# Respondents Brief — McCullough v. Kammerer Corp. (No. 755) > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386450_0212%3A8 ## Record - **Collection:** Supreme Court brief - **Document type:** Respondents Brief - **Published:** January 1, 1946 ## Text pad ~ Y . ‘IN Fil - Supreme Court of the United States Cicoiiie Tema, 1946. Ny oe ; 1 MeCur oa . Pet f rie I 7 ‘hi : RESPONDENTS’ BRIEF ls >. | Rit eke Statement of the as vinci ssssenseeseneneceussentunnsssphonssenasenssnunsensneeessssstent _urisdiction’ of the United States Circuit Court of Appeals... ise. ee RE RP RENTS ABE Eee Payee ae Lape. SE PEL MY , PRRs SP bac Se 18 a 8 ork - ° | * ‘ ; * is \ » ¥ . - ’ , e . = : n * 7 & “A. Act of Apsf 14, 1906, C. 1627, 34 Stat. 116... . Act or February 18, 1895, < 96, 28 Stat. oe... _ Walker on Patents (5th Ed., 1923), Sec, O44a, p * Report No. 1890 on House Resolution L184Q _ Report of Mr. ‘Metcalf from the Committee of ‘ - TABLE OF AUTHOR . CASES ae PAGE Baker v.: Walter Baker & Co., Ltd., 83 Fed. 3.\C.C.A. 4........... 8 ee ae & Sons, Inc... 21 Fed. 179... sesscscseesecseeee 10 Brockett_v. Bragkett, 2 Howard 228....000........ pai. Sa See ee Dreu v. Frankfort Land Co., 65 Fed. 642, 644, CCA. on 2 a Refining Co. ~, ‘ Chambers, 12 Fed. ti. ee 7 ( Fide y Insurance, Trust & Safe-Deposit Co. v: Dixon, 78 Fed. , as, CCA. 7... ees @ sesrsenellbaesdgageaen y Glinski v. U. S., 93 Fed. (24) us, 419, CCC. 7. niceade. Oe Heike v, U. S., 217 U. $.°423: as ln ae 7 ce Fred eHarvey, No. 10,783, 146 Fed. (2a) 989.2. 3. ‘4, 14 _ McCuflough v. a Corp., 323 U. S. 327, 156 Fed: (2d) 345... ee CIRRUS PS McLish v. “Roff, 14y U. ‘Ss. 661... ell Teas SUE | Ae ores ee 1 MeMicked v. Perin, 1S Mowset O00. 0s ss anise Wt Smith v. U.S., 52aFed. (2d) 848, C.C.A. Posccccccccccnen ae U. S. v. Addyston Pipe & Steet Co., 85 Fed. 271, C.C.A. 6.2.45. Willis v. Davis, Ow TY OE a “IE ee ener ne 4a Acts AND STATUTES © Act of Jrine 6, 1900, C. 801, 31 Stat. 660...... spshenseaisia “Act of March 3, 1911, C, 231, Sec. 129, @ Stat. 1134 Act of February 13, 1925,.C. 224. Sec. 1, 43 Stat. 937. Act of February 28, .1927, C: 22, 44 Stat. 1261... Judicial ‘Code, Sec. 129, 28 U S.C.A., Secs. 227,°227(a).......:..: schchseschieeehsaapaidisanshelenainecidlliot mY 8, 9, 10, 11.°12, 13 N OO 2 RB SO _« & TEexTBooK ‘ d a. 10 > . RESOLUPIONS AND Reportrs _ * Sénate to Accompany Senate, Bill 4957... | 3 IN THE Supreme Court of the United States: Pen TERM; 1946. | ’ “No. 755 | . CCULLOUGH, - | Petitioner, ° e. ’ a j vs. 7 7 KAMMERER CorPoRATION, a Corporation, and Baasu- “Ross Toot Company, a Corporation, -~ : rine | Respondents. RESPONDENTS’ BRIEF. Sa Statement gf the Case. in May, 1944, this Court granted certiorari tg the Circuit Court of Appeals for the Ninth Circuit upon the representation by Petitioner herein that these consolidated cases presented @ question of restraint of trade and viola- ‘tion of Anti-Monopoly laws. ’ After tull erits, this “a tound ; “A hus the only question for which we granted cer- ari is one not properly raised, litifted or: passed. upon below.” .( Citing cases.) “The .grounds, as- serted for the allowance of certiorari are inate quately supported by the record theretore dismissed.” (323 UJ. rahe argument of such representation, on the ‘ourt filed its: per curtam opinion: in which - ee : . afl the writ is 27-89.) . —2— After this dismissal Petitioner first moved in the Court of Appeals Nee “for a modification of its decree herein; dated Oc- tober 12, 1943, affirming the District Court’ in find- ing the patent in suit valid and infringed, by elimi- nating from such decree any affirmance of para- graphs VI and VII of the two District Geurt In- terlocutory Judgments [R. 121-122, 126], providing for payment by defendant to plaintiffs of profits and damages for alleged patent infringement, with costs. of suit. : : “The grounds for this motion are that plaintiffs (appellees here) have used