Amicus Curiae Brief — Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation

“I. Introduction and summary------.-..---------

6s II. The doctrine of mutuality of estoppel has properly

been rejected in those classes of cases where it

promotes neither fairness to the parties nor

| ‘2g judicial convenience---.....----------------

eS A. Judicial limitation of the doctrine of

mutuality of estoppel_--_...-..-----

B. Factors contributing to the judicial limi-

REESE SAE a SSEE eo a Nn ee

‘Be 1. “Offensive” v. ‘“‘Defensive’’ use of

mn OMA SRE Cas? EESTI Sh

et 2. Control over the circumstances of

oe RN Noes Dok. on eee

. 3. The fullness of the prior trial; the

absence of new evidence_--__-_-

& 4. Settlement and compromise - - ---

5. Inconsistent verdicts and the en-

o couragement of piecemeal liti-

, i al citia stasis edi atigctedombinle

Buen 6. Full and fair opportunity to

a & (Sen ARM ta |

| rr)

a

z .

4138-473—71——-1

21

21

a

0

III. While many of the same factors which have pro-

moted reform of the doctrine of mutuality of

estoppel are present in patent litigation, public

policy considerations suggest the need for par-

ticular care in extending the reform to such

A. Considerations supporting estoppel of a

patent holder once his patent has been

held invalid

B. Considerations arguing against estoppel

of a patent holder once his patent has

been held invalid

C. Conclusion

IV. The rule of Triplett v. Lowell has not been adop-

ted by Congress, and this Court should decide

its continued validity.

Conclusion

CITATIONS

Cases:

Adamson v. Hill, 202 Kan. 482, 449 P. 2d 536

Aghnides v. Goodrie, et al., 210 F. 2d 859

Aghnides v. Holden, 226 F. 2d 949

Aghnides vy. The Meyer Co., 117 F. Supp. 839

Bahler v. Fletcher, 474 P. 2d 329

Berner v. British Commonwealth Pac. Airlines, Lid.,

346 F. 2d 532, certiorari denied, 382 U.S. 983

Bernhard v. Bank of America Natl. Trust & Savings

Asen., 19 Cal. 2d 807, 122 P. 2d 892

9, 10, 11, 12, 13, 36

Bigelow v. Old Dominion Copper Co., 225 U.S. 111__--

Boys Market v. Clerks Union, 398 U.S. 235

Bruszewski v. United Stateg, 181 F. 2d 419, certiorari

Cauefield v. Fidelity & Cas. Co. of New York, 378 F. 2d

876, certiorari denied, 389 U.S. 1009

City of New York v. United States, 390 U.S. 715

Coca-Cola Co. v. Pepsi-Cola Co., 36 Del. 124, 172 Atl.

Commissioner v. Sunnen, 333 U.S. 591

Compeo Corp. v. Day-Brite Lighting, 376 U.S. 234..-. 3,26

(ases—Continued

Crosland-Cullen Co. v. Crosland, 249 N.C. 167, 105 Page

BE. Bd O86 2. 2.2 ce cnccccsncccccccocnscesesss 13

Davis v. McKinnon & Mooney, 266 F. 2d 870- ------ 11

Desmond v. Kramer, 96 N.J. Super. 96, 232 A. 2d 470. 13, 18

DeWitt v. Hall, 19 N.Y. 2d 141, 225 N.E. 2d 195_-_- 12

Ellis v. Crockett, 451 P. 2d 814_....---..-...------- 12

Falk v. United States, 375 F. 2d 561-.-....--------- 11

Feinstein v. Edward Livingston & Sons, Inc., 457

BW, Db FEB adn rence ccickccsccensonscesucccee 13

First Natl. Bk. of Cincinnati v. Berkshire Life Ins. Co.,

176 Ohio St. 395, 199 N.E. 2d 863_.-..-_-.------ 13

Girouard v. United States, 328 U.S. 61._-.---------- 38, 41

Graham v. John Deere Co., 383 U.S. 1----.---------- 3, 33

Graves v. Associated Transport, Inc., 344 F.2d 894. 5, 11, 16

Helvering v. Hallock, 309 U.S. 106.......--.-------- 38

Home Owners Fed. Savings & Loan Assn. v. North-

western Fire & Marine Ins. Co., 354 Mass. 448,

th i vc cammahinetbinattdinkemedbinimanidss 12

Howell v. Vito’s Trucking & Excavating Co., 20 Mich.

eR eA A eee 13, 23

Kayler v. Gallimore, 269 N.C. 405, 152S.E. 2d 518... 18

— Manufacturing Co. v. C-O-Two Co., 342 US.

ss deine estes die delint lien hed lide 14, 29, 30, 34

Bes v. National Screen Service, 349 U.S. 322__.--- 20

Lear, Inc. v. Adkins, 395 U.S. 653_------.---------- 27,29

Taher ¥. BENG TAT Be BO Tihiikn cnc ccctcccdnsiscss 11

Lucas v. Velikanje, 471 P. 2d 103.-....--------:---- 12

Lustik v. Rankila, 269 Minn. 515, 131 N.W. 2d 741... 12

Lynch v. Chicago Transit Authority, 62 Ill. App. 2d

IE Pc ttawandctieinadinnawicwines 13

Mackris v. Murray, 397 F. 2d 74.-..--.------------ 11,15

Mast, Foos & Co. v. Stover Manufacturing Co., 177

ER OTS A ESS SO ee 24

Nickerson v. Kutschera, 390 F. 2d 812, on remand, 295

F. Supp. 1, reversed 419 F. 2d 983_-.--- 19, 22, 25, 27, 34

Nickerson v. Pep Boys—Manny, Moe & Jack, 247

DR iithindiiewet bbb itinibenke idee 21

Nyyssonen v. Bendiz Corp., 342 F. 2d 531, certiorari

denied, 382 U.S. 847

ee ee ee

Cases—Continued

Pennington v. Snow, 471 P. 2d 370_---.--------2.. oe

People v. Ohio Cas. Ins. Co., 232 F. 2d 474__...____. ll

Picard v. United Aircraft Corp., 128 F. 2d 632__.___ 2

Rachal v. Hill, —- F.2d —, C.A. 5, No. 29585,

decided December 3, 1970. -.-..-------------222. 10

Reardon v. Allen, 88 N.J. Super. 560, 213 A. 2d 26... 4g

Sanderson v. Balfour, 109 N.H. 213, 247 A. 2d 185... 49

Sanitary Refrigerator Co. v. Winters, 280 U.S. 30____. 4

Sears, Roebuck & Co. v. Stiffel, 376 U.S. 225.______. 3, 26

Seguros Tepeyac, S.A. Compania Mexicana v. Jernigan,

410 F. 2d 718, certiorari denied, 396 U.S. 905......

S. H. Kress & Co. v. Aghnides et al., 246 F. 2d 718,

certiorari denied, 355 U.S. 889__-..........______ 39

Spettigue v. Mahoney, 8 Ariz. App. 281, 445 P. 2d 557_. 45

Stillpass v. Kenton County Airport Bd., Inc., 403 S.W.

Gc cdctbhdoudevdandadidnecéwsdent hc 13

Suggs v. Alabama Power Co., 271 Ala. 168, 123 So

BO A cnctececconcsmntcsnpenecccostbssnetwhelic 13

Taylor v. Sartorious, 130 Mo. App. 23, 108 S.W

ebimwnnnctsnssedddbedaonishedidusteuadlad 13

Technograph Printed Circuits, Ltd. v. Bendiz Aviation

Corp., 327 F. 2d 497, affirming 218 F. Supp. 1,

certiorari denied, 379 U.S. 826........-.--..____. 28

Technograph Printed Circuits, Ltd. v. Methode Elec-

tronics, Inc., et al., Civ. No. 62 C 1761____________ 28

Technograph Printed Circuits v. United States, 372 F.

i Sa ATES VS ie ot We 3, 7, 14, 19, 23, 25, 36

Teitelbaum Furs, Ine. v. Dominion Ins. Co., 58 Cal.

95 G0, O78 PO GIR. is isk cas ks 12

Tidewater Patent Devel. Co. v. Kitchen, 371 F. 2d 1004,

certiorari denied, 389 U.S. 821_.._....-.-..-...-.. 34

Triplett v. Lowell, 297 U.S. 638__..---------------- 2,

3, 4, 5, 6, 7, 8, 12, 19, 24, 25, 28, 30, 35, 36, 37, 39, 41, 43, 44

United States v. Bell Tel. Co., 128 U.S. 315__--_.-..- m4

United States v. International Bldg. Co., 345 U.S. 502. %

United States v. United Air Lines, 216 F. Supp. 709,

affirmed as to res judicata, sub nom. United Air

Lines v. Wiener, 335 F. 2d 378, certiorari dismissed,

Be Se ndinciwateararmnnkinknhivuksts 11, 16, 17, 22

—— Oe

‘ontinued

University of Ill. Foundation v. Winegard Co., 271 F.

Supp. 412, 402 F. 2d 125, certiorari denied, 394 U.S.

