Amicus Brief — Hazel-Atlas Glass Co. v. Hartford-Empire Co.

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IN THE

* Supreme Court of the United States

OcTCBER - kM, 1945.

Hazru-Atuas (Lass Company, Pet itioner

V

Hartronp-Empme Company, Respoudent. ’

No. 423.

SnawkKEE Manvractvrine Company, GLENSHAW GLass Com-

pany, McKee Grass Company, Greonce R. Waces, Petitioners.

V. ‘ as

Hartrorp-Empme Company, Respoudent,

On Writs of Certiorari to the United States Circuit Court -

of Appeals for the Third Circuit.

RESPONDENT'S REPLY TO THE BRIEF OF THE |

UNITED STATES AS AMICUS CURIAE. ~—

* Warren J. Buexxo..

Attorney for Respondent,

Of Counsel:

Francis W. Cope. ;

Kogan J. Goopnien. *

February 11) 1944...

Prrss or Byron 8S. ApAMS, WASHINGTON, IDC.

IN THE

Supreme Court of the Gnited laid

OcToBER Term, 1943.

No. 398.

Haze1-AtLas Guiass Company, Petitioner '

° y ° ~

Hartrorp-Emptire Company, Respondent.

ee. No. 423. .

SHAWKEE MANUFACTURING Company, GLENSHAW Guass Com-

pany, McKee Guass Company, Georce R. Haus, Petitioners.

-V. ,

Hartrorp-EmpirE Company, Respondent.

On Writs of Certiorari to the United States Circuit Court

of Appeals for the Third Circuit.

RESPONDENT'S REPLY TO THE BRIEF OF THE

UNITED STATES AS AMICUS CURIAE.

This memorandum is filed pursuant to leave granted at

the oral argument.

. | ‘ I. ‘

In our briefs, heretofore filed, and in oral argument, we

have stated the facts as shown by the record. On certain

points the government’s — materially departs from -

2

‘ecord. We shall not further argue these matters beyond

four specific comments as follows:

(a) The government’s brief cinieiasinee asserts,

_ pages 4, 9, 28 and 29, that the Clarke article was responsible _

for the grant of the Peiler patent. The fact is that it was

not. .The application was rejected. three times after the

- filing e article in the Patent Office, and: was only al-

lowed, e than a year after the filing of the Clarke ar-

ticle, on proof of Peiier’s priority: over a Howard patent.

(See our brief at. No. 398, pp. 16-17.) The priority of -

Peiler oyer Howard is not challenged in the briefs of

either of the opposing parties, or in the government’s brief.

(b) The governient’s brief erroneously states, page 7,

that it was proven in the anti-trust case at Toledo that .

. ‘*Hatch had been active in suppressing evidence’’ regard-.

‘ing the Clarke article ‘‘during Hazel’s investigation’’ of

that subject, and that Hatch on behalf of Hartford had

paid Clarke $8,000 ‘‘soon after Hazel’s . investigation

started’’, The facts are set out in our brief at No. 398,

pages 62-6.

A reading of the affidavit of Hazel’ s professional.detec-

tive McCarthy (No. 398, R. 193) -will show, contrary to what

_ is asserted by Hazel to.be shown by McCarthy’s report (No.

398, R. 25), that Clarke did not, on McCarthy’s second visit,

deny the connection of Hartford with the preparation of

the article. While Clarke refused to give McCarthy any

statement or affidavit atthe time, he also said ‘‘of course

if I am subpoenaed I ‘will give all thé facts as I: know them:

I would not perjure myself for anyone.’’ (No. 398, R. 24.)

There was no connection whatever between the Hazel in-

vestigation and the payments. to Clarke. (See our brief |

-at No. 398, p. 62 et seq.) -

(c) The government's brief, pages 30-31, refers to Hart-

ford-Empire v.,Coe., 87 Fed. (2d) 741, in support of the

proposition ‘that Hartford “further — 2 the favor-

able decision in the Hazel infringement suit ‘‘thus secur-

ing. additional patents in the glass making field’’. It is

true that in the Coe case, Hartford laid stress on the de-

cision in the Hazel case, but it is also true that the court in

the Coe case rested its decision on other data and dacisions.

It is submitted that a reading of the Coe decision will show

that it did not result from. Hartford’s favorable decision

in the Hazel case. Interesting to note, the court in the Coe

ease referred at length to the decision of the Eighth Cir-.

cuit Court of Appeals in the Obear-Nester ease, wherein

that court reached conclusions on the prior art directly con-

trary.to the conclusions of J udge Gipson in the Hazel case.