the patent in suit contrary to public policy and in restraint of trade, for which reasons they come into a Court of Equity with ‘un- clean hands’ and are not entitled to ama¢counting ,of 7 profits and damages for alleged patent infringement. k * * * * x * + _ “In the alternative, appellant moves:for permission to apply to‘the District Court to reform said Inter- ‘locutory Judgments and stay the accounting, or for such other and different relief as may seem proper.” ‘11102.33) ° é On March 14, 1945, the Court of Appeals granted Peti- tioner’s alternatiye motion “that permission be granted him to move in, the srsbab court below, that such reliet be dented annaliene ” 11166-7.] Thereafter, tae filed in thé District CBuri his motion * “for modifications of its Interlocutory Judgments herein, dated June 28, 1941, in finding the patent in | suit valid ang infringed, by eliminating from eéach ° : —3— of such Interlocutory Judgments paragraphs VI and VII thereof -[R.:121, 122, 125,126, providing for ac- countings of ‘and for payment by defendant to plain- tiffs of, profits and damages for patent, infringement, - with costs of suits] for a stay of the accountings,’ | ~ and for Final Judgments providing that the plaintiffs have used the patent in suit contra to the public in- ‘terest, and that the complaints be dismissed with costs ° to defendant. . k | “The grounds for this motion are that plaintiffs » have used the patent in suit contrary to the public interest and in restraint of trade, for which reasons ~~ .they come into a Court of Equity with ‘unclean hands’ and are not entitled to accountings of profits and damages for patent infringement.” fl, 2-4.] The District Court denied this motion: [1, 15-16.] The record contains a proposed “Supplemental Interlocutory Judgment” [1, 12-15] presented by, Petitioner, upon which is found the District Court's Order: ‘Motion for: entry of Supplemental Interlocutary Judgment is denied, as the motion to modify the judgment was’ denied, the original - judgment stands.” [1,154] | Notwithstanding the denial of Petitioner’s motion, in order to comply \with his interpretation of the decision of the Court of Appeals in Mateas v. Fred Harvey (No. 10783, 146 F. (2d 989, p. 146),. the District Court made Findings of Fact and Conclusions of Law {1, 20- 26), al- though the District Court did “not think it is consistent with the theoty of pleadings to require findings in_ the case of a non-suit * * *.” [I, 46. | Not only did the District Court refuse to enter any judgment, or to modify the judgment entered June 28, 1941 pout clearly indicated — i I i J Be. OE that he made these Findings of Fact and Conclusions of Law only,’ and. under protest, to comply with the interft of this, Mateas v. Fred Harvey decision of ‘the Court of Appeals of his — : 2 Petitioner did not Appeal from a new judgment or decree. In his notjees of appeal [1, 31, 34] he stated that - he “hereby appeals to the Circuit Court of Appeals for the Ninth Circuit from‘the Final Order entered in this action on the 5th day of June, 1945.” By.these notices of appeal, Petitioner recognized the fact that (1) his ‘motion was denied; and (2) that the District Court re- fused to enter a new decree, or to. modify the decrees of June 28; 1941. The majority opinion of the Court of Appeals in dismissing the appeals for, want of jurisdic- tion’ states: “Appellant contends that jurisdiction of this court .to entertain said appeal.is found in §129 of the Judicial Code, as amended, (28 U.S.C.A., §227(a)), _ which reads: “*When in any fit te equity forthe infringement . .of letters patent for inventions, a decree is rendered which is finial excapt for the ordering of an account: ing, an appeal may be taken from such decree to the circuit court of appeals: Provided, that such appeal . _ bé taken’ within thirty days from the entry: of ‘such _ decree or from February 28, 1927; and thy pro- ceedings upon the accounting .in the court below _ shall not be stayed unless so ordered by that court -’ during the pendency of such gppral.’ “We do not agree. Said section has no application since, the order appealed from is not a decree, ‘inal or otherwise. .A* denial of a motion to modify a- judgment and a denial of a motion to dismis$ a . . ee a ak “eo complaint: is not a final decree within §227(a). It is true that an ‘order’ can be a ‘judgment’, and it is * equally true that it. is the cofirt’s action which de- termines the character of its decision. But. here the District Court specifically refused to enter a ‘sup- plementary interlocutory judgment’. Its order reads: ““ ‘Motion for entry of Supplemental Interlocu- tory Judgment is denied, as the motion to modify the Yudgnient was denied, the origina jadgment stands. . LM 2 ' Ne - “Appellant appealed from the interlocutory judg- ment of June 28, 1941, under Judicial Code, §129, as amended. No further appeal.under this section is open to him because the interlocutory judgment ap- pealed from stands and is still ‘final except’ for the order of an accounting’. _ “The order of June 5, 1945, denying the motion ., to modify the judgment was not & ‘final decision’ — within §128 of the Judicial Code, nor was the order \ denying the motion to dismiss a final judgment so as to give ‘us jurisdiction’ of the attempted appeal from said order.” [L1, 60-62.] . Petitiondr sought the grant ‘. this Court ot certiorari “not only to review this last. decision . ‘of the Court of Appeals with | respect to jurisdiction of that court, but also prayed certiorari to again. present. the same asserted misuse: of the patent in ‘Violation of the Anti- Monopoly laws, which this Court’in its previous per curiam opinion stated was “inadequately. supported by the record”. , With the foregoing’ exceptions, i. e., the permission vranted i Berig Court that jt “‘may entertain a mo- tion or 1 tions, * * * and take such action thereon - alien ds it may determine” and the denial of the*court of such wae ‘including its recorded refusal to enter any new judgment or decree, the record heréin stands as it stood when this: Court ‘dismissed the first Writ - sail tiorari herein. ; a Pétitioner had appealed from the interlocutory, re ments of June 28, 1941. The Court of Appeals: hah juris- diction of such appeals by virtue of Sec. 129 of the Judicial Code, (28 U.S.C.A., Sec: 227, as amended): In taking his appeals therefrom Petitioner did .not include in his “Statement of Points’” rule 75, R.C.P., sub-division (d), “a concise statement’.@t any statement or reference - whatsoever to the defense or “question of patent misuse”, _nor did Petitioner therein, ‘as required by Rule 19 of the Court of Appeals of the Ninth Circuit, refer to this alleged question or defense of -patent misuse as one of the points * upon which Petitioner intended to rely, [R: 732-38]; nor ‘was such *question or defense either remotely or in- . ferentially referred to or specified. in Plaintiff’s Brief on . '. said appeals, in the Specifications of Error of Petitioner's Brief as required by-.said Rule 19, or Stated therein as cone of “the questions involved”. (Rule 20, sub-division (c) of said Court.) A question which is inherent in the question of jurisdiction under consideration by this Court. is: Does the question of patent misuse remain in. the. case or was it waived and barred by Petitioner’s failure - _to- raise and rely ‘thereon in. its said statutory appeals ? In other w ords, havi ing waived such defense in its statu- tory appeals, om Sec. 129 (Sec. 227; as amended) be inter} hh to authorize a. second appeal t. raise a aues- tion’ waived by Petitioner. upon his statue; appeal? ’ Jurisdiction - of the United States Circuit Court of . ox Appeals. _ “The appellate jurisdiction in the Federal -system of- procedure is purely statutory. American Constr. Co. v. Jacksonville