Walker Inc. v. Food Machinery, 382 U.S. 172...-----

W. E. Hedger Transp. Corp. v. Ira S. Bushey & Sons,

Je; 10D Fi BE Te ads Cow cipttawiwincsiscnncsven

Zdanok v. Glidden Co., 327 F. 2d 944, certiorari denied,

WT UB. TER. ncccccntaciewionssins 5, 9, 11, 16, 17,

Statutes and Rules:

aA | 8 Re er a ee

Patent Code of 1952, 66 Stat. 792, 35 U.S.C. 1-293--

37,

BI, Til cckssansnnackedtenaseeomae deb weiiaie

ih He. dckobbhhchhoubnaanbdiae dade pethedwene

I ki i i lh

I ITT iscsi ik cc lh le sa oo mg eegniemti

EA Biiteskceneisrbnascunieeosnuner ntveie

is srs en a: oie ee alien ew ncenanlain de api

DD, TR n dc cvdivesscdsconassstensparsonawnap

Congressional :

“An Analysis of Patent Litigation Statistics,” Staff

Report of the Subcom. on Patents, Trademarks,

and Copyrights of the Sen. Com. on the Judiciary,

86th Cong., 2d Sess., S. Res. 240.....-----..-----

General Revision of the Patent Laws, Hearings Before

the House Judiciary Committee, 90th Cong., on

H.R. 5924, 90th Cong., Ist Sess__.....-..----.._--

Hearings on the American Patent System before the

Subcommittee on Patents, Trademarks and Copy-

rights of the Senate Committee on the Judiciary,

Ce. Ss ai, cade a dew vend ddnnde

Hearings before Subcomm. on Patents, Trademarks,

and Copyrights of Sen. Comm. on the Judiciary, on

Patent Law Revision, 90th Cong., 1st Sess. (1967) - -

Patent Law Codification and Revision, Hearings

Before the House Judiciary Committee on H.R.

a ee a ee

Patent Law Revision, Hearings Before the Subcom-

mittee on Patents, Trademarks and Copyrights,

Senate Committee on the Judiciary, 90th Cong., 1st

Sess., on S. 2, S. 1042, S. 1377 and S. 1691

21, 22

37

34,

38, 40

38

27

42

34

Congressional—Continued he

Recovery in Patent Infringement Suits, Hearings

before H. Comm. on Patents, on H.R. 5311, 79th

Cang., 8 Best... . nwccasccncccccecccccncecnesks 4

Report of the President’s Commission on the Patent

System, Recommendation No. XXIIT..... 2.2.2... 42

Report of the Proceedings of the Judicial Conference

of the United States, Feb.-Sept. 1968_............. 4

H.R. 3760, 82d Cong., 1st Sess. ...........--22.2.. 40

H.R. 5924, 90th Cong., Ist Sess... ......---222 222. 4

H. Rep. No. 1587, Part 2, 79th Cong............... 4

H. Rep. 1923, 82d Cong., 2d Sess._......-..---.... 4]

Dh nol tdnannendtenesbanesenesdunis 43

i Se ee AE ininnnceusengenvencssuedeeustia 43

S. Rep. No. 1503, 79th Cong., 2d Sess___.---..._... 4]

S. Rep. No. 1979, 82d Cong., 2d Sess....-..-....... 4

Miscellaneous:

Calvert, The Encyclopedia of Patent Practice and Inven-

CD SR. cv ciccccnccecccnsecticnndenens 34

Currie, Civil Procedure, The Tempest Brews, 53 Cal.

a I a iw hae Niele eee i ed 15, 22

Currie, Mutuality of Collateral Estoppel, 9 Stan. L.

BA Be Ce itkcitnddn gachondaes casendenchasse 22

Developments in the Law—Res Judicata, 65 Harv. L.

i PE nettvtattucdescccuskhaminoestnns 20

Kayton, “The Crisis of Law in Patents” (Patent

Resources Group, Washington, D.C., 1970). __.-_.. 34

1B Moore’s Federal Practice, 4 0.412_...........--.. 12

Moore’s Federal Practice, 1970 Cum. Supplement- . - -- 12

Moore & Currier, Mutuality and Conclusiveness of

Judgments, 35 Tul. L. Rev. 301........-..----- 14, 18, 22

Note, 35 Geo. Wash. L. Rev. 1010 (1967). __....--.-- 15, 19

Restatement, Judgments, § 93 (1942). ............-. 8, 23

Semmel, Collateral Estoppel, Mutuality and Joinder of

Parties, 68 Colum. L. Rev. 1457. ..........-.-- 14, 15, 21

Weinstein, Revision of Procedure: Some Problems in

Class Actions, 9 Buff. L. Rev. 433 (1960) _....----.- 16

7 Works of Jeremy Bentham 171 (Browning ed. 1843)...

2% fy See ere

9n the Supreme Court of the United States

OcToBER TERM, 1970

No. 338

BLONDER-TONGUE LABORATORIES, INC., PETITIONER

Vv.

University OF ILLINOIS FouNDATION AND JFD ELEc-

TRONICS CORPORATION, RESPONDENTS

ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF

APPEALS FOR THE SEVENTH CIRCUIT

BRIEF FOR THE UNITED STATES AS AMICUS CURIAE

OPINIONS BELOW

The opinion of the court of appeals (App. 54-71) is

reported at 422 F’, 2d 769. The opinion of the district

court (App. 71-90) is not reported.

JURISDICTION

The modified judgment of the court of appeals was

entered on April 2, 1970. The petition for a writ of

certiorari was filed on June 30, 1970 and was granted

on October 19, 1970. Subsequently this Court re-

quested the parties to discuss the following additional

issues not raised in the petition for certiorari:

(1)

2

“1, Should the holding of Triplett v. Lowell, 297 U8,

638, that a determination of patent invalidity is not

res judicata as against the patentee in subsequent liti-

gation against a different defendant, be adhered to?

2. If not, does the determination of invalidity in

the Winegard litigation bind the respondents in this

case ?”

The jurisdiction of this Court rests on 28 U.S.C,

1254(1).

QUESTIONS PRESENTED

The United States will discuss the following ques-

tion:

Whether Triplett v. Lowell, 297 U.S. 638, holding

that a determination of patent invalidity does not

bind the patentee in subsequent litigation against a

different defendant, should be overruled or limited.

INTEREST OF THE UNITED STATES

The United States submits this brief amicus curiae

because of its interest in the questions which this

Court asked the parties to discuss, namely, whether

and to what extent Triplett v. Lowell, 297 U.S. 638,

should be adhered to. That case held that the defend-

ant in an action for patent infringement may not

plead as a defense that the patent he is charged with

infringing was found invalid in prior litigation to

which he was not a party, but must establish invalidity

again, if he can, in his own right.

The suggestion that a final adjudication of patent

invalidity may estop the patent holder from asserting

his patent against any defendant raises issues of pub-

lie importance. On the one hand, through the con-

stitutional provision for a patent system and the im-

plementing statutes, the United States is committed

to the preservation and enforcement of a system which

rewards invention by conferring a legal monopoly over

its exploitation for 17 years. On the other hand, it is

of paramount public importance to prevent and cor-

rect the existence and exercise of unprivileged eco-

nomic monopoly power. Graham v. John Deere & Co.

383 U.S. 1. Both policies bear on the Triplett issue. As

this Court itself has held, the public should not be

denied access to unpatentable ideas through improper

assertions of patent monopoly power. Sears, Roebuck

& Co. v. Stiffel, 376 U.S. 225; Compco Corp. v. Day-

Brite Lighting, 376 U.S. 234. Yet there are many who

have concluded that patent litigation presents issues

so complex and difficult of understanding to the non-

technical mind, e.g. Nyyssonen v. Bendix Corp., 342

F, 2d 531, 5382 (C.A. 1), certiorari denied 382 U.S. 847,

that a single judicial declaration of patent invalidity is

insufficient to conclude the issue. F.g., Technograph

Printed Circuits v. United States, 372 F. 2d 969, 977-

978 (Ct. Cl.). Issues of fairness to the patent holder and

of judicial economy are also at stake.

Various legislative solutions to this complex and

difficult question have béen suggested over the years—

some by those responsible for the administration of the

patent system and some by those responsible for the

administration of the antitrust statutes—bnt no unified

legislative policy has yet emerged. We cv not sug-

gest, however, that for this reason the Court should

4138-473—71——-2

sacinattiedine

4

withhold decision, or avoid any modification of Triplett

pending legislative action. To the contrary, Triplett

follows the doctrine of mutual estoppel, a common

law creation subject to judicial change and, as we

show in our argument, there has been no legislative

action which should deter the Court from deciding the

questions which it posed to the parties in this case.

STATEMENT

The Respondent University of Illinois Foundation

instituted actions, against different defendants, in two

separate United States District Courts, claiming in-

fringement of patents for home television antennae.

On June 23, 1967, the United States District Court

for the Southern District of Iowa rendered a detailed

and comprehensive opinion (A. 101-124) holding the

so-called ‘‘Isbell Patent’’ invalid. University of IU.

Foundation v. Winegard Co., 271 F. Supp. 412 (S.D.

Iowa). In an opinion revealing careful attention to

the technical issues raised, the Court of Appeals for

the Eighth Circuit affirmed. 402 F. 2d 125. Certiorari

was denied on March 24, 1969. 394 U.S. 917.

The present suit, brought by the Foundation in

the United States District Court for the Northern Dis-

trict of Illinois, claimed infringement by petitioner

Blonder-Tongue Laboratories, Inc., of two patents:

the “Isbell” patent which had been the subject of the

Towa litigation, and the “Mayes” patent. On June 27,

1968, the district court held that both the Isbell and

Mayes patents were valid and infringed by petitioner

(A. 71-90). Citing the decision of this Court in Trip-

lett v. Lowell, supra, it expressly declined to follow the

ruling of the District Court for the Southern District

of Iowa in Winegard holding the Isbell patent invalid

(A. 73).' On appeal, the Court of Appeals for the

Seventh Circuit affirmed the district court’s ruling

with respect to the Isbell patent, but held that the

Mayes patent was invalid for obviousness, 422 F. 2d

769. The Seventh Circuit, noting the inconsistency of

its holding with the Eighth Circuit’s ruling, stated that

“Tt would seem sound judicial policy that the adjudica-

tion of that issue against the Foundation in one action

where it was a party would provide a defense in any

other action by the Foundation for infringement of

the same patent.” The Seventh Circuit added: “That,

however, is not the law in this field,” citing Triplett,

422 F. 2d at 772.

ARGUMENT

I. INTRODUCTION AND SUMMARY

The ruling in Triplett v. Lowell, 297 U.S. 638, that

a determination of patent invalidity does not bind the

patentee in subsequent litigation against the different

defendant, rested primarily upon a legal doctrine of

“mutuality of estoppel,” which holds that a party to

litigation may not assert that a prior judgment is

binding upon his adversary unless the party asserting

the judgment also is bound by it. That doctrine has

been the subject of criticism and limitation in recent

years. There is increasing recognition that there are

circumstances in which no unfairness results from

estoppel which is not mutual. £.g., Zdanok v. Glidden

Co., 327 F. 2d 944 (C.A. 2); Graves v. Associated

‘The decision of the Eighth Circuit in the Winegard case had

not yet been rendered.

6

Transport, Inc., 344 F. 2d 894 (C.A. 4) ; Bruszewski y,

United States, 181 F. 2d 419 (C.A. 3), certiorari de.

nied, 340 U.S. 865; Bernhard v. Bank of America

Natl. Trust & Savings Assn., 19 Cal. 2d 807, 122 P

2d 892. In particular, it is held, there is normally no

unfairness where no new facts appear ; where the party

asserting the estoppel is the defendant; where the

plaintiff, being also plaintiff in the action asserted ag

estopping, had the incentive and opportunity fully to

present his case; and where the threat of estoppel may

serve to promote a joinder of parties which the poten-

tially estopped party might otherwise find it in his ip-

terest to resist.

