Petition for a Writ of Certiorari — Remington Rand, Inc. v. Royal Typewriter Co.

Supreme Court brief1949

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Text

aj VvrP it

Supreme Court of the Unite

Ocroser TzRm, 1949

REMINGTON RAND INC.,

Petitioner,

vs.

ROYAL TYPEWRITER COMPANY, INC.,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT AND SUPPORT-

ING BRIEF

‘ Frawors J. McNamara

Josers V. Meics

Attorneys for Defendant-Petitioner.

Y Praxcrs J. McNamana, |

JoszpH V. Metas, 2d¢on. 42° *

J. A. W. Suuson,

Frank C. STEeRox,

Wurm C. Conner,

Of Counsel.

Se ——————

INDEX

PAGE

Petition:

Questions PRESENTED - - 1,2

1. Is public policy contravened where a Dis-

trict Court decrees a patent to be valid and in-

fringed without trying the issue of validity, the

court having no adequate means to decide that

issue because defendant conceded validity? _.____ 1

2. Is public policy contravened where a court

of appeals affirms such a decree? _____________-_- 1

| 3. Should the Court of Appeals in such a case

permit the presentation of evidence on the issue

of validity so that the trial court may have ade-

quate means to decide that issue while the case is

still in the interlocutory stage and before account-

ing has. bagual ............... 2

VOLVED .......... oe

JURISDICTION —_-

Reasons RELIED ON FOR THE ALLOWANCE OF THE WRIT

PORTIA: inn siiciitinennivtiitebiines 6,7

Brief in Support of Petition:

JURISDICTION AND STATEMENT OF CasE _ 9

SprciricaTion oF Errors 9

Summary or ARGUMENT -_-- 9, 10

ARGUMENT:

I. The Woodfine patent in suit should be held in-

valid and the patented structure should be in

the public domain —~_------_ prea 10

ii INDEX

PAGE

II. In the patent system, the public interest (in pre-

serving the public domain) is paramount _____ 15

III. A concession of validity in a patent infringe-

ment suit contravenes the public policy which

requires that in the public interest, the issue of

validity shall be contested to protect the public

domain from conversion into illegal private

ne eR eee Ry —

IV. Failure of a party to contest the issue of valid-

ity does not foreclose the Court from deter-

mining that issue, in the public interest, and

does not relieve the Court of its duty to do so 17

V. A concession of validity does not create any

preclusion by estoppel in pais or by judgment

or otherwise. Even where private rights are

created thereby, they must be set aside where

it is necessary to do so to protect the public in-

terest __ ne “ 19

VI. The decree of the Court of Appeals should be

reversed because (1) the District Court contra-

vened public policy by failing to require a trial

of the issue of validity and thereby failing to

protect the public interest (2) the Court of

Appeals participated in and confirmed that

error, and (3) the Court of Appeals further

erred by refusing to give defendant any oppor-

tunity to correct those errors _..._.-__ 23

Conclusion:

This case involves questions of the greatest

importance in patent litigation, to wit, the pro-

cedure to be followed by members of the bar and

the District Courts and Courts of Appeal in pro-

tecting the public interest which is paramount in

every patent suit. Questions 1 to 3 inclusive under

the heading ‘‘Questions Presented’’ (supra, p. 1)

INDEX iii

PAGE

should be answered in the affirmative and by

so doing this Court will confer a benefit on the

lower Courts, the legal profession and the entire

public. The decision of the Court below is er-

roneous and should be reversed -------~---- 27

List or AUTHORITIES

Addressograph-Multigraph Corp. v. Cooper, 60 %.

Supp. 697, 156 F. (2d) 483 (1946) __- 19, 22

Atlantic Works v. Brady, 107 U. 8. 192, 2 S. Ct. 225 13

Baker, et al. v. Hughes-Evans Co., et al., 270 Fed. 97,

® ain 13

Concrete Appliances Co. v. Gomery, 269 U. 8S. 177, 46

S. Ct. 42, 45 (1925) 13

Cuno Engineering Corporation v. Automatic Devices

Corporation, 314 U. 8. 84, 62 S. Ct. 37 (1941) ------ 11, 12

Edward Katzinger Co. v. Chicago Metallic Mfg. Co.,

399 U. 8. 394, 67 S. Ct. 416, 420 (1947) ----6, 16, 19, 20, 23

Exhibit Supply Company v. Ace Patents Corporation,

315 U. §. 126, 138, 63 8. Ct. 513, 519 (1941) 45 U.S.

P. Q. 601 to 603, 119 F. (2d) 349 23, 24

Fitzsimmons v. Eagle Brewing Co., 3 Cir. 107 F. (2d)

BL Gatarioees 18

General Electric Co. v. Wabash Appliance Corp., et

al., 304 U. S. 364, 58 S. Ct. 899, 903 (1938) ---------- id

Halliburton Oil Well Cementing Co. v. Walker, 329

U. S. 1, 67 S. Ct. 6 (1946) ---- 14

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 332

U. 8. 238, 246, 64 S. Ct. 997, 1001 (1944) 15

Hill v. Wooster, 132 U. S. 693, 10 8. Ct. 228 ~...---- 26

iv INDEX

: waa

Hollister v. Benedict Manufacturing Co., 113 U. 8. 59,

72, 5 S. Ct. 717, 724 ~-

Mercoid Corp. v. Mid-Continent Investment Co., 320

U.S. 661, 64 S. Ct. 268, 271, 273 (1944) ________ 15, 16, 19,

21, 22, 23, 25

Morton Salt Co. v. Suppiger Co., 314 U. S. 489, 62 §.

Ct. 402 (1942) ___ totiinnninccthinigenihsoncemebiocdneaeae 15

Muncie Gear Works, Inc. v. Outboard etc., 315 U. S. 759,

766, 768, 62 S. Ct. 865, 870 (1941) ___.._ 17, 18

Nachman Spring-Filled Corp. v. Kay Mfg. Co., 2 Cir.,

139 F. (2d) 781, 783 (1943) at ae

Oscanyon v. Winchester Repeating Arms Co., 103 U. 8.

