The extent of the estoppel resulting from the Bendix

case came up again in T'echnograph Printed Circuits, Ltd. v.

Martin-Marietta Corp., 474 F2d 798, 801, 802 (4th Cir.

1973). The court affirmed the dismissal of a patent infringe-

ment action on the authority of Blonder-Tongue for the

following reasons:

“We turn to the next requirement of Blonder-Tongue:

that the issues in both proceedings be identical. In

Bendix, the district court held that claims 4, 5, 10, 14,

15 and 16 of the 697 and certain claims of ’165 and

960 were invalid for obviousness and anticipation. 218

F.Supp. 1, 31, 58. In the present appeal, no issue is

raised concerning ’165 or ’960. Plaintiffs claim only

that claims 4 and 10-14 inclusive of ’697 were infringed

by the defendants. Although it appears that the validity

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A BEE RLY a AR IMO AIG BO

12

of claims 11, 12 and 13 of ’697 were not specifically

mentioned as being invalid in Bendix, an examination

of those claims shows that they were dependent on

claim 10, which was held invalid in Bendix. Also, the

trial court’s opinion states that the parties here con-

ceded that the issues in suit were identical to the issues

decided against plaintiffs in Bendix (340 F.Supp. 423,

425), and this is not contested on appeal. Accordingly,

the requirement of Blonder-Tongue that the issues be

identical in both proceedings has been complied with.”?

In Technograph Printed Circuits, Ltd. v. Methode Elec-

tronics, Inc., (A59) (7th Cir. 1973) the Seventh Circuit

agreed with the Fourth Cireuit’s decision in the Martin-

Marietta case just discussed. The opinion of the Seventh

Cireuit in the Methode Electronics case denies any conflict

with the opinion of which the present petition seeks review.

Such conflict, however, is manifest because the Seventh

Cireuit in the Methode Electronics case applied Blonder-

Tongue estoppel to claims not expressly invalidated in a

prior litigation, saying (A66) :

“Even without the stipulation, [relating to identity of

issues] a reading of claims 10, 11, 12 and 13 demon-

1 The concession referred to in the penultimate sentence of this

quotation is explained as follows in footnote 13 of the petition for

a writ of certiorari No. 73-147 October Term 1973:

“In oral argument to the District Court, plaintiffs’ counsel

stated, as an aside, that ‘the issues in this suit, your Honor,

are the same as the issues in the Bendix case’ (Tr., p. 139)

but there was no intent to waive plaintiffs’ rights to a deter-

mination on the merits of the claims not actually adjudicated

in Bendix. The critical point on the issue of collateral estoppel

is that the Bendix court did not in fact adjudicate claims 11,

12, and 13: ‘Sinee the (Bendix) court’s judgment by its terms

did not depend on the invalidity of claims not specified in that

judgment, appellants are not collaterally estopped from assert-

ing the remaining claims of the ('697) patent.’ See Bourns,

A-53.”

CRN ee oe WEEE SAC LONG ELLE YY OE YER BT anor BOR eer eR, ne:

13

strates the complete dependence of 11, 12 and 13 upon

claim 10.”

Thus the Fourth and the Seventh Circuit based their

holdings of collateral estoppel on a comparison of patent

claims. A similar reading and comparison of the claims of

the ’926 Bourns patent would have shown that the claims not

expressly invalidated in the Dale decree do not differ sig-

nificantly from the claims which were so invalidated. The

failure to compare the claims of the 926 patent in the hold-

ing below was apparently induced by the unduly strict

interpretation of the requirements of common law estoppel.

C. The Tenth Circuit Has Applied Blonder-Tongue

Estoppel To Patent Claims Not Previously Invalidated

Blumcraft of Pittsburgh v. Architectural Art Mfg. Inc.,

459 F2d 482 (10th Cir. 1972) affirmed per curiam a judg-

ment “for the reasons stated by the district court, reported

at 337 F.Supp. 853 (D. Kan. 1972).” The affirmed opinion

includes the following paragraph (337 F.Supp. 858, 859) :

“Plaintiff claims a significant difference exists between

the issues and scope of the South Carolina case and the

issues and scope of the one at bar, in that the mechani-

cal patent No, 2,905,445, in this case, has all six claims

contested, whereas only claims one and three were at

issue in South Carolina in addition to the design patent.