More controversial issues are presented by the ques-

tion whether this development in the law generally

ought to have application in patent cases. This ques-

tion presents a public policy issue in addition to the

usual questions of judicial economy and fairness to

parties thought to be involved in the estoppel ques-

tion. The public interest in limiting monopolies, on

the one hand, and its interest in rewarding inven-

tion, on the other, have at least a potential for con-

flict. The highly technical nature of some patent liti-

gation, often taxing the capacity of lay courts to de-

cide with confidence, Nyyssonen v. Bendix Corp.,

supra, suggests a particular need for caution and care

in developing estoppel rules in the patent context.

Nonetheless, we conclude that the difficulty of these

issues is insufficient to warrant an uncritical continu-

ing adherence to Triplett, particularly in the face of

7

the changes in estoppel doctrine generally. Instead,

claims of estoppel in patent cases should be considered

on a case by case basis, giving due weight to any fac-

tors which would point to an unfair or anomalous

result from their allowance.’ In this case, the facts

appear to indicate that an estoppel would not be un-

fair, and we suggest that the case be remanded to the

lower court to determine, under the guidance of this

Court’s opinion, whether that is so.

Finally, we address the contention that Triplett has

been adopted by legislative action, or is so uniquely a

matter for legislative consideration that this Court

ought not now to disturb it. Neither contention, in our

view, is valid. The rules of estoppel are uniquely judi-

cial in character, and Triplett never pretended to be

more than a particular application of those rules to

patent litigation. The legislative consideration of the

estoppel rule in patent cases has been inconclusive,

and has never reached such a stage as to amount to

legislative adoption. It is thus entirely appropriate for

the Court to act in the matter.

?“From the course of decisions since Bernhard in 1942 it is

clear * * * that the courts have been moving cautiously, at-

tending closely to the circumstances and needs of the particu-

lar case and type of litigation, rather than applying sweeping

generalizations or the broad principle that ‘one day in court’

is always enough. If appraisal of the factors pertinent to the

concrete case plainly teaches that the prior judgment should

be conclusive mutuality may well be held unnecessary; but if

that road is not the one clearly marked, relitigation will still

be allowed.” Technograph Printed Circuits Ltd. v. United States,

372 F. 2d 969, 976 (Ct. Cl.).

8

Il. THE DOCTRINE OF MUTUALITY OF ESTOPPEL HAS prop.

ERLY BEEN REJECTED IN THOSE CLASSES OF Cases

WHERE IT PROMOTES NEITHER FAIRNESS TO THE pap.

TIES NOR JUDICIAL CONVENIENCE

At the time of the unanimous decison in Triplett, it

was unquestioned that ‘‘the common law applicable to

successive litigations concerning the same subject mat-

ter,’’ 297 U.S. at 644, allowed a party to rely upon a

prior judgment as res judicata or collateral estoppel

only if both he and the party against whom the plea

was asserted were bound by the prior judgment. Bige-

low v. Old Dominion Copper Co., 225 U.S. 111, 131;

Restatement, Judgments, §93 (1942). This was the

doctrine of ‘‘mutuality of estoppel,” and it formed the

basis of this Court’s conclusion in Triplett that “an

adjudication adverse to any or all the claims of a

patent * * * is not res adjudicata and may not be

pleaded as a defense’’ by a person who was not a party

to the prior litigation. 297 U.S. at 642. For sound rea-

sons, the doctrine of mutuality is now being sharply

curtailed. In this section of the brief we examine that

development without reference to the special consider-

ations applicable to patent litigation, seeking to iden-

tify the factors promoting change and the factors

contributing to the continuing application of the

doctrine.

A. JUDICIAL LIMITATION OF THE DOCTRINE OF MUTUALITY OF

ESTOPPEL

As early as 1843, the mutuality doctrine had been

criticized by Bentham as destitute of any semblance

of reason, and as “a maxim which one would suppose

to have found its way from the gaming table to the

pench.’’ Bentham, Rationale of Judicial Evidence, in

7 Works of Jeremy Bentham 171 (Browning ed.

1843), quoted in Zdanok v. Glidden Co., 327 F. 2d 944,

954 (C.A. 2), certiorari denied, 377 U.S. 934. In 1942,

the Supreme Court of California rendered a landmark

decision rejecting the rule. Justice Traynor stated:

The criteria for determining who may assert

a plea of res judicata differ fundamentally

from the criteria for determining against whom

a plea of res judicata may he asserted. The re-

quirements of due process of law forbid the

assertion of a plea of res judicata against a

party unless he was bound by the earlier litiga-

tion in which the matter was decided. * * *

He is bound by that litigation only if he has

been a party thereto or in privity with a party

thereto. * * * There is no compelling reason,

however, for requiring that the party asserting

the plea of res judicata must have been a party,

or in privity with a party, to the earlier

litigation.

No satisfactory rationalization has been ad-

vanced for the requirement of mutuality. Just.

why a party who was not bound by a previous

action should be precluded from asserting it as

res judicata against a party who was bound by

it is difficult to comprehend.

Bernhard v. Bank of America Natl. Trust & Savings

Assn., 19 Cal. 2d 807, 811-812, 122 P. 892, 894-95.

) In the 28 years that have followed, federal and

state courts have increasingly rejected the require-

10

ment of mutuality, and this has especially been the

ease where the prior decision is invoked defensively,

against the plantiff bringing a suit which depends on

an issue he lost in a prior action in which he also wag

the plantiff. The Court of Appeals for the Fifth Cir.

cuit recently stated:

Although many states still honor the rule of

mutuality of estoppel, the modern trend hag

been to discard the rule and preclude a party

from relitigating an issue decided against him

in a prior action, even if the party asserting the

estoppel was a stranger to the prior action.

See DeWitt v. Hall, 19 N.Y. 2d 141. 278

N.Y.S. 2d 596, 225 N.E. 2d 195, 31 A.L.R. 3d

1035 (1967). The federal rule comports with the

modern trend and thus it is clear that the re-

quirements of mutuality need not be met for

collateral estoppel to be applied in an action

presenting a federal question in the courts of

the United States.

Rachal v. Hill, C.A. 5, No. 29585, decided December 3,

1970, sf, op. p. 5 (emphasis added)-

The quoted statement accurately reflects the current

state of the law in the lower federal courts; in well-

reasoned decisions, several circuits have followed the

Bernhard holding. See, e.g., Bruszewski v. United

States, 181 F. 2d 419, 421 (C.A. 3) (per Hastie, J.),

certiorari denied, 340 U.S. 865:

This second effort to prove negligence is com-

prehended by the generally accepted precept

that a party who has had one fair and full op-

portunity to prove a claim and has failed in

that effort, should not be permitted to go to

trial on the merits of that claim a second time.

11

- Both orderliness and reasonable time saving in

judicial administration require that this be so

unless some overriding consideration of fair-

ness to a litigant dictates a different result in

the circumstances of a particular case.

The countervailing consideration urged here

is lack of mutuality of estoppel. In the present

suit Bruszewski would not have been permitted

to take advantage of an earlier affirmative find-

ing of negligence, had such finding been made

in the Isthmian case * * *. The finding of no

negligence * * * was made after full opportu-

nity to Bruszewski on his own election to prove

the very matter which he now urges a second

time. Thus, no unfairness results here from

estoppel which is not mutual. In reality the

argument of appellant is merely that the appli-

cation of res judicata in this case makes the

law asymmetrical. But the achievement of sub-

stantial justice rather than symmetry is the

measure of the fairness of the rules of res

judicata.’

*Accord: Zdanok v. Glidden Co., 327 F.2d 944, 954-56

(C.A. 2), certiorari denied, 377 U.S. 934; Graves v. Asso-

ciated Transport, Inc., 344 F.2d 894 (C.A. 4); Lober v. Moore,

417 F.2d 714, 717 (C.A.D.C.); Seguros Tepeyac, S.A. Com-

pania Mexicana v. Jernigan, 410 F.2d 718 (C.A. 5), certiorari

denied, 396 U.S. 905; Cauefield v. Fidelity & Cas. Co. of New

York, 378 F.2d 876, 879 (C.A. 5), certiorari denied, 389 U.S.

1009; United States v. United Air Lines, 216 F. Supp. 709,

725-720, affirmed as to res judicata, sub. nom. United Airlines

v. Wiener, 335 F.2d 378, 404-405 (C.A. 9), certiorari dismissed,

379 U.S. 951; People v. Ohio Cas. Ins. Co., 232 F.2d 474 (C.A.

10); Davis v. McKinnon & Mooney, 266 F.2d 870 (C.A. 6);

but ef. Mackris v. Murray, 397 F.2d 74 (C.A. 6) (no use of

prior judgment against defendant in former action, under

Bernhard rule, by plaintiff in second action); Falk v. United

States, 375 F.2d 561 (C.A. 6) (reciting the mutuality rule while

413-473—71——-3

12

There is also an unmistakable trend in the state

courts toward abandoning the ‘‘mutuality’’ require.

ment ;* of the state courts of last resort squarely faced

with the issue in recent years, most have followed the

Bernhard decision, at least where a plaintiff is suing

twice on the same claim, and a decision against him in

the first suit is invoked as a defense.’

holding that the issues were not the same in the two suits),

On the basis of its unfavorable commentary upon the Triplet

rule in the opinion now under review, it seems safe to assume

that the Court of Appeals for the Seventh Circuit would join

the courts rejecting the mutuality doctrine.

*One of the few commentators to defend the mutuality doc-

trine previously stated that “Most state courts recognize and ap-

ply the doctrine of mutuality, subject to certain exceptions sub-

sequently discused. And the same is true of federal courts, when

free to apply their own doctrine”. IB Moore’s Federal Practice,

€ 0.412, pp. 1803-1804. But in the 1970 Supplement to his work,

Professor Moore recognized that “Admittedly, the trend in the

federal courts is away from the rigid requirements of mutuality

advocated herein.” Jd., 1970 Cum. Supplement, p. 53. The same

trend is evident in state courts; it no longer can be stated

safely that most state courts adhere to the mutuality doctrine.