261 __ 18

Paramount Publix Corp. v. American Tri-Ergon Corp.,

294 U. S. 464, 477, 55 S. Ct. 449, 455 (1935) _____ 26

Pittsburgh Forgings Co. v. American Foundry Equip-

ment Co., 3 Cir., 119 F. (2d) 619 (1941) ______ 25

Pope Mfg. Co. v. Gormully, 144 U. S. 224, 12 8. Ct. 632,

636 (1892) ____ 16, 19, 21, 23

Precision Inst. Mfg. Co. v. Automotive Maintenance

Co., 324 U. S. 806, 65 S. Ct. 993, 998 ( WE eich cinetiees 15

Roberts v. Criss, 2 Cir., 266 F. 296, 302 __ Behe. 18

Scott Paper Company v. Marcalus Mfg. Co., 326 U.S.

way ee Oe ee) 16, 19, 20, 23

Sinclair & Carroll v. Interchemical etc., 325 U. S. 327,

65 S. Ct. 1143, 1145 (1945) ___ dis 17

Sola Electric Co. v. Jefferson Electric Co., 317 U. S.

173, 63 8. Ct. 172 (1942) ______ x!

Thomson-Houston, etc. Co. v. Lorain, etc. Co., 117 Fed.

my A A Ue i a eee 13

INDEX Vv

PAGE

United States v. Masonite Corp., 316 U. S. 265, 278,

62 S. Ct. 1070 (1942) 15

Universal Oil ete. v. Root Refining Co., 328 U. S. 575,

581, 66 S. Ct. 1176, 1179 (1946) 26

Veaux v. Southern Oregon Sales, {nc., 33 F. Supp. 605,

610, 9 Cir., 123 F. (2d) 455 (1942) 25, 26

Orner AUTHORITIES

Restatement of Contracts, Sec. 600, Comment -------- 18

Rivise and Caesar, Patentability and Validity, page 202,

Sec. 117

Walker on Patents (Deller’s Edition) Vol. 1, page 142 13

Williston, Contracts (Rev. Ed.), Sec. 1630a --------- 18

—

In THE

Sunreme Court of the United States

Ocroses Team, 1949

——— >

Remineton Ranp Inc.,

Petitioner,

vs. .

Royal TyPewRiTeR CoMPANY, Inc.,

Respondent.

senile

——

PETITION FOR WRIT OF CERTIORARI TO

THE UNITED STATES COURT OF APPEALS

FOR THE SECOND CIRCUIT

To the Honorable The Chief Justice and the

Associate Justices of the Supreme Court

of the United States:

Your Petitioner, Remington Rand Inc., respectfully

prays for a Writ of Certiorari to the United States Court

of Appeals for the Second Circuit to review a decree of

that Court entered on June 22, 1949.

A certified transcript of the record, including the pro-

ceedings in said Circuit Court of Appeals, is furnished

herewith, pursuant to Rule 38 of the rules of this Court.

Questions Presented

1. Is public policy contravened where a District Court

decrees a patent to be valid and infringed without trying

the issue of validity, the court having no adequate means

to decide that issue because defendart conceded validity ?

2. Is public policy contravened where a court of appeals

affirms such a decree ?*

*The Court of Appeals expressly stated that it and the District

pe had “no adequate means to decide the issue” (of validity).

nfra, p. 4.

3. Should the Court of Appeals in such a case permit the

presentation of evidence on the issue of validity so that the

trial court may have adequate means to decide that issue

while the case is still in the interlocutory stage and befor

accounting has begun?

Summary and Short Statement

of the Matter Involved

This petition relates to the case of Royal Typewriter

Company v. Remington Rand, Inc., a patent infringement

action involving U. S. Patent No. 1,916,905 to Woodfine,

relating to automatic, that is, spring-actuated, mechanism

for setting the margin controlling stops on a typewriter

carriage. The structures of the patented device and of the

accused device are described in the opinions of the District

Court for the District of Connecticut and the Court of

Appeals for the Second Circuit. See 76 F. Supp. 220 and

168 F. (2d) 691. Although the defendant! in its answer

pleaded the invalidity of tke Woodfine patent and cited

several prior art patents, at the trial defendant did not

contest this issue and put in no evidence to show the applica-

bility of these references im anticipation of the W oodfine

patent or as negativing invention therein. The trial issue

was erroneously narrowed to the sole question of infringe-

ment.”

*In this petition and accompanying brief, the petitioner and re-

spondent are identified by their positions in the District Court, :. é,

as defendant and plaintiff, respectively.

? The statement of counsel for defendant during the trial (opening

statement, Trial Record, page 23) was as follows:

“The validity of those claims may be doubtful, but non-in-

fringement by the defendant structure is so clear that we prefer

to rely upon the defense of non-infringement.”

In his brief in the Court of Appeals, defendant's attorney said

(Opening brief, p. 1):

“In the Court below we did not contend that the patent in suit

was invalid, nor do we make such contention here, but our positi

was and is that the claims in suit of the Woodfine patent are not

infringed by the structure manufactured and sold - appellant.”

—

| 3

was entered in favor of plaintiff. ( Res. '

On appeal to the Court of Appeals on the only issue tried,

and the District Court had “no adequate means to decide”

the question of validity (infra, p. 4). This Court denied

certiorari October 11, 1948, 69 S. Ct. 50, and rehearing was

denied November 11, 1948, 69 S. Ct. 129. The only issue

involved in those proceedings was the question whether the

doctrine of equivalents should be invoked to stretch the

claims to cover defendant’s device. .