T. & K. W. R. Co., 148 U. S. 372.” (Heike . v. U. S., 217 U. S 423) “Congress rarely confers juris- diction on a court by implicatign: When it does, the im- plication. to be effective, n be not only clear but neces- sary.’ nee Beg: v. Chambers, 14 F. (2d) — 104.) The history of See. 129 of the Judicial Code ex- cludes’ any implication that by the Act of February 28, 1927, C. 228, 44 ‘Stat. 1261, Congress intended that the denial of a motion to set aside or amend a decree ‘‘which “is final except for the ordering of an accounting”, which ‘had been made in a patent infringement case and which had been. appealed under said Sec. 129, as amended, should. constitute an appealable new decree. Congress more than once amended Sec, 129 (Sec. 227) to extend the right of appeal thereunder. Such Section at no time was limited to a decree in a suit in equity for. the’ infringement of Letters Patent for inventions. It was and is applicable to any granting, continuing, modifying, refusing or dis- solving an injunction “by an interlocutory order or de- cree”. or to the denial of ‘an “application to dissolve or modify an injunction”, or an interlocutory order or decree: appointing a receiver, etc. In its. original ‘form, as en- “acted, said Section was ‘adjudged not to grant the right to.an appeal from the denial of -petitions to vacate and set-aside orders appointing -a receiver of a railroad, the authorizing of the issuance of receiver’s certificates and wlso praying that the réceiter be enjoined ‘and resteaied from receiving, takmg or managing the railroa’d sete, » (Fidelity Insurance, Trust & Safe-Deposit Co. v. Dixon, 78 Fed. 205, C.C.A. 7)% it was likewise adjudged that ‘ \ after the expiration of the thirty ‘days from the order granting the injunction, a party could not acquire a new ti ght of appeal by the filing Of a motion. to dissolve the injunetion and an order of the court, denying the motion, (Dreitts cer v. Frankfort Land Co., 65 Fed. 642, 644, C.C.A. 6; Bakex. wv. Walter Baker \y Co.; Ltd., &3 | Fed. 3, C.C.A,4; Gliniski “os, S., 93 Fed. (2d) 418, 419, 3 CCA, 7: Smith 'v. U. S., 52 Fed> (2d) 848, C.C.A. 7). The history of Sec. 129 and the various exthosions of of the right of appeal thereunder may be readily ascertained by reference to the following acts: February 18, 1895, C. 96, 28 Stat. 666; June 6, 1900, C. 801, 1 Stat. 660; Apr. 14, 1906, C. 1627, 34 Stat. 116; Mar. 3, 1911, C 231, Sec. 129, 36 Stat. 1134; Feb. 13, 1925, C. 220,-See. : “ 43 Stat. 937. "Sen. 129, unlike the amendment thereto by the addi- tion of Sec. 227(a), is not limited to a decree, either final or interlocutory. It applies to any interlocutory order or decree of ithe kind specified, whereas, the amendment (Sec. 227(a)). makes no reference whatsoever to any order as being appealable. “When in any suit in equity for. the infringement of letters patent for inventions, a decree is rendered which -is figal except for: the ordering of an accounting, an appeal may be taken from ‘such decree to the Circuit Court. of Appeals: Provided, - that such. appeal be taken within thirty days from the entry ia February 28,.1927;°%* * *° of such deeree or —— : It cannot be said that Congress intended the word “de- cree”, as thus used in this amendment, should be inter- preted to include all orders. Congress had been repeatedly called upon to amend Sec:129 to include both the grant- ing and the denying of many orders. The amendment (Sec.,227(a)) to Sec. 129 was enacted by Congress to cover a specific situation. (See House Report No. ‘1890 on House Resolution 11840.) Many patents have expired during the pendency of a suit and _-prior to the interlocutory decree finding the patent valid and infringed. As no injunction could issue and the de- cree was interlocutory only, the Defendant was relegated to an appeal after the final. decree. See report of Mr. Metcalf from the Committee of Patents to the Senate to accompany