5 The Supreme Court of Oregon, in a well-reasoned opinion,

was the most recent state court to adopt Bernhard. Bahler v.

Fletcher, 474 P.2d 329 (Ore. 1970); see also Pennington vy.

Snow, 471 P.2d 370, 376-77 (Alaska 1970); Ellis v. Crockett,

451 P.2d 814, 822 (Hawaii 1969); Pat Perusse Realty Co. v.

Lingo, 249 Md. 33, 238 A.2d 100 (1968); Sanderson y. Balfour,

109 N.H. 213, 247 A.2d 185 (1968); Home Owners Fed. Sav-

ings & Loan Assn. v. Northwestern Fire & Marine Ins. Co.

354 Mass. 448, 238 N.E. 2d 55, 57-59 (1968) (approving use of

Bernhard by a defendant against a previously losing plain-

tiff); DeWitt v. Hall, 19 N.Y. 2d 141, 225 N.E. 2d 195 (1967)

(“In New York “the ‘doctrine of mutuality’ is a dead letter”);

Lustik v. Rankila, 269 Minn. 515, 131 N.W. 2d 741 (1964);

Teitelbaum Furs, Inc. v. Dominion Ins. Co., 58 Cal. 2d 601,

875 P.2d 439 (1962); Lucas v. Velikanje, 471 P.2d 103 (Wash.

App. 1970) (lower state appellate court held that State Su-

13

- B, FACTORS CONTRIBUTING TO THE JUDICIAL LIMITATION

The basic force behind these judicial developments

appears to be the desire, consistent with considerations

of fairness, to limit relitigation of issues, particularly

in an era of crowded dockets and long pre-trial delays.

While due process would preclude use of an estoppel

against a party who never had an opportunity to

eontest the issue, no such fundamental consideration

forbids its use against one who has already lost the

issue, albeit in another forum and against another

party. It is true, as some have pointed out, that where

the party asserting the estoppel is involved in the

litigation for the first time, the litigation against him

is not “harrassment,” an ‘‘additional’’ expense, or the

perpetuation of a controversy which he had previously

thought to have settled; even without an estoppel, he

has the advantages of knowing what his opponent’s

preme Court would follow Bernhard in an appropriate case) ;

Howell v. Vito’s Trucking & Excavating Co., 20 Mich. App.

140, 173 N.W. 2d 777 (1969); Desmond v. Kramer, 96 N.J.

Super. 96, 232 A.2d 470 (1967); Lynchv. Chicago Transit

Authority, 62 Til. App. 2d 220, 210 N.E. 2a 7#z (1965); Coca-

Cola Co. v. Pepsi-Cola Co., 36 Del. 124, 172 Atl. 260, 263 (Del.

Super. 1934); Contra, Adamson v. Hill, 202 Kan. 482, 449

P.2d 536 (1969); Kayler v. Gallimore 269 N.C. 405, 152 S.E.

2d 518 (1967) (compare, however, Crosland-Cullen Co. v. Cros-

land, 249 N.C. 167, 105 S.E. 2d 655); Suggs v. Alabama Power

Co. 271 Ala. 168, 123 So. 2d 4 (1960); cf. Feinstein v. Ed-

ward Livingston & Sons, Inc., 457 S.W. 2d 789 (Mo. 1970)

(dictum; compare Zaylor v. Sartorious, 130 Mo. App. 23, 108

S.W. 1089, 1094); Stillpass v. Kenton County Airport Bd.,

Inc., 403 S.W. 2d 46, 47 (Ky. 1966) (dictum). The vitality of

the mutuality doctrine is uncertain in several other states.

E.g., First Nat'l Bk of Cincinnati v. Berkshire Life Ins. Co.,

176 Ohio St. 395, 199 N.E. 2d 863 (expressly leaving the ques-

tion open).

14

case will be and of arguing for a result in comity with the

prior litigation. Technograph Printed Circuits, Ltd, y,

United States, 372 F. 2d 969, 977 (Ct.Cl.) ; Moore &

Currier, Mutuality and Conclusiveness of Judgments,

35 Tul. L. Rev. 301 (1960).

Nonetheless, litigation is expensive under any cir

cumstances, not only to the parties but also to others

who must wait their turn; and the expense itself

makes it possible that at least potential defendants

could be harassed by previously losing plaintiffs into

making settlements to avoid lawsuits which perhaps

they could not afford to defend. Where an issue has

been decided in one case after a full and fair trial,

the effort of a party to that litigation to secure the

opposite result in subsequent litigation does suggest

the logic of the gaming table, or else ‘“‘a lack of

discipline and of disinterestedness on the part of the

lower courts, hardly a worthy or wise basis for fash-

ioning rules of procedure.’’ Kerotest Manufacturing

Co. v. C-O-Two Co., 342 U.S. 180, 185. Particu-

larly is this true if the multiple trials could have been

avoided by the party against whom estoppel may be

asserted, through joinder in a single trial. Semmel,

Collateral Estoppel, Mutuality and Joinder of Parties,

68 Colum. L. Rev. 1457, 1475. In at least some circun-

stances, then, rejection of the mutuality requirement

appears warranted.

1. “Offensive” v. “Defensive” use of estoppel

From the beginning, courts and commentators have

appeared more willing to endorse rejection of the

mutuality requirement where the party sought to be

15

estopped was a repeating plaintiff, or at least plain-

tiff in the action claimed as estopping, than where he

was a repeating defendant or defendant in the action

first decided against him. Semmel, op. cit. supra at

1462; Currie, Mutuality of Collateral Estoppel, 9 Stan.

L. Rev. 281 (1957); Note, 35 Geo. Wash. L. Rev.

1010 (1967) ; Mackris v. Murray, supra; Spettigue v.

Mahoney, 8 Ariz. App. 281, 445 P. 2d 557. The plaintiff

has the initiative and a choice of forum, of defendant,

and, at least so far as service of process and venue per-

mit, of joinder. In such circumstances, there is no worthy

basis for an assumption that the first trial will not be

a full or a fair one, in which part of the plaintiff’s

case must or may be withheld. No concept of fairness

requires that a plaintiff be allowed to litigate the same

claim over and over again so long as he can find new

defendants. Indeed, permitting such behavior may

encourage plaintiffs to avoid joinder of claims, with

consequent wasting of judicial effort and time.

It does not follow that mutuality of estoppel must

be required where the party sought to be estopped was

the defendant in the action claimed as estopping. Pro-

fessor Currie, who initially inclined to the view that

mutuality should be insisted upon in such circum-

stances, op. cit. supra, has since acknowledged that

that view was the product of concerns which can be ac-

commodated in less sweeping fashion. Currie, Civil

Procedure: The Tempest Brews, 53 Cal. L. Rev. 25

(1965). The central concern is one of fairness—whether

the prior litigant had a full and fair opportunity to

present his case, and whether the application (or de-

ee

Sell tenheaiashnieadiih ee 1oa rained tena

16

nial) of an estoppel may tend to promote a “wait-and.

see” attitude on the part of persons who might haye

participated in the initial adjudication. In a number

of important cases, courts have concluded that use of

an estoppel against a former defendant was appropri-

ate. E.g., Zdanok v. Glidden, supra; Graves v. Asso-

ciated Transport, Inc., supra; United States v. United

Air Lines, 216 F. Supp. 709, 725-729, affirmed as to

collateral estoppel sub nom. United Air Lines v. Wie-

ner, 335 F. 2d 379, 404-405 (C.A. 9), certiorari dis-

missed, 379 U.S. 951. Some of the factors involved in

those cases bear examination.

2. Control over the circumstances of litigation

One of the factors referred to by those who would

limit estoppel to use against repeating plaintiffs is the

plaintiff’s greater control over where and whom and

whether he sues. However, a defendant subject to mul-

tiple suits may find that the first action against it is

brought in an inconvenient forum, or one where it

may seem that juries or courts are particularly recep-

tive to claims of the nature being made. Especially if

the potential plaintiffs share some commonality of

interest, there may be a risk that a strategy of suc-

cessive suits will be adopted.

* * * Tf the cases ultimately permit use of the

doctrine offensively, then collateral estoppel

would give non-party members of a plaintiff or de-

fendant class all the advantages of a class action

without the disadvantage of being bound by an

adverse decision. [Weinstein, Reviston of Pro-

cedure, Some Problems in Class Actions, 9 Buff.

L. Rev. 433, 454 (1960) ].

17

But it is evident that these factors are not present in

all cases, and where they are not, estoppel is appro-

priate.

Thus, in Zdanok, supra, there was essentially only

one forum where the dispute—the meaning of a col-

lective bargaining agreement—could be resolved. Al-

though the defendant employer faced suit by a large

number of its employees, it had acquiesced in the des-

ignation of one of the proceedings against it as a

“test case.”? In these circumstances, the Company,

although defendant, had assumed meaningful control

over the course of litigation against it; it had chosen,

and obtained, a full and fair judicial determination in

one of the cases against it, and was properly bound by

that decision in subsequent actions. Similarly, the

United Air Lines litigation, supra, involved multiple

suits against a carrier for injuries resulting from a

erash. The main trial was in a United States District

Court in California ; others had brought suit in Nevada.

The latter volunteered to join the California litigation,

and the defendant air line objected. Again, it had as-

sumed a responsibility for non-joinder which warranted

application of an estoppel on the issue of liability

against it.

3. The fullness of the prior trial; the absence of new evidence

One of the frequent criticisms in the commentaries

regarding rejection of the doctrine of mutuality is that

it fails to recognize that parties may not present their

entire case in litigation against a particular opponent,

and thus cannot fairly be bound in subsequent litiga-

tion by the outcome. Indeed, it is claimed, by making

Qe ORIN

18

each trial a possibly final one for the party faced with

multiple litigation, an estoppel rule could increase ag

well as reduce the burden on the courts. The party

will, of necessity, have to present his entire case each

time around, however trivial the outcome of that par-

ticular litigation. Moore & Currier, op. cit. supra, at

309-310.

The criticism has no validity as applied to plaintiffs

bringing multiple litigation against a number of parties;

it must be assumed that if a plaintiff feels strongly

enough to bring suit, he will do whatever is required

to win, and a contrary conclusion might only encour-

age the bringing of multiple litigation where it can he

avoided by joinder. As to defendants against multiple

plaintiffs, however, the criticism may be valid. The

first plaintiff may present a claim which is particu-

larly appealing for some special reason, or which in-

volves so little money as not to warrant a full defense.