This is a case where defendant’s trial attorney and the

District Court contravened the public policy by failing to

try the issue of validity. The Court of Appeals in its

opinion said, 168 F. (2a) 691 (decided May 1948):

“Judge Smith’s opinion in the district court has

been published, and states the disclosure in substance

and the claims in full. We shall assume a familiarity

with it in what we say and confine our discussion to

the only issue in dispute—infringement. As a pre-

liminary it is to be observed that the defendant con-

cedes the claims in suit to be valid; a concession we

shall accept, although the Supreme Court has said that,

when the defendant challenges the validity of claims

as well as their infringement, it is better practice to

pass on their validity. At first blush it might appear

8 There are two transcripts of the Record in this case. The first

was filed as a part of the petiti for certiorari denied Oct. 11, 1948,

69 S. Ct. 50, rehearing denied Nov. 11, 1948, 69 S. Ct. 129. The

question of validity was not involved. The second transcript of Record

is that filed as a part of the present petition to this Court for a writ

of certiorari and shows the proceedings in the Court of Appeals on

defendant’s petition in that seeking a hearing on the issue of

validity. To avoid confusion the first and second transcripts will be

identified as “First Rec.” and “Second Rec.” respectively.

that the situation is the same when validity is cop.

ceded, because the reason why we should pass on that

question, even though we can dispose of the suit other.

wise, ts so that invalid claims shall not remain ix

terrorem of the art. There is however *his di

im so proceeding, when the defendant concedes the

validity of the claims. He then puts in no evidence,

nor does he seek to defeat them on the patentee’s ows

presentation; and the Court has therefore no adequate

means to decide the issue.”

Note the statement of the Court of Appeals that neither

it nor the District Court had adequate means of deciding

the question of validity.

For reasons hereinafter set forth the Court of Appeals

should have, then and there, sua sponte, remanded the case

to the District Coxrt with instructions to obtain adequate

means to decide the issue by requiring a trial of the issue

of validity.

The judgment of the District Court as affirmed by the

Court of Appeals is therefore based on error, i. ¢., contra-

vention of public policy by failure to try out the question

of validity.

The purpose of the petition in the Court below was to

correct the above mentioned error and thereby promote

the public policy.

On June 13, 1949, defendant petitioned the Circuit Court

of Appeals as follows (Second Rec. 1 to 17):

“*(a) For an order recalling and amending the mandate

of this Court to the District Court for the District of Con-

necticut in this action, and remanding the case to the Dis-

trict Court for the filing of an amendment to the answer,

as appended hereto, and for a hearing on the issue of the

validity of the patent in suit, U. S. Patent No. 1,916,905 t»

Woodfine, and for a stay of the accounting.

3 5

(b) For such other and further relief as this Court may

deem appropriate for the purpose of permitting defendant

to show the invalidity of the Woodfine patent.’’

The grounds upon which that petition was based are as

follows:

“(1) The Woodfine patent is invalid and should be de-

elared to be so, for the reasons set forth in the accompany-

ing affidavit of Edwin W. Hammer.®

(2) For reasons of public policy, the defendant-peti-

tioner has the right to contest the validity of the Woodfine

patent.”

Plaintiff filed no answer and merely submitted a brief.

On June 22, 1949, the Court of Appeals denied defend-

ant’s petition without opinion and without giving any

reasons for such denial; in fact, the Court below omits in

its decree dated June 22, 1949 any reference to the real

relief prayed for; ¢. e., that the case be remanded to the

trial Court for a trial of the issue of validity.

The case is still in the interlocutory stage. Accounting

has not begun.

Jurisdiction

1. This is a suit arising under the Patent Laws of the

United States (28 U. S. C. Sec. 41 (7), Judicial Code Sec.

24 (7), New Title 28, Sec. 1338).

2. The jurisdiction of this Court is invoked under New

Title 28 U. 8. C. Sec. 1254 (1) and Rule 38 (5) (b) of the

rules of this Court.

3. The date of the decree which petitioner seeks to have

reviewed is June 22, 1949 (Second Ree. 17).

* That affidavit stands admitted. See footnote 5 infra, page 12.

Reasons Relied On for the Allowance

of the Writ

(1) It is of the greatest public importance to have

affirmative answers to the questions 1, 2, and 3 presented

above (supra, pp. 1, 2).

The answers should be in the affirmative because this

Court has laid down the general rule that fatlure to contest

validity is against public policy. See Edward Kateinger

Co. v. Chicago Metallic Mfg. Co., 329 U. 8. 394, 401, 67 S. Ct.

416, 420 (1947), where this Court clearly stated that failure

to make the defense of invalidity is a contravention of pub-

lic policy.

In that case this Court said:

“* * * public policy * * * is promoted by his making

the defense, and contravened by his refusal to make it.”

The fact that both the District Court and the Court of

Appeals in the present case acted in contravention of

that public policy emphasizes the need for a clear direc-

tive from this Court particularly when the Court of Ap-

peals admitted that it and the District Court had no ade.

quate means to decide the issue.

(2) There is no likelihood of litigation resulting in a

conflict of decisions between different Circuit Courts of

Appeal. See Petitioner’s Briefs, Petition for Certiorari,

Remington Rand, Inc., Petitioner v. Royal Typewriter Com-

pany, Inc., Respondent, 69 S. Ct. 50.

Prayer

Wuenerorg, your petitioner respectfully prays that a

writ of certiorari be issued to the United States Court of

Appeals for the Second Circuit to the end that this cause

may be reviewed and determined by this Court; that the

decree of said Court of Appeals dated June 22, 1949 be re-

versed and that petitioner be granted such other and fur-

ther relief as may be just.

Respectfully submitted,

Frawor J. McNamara

Joszpx V. Mezrcs

Attorneys for Defendant-Petitioner.

eS...

BRIEF IN SUPPORT OF PETITION

Decree of the Court Below (without opinion)

The United States Court of Appeals for the Second Cir-

cuit denied defendant’s petition without opinion (Second

Rec. p. 17).

Jurisdiction and Statement of the Case

The jurisdictional statement and the essential facts are

set forth in the accompanying petition.