This sort of claim was put at rest by Judge Hoffman

on the remand of Blonder-Tongue, where it was pointed

out the judgment in the first court held the whole

patents invalid, even though all of the claims were not

controverted in the lawsuit. In the case at bar, when

one examines the opinions in the South Carolina case,

both in the trial and appellate courts, the final judg-

ment referred to the validity or invalidity of the whole

patents. Moreover, the discussion by the appellate court

of the obviousness of plaintiff’s mechanical patent

indicates their reference and contemplation of it as a

“AAW TAROT IND PORN RR: Per MEGUMI A MY ALENT EAA CANE RU IRN ENS HEME ATSC Oe NR

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14

whole as to rails, posts, and the clamp, bolts and

notches for holding them in place. No separability or

savings clause as to any claims is indicated by the

Fourth Circuit. The judgment of obviousness must be

deemed to relate to the entire mechanical patent.”

The five recent decisions summarized above determine

the scope of estoppel in patent cases by reference to the

pleadings, the nature of the invention, the patent claims

involved and the opinions rendered in the earlier case, The

policy of Blonder-Tongue cannot be effected by an unduly

technical application of common law concepts of collateral

estoppel. The present holding of the Seventh Circuit that

collateral estoppel cannot apply to patent claims not ex-

pressly invalidated by a prior judgment if the prior “judg-

ment by its terms did not depend on the invalidity of

[those] claims” conflicts with the foregoing decisions and

should be reviewed.

~~

15

Question 2

The opinion below narrowed the estoppel resulting from

the Dale case not only by resort to an unduly restrictive

interpretation of common law collateral estoppel but also

by misinterpreting the opinion in the Dale case and by

attributing no importance to the fact that all of the claims

of the 926 patent were put in issue by the pleadings in the

Dale case, The Seventh Circuit ruled (A2):

“. .. Dale is binding only as to the claims specifically

mentioned in its judgment.”

By contrast the district court had focused on the issue

of patent validity as pleaded and on the general pronounce-

ments of patent invalidity in the opinion of the Nebraska

district court (A19):

“Among other things, the court’s decision says with re-

spect to Patent No, 2,777,926: ‘. . . the 926 patent is

held to be invalid.’ 308 F.Supp. at 507.

The pleadings in the Nebraska suit demonstrate that

both the plaintiffs and the defendant were litigating

the validity of the patent, not merely part of it.”

The disagreement between the two lower courts involves

important questions of federal law which should be laid to

rest (A) to preserve Blonder-Tongue’s vitality and (B) to

preserve the public policy requiring adjudication of patent

validity and complete disposition of a counterclaim for

declaratory judgment of patent invalidity, Sinclair & Car-

rol Co. v. Interchemical Corp., 325 U.S. 327, 330, 65 S.Ct.

1148, 1145 (1945); Altvater v. Freeman, 319 U.S. 359, 363,

63 §.Ct. 1115, 1118 (1943).

A. The Ruling Below Should Be Reversed To Preserve

Blonder-T ongue’s Vitality

If Blonder-Tongue’s disapproval of multiple patent trials

and the resulting misallocation of resources is to have any

PK ett ew » RT aed) it a i ated oe ” CUISINE MY ST ee ee NP nee LP 4 LE PATE ATT OVEN Pow

16

vitality it should not permit the patentee the option of con-

ducting a number of infringement trials equal to the num-

ber of claims in his patent. While the law permits a patent

to contain plural patent claims which may be severable

with respect to validity, 35 USC 253, 282, 288, these claims

are merely convenient means of expressing and defining

the same inventive idea in different ways. As stated in See.

706.03(1) of the Official Manual of Patent Examining Pro-

cedure (1973) the Patent Office (A71) “examiner should

be reasonable in setting the number [of claims] to afford

the applicant some latitude in claiming his invention.” The

extent of this latitude is demonstrated by /n re Flint, 411

F2d 1353 (CCPA 1969), which held that forty-two was

not an unduly large number of patent claims for an inven-

tion identified as a spring seat.

The liberality with which the Patent Office allows numer-

ous claims in a patent for a single invention should not be

complemented by an equal liberality of the judiciary. To

permit a patentee the opportunity of bringing successive

law suits on different claims until each and every claim

has been expressly invalidated in a decree complying with

the Seventh Circuit’s unduly restrictive interpretation of

common law collateral estoppel would render Blonder-

Tongue ineffective. In determining the subject matter cov-

ered by Blonder-Tongue estoppel the precise wording of

the final decree should not be of controlling importance,

The words employed in a final decree adverse to patent

validity seem to be largely fortuitous as shown by a com-

parison of the decrees in the Winegard ease (A56) and

in the Dale case (App 86). Happenstance of decree drafts-

manship should not be decisive in the operation of the

Blonder-Tongue doctrine. Application of the Blonder-

Tongue doctrine should turn on the generality of the va-

lidity issue raised in the pleadings and on the patentee’s

procedural, substantive and evidential opportunity to es-

17

tablish validity in the earlier case. The patentee should not

be able to limit unilaterally the scope of the ensuing estop-

pel by specifying at the trial only one or a few claims as

being infringed.