Again, it would seem harsh to insist on such a defense

from one who may know that other potential plaintiffs

against him are waiting in the wings—plaintiffs who

will continue to have a cause of action against him if

he prevails, since they will not yet have had their “day

in ecourt.”’ See Pennington v. Snow, 471 P. 2d 370,

377-78 (Alaska 1970); Berner v. British Common-

wealth Pac. Airlines, Ltd., 346 F. 2d 532 (C.A. 2), cer-

tiorari denied, 382 U.S. 983; Reardon v. Allen, 88 N.J.

Super 560, 213 A. 2d 26 (1965) (no collateral estoppel

where first judgment was for $657); compare Des-

mond v. Kramer, 96 N.J. Super. 96, 323 A. 2d 470

(1967).

Jt is evident, however, that there are cases to which

the criticism does not apply. The first suit may be of

an importance that makes clear that a full defense

was in fact madé; the defendant may be unable to

state any new evidence or contentions which it might

make in a subsequent suit against it by other plain-

tiffs: In the United Air Lines litigation, for example,

the first trial consumed fifteen weeks, and the air line

conceded that. it would have no new evidence to pre-

sent on retrial. 216 F. Supp. at 728; see also, Nicker-

son V. Kutschera, 309 F. 2d 812 (C.A. 3), on remand,

295 F. Supp. 1, reversed 419 F'. 2d 983; Note, 35 Geo.

Wash. L. Rev. 1010, 1042 (1967). In Triplett itself

the Court observed that on remand ‘‘the court must

decide whether the issues of law and fact in the two

eases are the same and, tf they are not, it is not bound

by the earlier decision.’’ 297 U.S. at 648 (emphasis

added); see Aghnides v. Holden, 226 F. 2d 949, 950

(C.A. 3); Technograph Printed Circuits, supra, 372

F. 2d at 979. There remains the possibility, of course,

that a different court might interpret the same body

of evidence differently ; but that consideration returns

us to the gaming table and is insufficient to preclude

estoppel.

4. Settlement and compromise

Whenever a plaintiff obtains a judgment on all

claims, whatever its size, the question of estoppel

against him in a subsequent action is moot. But it

does not follow that the question of estoppel against

his defendant is settled, should the defendant face

further suits. The judgment may be in the form of a

4138-478—_71——4

20

consent decree, or so obviously a compromise resdly-

ing no issues that it would be improper to ascribe

to it any estopping effect. United States v. Inter.

national Bldg. Co., 345 U.S. 502, 504-505; cf. Lawlor

v. National Screen Service, 349 U.S. 322. .

It is improper to argue that an estoppel rule would

inhibit settlements or consent judgments. Collateral

estoppel bars relitigation only of issues actually liti-

gated to final judgment. Lawlor v. National Screen

Service, supra; see Developments in the Law—Res

Judicata, 65 Harv. L. Rev. 818, 840 (1952). Even in

the case of a settlement after judgment, in lieu of

appeal (when the justification for subsequent retrials

is substantially less), a settlement may in terms or

effect operate as a vacation of judgment. A consent

decree, too, is between the parties only, and ordinarily

admits no liability to the world at large. Cf. City of

New York v. United States, 390 U.S. 715.

The problem of compromise verdicts, in which a

jury discounts its doubts as to liability by reducing

damages, is more difficult. Like the defendant who does

not fully defend a case of minor importance, p. 18

supra, a defendant who is subject to an apparent com-

promise verdict cannot fairly be held bound by that

result in all circumstances, against all comers. But

such verdicts can often be identified; more important

for the question here, perhaps, they are likely to be

delivered only in a limited class of cases, such as

negligence actions. “Compromise” over the meaning of

a contract clause is not a likely outcome; other issues,

like patent validity, are more often tried to. the

court than to a jury. It would be excessive to foreclose

the use of estoppel against all repeating defendants

merely on the chance that particular verdicts might

eonstitute compromise.

5. Inconsistent verdicts and the encouragement of piecemeal

litigation

Making the estoppel rule applicable to defendants

might be thought to encourage piecemeal litigation and

a wait-and-see attitude on the part of potential plain-

tiffs in still another respect. Even though the de-

fendant might be successful in the first few suits

against it, those outcomes do not bind persons not

yet associated with the suit. There remains the chance

that the defendant will lose and, at that point, an

assertion of estoppel will become available against it.

The problem is a real one. Rules should perhaps be

developed that would compel joinder of plaintiffs in

such a way as to avoid such tactics. See Semmel, op.

cit. supra at 1475. As in the case of the issue of con-

trol over the course of litigation—perhaps more so,

since an inconsistency of verdict has already oc-

curred—an estoppel ought not to be found if this

factor suggests it unfair to do so. But the possibility

is a hypothetical one, hardly sufficient to warrant fore-

closing estoppel in all cases against once-defeated de-

fendants. Zdanok, supra, 327 F. 2d at 954-956.

6. Full and fair opportunity to defend

_ Another criticism sometimes made of the estoppel

rule is that it will not reduce litigation, but simply

change the issues. Rather than the substantive ques-

tion between the parties then on trial, it is ‘said; the

emphasis will be on the prior judicial Proceedings re

lied on as estopping. Moore & Currier, op. cit. supra.

The potentially estopped party will devote all: his

energy to showing why the former judgment was not

reached after a full opportunity to litigate, or is other-

wise unfairly viewed as estopping.

It is because there are so many more such isgues

where multiple-occasion defendants are concerned that

Currie initially suggested that only “defensive” use of

estoppel, against multiple-occasion plaintiffs, be per-

mitted. 9 Stan. L. Rev. at 322. He withdrew that sug-

gestion, however, when experience showed this not to

be a substantial problem, 53 Cal. L. Rev. at 37, and in

fact those courts permitting estoppel have experi-

enced no such difficulty. Zdanok, supra; United Air

Lines, supra; Nickerson, supra, 295 F. Supp. 1. It is

not a question of collateral review of the prior pro-

ceedings, for it is not the fairness of the trial which is

in question. Rather it is the fullness of the oppor-

tunity for determination of the issue as to which estop-

pel is sought. Whether there was such an opportunity

ean fairly readily be determined, with considerably

greater economy than retrial of the issue.

The factors discussed are not thought to be exhaus-

tive.* An estoppel will not be applied even in cireum-

*In one case, for example, an estoppel was denied against

a defendant whose first loss had been in an action for injunc-

tion, in which he had no right to a jury trial. Rachal v. Hill,

supra. Similarly, one can imagine cases in which even a plain-

tiff ought not to be found estopped by an initial defeat—for

example, as petitioner urges on another point here, if he was

stances of mutality “if injustice would result.” Re-

statement, Judgments §70 (1942); Commissioner v.

Sunnen, 333 U.S. 591, 600; Technograph Printed Cir-

cuits, supra, 372 F’, 2d at 977. These factors do suggest,

we believe, that limitation of the doctrine of mutuality

of estoppel even as to those who face multiple suits as

defendant could be brought about without eliminating

“the principles of justice and equity inherent in de-

termining whether collatera! estoppel should bar a

party from relitigating” issues in a particular situa-

tion. Howell v. Vito’s Trucking and Excavating Co.,

20 Mich. App. 140, 173 N.W. 2d 777. It is particu-

larly hard to see how an inflexible rule allowing reliti-

gation of issues by a plaintiff so long as new defend-

ants can be found is in any way a just or desirable

rule. Almost inevitably, because the choice to litigate is

his, it must be concluded that he has had a full and

fair opportunity at trial; refusing estoppel encour-

ages the wasteful and potentially oppressive practice

of piecemeal litigation; and relatively few cases can

be imagined in which equitable considerations would

warrant overriding an estoppel rule. If the prior

litigation necessarily decided an issue he seeks to re-

litigate, save for extraordinary circumstances an estop-

pel would be proper. While the case of the multiple-

deprived of key testimony by the refusal of a trial court to

grant a continuance during the unavoidable absence of a wit-

ness. While that refusal might not warrant reversal of an ad-

verse judgment in the particular action, it could nonetheless

raise questions about the fullness of the opportunity for trial,

and hence the justice of an estoppel in a suit against strangers

to that proceeding.

esniiania naumiadido ee

a

ee a er an te ee een Lee ae anne oe nme

24

occasion defendant is more difficult, it is not in oy

view insuperable; it is in any event not presented

here.

III. WHILE MANY OF THE SAME FACTORS WHICH Hayg

CAUSED MODIFICATION OF THE DOCTRINE OF MUTUALITy

OF ESTOPPEL ARE PRESENT IN PATENT LITIGATION, Pup-

LIC POLICY CONSIDERATIONS SUGGEST THE NEED FoR

CARE IN EXTENDING THE MODIFICATION TO SUCH LITI-

GATION

The discussion above makes plain that Triplett no

longer reflects estoppel law in general.’ The issue

7One district court has persuasively shown that, even at

time, the decision was broader than required by the two principal

cases on which it relied, Mast, Foos & Co. v. Stover Manufac.

turing Co., 177 US. 485 and Sanitary Refrigerator Co. y,

Winters, 280 U.S. 30. Nickerson v. Pep Boys—Manny, Moe &

Jack, 247 F. Supp. 221, 221-222 (D.Del.). Another decision

relied on in Triplett, United States v. Bell Tel. Co., 128 US.

315, 372, recited the difficulties caused by the mutuality doctrine,

as a justification for permitting the United States to sue to

void patents obtained by fraud:

“* * * [The right given to the infringer to make this defense

is a right given to him personally, and to him alone, and the

effect of a successful defense of this character by one infringer

is simply to establish the fact that, as between him and the

patentee, no right of action exists for the reasons set up in

such defense. But the patentee is not prevented by any such

decision from suing a hundred other infringers, if so many

there may be, and putting each of them to an expensive de-

fense, in which they all, or some of them, may be defeated and

compelled to pay because they are not in possession of the

evidence on which the other infringer succeeded in establishing

his defense. On the other hand, the suit of the government, if

successful, declares the patent void, sets it aside as of no force,

vacates it or recalls it and puts an end to all suits which the

patentee can bring against anybody. It opens to the entire

which remains is whether patent law ought to be an

area of special treatment, in which for reasons of pub-

lie policy the general modifications of the mutuality

doctrine should not be made. The general practice

in lower federal courts has been to continue to follow

Triplett,’ usually without any considered discussion of

the function of mutuality of estoppel in patent law.