Specification of Errors

The errors which petitioner will urge if the writ of

certiorari is issued are that the United States Court of

Appeals for the Second Circuit erred:

1. In contravening the public policy in respect of pat-

ents by affirming a decree of patent validity and infringe-

ment in a case where the issue of validity was not tried and

then

2. by refusing to give defendant any opportunity to cor-

rect error No. 1.

Summary of Argument

I. The Woodfine patent in suit should be held invalid and

the patented structure should be in the public domain.

II. In the patent system, the public interest (in preserv-

ing the public domain) is paramount.

III. A concession of validity in a patent infringement

suit contravenes the public policy which requires that

in the public interest, the issue of validity shall be

contested to protect the public domain from conversion

into illegal private monopolies.

IV. Failure of a party to contest the issue of validity does

not foreclose the Court from determining that issue, in

the public interest, and does not relieve the Court of its

duty to do so.

V. A concession of validity does not create any prech. —

sion by estoppel in pais or by judgment or otherwise

Even where private rights are created thereby, they

must be set aside where it is necessary to do so t

protect the public interest.

VI. The decree of the Court of Appeals should be reversed

because (1) the District Court contravened public pol.

icy by failing to require a trial of the issue of validity

and thereby failing to protect the public interest; (2)

the Court of Appeals participated in and confirmed

that error, and (3) the Court of Appeals further erred

by refusing to give defendant any opportunity to cor-

rect those errors.

ARGUMENT

I. The Woodfine patent in suit should be held

invalid and the patented structure should

be in the public domain.

(A) Nature of the Alleged Invention

The essence of the Woodfine patented structure is the

use of a spring* to caase quick, automatic movement of the

margin controlling stops on a typewriter, instead of manual

movement.

(B) Reasons for Invalidity

The Woodfine patent is invalid and the subject matter

is in the public domain because that patent seeks to monopo-

lize the use of a notoriously old expedient, i. e., the use of

& spring to automatically move a slidable member (the mar-

gin controlling stop on a typewriter carriage) toward a

fixed abutment. The use of such an expedient was common

to many diverse arts prior to Woodfine’s alleged invention

and Woodfine’s use thereof represents nothing more than

mechanical skill lying within the public domain.

* Emphasis throughout the brief has been supplied.

aca aran meena er sr

The following quotation from the well-known text,

“Patentability and Validity’ by Rivise and Caesar, page

202, Sec. 117, states the general rule as follows:

“$117. Utilising Expedient Common to Many Arts.

The second rule is that it generally requires nothing

more than the exercise of mere mechanical skill to

utilize an expedient common to many diverse arts,

even though its new use had never before been con-

templated.’’

The above rule merely reiterates the doctrine recog-

nized by this Court over a period of many years.

One of the most recent applications of the rule was in

the case of Cuno Engineering Corporation v. Automatic

Devices Corporation, 314 U. S. 84, 62 S. Ct. 37 (1941).

There, the essence of the patented structure was the use,

in a cigar lighter such as is commonly found on automobile

dashboards, of a bi-metallic element automatically to cut

off the electric heating current when the heating element

of the lighter reached a predetermined temperature. It was

shown that this expedient had been commonly used in di-

verse arts for the purpose of automatically cutting off the

electrical current in resistance heating elements, and this

Court held that its use for the particular purpose of the

patent represented the skill of the calling but not invention.

Mr. Hammer’s affidavit (Second Ree. 4 to 17)° attached

to the petition in the Court below shows that it is a com-

mon expedient in many diverse arts and also in the type-

writer art to use a spring to cause quick, automatic move-

ment of an element as a substitute for manual movement;

indeed it may be said to be axiomatic to cause quick, auto-

matic movement by the use of a spring. The patents dis-

cussed in Mr. Hammer’s affidavit are set forth in the

proposed amended answer (Second Rec. 3). None of those

patents were cited in the original answer.

The following is quoted from Mr. Hammer’s affidayit

‘Second Ree, 16, 17):

“As stated at the outset, I find that the essence of the

subject matter on which a patent was granted to Wood.

fine by the Patent Office was the use of a spring to cause

a margin setting stop on a typewriter to automatically

move toward and into engagement with an abutment,

instead of manual movement.

‘*In summary it will be seen:

(1) that the use of a spring to cause an element to

move quickly and automatically as a substitute for

manual movement is notoriously old.

(2) that the elements of the Woodfine structure in

the same or analogous functional relationship are found

in the patents discussed above. Those elements and

their functional relationship may be briefly described

as follows:

A slidable member or stop is normally held in en-

gagement with a rack bar or equivalent by a detent or

latch. The slidable member is biased toward a fixed

abutment by a spring. Release of the latch or detent

permits the spring to act and causes the slidable mem-

ber to ‘jump’ toward and into engagement with the

fixed abutment.’”*

Regarding the Benzing patent discussed in Mr. Ham-

mer’s affidavit, it will be seen (Second Rec. 8 to 9) that

the structure of that patent is the complete equivalent

of the Woodfine structure in every respect, indeed the

Benzing patent may be said to be a “judicial photograph”

of the Woodfine structure. The Benzing patent was applied

*See Hammer affidavit (Second Rec. 5 to 6) for a description

and illustration of the Woodfine patent in suit. A copy of that

patent was inadvertently omitted from the binder attached to defend-

ant’s petition in the Court below. A copy will be found in the First

Rec. (69 to 73).

—

(ERI a aa a SSH

| 13

for in Germany about forty days after Woodfine’s fili

date.