If the pleadings put the validity of the entire patent in

issue and the particular claims specified at the trial are

held invalid, that holding should ordinarily prevent further

litigations on the other claims of the patent. Under these

circumstances further litigation should be permitted only

: where the earlier decision of invalidity contains a specific

savings clause of the type referred to in the passage from

the Blumcraft case quoted on page 14 of this petition.

B. The Ruling Below Should Be Reviewed To Preserve

The Public Policy Requiring Adjudication Of Patent

Validity And Disposition Of A Counterclaim For

Declaratory Judgment Of Patent Invalidity

|

Tt has long been an established principle that the validity ’

of a patent is a question of public importance and should

be resolved whenever possible, Sinclair & Carroll Co. v. ;

Interchemical Corp., 325 U.S. 327, 330, 65 S.Ct. 1148, 1145 i

(1945); Hale v. General Motors Corp., 147 F2d 383 (1st

Cir. 1945); Bresnick v. United States Vitamin Corp., 139

F'2d 239, 242, (2nd Cir. 1943); Shatterproof Glass Corp. v.

Guardian Glass Co., 462 F2d 1115 (6th Cir, 1972) ; M.0.8.

Corp. v. John I, Haas Co., 375 F2d 614 (9th Cir. 1967). The

decision sought to be reviewed subverts this principle by

narrowly restricting the prior general ruling of patent in-

validity to the claims specifically relied on at the trial and

expressly invalidated in the final decree.

o> De re regat F er

A related principle is that the validity of a patent prop- i

erly put in issue by a counterclaim must be disposed of and

does not become moot when the infringement question is b

pe = a all Ma ee nl ida Cling Min) Pika Wn ot a ee oe eee ee, keen arn , =

il) 4d OR Sal aR PEO ee OS

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MESBLERE Bi

18

resolved adversely to the patentee.’ This principle is violated

by the decision sought to be reviewed. That decision treats

the Dale case as failing to dispose of the counterclaim for

declaratory judgment of invalidity with respect to the

patent claims which were not enumerated in the specific

invalidity holding of par. 2 of the judgment.

CONCLUSION

Application of the Blonder-Tongue doctrine in the lower

courts has resulted in a conflict about the scope of the estop-

pel and the elements to be considered in determining the

scope of the estoppel. This petition should be granted to

resolve the conflict among the Circuits and the district

courts and to make clear that the technicalities of the com-

mon law rule of collateral estoppel are inconsistent with

the policy objectives of Blonder-Tongue. The lower court’s

ruling erroneously restores to the patentee the opportunity

for multiple litigation. It erroneously permits the patentee

to rely on a different patent claim at each successive trial.

It erroneously limits the scope of the Blonder-Tongue

estoppel by narrowly interpreting the decree of dismissal

with prejudice of the Amended Complaint after a trial upon

pleadings which had put the entire patent in issue. It errone-

ously failed to compare the claims of the patent in suit and

1 Alvater v. Freeman, 319 U.S. 359, 63 S.Ct. 1115 (1943) ; Young

v. John McShain, Inc., 130 F2d 31, 34 (4th Cir. 1942); Sterling

Aluminum Prods., Inc. v. Bohn Aluminum & Brass Corp., 298 F2d

538, 540 (6th Cir. 1962); Kalo Inoculant Co. v. Funk Bros. Seed

Co., 161 F2d 981, 991 (7th Cir. 1947), rev’d on other grounds, 333

U.S. 127, 68 S.Ct. 440 (1948); Allegheny Steel & Brass Corp. v.

Elting, 141 F2d 148, 149, 150 (7th Cir. 1944) ; Illinois Tool Works,

Inc. v. Brunsing, 378 F2d 234 (9th Cir. 1967); Kawneer v. Pitts-

burgh Plate Glass Co., 103 F.Supp. 671 (W.D. Mich. 1952).

19

erroneously failed to give full effect to the opinion rendered

in the earlier action which stated (A34) “the ’926 patent

is held to be invalid”.

Respectfully,

Ricuarp D. Mason

Reematp K. Barey

Cremens HurMann

Attorneys for Petitioner

Beckman Instruments, Inc.

Of Counsel

Mason, KoLEHMAINEN,

Ratusurn & Wyss

20 North Wacker Drive

Chicago, Illinois 60606