But see T'echnograph Printed Circuits, supra, 372

F. 2d at 977-978. One judge has gone so far as to

characterize the Triplett rule as “queer’’ and ‘‘par-

ticularly abhorrent when considered against the back-

log of untried cases which clog our federal courts.”

Aghnides v. Holden, 226 F. 2d 949, 951 (C.A. 7) (con-

curring opinion). But most appear to have concluded

that “‘such change as may be desirable in this excep-

tion in patent cases to the general rule of collateral

estoppel should be made by the Supreme Court itself

or by Congress, which so far has refused to change the

rule in T'riplett.’’ Nickerson v. Kutschera, 419 F. 2d

983, 984 (C.A. 3) (Hastie, J. dissenting).

We discuss below the question of congressional ac-

world the use of the invention or discovery in regard to which

the patentee had asserted a monopoly.

This broad and conclusive effect of a decree of the court,

in a suit of that character brought by the United States, is * * *

so much more beneficial, and is pursued under circumstances so

much more likely to secure complete justice * * * that it is im-

possible to suppose that Congress, in granting this right to

the individual, intended to supersede or take away the more en-

larged remedy of the government.”

*Patent cases following 7'riplett are listed in Technograph

Printed Circuits, Ltd. v. United States, 872 F. 2d 969, 973-974

(Ct. Cl.).

26

tion. Here, we set out the policy considerations whieh,

in our view, suggest the need for caution and for

avoiding sweeping generalities in extending the gen-

eral modification of collateral estoppel doctrine to the

question of patent validity.

A. CONSIDERATIONS SUPPORTING ESTOPPEL OF A PATENT HOLDER ONCE

HIS PATENT HAS BEEN HELD INVALID

A patent is a legal monopoly. Sears, Roebuck & Co,

v. Stiffel Co., 376 U.S. 225, 229-30. It is anomalous

that once it has been found invalid after a full and

fair judicial proceeding, its holder may continue to

reap the benefits of the monopoly, and thus to deter

both the free use of his device and future invention in

the field. Ibid; Compco Corp. v. Day-Brite Lighting,

376 U.S. 234. Yet the economics of patent litigation

and the allocation of burden on the invalidity question

are such that the ability to continue bringing infringe-

ment suits, after a declaration of invalidity, assures that

many holders of a patent held invalid will continue to

benefit from the patent.

The vosts of infringement litigation are well known.

See Hearings before Subcomm. on Patents, Trade-

marks, and Copyrights of Sen. Comm. on the Judi-

ciary, on Patent Law Revision, 90th Cong., 1st Sess.

(1967), p. 103:

Another problem that faces the businessman

today is the matter of the high cost of prose-

cuting applications and asserting them against

infringers. The businessman can be subjected to

considerable harassment as an alleged infringer.

Even in cases where he feels strongly that the

- patent would ultimately be held invalid, when

he considers the hundreds of thousands of dol-

lars in complex cases that could be involved in

defending a suit, he may conclude that the best

course of action is to settle for less to get rid

of the problem. These nuisance settlements, al-

though distasteful, are often, under the present

system, justified on pure economics.

Another witness at these hearings estimated that the

average cost of litigating a patent suit was $50,000. Id.,

at 616. See also Lear, Inc. v. Adkins, 395 U.S. 653,

669; Picard v. United Aircraft Corp., 128 F. 2d 632, 641

(C.A.2) (concurring opinion).

These costs often preclude effective defense by al-

leged infringers. As Judge Hastie said in dissent in

Nickerson v. Kutschera, 419 F. 2d 983, at 988 n. 4:

Unless holdings of invalidity are given some

preclusive force, the expensive prospect of de-

fending an action for infringement brought

under even an invalidated patent may suffice to

force alleged infringers to pay royalties rather

than challenge the patent as a defense * * *.

The result is that invalidated patents may have

nearly as much force as valid ones, and the pub-

lie may have to pay “tribute to would-be mo-

nopolists’’ even after a holding of invalidity.’

*One study found that previously invalidated patents were

reasserted in 62 suits between 1949 and 1958. It also reported

that most suits of this kind were terminated without a second

adjudication, “An Analysis of Patent Litigation Statistics,” Staff

Report of the Subcom. on Patents, Trademarks, and Copyrights

of the Sen. Com. on the Judiciary, 86th Cong., 2d Sess., S. Res.

240, p. 19. Apparently, the defendant accepted a license under the

previously invalidated patent rather than bear the cost of

litigation.

28

Not only must the public pay royalties ; competitors

in the same field of endeavor may have to meet on an

unequal basis. Some may have obtained a determina-

tion of patent invalidity; others may have failed to

do so; still a third may have been forced to settle,

The three groups incur substantially different costs

for using the same device.

While such results cannot always be avoided, as

where the challenged patent is at first upheld, un-

critical adherence to Triplett tends to promote them,

For the expense of defending infringment actions

may make it as likely that an invalid patent will

continue to pay economic dividends as that an errone-

ous holding of invalidity will subsequently be over-

come. The Technograph Printed Circuits litigation

is a good example. The patent in question was ruled

invalid by the Court of Appeals for the Fourth

Circuit, Technograph Printed Cirenits, Ltd. v. Ben

dix Aviation Corp., 327 F.2d 497, affirming 218 FP.

Supp. 1 (D.Md.), certiorari denied, 379 U.S. 826,

and a similar recommendation has been made by the

Commissioner in the pending Court of Claims litiga-

tion, which has been on that court’s docket for more

than eight years. Yet at least ten other suits on the

patent are now pending in other district courts, see

372 F.2d at 971, including a class action in the North-

ern District of Illinois involving some 225 defend-

ants. Technograph Printed Circuits, Ltd. v. Methode

Electronics, Inc., et al., Civ. No. 62 C 1761; see id,

356 F.2d 442 (C.A. 7), certiorari denied, 384 U.S. 950.

The factors which brought about modification of

29

| the mutuality doctrine are particularly strong as ap-

plied to the typical infringement suit. In such suits,

the patent holder is plaintiff, with attendant choice of

whether, when, where, and whom to sue. The issues

presented, technical as they are, involve few risks of

the considerations which have sometimes been thought

to warrant caution in recognizing an estoppel against

a prior defendant. The patent holder could be said to

have something of a head start in defending the valid-

ity of the patent, since he has already had to establish

patentability to the satisfaction of the Patent Office.

The breadth of interpretation he places on his claims

in the course of seeking to show infringement is also

a matter subject to his control.

Perhaps the strongest argument for estoppel arises,

|| however, from the statutory presumption that the pat-

| ent is valid. 35 U.S.C. 282.° The estoppel of former

plaintiffs from relitigating in non-patent suits is

closely associated with their initiative in bringing

suit; they nonetheless have the burden of establish-

ing their right in those suits, and the estoppel is rec-

ognized even though the former judgment might be

said to be only that the plaintiff failed to carry his

'} burden—not that he had no right. In infringement ac-

| tions, the patent holder not only has the initiative, but

The statutory presumption applies in all contexts in which

| the issue of validity may arise: an infringement action under

35 U.S.C. 281; a suit for royalties, Lear, Inc. v. Adkins, 395

US. 653; a declaratory judgment action by one fearing an in-

fringement suit, Kerotest Mfg. Co., supra; and, conceivably, an

anti-trust suit charging monopolization through assertion of a

| patent known to be invalid, cf. Walker, Inc. v. Food Machinery,

| 882 U.S. 172.

en ene :

ee eS a

the comfort of knowing that, on the validity issue, it

is his opponent who bears the burden of proof.”

Moreover, this presumption is effectively reinforced

if the patent holder has prevailed in previous chal-

lenges to the patent’s validity. Supported by such de.

cisions, and the presumption of Section 282, he can

move at the close of the defendant’s evidence to strike

the defense of invalidity for failure to carry the bur.

den. The previous adjudication would seem to make

success on such a motion likely in most cases. Thus,

armed both with the initiative of suit and the placing

of the burden of proof on the opposing party, the

patent holder is poorly situated to complain that the

first suit he chooses to prosecute involves an insufii-

cient record or presentation.

B. CONSIDERATIONS ARGUING AGAINST ESTOPPEL OF A PATENT HOLDER

ONCE HIS PATENT HAS BEEN HELD INVALID

The principal considerations which have been

thought to counsel against estoppel in patent validity

litigation are summaried in the Court of Claims’ Tech-

nograph Printed Circuits decision—a decision which

nonetheless seems to recognize a flexibility in applica-

tion of the Triplett doctrine to permit the avoidance

of inequities or abuses, supra, n. 2:

For patent litigation there is a special rea-

son why relitigation is not automatically banned

4 Although the patent holder does not have the initiative in

a suit for declaratory judgment, Kerotest Mfg. Co., supra, such

a suit could be brought only on a showing of the basis for fear-

ing suit, and if the patent holder had earlier begun infringe-

ment actions his choice of venue would control. /bid.

31

as needless or redundant, and why error should

not be perpetuated without inquiry. Patent

validity raises issues significant to the public as

well as to the named parties. Sinclair & Carroll

Co. v. Interchemical Corp., 325 U.S. 327, 330

* * * Tt is just as important that a good patent

be ultimately upheld as that a bad one be defini-

tively stricken. At the same time it must be re-

membered that the issue of patent validity is

often “as fugitive, impalpable, wayward, and

vague a phantom as exists in the whole para-

phanalia of legal concepts * * *. If there be an

issue more troublesome, or more apt for litiga-

tion than this, we are not aware of it.” Harries

y. Air King Products Co., supra, 183 F. 2d at

162 (per L. Hand, C.J.). Because of the intrin-

sic nature of the subject, the first decision can

be quite wrong, or derived from an insufficient

record or presentation. [372 F. 2d at 977-978]

For the reasons set out above, pp. 17-19, we believe that

the question of “insufficient record or presentation’’

is no proper basis for withholding estoppel in infringe-

ment actions, brought on the patent holder’s initiative,

save in the most unusual circumstances, n. 6 supra.

The remaining considerations, however, warrant more

careful attention.