The principle set forth by this Court in Concrete Ap-

pliances Co. v. Gomery, 269 U. 8. 177, 46 8. Ct. 42, 45 (1925),

is applicable here. In that case, the Court said:

«e © * The adaptation independently made by engi-

neers and builders of these familiar appliances to the

movement and distribution of concrete cement in build-

ing operations and the independent patent applica-

tions, within a comparatively short space of time, for

devices for that purpose are in themselves persuasive

evidence that this use, in combination of well known

mechanical elements was the product only of ordinary

mechanical or engineering skill and not of inventive

genius. Atlantic Works v. Brady, 107 U. 8. 192, 2

g. Ct. 225, 27 L. Ed. 438. It is but ‘the suggestion of

that common experience, which arose spontaneously

and by a necessity of human reasoning, in the minds of

those who had become acquainted with the circum-

stances with which they had to deal.’ Hollister v. Bene-

dict Manufacturing Co., 113 U. 8. 59, 72, 5 8. Ct. 717,

| 724 (28 L. Ed. 901).”’

In Baker, et al. v. Hughes-Evans Co., et al., 270 Fed. 97,

99 (2 Cir., 1920), the Court said, quoting from Thomson-

Houston, etc., Co. v. Lorain, etc., Co., 117 Fed. 253, 54

0. C. A. 285:

‘Where a number of workers in a single field, when

confronted by an obstacle to the development of a

device, naturally, and practically contemporaneously,

independently substitute one well-known material for

another, * * ° the presumption is raised that such

workers rightly regarded the substitution as a mere

improvement, * * ° such as would be adopted or

selected by the skilled workman.’’

See also Walker on Patents (Deller’s Edition), Vol. 1,

page 142.

coer

aes

In addition to invalidity because of lack of invention

claims 1 and 2 are invalid because they are functional anj

indefinite and do not comply with Sec. 4888, Revised Stat.

utes,”

The spring which is the essence of the alleged invention

(as conceded by plaintiff’s counsel) is not even mentioned

in claims 1 and 2.

Instead of a definite statement of the spring, use is

made of the functional expression (in claim 1)

“means etc. tending to slide the stops in one direction

on the rack bar * * °,

and in claim 2

“means etc. tending to slide the stops in opposite diree-

tions on the rack bar * * *”, (First Rec, 229, 230)

In General Electric Co. v. Wabash Appliance Corp. et

al., 304 U. S. 364, 58 S. Ct. 899, 903 (1938), this Court said:

“‘But the vice of a functional claim exists not only when

a claim is ‘wholly’ functional, if that is ever true, but

also when the inventor is painstaking when he recites

what has already been seen, and then uses conveniently

functional language at the exact point of novelty.”

So here claims 1 and 2 use functional language to de-

scribe what plaintiff’s attorney asserted to be the ‘‘essen-

tial novelty’’ of Woodfine (supra, p. 3).

The rule prohibiting the misuse of functional phrase-

ology in patent claims was recently and emphatically set

forth by this Court in Halliburton Oil Well Cementing Co.

v. Walker, 329 U. 8S. 1, 67 S. Ct. 6 (1946).

* Only claims 1, 2, and 3 of the four claims of the Woodfine patent

in suit were placed in issue (First Rec. 232, 233).

—

II. Inthe patent system, the public interest (in

preserving the public domain) is para-

mount.

In Mercoid Corp. v. Mid-Continent Investment Co., 320

U. 8. 661, 665, 64 8. “t. 268, 271 (1944), this Court said:

“It is the public interest which is dominant in the pat-

ent system.’’

ain in Precision Inst. Mfg. Co. v. Automotive Main

tenance Co., 324 U. 8. 806, 65 S. Ct. 993, 998 (1945), this

Court said:

‘The possession and assertion of patent rights are ‘is-

sues of great moment to the public.’ Haeel-Atlas Glass

Co. v. Hartford-Empire Co., 322 U. 8. 238, 246, 64 8.

Ct. 997, 1001. See also Mercoid Corp. v. Mid-Conti-

nent Investment Co., 320 U. S. 661, 665, 64 S. Ct. 268,

271; Morton Salt Co. v. Suppiger Co., supra; United

States v. Masonite Corp., 316 U. S. 265, 278. A pat-

ent by its very nature is affected with a public interest.

As recognized by the Constitution, it is a special privi-

lege designed to serve the public purpose of promoting

the ‘Progress of Science and Useful Arts.’ At the same

time, a patent is an exception to the general rule

against monopolies and to the right to access to a

free and open market. The far-reaching social and

economic consequences of a patent, therefore, give the

public a paramount interest in seeing that * * * such

monopolies are kept within their legitimate scope.”

Itt. A concession of validity in a patent is.

fringement suit contravenes the Public

policy which requires that in the public

interest, the issue of validity shall be con.

tested to protect the public domain from

conversion into illegal private monopolies,

In Edward Kateinger Co. v. Chicago Metallic Mfg. Co,

329 U. S. 394, 67 S. Ct. 416, 420 (1947), this Court em.

phasized the necessity of preserving the public domain

against inroads upon it by private monopolies in the form

of invalid patents in the following language:

‘*In Scott Paper Co. v. Marcalus Co., 326 U. 8. 249, it

was held that even an assignor who had sold a patent

issued to itself was free to challenge the validity of the

patent and thereby defeat an action for infringement

by showing that the invention had been described in

an expired patent. In thus emphasizing the neces.

sity of protecting our competitive economy by keep.

ing open the way for interested persons to challenge

the validity of patents which might be shown to be

invalid, the Court was but stating an often expressed

policy that ‘it is the public interest which is dominant

in the patent system’ Mercoid Corp. v. Mid-Conii-

nent Investment Co., 320 U. S. 661, 665, (64 S. Ct. 268,

271) and that the right to challenge ‘is not only a private

right to the individual but it is founded on public policy,

which is promoted by his making the defense, and con-

travened by his refusal to make it.’ Pope Mfg. Co. v.

Gormully, 144 U. S. 224, 235."

_—

| 17

Iv. Failure of a party to contest the issue of

validity does not foreclose the Court from

determining that issue, in the public inter-

est, and does not relieve the Court of its

duty to do so.**

In Muncie Gear Works, Inc. v. Outboard Marine Manw-

facturing Co. etc., 315 U. 8. 759, 766, 768, 62 S. Ct. 865, 870

(1941), the issue of invalidity of a patent (because of pub-

ijo use of the claimed subject matter more than two years

before it was first presented to the Patent Office) was

pleaded but “was not clearly presented, if indeed it was

at all” in the District Court and Court of Appeals.