The court deciding ~ Coe case —* with that Court of —

-Appeals.

(d) The’ government's brief reiterates seores of times —

the charge of ‘‘fraud’’ against respondent. In contrast is

the significant fact that the government’s brief nowhere as- ©

serts that the article contained any untruth whatever, or .

that Clarke did not. in good faith adopt it as his own, or that -

it did not correctly state Clarke’s own Pe ledge and be-

lief.

On

Il.

The unclean hands doctrine is not applicable to either

the Hazel or the: Shawkee infringement suit. Since the

Clarke article was true, since it was in fact Clarke’s ar-

ticle when used, and since Hazel’s counsel had elected not

to challenge it because the challenge would merély empha-

‘size its truth (see our brief at No. 398, pp. 54-5), there i:

no factual basis for the application of the unclean hands ,

doctrine to the Hazel case. /

It seems plain from the concessions uit by counsel for

Shawkee at the argument that in the Shawkee infringement -

suit the validity of the patent was ‘‘not disputed’’ (it was

“in fact admitted—-see p. 6, mfra), and that the / Clark’.

article was not referred to at all. The only question was

ae

infringement ; more specifically whether. Shawkee was using ~

the feeder of the expired Hitchcock patent. Both the Dis-

trict Court and the Court of Appeals held against Shawkee

on that issue of fact. And see our brief at No. 423, p. 10. -

_ Quite apart from these matters, however, the power of

the Circuit Court of Appeals to recall its mandate and re-

assume jurisdiction over the cases ended with the terms in

which the respective mandates were sent down (see our

brief at No. 398, pp. 25-8), and consequently, it could not, as

a matter of law, have ordered dismissal of the bills.

The lack of power in the Court of Appeals is not a mere .

‘self-imposed custom, as the government’s brief contends

(p. 12) but.is statutory (See our brief at No. 398, p. 27).

We are not here concerned with the powers of the District -

Court (cf. the government’s brief, p. 13) but only with the’

present power of the Court of Appeals in the premises.

; It.

-The government urges, brief p. 26, that if an applicant

' practices a fraud upon the Patent Office, and a. patent

thereafter issues, the patent, owner should be’ denied all

equitable relief against infringers on the ground of un-

clean hands. It urges- this ‘‘even. though the fraud was not

essential to the issuance of the patent’’ (brief, p. 3). It

‘would have the Court declare a sort of attainder to be

saddled upon the patent throughout its entire life, nullify-

ing the terms of the patent grant provided by. the statute

(35 U.S. C. 40). and precluding an injunction or aeccount-

ing, no matter how inconsequential or ineffective the

‘‘fraud’’ or kow gross and deliberate the infringement.

‘It has long been held by this Court that fraud in the pro-—

curement of a patent is.nct a’ defense to an action for in-

fringement. _ Rubber Co. v. Goodyear, 9 Wall. 788; Railway

Co. v, Dubois, 12 Wall. 47; Mowry v. Whitney, 14 Wall. 434.

The Goodyear and Mowry cases were-in equity, yet this

- Court did not hold that the fraud alleged constituted un-—

r

“”

.

-clean ugh the nature of the fraud in those cases.

was of far greater consequence and far more intimately re-

lated to the grant of the patent than is claimed in the case

at har. Indeed, in the Mowry case, which was for infringe-

ment of a patent that had been extended under the law then

existing, the allégation of the defendant, taken as true for

purposes of decision, was that the extension had been pro- ~

cured by fraud. Yet this Court rejected’ the defense.

The reason for these holdings is plain.- An inventor, by.

taking out a patent, publishes to the world a creation which

he might have kept to himself, and the public receives the . .

benefit. This is the consideration he gives for the patent

contract. If he in fact discloses a real invention, why, ab-

sent a contrary statutory condition, should the patentee and

his assignees* be deprived of the limited right of exclusion

which was held out to him as an inducement to make that

disclosure? And, since the public has irrevocably taken the

benefit of the disclosure, why, absent a statutory condition,

should it refuse-to give the patentee what it promised by

the statute to give him?

It is significant that although the cases upon the subject .

go back for three quarters of a century, and Congress has

since enumerated the defenses available to infringers**, it

has never chosen to make fraud i in the procurement of the

patent a defense. .