The constitutional provision for a patent system

argues against the adoption of a rule which in some

sense rests on a presumption that patents are aberrant,

or usually invalid. The patent system embodies an af-

firmative policy to reward invention. That is reflected

in the statutory presumption of patent validity; it

ought also to be reflected, it may be contended, in a

care that the law not seem to favor the invalidation of

NOMS Tet Naeger me me TN" MRR or

ern we AE a0 en

32

patents generally. It is as important that sound pat.

ents and invention be rewarded as that the public ly

protected against patent monopolies based on ingyf.

ficient invention. Both are strong public policies

From this it would not necessarily follow that be.

cause a declaration of patent validity is not binding

against persons not party to the litigation, a declam.

tion of invalidity ought not to be. But there is at least

reason to be sure that any declaration of invalidity is

fully warranted before it is given conclusive effect in

other litigation. For the fact is that courts do disagree

regarding the validity of particular patents.” And in

2 Litigation on the log-periodic antenna involved in the

instant litigation is a good example. Litigation on the Aghnides

patent No. 2,210,846 is another. In the four suits involving the

Aghnides patent, it was twice held valid in North Carolina

courts, Aghnides v. The Meyer Co., 117 F. Supp. 839 (M.D.NC.

1954); S. H. Kress & Co. v. Aghnides et al, 246 F. 2d 718

(4th Cir. 1957), cert. denied, 355 U.S. 889 (1957), and twice

invalid in Illinois courts, Aghnides v. Goodrie et al, 210 F. %

859 (7th Cir. 1954), Aghnides et al v. Holden et al, 226 F. %

949 (7th Cir. 1955), once in the latter court over the same prior

art evidence considered by the Patent Office Board of Appeals

and the North Carolina courts.

The Tatko patent No. 2,693,926 was held invalid by a New

York district court, 134 F. Supp. 4 (1955), the judge stating

that the patent was unbelievably simple. The Court of Appeals

affirmed the holding of invalidity, 233 F. 2d 9 (2d Cir. 1956},

cert, denied 352 U.S. 917 (1956). Tatko then sued a different

defendant in Vermont, and the District Court found the patent

valid and infringed, 157 F. Supp. 277 (1957), although the Court

of Appeals reversed by a divided vote, 270 F. 2d 571 (2d Cir. 1959).

Patent No. 2,133,642 was held invalid by the District Court,

159 F. Supp. 944 (1958) and affirmed by the Court of Appeals,

280 F. 2d 278 (1st Cir. 1960). The patent was subsequently held

valid by the 5th Circuit Court of Appeals, 307 F. 2d 790 (5th

Cir. 1962). The patent was then sued upon in a Delaware

district court and found invalid, 297 F. 2d 323 (3d Cir. 1961).

33

light of the public policy involved, the mere con-

yenience of an estoppel rule in ending litigation is

not sufficient in itself to warrant the conclusion that a

declaration of invalidity in the first litigation involv-

ing a patent ought to be conclusive.

One reason for the courts’ disagreement is undoubt-

edly the technical nature of many patent questions.

Although this Court stated in Graham v. John Deere

Co., 383 U.S. 1, 18, that patent questions are no more

difficult than “those encountered daily by the courts

in such frames of reference as negligence and scien-

ter,’ questions of reasonable care and intention pre-

sent issues of human experience, regarding which the

fact-finder can draw on his own experience. To decide

a question of obviousness, on the other hand, may

require a technical understanding that few ordinarily

achieve. American trial judges are not usually sci-

entists or engineers—qualifications that are widely

believed necessary for practice at the patent bar. In-

deed, it is not unknown for a court to admit its be-

wilderment with technical issues, and rest its decision

fundamentally on issues of credibility and the like—a

dubious ground on which to base a finding of invalid-

ity that is to be binding in all contexts. Nyyssonen v.

Bendiz Corp., 342 F. 2d 531, 532 (C.A. 1), certiorari

denied, 382 U.S. 847. All courts may not be so frank,

but inevitably in an era of growing technological com-

plexity many face the same difficulty. In some eases, a

* The case where a patent is at first upheld, and then declared

invalid, is more complex. See p. 21 supra.

34

careful and complete consideration of the issues,

marked by apparent understanding of technical ques-

tions, may be ample to warrant attributing estopping

effect to an adjudication of invalidity. Cf. Nickerson

v. Kutschera, supra, 419 F.. 2d at 986 (Hastie, C. J.,

dissenting). In view of these difficulties, however, a

flat rule of estoppel would not be warranted.

Objection is also made to general revision of the

Triplett rule on the ground that it would be largely

unnecessary. The patent code already embodies pro-

visions which arguably reduce the possibilities of

harrassment through successive litigation. Section

285 allows a court to allow reasonable attorney fees

to a prevailing party “in exceptional circumstances,”

which would include suit on a patent previously held

invalid and as to which the second court can find no

reasonable argument for validity. Tidewater Patent

Devel. Co. v. Kitchen, 371 F. 2d 1004, 1013 (C.A. 4).

Under 35 U.S.C. 288, a patentee forfeits his right to

recover his costs even as to valid claims of a patent if

he does not disclaim any invalid claims before bring-

%* Those who oppose revision of the 7’riplett doctrine also

suggest another source of conflict: the varying attitudes

among different: courts towards validity questions. See Cal-

vert, The Encyclopedia of Fatent Practice and Invention Men-

agement, 20-25; Hearings on the American Patent System be

fore the Subcommittee on Patents, Trademarks and Copy-

rights of the Senate Committee on the Judiciary, 84th Cong.,

1st. Sess., 176-185; Staff Report, id., 86th Cong., 2d Sess., “An

Analysis of Patent Litigation Statistics”; and see Kayton,

“The Crisis of Law in Patents” (Patent Resources Group,

Washington, D.C., 1970). This is an argument of which this

Court has previously refused to take cognizance. Kerotest

Mfg. Co. v. C-O-Two Co., 342 U.S. 180.

35

ing suits. The expense of patent litigation it is said,

renders both of these provisions inhibitors of worth-

less suits.

In addition to these general considerations, there

is reason to be concerned in particular cases as to

the proper scope of an asserted estoppel. It is com-

mon for the scope of litigated claim to be limited

or expanded by the patentee in light of the prior art

and, appropriately or inappropriately, the nature of

the infringing device. A claim could be interpreted

so broadly against a first infringer that it is held in-

valid, and yet it might be agreed that a narrower in-

terpretation, for example application against a pure

copier, would be sustained. Even though it might be

agreed that the patentee should be estopped from as-

serting the overbroad interpretation of his claim,

that estoppel ought not to run against all interpreta-

tions of the claim. In such a case, perhaps it can be

said that the issues are not identical to those previ-

ously adjudicated, and hence collateral estoppel would

not apply irrespective of the mutuality doctrine; the

patentee who loses his first suit may attempt to show

that a second presents narrower issues and thus es-

cape an estoppel that would otherwise apply.”

C. CONCLUSION

Since a unified legislative policy on patent estoppel

has not yet emerged, we do not suggest any final reso-

Intion to the Triplett issue here. As a general matter,

*The problem may also be alleviated to some degree by the

reissue provision, 33 U.S.C. 251.

a

ee oe

eect ALE «OEE

however, we support the modification of the doctrine

of “mutuality of estoppel’? which began with the

Bernhard decision. While the application of that

modification to patent questions is not without diff-

culty, we submit that it is at least appropriate to hold

that the Triplett doctrine is sufficiently flexible to deal

with the obvious waste motion of cases which present

identical issues of law and fact. 297 U.S. at 648; ef,

Technograph Printed Circuit, supra 372 F. 2d at 976,

And even that limited principle suggests that the pres-

ent case may be an appropriate one for an estoppel.

Here, the respondent was twice the plaintiff in in-

fringement actions; it chose the forum and the de-

fendant; it had the initiative to sue. The first proceed-

ings were evidently extensive; nothing in the record of

which we are aware suggests any discovery by re-

spondent of new evidence, or improper exclusion of

evidence by the court. Those proceedings resulted in a

thorough and well-reasoned opinion, revealing evident

grasp of technical detail; on review in the court of

appeals, the same competence and care were evident.

In these circumstances, few if any of the consider-

ations arguing against estoppel come to bear; those

which argue for it are particularly strong. Whatever

the resolution of the estoppel question in more diff-

cult cases, here there appears to be little doubt. While

it might be appropriate to remand the case to permit

the respondent to supplement the record to show how

estoppel would be inequitable—for example, whether

there had been any narrowing of claim, or whether

37

it could establish some equitable reliance on the exist-

ing Triplett rule—we believe that this case should be

reversed.”*

lv. THE RULE OF TRIPLETT V. LOWELL HAS NOT BEEN

ADOPTED BY CONGRESS, AND THIS COURT SHOULD DECIDE

ITS CONTINUED VALIDITY

A. It might be argued that because Congress has

not modified T'riplett v. Lowell in the 35 years it has

been on the books, it has in effect sanctioned succes-

sive suits to enforce patents previously held invalid. :

But our review of the available legislative materials,

in connection with both the 1952 revision of the

Patent Code and recent legislative proposals for in

rem determinations 2f patent validity, shows that

Congress has never made a legislative determination

in this area. This Court has often pointed out that

Congressional silence is an extremely weak reed on

which to rest an inference of legislative approval.

Boys Market v. Clerks Union, 398 U.S. 235, 241-242.

“The silence of Congress and its inaction are as con-

sistent with a desire to leave the problem fluid as they

% Res judicata and collateral estoppel are affirmative defenses

that ordinarily must be pleaded, which defendant did not do

here. See F.R. Civ. P. 8(c). However, the purpose of that

requirement is to give the plaintiff notice of the defense so

that he can meet it. Accordingly, where the defense necessarily

would have failed because of a controlling decision of this

Court, and where the facts giving rise to such a defense—the

presence of two suits upon the same patent—are readily noticed

by the Court, the requirement of a pleading should not be

viewed as precluding this Court from passing upon the issue.

Ci. W. E. Hedger Transp. Corp. v. Ira. S. Bushey & Sons,

Inc, 186 F. 2d 236, 237 (C.A. 2).

are with an adoption by silence of the rule of [pr.

viously decided] cases.” Girouard v. United States, 328

U.S. 61, 70.