This Court said (62 S. Ct. 870):

“We think the conclusion is inescapable that there was

public use, or sale, of devices embodying the asserted

invention, more than two years before it was first pre-

oreclosed

guarded by the patent statutes, and so frequently pres-

See

on.”

In Nachman Spring-Filled Corporation v. Kay M. fg. Co.,

2 Cir., 139 F. (2d) 781, 783, there was failure in the District

Court to try the issue of validity and the Court of Appeals

remanded the case to the District Court with instructions

** Where infringement is found (as in the case at bar) that

duty is mandatory because an invalid patent cannot be infringed.

Even where non-infringement is found, the Court should inqui

fully into validity as a general rule. Sinclair & Carroll Co. v. Inter-

chemical Corporation, 325 U. S. 327, 330, 65 S. Ct. 1143, 1145.

to vacate the decree and hear evidence as to validity, Ip

that case the Court of Appeals followed the doctrine of

the Muncie case and said (speaking through Frank, (jp.

cuit Judge) with reference to the failure to try the issue

of validity in the District Court (139 F. (2d) 783) :

This contention was not made in the court

below; but we do not reject it on that account, since

Muncie Gear Co. v. Outboard Co., 315 U. 8. 759, 766,

768, 62 S. Ct. 865, 870, 86 L. Ed. 1171, seems to us tp

hold that regard for ‘the public interest sought to be

safeguarded by the patent statutes, and so frequently

present but so seldom adequately represented in pat-

ent litigation’, requires that an upper court should con-

sider important defenses in such litigation even though

not raised in the court below.’’

It is of interest to note the analogy drawn by the Court,

in the Nachman case, between (1) the doctrine of the Muncie

case that in patent litigation a Court should sua sponte

investigate the defense of invalidity, and (2) the doctrine

in the field of contract law that a Court should sua sponte

investigate the important defense of illegality of a contract,

(It may also be noted that it is well settled that a patent

is a contract, between the patentee and the Government.)

That analogy is set forth by the Court in a footnote,

139 F. (2d) 783, as follows:

**:Also pertinent are cases holding that a court should

sua sponte raise the question of the illegality of an

agreement where the illegality is serious (especially

where an important public interest is involved), and

that the defense of illegality cannot ordinarily be

waived. See e. g., Oscanyan v. Winchester Repeating

Arms Co., 103 U. S. 261, 26 L. Ed. 539; Roberts v. Criss,

2 Cir., 266 F. 296, 302, 11 A. L. R. 698 ; Fitzsimmons

v. Eagle Brewing Co., 3 Cir., 107 F. 2d 712, 126 A. L. B.

681; Williston, Contracts (Rev. Ed.) Sec. 1630a; Re-

statement of Contracts, Sec. 600, comment.’’

__ still

vy. A concession of validity does not create

any preclusion by estoppel in pais or by

judgment or otherwise. Even where private

rights are created thereby they must be set

aside where it is necessary to do so to pro-

tect the public interest.

That the above proposition has been established by this

Court is shown by numerous decisions. It will suffice how-

ever to discuss briefly only the following:

1. Pope Mfg. Co. v. Gormully, 144 U. S. 224, 12 S. Ct.

632, 636 (1892) ;

9. Scott Paper Company v. Marcalus Mfg. Co., 326

U. 8. 249, 66 S. Ct. 101 (1945) ;

3. Edward Kateinger Co. v. Chicago Metallic Mfg. Co.,

399 U. S. 394, 67 S. Ct. 416, 420 (1947) ;

4. Mercoid Corp. v. Mid-Continent Investment Co.,

390 U. 8. 661, 64 S. Ct. 268, 271, 273 (1944).

See also Addressograph-Multigraph Corp. v. Cooper, 60

F. Supp. 697 (1945), affirmed 2 Cir., 156 F. (2d) 483 (1946).

In Pope Mfg. Co. v. Gormully, 144 U. S. 224, 12 S. Ct.

632, 636 (1892), specific performance was sought on a li-

cense agreement in which the defendant had expressly

agreed not to attack the validity of certain patents. The

question was:

disputing patents which may be wholly void * * °.”’

In that case defendant had agreed never to make or

sell any machines covered by plaintiff’s patents. That was

equivalent to extending the patents far beyond their terms.

Defendant further agreed to the entry of an injunction

against him, without notice, in the event that after expira-

tion of the license he should make, sell or use any of

the machines patented by plaintiff. Long after the date of

the contract, defendant in a suit for specific performance,

repudiated the illegal agreement and was justly permitted

to do so, on the ground that that agreement was in con-

travention of public policy.

This Court pointed out that validity of patents is a mat.

ter of public policy, and, comparing the defense of in.

validity with the defense of usury to an action on a note,

quoted with approval from an earlier decision as follows:

private right to the individual, but it is founded on

public policy which is promoted by his making the de.

fense, and contravened by his refusal to make it. * * *

With regard to all such matters of public policy, it

would seem that no man can bind himself by estoppel

not to assert a right which the law gives him on rea.

sons of public policy.”*

In Scott Paper Company v. Marcalus M fg. Co., 326 U.§,

249, 66 S. Ct. 101 (1945), Marcalus had assigned the patent

in suit to the plaintiff. Thereafter Marcalus organized and

controlled defendant Company and proceeded to make and

sell the patented machine and method. At the trial of the

infringement suit the essence of the defense was that the

plaintiff’s patent was invalid because it was completely

anticipated by an expired prior art patent to Inman, that

the accused machine was substantially a copy of the struc-

ture of the expired Inman patent and was therefore in the

public domain. The plaintiff invoked the rule of estoppel

by which an assignor was precluded from asserting the

invalidity of the invention and patent assigned. The Dis-

trict Court applying that rule gave judgment for the plain-

tiff. The Court of Appeals for the Third Circuit reversed

and its decision was affirmed by this Court.