The government’s brief, p. 31, admits that ‘‘a defendatt

in an infringement suit may not attack the validity of a

patent on the ground of fraud,’’ and that ‘‘the Government.

alone may maiftain an.action for the cancellation, of /a pat-

ent.’? The government says it is not asking thatthe pat-

ent be held invalid, but does ask that enforcement of it be

‘ refused in equity. We submit that the aie cm is ask-

*It will be eed that if the government's (rane be.

adopted even an innocent purchaser of the patent for value would

bée penalized. |

** See R. S. 4920, 35 U.S. C. § 69, enae ‘ul “Mareh 3, 1897, and re- .

enacted August 5, 1939.

6

ing: that there be done indirectly what it sdeseatidl cannot be -

déne directly. The very essence of the patent grant is ex-

clusion. (35 U.S. C. § 40.) ;

‘Under the government’s -présetit contention, patentees :

would .be forever subjett to the danger that some court

might .be persuaded there had been a fraudulent represen- .

tation to the Patent Office and hold the patent to be unéu-

forceable thereafter, ‘even though the representation was

wholly immaterial to the grant (Govt. brief, p. 3).

_ In considering the application to the instant case of the

proposition just, stated, it is significant that although the.

government, knowing the facts regarding the Clarke

article, filed its anti-trust suit in Toledo -in 1939, it

_did not seek to have the Peiler patent annulled; it filed a

brief amicus curiae in the court below in 1941 but there said

it was not ‘‘now taking steps to have the patent here jin-

volved annulled’? (No. 423, R. 48); and it has not now -—

brought. such an action ‘and does not suggest any intention

to do so, although it asserts that it ‘‘does in proper cases”

do so (see fhe government’s brief, p. 31, footnote).

' Nor does the government’s brief challenge the validity

of the Peiler patent or deny that it discloses a real con- .

tribution to the glass art. The Shawkee petitioners, Glen-

shaw and McKee, admitted i in their answer that they had ,

‘‘acknowledged and recognized and still continue to ac-

knowledge and recognize?’ the valitlity of the Peiler pat-

ent (No, 423, R. 63). * ?

The evils of a policy such as the government contends for

are-recognized and fully discussed by this Court i in Mow re

ee Whitney, 14 Wall. 434, supra. ;

The government’s contention goes far beyond any of the

- eases on the subject of unclean hands. In the Keystone

Driller case, 290 U. S. 240 (govt. brief pp. 22, 26, 30): this

Court said the unclean hands doctrine was applicable only

where there were ‘such violations of conscience as in some

; oo “ - i . - ee

a

measure affect the equitable relations: between the parties

in respect of something brought before the Court for ad-

judication”” (emphasis ours). \And the Court of Appeals

in that case indicated that, the facts being fully known, the ©

patent owner might institute new suits. 62 F. (2d) 48, 51.

Indeed, the patent was subsequently litigated and was con-

sidered by this Court on its merits. Keystone Driller Co..

v. Northwest/Engineering Co., 294 U. S42. It is inconceiv-

able that if this Court had. deomed that» can attainder was

saddled on the patent. by the unclean hands decision in 290

U. S. 240 it would have done anything other than dismiss

the complaint in the Northwest Engineering ease on that

ground.

te the Morton Salt case, 314 U. S. 488 (govt: br. pp. 10,

28, 29) this Court said that ‘‘Undoubtedly ‘equity does |

a demand that its suitors shall have led blameless lives’ ’’,

and indicated that when the practices therein found ob-

_jectionable had been ended and the results of past miscon-

_ duct had been fully dissipated, equity would no Janger deny

relief (314 U. S. p. 493).

The decisions typified by. the Morton Salt case and the

Mercoid case (govt. br. »p. 10, 13, ete.) stand for a principle

wholly different from that for which the government con-

tends in the case at bar: Those cases involved the wrong-

-ful use of a patent, after issue, in an attempt to create or

maintain a monopoly outside that measured by the patent

claim. They held the patent to its lawful scope and refused

its enforcement, where to do so would in fact enforce a-

-monopoly uncountenanced or forbidden by the law. In‘those -

cases this Court acted in personam and condemned,. not

the patent, but.the current acts of the patent owner in cre-

ating or maintaining an unpatented monopoly. Here, the

' . government would have the Court act in rem and forever at- :

taint a patent for acts which were ended before the patent

ever issued, eyen though those acts were not essential to the

On natal at - abt iarntlilaersee ional pusee-> ante

> »* *

. ‘ 8 . /

. . °

grant of the patent, and in the absence af any misuse of the

-pateat grant. :

.

Réspectfully submitted, .- -

Watters J. Buewrxo,

Aitorney for Respondent.

Of Counsel: ,

Franck W. Coz,

Epcar J. Gooprics.

February 11, 1944.

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