In Girouard the Court concluded that three previous

decisions construing the citizenship oath in the No.

turalization Act did not state the correct rule of

law. The government argued, however, that the Court

could not overrule those decisions because Oongress had

adopted them. It pointed to the many legislative propos.

als to change the principle of the decisions, all of which

had died in committee, and to the fact that Congress

had re-enacted the oath without change even though

it generally revised the naturalization laws. The

Court held, however, that such legislative history did

not constitute approval by Congress of the que-

tioned decisions and that its silence could therefore

not be taken as an adoption. Accord, Helvering v. Hal-

lock, 309 U.S. 106, 119-120; Boys Market v. Clerks

Union, supra.

There is a striking parallel between Girouard and

this case, particularly as reflected in the history of the

1952 revision of the Patent Code. There the rule per-

mitting successive enforcement of patent claims pre

viously held invalid was adverted to in connection

with changes proposed in disclaimer procedure.” But

no action amounting to legislative adoption was taken.

* Disclaimer is the practice by which a holder of a multi-

claim patent may file with the Patent Office a disavowal of

one of the claims upon learning that it is invalid. At common

law, if one of several claims was invalid, the entire patent was

unenforceable. To relieve patent holders from this harsh rule

Congress in 1837 created a patent disclaimer procedure. 5 Stat.

117, R.S. 4917, 4922. Under this procedure a patentee who

had innocently and without fraudulent intent claimed more

Sl —_—_— NN SP OP Ss

o .

oo Vw s0lUeWlUCUMDOUlUCUMDECU

39

For ‘many years proposals had been submitted to

Congress to eliminate the unfairness and complexities

which had developed in disclaimer practice under the

Patent Code. Indeed, in 1933 the American Bar Asso-

ciation suggested a statute to relieve these complex-

ities which would have provided that a patentee’s

rights under a claim held invalid would not be affected

or prejudiced except as to the parties to the suit or

their privies.” Such a statute, of course, would have

definitively codified the doctrine of mutuality of

estoppel as applied to patents. The contemporary

judicial acceptance of the mutuality principle, how-

ever, as reflected in this Court’s decision in Triplett

v. Lowell, apparently reduced pressures for this solu-

tion. But continued confusion over disclaimer practice

finally resulted in incorporation of proposals for its

improvement into the comprehensive revision of the

than he should have could without unreasonable delay formally

disclaim the invalid portion of his patent upon learning of its

invalidity. Thereafter the remainder of his patent could be

enforced by the courts notwithstanding the common law rule.

Triplett v. Lowell, swpra, was a disclaimer case. The procedure

was quite complex because of difficulties in determining when

the patentee could be said to have learned that he had claimed

too much; and what constituted unreasonable delay. In addi-

tion, administrative problems resulted from attempts to dis-

claim less than an entire claim. These problems continued to

plague the courts, patentees and the Patent Office until the

disclaimer statute was revised in 1952, as explained within.

*15 J.P.O.S. 798: “A judgment or decree holding one or

more claims of a patent invalid shall not affect the validity of,

nor prejudice any rights under, any other claims of said patent;

and shall not affect the validity of, nor prejudice any rights

under the claims held invalid except as to the parties to the

suit in which such decree is entered, or their privies.”

OE Se tegen

i

40

patent laws which culminated in the present Patent

Code of 1952. 66 Stat. 792, 35 U.S.C. 1-293.

In testimony on the bill which became the 1952 law,

H.R. 3760, 82d Cong., 1st Sess., Mr. P. J. Federieo,

Patent Examiner-in-Chief, gave a comprehensive ex.

planation of the proposed revision, including changes

in disclaimer procedure. The bill proposed in Sections

203 and 204 that only a whole claim could be dis.

claimed, and that the invalidity of one claim would

not bar enforcement of the other claims, even if the

bad claim had not been formally disclaimed.” Mr,

Federico then went on to make the only reference to

the practice of relitigating claims previously adjudi-

cated invalid which we have been able to find in the

history of the 1952 legislation. He stated (1951 Hear.

ings, p. 103):

Other provisions of the bill perhaps take care

as well as is done in the present law of the

possibility of a patentee suing again after his

patent has been held invalid. That can be done

today and the bill makes no change in that sit-

uation, except that certain provisions might

tend to deter doing such a thing.

Apparently the provisions which “might tend to deter

doing such a thing”’ were Sections 248, which proposed

to bar recovery of costs unless a disclaimer of an in-

valid claim has been filed prior to suit; and Section

245, which proposed that the court in exceptional cases

may award reasonable attorneys fees to the prevailing

1° Patent Law Codification and Revision, Hearings Before the

House Judiciary Committee on H.R. 3760, 82d Cong., 1st Sess.

(hereinafter, “1951 Hearings”), at pp. 102-104.

41

party.” See 1951 Hearings, pp. 108-109. Mr. Feder-

ieo’s testimony was incorporated into both the House

and Senate Reports on the revision (H. Rep. No. 1923,

82d Cong., 2d Sess., p. 8; S. Rep. No. 1979, 82d Cong.,

9d Sess., p. 7) ; and the disclaimer and other provisions

proposed, renumbered because of other changes in the

pill, were enacted into law. 35 U.S.C. 253, 288 (dis-

claimer) ; 35 U.S.C. 285 (attorneys fees).

The foregoing passing reference to “present law’’,

in the course of a comprehensive revision of the Code,

presents substantially the same circumstances as were

involved in Girouard, and for the same reasons Con-

gress cannot be said to have re-enacted the rule of

Triplett.

B. Congress’ failure to act on various legislative

proposals which have recently been introduced either

to overrule Triplett or to alleviate its consequences,

are also without significance.

In 1966 the President’s Commission on the Patent

System formally recommended that the rule permit-

ting subsequent suits on patent claims previously held

invalid be abolished by legislation providing that a

final federal judicial determination declaring a patent

*The attorneys fee provisions in Section 248 were adopted

from a 1946 statute which permitted reasonable attorneys

fees to the prevailing party in an infringement suit. 60 Stat.

778. Mr. Federico testified that the statute was intended to

give the courts discretion to award fees only in exceptional

cases. 1951 Hearings at 108-109. Nothing in the history of

that statute referred to the rule in 7'riplett. See H.R. Rep. No.

1587, Part 2, 79th Cong., S. Rep. No. 1503, 79th Cong., 2d

Sess. Recovery in Patent Infringement Suits, Hearings Before

H. Comm. on Patents, on H.R. 5311, 79th Cong., 2d Sess.

ey aqeen ne meee

ae

42

claim invalid should be in rem. Report of the Presi.

dent’s Commission on the Patent System, Recom.

mendation No. XXIII, p. 38-39. A bill to implement

this and other recommendations, sponsored by the ad:

ministration then in office, was introduced (HR,

5924, 90th Cong., Ist Sess.). With other patent reyi-

sion bills, it was the subject of extensive hearings”

Section 294 of this bill proposed that a final adjudi-

cation limiting the scope of a claim or holding it in-

valid, should constitute an estoppel against the pat-

entee in any subsequent federal action. There was tes-

timony both in favor of and in opposition to this pro-

vision. For example, the American Bar Association

strongly opposed the change. 1967-68 Hearings at

464-465. The Department of Justice favored it. Id. at

622. The Judicial Conference of the United States

approved it in principle. Report of the Proceedings

of the Judicial Conference of the United States, Feb.-

Sept. 1968, p. 81. A parallel bill, 8. 2, 90th Cong., was

also introduced in the Senate and hearings were held

in which the same range of views were expressed.”

However, the committees which heard testimony

on the various proposed revisions, including the es-

toppel provision, made no report; no other legislative

action was undertaken ; and all bills died in committee.

21 General Revision of the Patent Laws, Hearings Before

the House Judiciary Committee, 90th Cong., on H.R. 5924, 90th

Cong., ist Sess, (hereinafter “1967-68 Hearings”).

#2 Patent Law Revision, Hearings Before the Subcommittee on

Patents, Trademarks and Copyrights, Senate Committee on the

Judiciary, 90th Cong., Ist Sess., on S. 2, S. 1042, S. 1377 and

S. 1691.

43

Thus neither house of the Congress acted one way or

the other with respect to the rule in Triplett.

Since that time a number of other patent revision

pills have been introduced. Two of these introduced

in the 91st Congress, S. 1246 and S. 2756, would, at

east by implication, recognize the rule of Triplett v.

Lowell by amending the provision for the award of

attorneys’ fees in exceptional cases. The proposal

would permit award of such fees where a claim had

been previously held invalid and is again held invalid,

if the court found there was no reasonable grounds

for the subsequent suit. Sec. 285, S. 1246, 91st Cong.;

Sec. 285, S. 2756, 91st Cong. There have been no hear-

ings or other action and the bills expired with the 91st

Congress.

C. Finally, it might be argued, particularly in the

light of recent legislative attention to the estoppel

problem, as outlined above, that if the T'riplett princi-

ple is to be changed, Congress rather than this Court

should do so.

Congress may of course ultimately adopt legisla-

tion making patent litigation an exception to the gen-

eral rules of estoppel that obtain in the courts; it may

determine, as proposed in 1967, that some form of in

rem procedure, with published notice and formal can-

cellation by the Patent Office, should be adopted in

place of existing practice. Or it may wish to permit

successive litigation subject to some form of sanction

to bar unreasonable conduct. There are a wide range of

possible legislative choices. The question here, how-

ever, does not involve a legislative choice. It is a ques-

t

aaa

44

tion of the general law of estoppel whose devel r

ment, in the absence of legislation, is peculiarly'a #

sponsibility of the judicial process. This Court create

the Triplett rule on the basis of the law of mutual

of estoppel as it then stood, and this Court appr

priately may modify the rule to reflect the char a

in that law that have since taken place. a

CONCLUSION

For the reasons stated, the judgment of the cous

of appeals should be reversed, and the case remanded

for further proceedings in accordance with this

Court’s opinion.

Respectfully submitted.

Erwin N. Griswo1p, Y

Solicitor General,

Ricuarp W. McLaren, #

‘Assistant Attorney General ©

L. Patrick Gray ITI, ae

Assistant Attorney Generelt fe

Peter L. Strauss,

Assistant to the Solicitor General,

Howarp E. SHaprro, ia

Watrter H. FLEIscHer, ers

Attorneys,

Janvaky 1971. e

6.8. GOVERNMENT PRINTING OFFICE: 197%