The doctrine of the Marcalus case was summarized by

this Court in the later Katzinger case in the following

language (67 S. Ct. 420):

“*In Scott Paper Co. v. Marcalus Co., 326 U. 8. 249, it

was held that even an assignor who had sold a patent

* Cited with approval in Edward Katzinger Co. v. Chicago Metallic

Mfg. Co. (1947), supra.

issued to itself was free to challenge the validity of the

patent and thereby defeat an action for infringement

by showing that the invention had been described in

open the way for interested persons to challenge the

validity of patents which might be shown to be invalid,

the Court was but stating an often expressed policy

that ‘It is the public interest which is dominant in the

patent system’, M ercoid Corp. v. Mid-Continent Invest-

ment Co., 320 U. S. 661, 665, 64 S. Ct. 268, 271 and that

the right to challenge ‘is not only a private right to the

individual but it is founded on public policy, which is

by his making the defense, and contravened

by his refusal to make it.’ Pope Mfg. Co. v. Gormully,

144 U. S. 224, 235.”’

In the Mercoid case, one of the elements (a switch) of

the patented combination (stoker mechanism) was in the

public domain and plaintiffs tried to monopolize the switch

by granting the right to use the patented combination only

to those who purchased the unpatented switch from one of

the plaintiffs. The defense was misuse of the patent.’

It was asserted that this defense was barred by res

judicata because Mercoid was in privity with the defendant

in a previous suit where the defense was available but was

not made. All this was conceded.

This Court nonetheless refused to apply the doctrine of

res judicata, and allowed Mercoid to raise its belated de-

fense, in furtherance of the public policy against monopoly

of that which is in the public domain (in that case an un-

patented part of a patented combination).

This Court said (64 S. Ct. 273):

“The parties cannot foreclose the Courts from the

exercise of that discretion by the failure to inter-

pose the same defense in an earlier litigation. Cf. Sola

® The “misuse” of a patent is a subdivision of the broader topic

of illegal monopoly of that which is in the public domain. Every

restraint of trade by means of an invalid patent constitutes an illegal

capture of a part of the public domain.

Electric Co. v. Jefferson Electric Co., 317 U. 8. 173, 63

S. Ct. 172.”

That the principle of the Mercoid case is broad enough

to protect the public interest against invalid patents as wel]

as against the ‘‘misuse’’ of a patent is shown by the case

of Addressograph Multigraph Corp. v. Cooper, 60 F. Supp.

697, D. C. N. Y. (1945) affd. 2 Cir. 156 F. (2d) 483 (1946),

In that case it was contended (in a suit against the indi.

vidual defendants and a corporation owned and dominated

by them) that a consent decree entered in 1939 in a former

suit brought by the same plaintiff against the individual

defendants acted as a bar to the defense of invalidity in

the later action. The Court rejected that contention, found

the claims of the patent invalid, dismissed 2he complaint

and said (p. 700):

“In the opinion of the Court the claims are clearly in-

valid, and restraints on competition should not be per-

mitted whether brought about by agreement, consent

decree or estoppel. See Sola Electric Co. v. Jefferson

Co., 317 U. 8. 173, 63 S. Ct. 172, 87 L. Ed. 165.’’

In affirming the above case the Court of Appeals for the

Second Circuit, referring to the Mercoid case, said:

vestment Co., 320 U. S. 661, 670, 64 S. Ct. 268, 88 L. Ed.

376, the Supreme Court held that in patent cases, as

in other litigation, equitable relief should be either

extended or limited as the public interest may require,

and that as a result the doctrine of res judicata in pat-

ent cases is limited by the public policy against

yI. The decree of the Court of Appeals should

be reversed because (1) the District Court

contravened public policy by failing to re-

quire a trial of the issue of validity and

thereby failing to protect the public inter-

est, (2) the Court of Appeals participated

in and confirmed that error, and (3) the

Court of Appeals further erred by refusing

to give defendant any opportunity to cor-

rect those errors.

The principle enunciated by the cases discussed above

is that it is more important to promote the public policy

and to have the public domain preserved than it is to

enforce doctrines relating to private rights, for example

estoppel by agreement not to contest validity, equitable

estoppel (the Pope v. Gormully, Marcalus and Katzinger

cases) and even estoppel by judgment (res judicata) by

failure to raise the defense in prior litigation (the Mercoid

case).”°

In Exhibit Supply Company v. Ace Patents Corpora-

tion, 315 U. S. 126, 138, 62 8. Ct. 513, 519 (1941), the dis-

senting opinion stated that

‘‘By failing to assign error on the issue of patent-

ability, parties to an infringement suit should not be

permitted to foreclose a court from protecting the

public interest.”’

In the Exhibit Supply case the issue of validity was

tried in the District Court and that Court and the Court of

Appeals (7 Cir.) therefore had adequate means to decide

the issue and it was decided by those Courts in favor

of the plaintiff. In this Court, the petitioners in the Ex-

hibit Supply case did not assign error on the issue of

— cannot seek to invoke the doctrine of res judicata. The

ercoid case is discussed to show the basic principle that even the

doctrine of res judicata will be disregarded where it is necessary to do

so to protect the public interest.

patentability. In the present case counsel for the plaintiff

(Royal Typewriter Company, Inc.) may seek to derive

comfort from that fact because in their brief in the Court

below they argued as follows:

“*Counsel omit from their discussion Exhibit Sup.

ply Company v. Ace Patents Corporation, 315 U. §

126, which seems to us the most pertinent of all. J]

was cited by this Court in its opinion in this case (168

F. 2d at 692). Disposition of that case in the Supreme

Court was on all fours with the disposition of the

instant case in this Court.’’

The opinion and conclusion set forth in the first and last

sentences, respectively, of the above quotation are erron-

eous.

In the Exhibit Supply case, the majority of this Court

accepted the concurring opinions of both lower Courts that

the patent was valid those opinions being based on a trial

of the issue of validity and full consideration of that issue,

See 119 F. (2d) 349, 7 Cir., (1941). The District Court’s

opinion was rendered orally and is reported in 45 United

States Patents Quarterly, 601 to 603.

Contrast that case with the present case where the

finding of validity by the District Court and affirmance

thereof by the Circuit Court of Appeals was made with

no adequate means to decide the issue, as expressly stated

by that Court (supra, p. 4).

No sanction can be found in the Exhibit Supply case

for the practice of decreeing the validity of a patent in

the absence of a trial of the issue of validity, and such prac-

tice is clearly condemned by this Court, as a contraven-

tion of public policy, in the later Katzinger case.

It is clear that defendant’s trial attorney made an error

in contravening the public interest by failing to contest

validity or conceding validity. That the trial court and

Court of Appeals participated in and confirmed that error

is also true. Indeed the Court of Appeals has refused

defendant’s attempt to correct that error, by denying de-

fendant’s petition for an order instructing the trial judge ,

| __ eae eee R RR ER :

to grant a hearing on the issue of validity. The Court of

Appeals has even gone to the extreme of denying defendant

the privilege of applying to the District Court to ask that

Court for a hearing on the issue of validity.”

The Court of Appeals gave no reasons for denying

defendant’s petition.

In plaintiff’s brief in opposition to defendant’s petition

in the Court below, plaintiff said:

“There is therefore no reason for not holding defend-

ant to its own election not to contest validity and to the

judgment. Any other rule would lead to interminable

litigation in patent cases.”’

The answer to the first sentence of that statement is

that it is against public policy to hold defendant to its

election as clearly shown by the principles of the cases

discussed above. The answer to the second sentence of

that statement is that the District Court has both the power

and the duty of protecting the public interest, in patent

litigation, and must require a trial of the issue of validity

where infringement is found. See footnote, supra, page 17.

As stated by this Court in the Mercoid case, 320 U. 8.

661, 64 S. Ct. 268, 273, protection of the public interest

“Gs not ‘at the mercy’ of the parties”

and as stated in Veaua v. Southern Oregon Sales, Inc., 33

F. Supp. 605, 610 (D. Ore. 1940) affirmed 9 Cir., 123 F.

(2d) 455 (1942),

‘Even if plaintiff and defendant should stipulate that

invention was present, the Court should consider the

question.’’ ”

11 That leave is usually granted as a matter of course, Pittsburgh

Forgings Co. et al. V. American Foundry Equipment Co., 3 Cir., 119

F. (2d) 619 (1941) and could have been granted under paragraph

(b) of defendant's petition (supra, p. 5).

12 The use by the Court of Appeals for the Ninth Circuit of the

word “consider” in the Veaux case necessarily implies that the trial

court should have adequate means to consider and decide the issue,

. as indicated by the court below in its original opinion (supra, pp. 3,4).

That statement of principle reiterated the same

enunciated by this Court in Hill v. Wooster, 132 U. §.

10 8. Ct. 228 (1890) and Paramount Publix Corp. v. Ameri.

can Tri-Ergon Corp., 294 U. 8. 464, 477, 55 S. Ct. 449, 455

(1935) .*8

The Government unsuccessfully sought in 1942 to have

legislation enacted which would give the Attorney Genera]

the right to intervene in all patent litigation in order to

protect the public interest. See S. 2730 introduced Aug,

20, 1942, 77th Congress, 2nd Session. See also H. R.

Sec. 27, 79th Congress, 1st Session, June 13, 1945, That

legislation was not enacted.

This Court has accomplished the purpose of protecti

the public interest by establishing the rule that the respon-

sibility for adequately protecting the public interest in pat-

ent litigstion rests on the Courts, i. ¢., the judicial rather

than the executive branch of the Government, as shown by

the cases discussed herein. That rule (as emphasized by

the present case) is not uniformly followed by the lower

Federal Courts and further direction by this Court is there.

fore needed.

The implementation of that rule is clearly within the

power of the trial court. Should the parties refuse or fail

properly to protect the public interest, the court is not

helpless to do so because it has full power and authority to

appoint its own master or expert to make a thorough in-

vestigation of the facts relating to validity, to enable the

court to discharge its duty, and to tax the costs in the

court’s discretion. Furthermore, as stated by this Court

in Universal Oil Products Co. v. Root Refining Co., 328

U. 8. 575, 581, 66 S. Ct. 1176, 1179: «A federal court can

always call on law officers of the United States to serve as

*In the Veaus case where the defendant in the Patent Office

Tribunal had represented the claims to be valid and then reversed

its decision when sued for infringement the Court said, referring

to the Paramount Publix case

“this conduct of defendant does not preclude ‘the Court from

relieving the alleged infringer and the public from the asserted

monopoly when there is no invention’.”

(ag Se ca Rt

amici’’, to represent the public interest in the administra-

tion of justice.

Conclusion

This case involves questions of the greatest importance

in patent litigation, to wit, the procedure to be followed by

members of the bar and the District Courts and Courts of

Appeal in protecting the public interest which is para-

mount in every patent suit. Questions 1 to 3 inclusive under

the heading ‘‘ Questions Presented’’ (supra, pp. 1, 2) should

be answered in the affirmative and by so doing this Court

will confer a benefit on the lower Courts, the legal profes-

sion and the entire public. The decision of the Court below

is erroneous and should be reversed.

It is therefore urged that the petition be granted.

Respectfully submitted,

Franois J. McNamara

Joszern V. Meics

Attorneys for Defendant-Petitioner.

Francis J. McNamara,

Josern V. Meias,

J. A. W. Srmson,

Frank C. STercr,

WruaM OC. ConneR,

Of Counsel.

Dated, August 23, 1949.

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