Senate Bill 4957, aneree it was pointed out - that: : ; “If the patent expires before the entry of the de- cree by the Lower Court so that no injunction is ordered, ther. can bé, under the present statutes, no - appeal until after the accounting is completed and a final decree entered. If then ‘on appeal the Court of Appeals deterntines that the patent is invalid or is not infringed, the whole expense of the accounting is wasted. | “This Bill, which is a duplicate of House Bill 11,840, chas been prepared for the purpose of per- mitting an appeal to be taken immediately ‘in those cases where the patent has expired before the de- cree is entered in the Trial Court. The Honorable Evan A. Evans, one of the judges of_the. Circuit Court of Appeals of the 7th. Circuit, was interested in this Bill and recommends it. . There is NO Opposi- tion to the Bill anywhere. It has approval of the — entire patent bar and of all of the Federal judges.” Jae: —10— ; . Judge ‘fie, in Brick *v. A. 1. Namm & Sons, Ineé., 21 Fed. 179-180, points out that it was Congress’ intention to provide an appeal under these particular conditions. “Where, however, no question of injunctive re- lief could be decided because the patent had expired, there was nothing left to be decided but the ac- counting, and for all practical purposes such decree was final, yet there was no appeal provided for by statute, except and after the atcounting had “been completed and a final decree thereon entered. Thus,’ in such cases, although the higher court should sub- sequently decided that the patent had been invalid, or had not been infringed, nevertheless such question coyld not be brought before the court until the whole expense of possibly an extensive atcounting had been borne and paid for, in such cases unnecessarily. ‘No appeal can be taken by a defendant from an inter- locutory decree, which directs an accounting of profits ahd damages, but doesnot order an injunc- . tion.’ Walker on Patents (5th Ed. 1923), Sec. 644a, p. 720; Lederer v. Garage Co., supra. “This difficulty has now been overcome by this new law, and an appeal has now been provided, in order to avoid in a proper case this unnecessary ex- pense of an accounting, where no injunctive relief is or can be granted. The accounting may be stayed.” To hold that the District Court's denial of Petitioner's — motion (1) to ‘enter.a new interlocutory decree, or (2) amend the interlocutory decrees: of June 28; 1941, or (3) to dismiss the cases, constituted a final decree, under the — amendment (Sec. 227(a)) to Sec. 129, “would render the Act under consideration incongistent with this long-es tablished object - and policy. . More than this, it. woyld i 2 defeat the very object for Bagong the Att was -passed.” (MecLish v. Roff, 141 U. S. 661.) - Such “established object and policy” was, as stated in ‘the decision just referred ‘to, “to save the expense and delays of repeated appeals in the same suit, ‘and to have the whole case and every matter in controversy in: it . decided by a single appeal.” The “difficulty” pointed out — by Mr. Metcalf and judge Inch was overcome by Con- — gress providing a right of appeal, if exercised within thirty days. Such right of appeal was exhausted by the first appeals taken by Petitioner from said Interlocutory” Decrees. The fact that Petitioner did not raise as a ground of appeal its present contention of patent misuse and violatjon of, the Anti-Monopoly laws cannot justify a second appeal ‘Pom the same Interlocutory Decrees: The amendment (Sec. 227(a) to Sec. 129) contains nothing vranting Petitioner a second right of appeal, it is limited to a single right to be exercised within thirty days. In its per curiam opinion dismissing the previous certiorari it these cases, this Court- pointed out that Petitioner’s — Amended Answer “made np mention of the: restrictions comtained in the license agreement *. * *. On appeal*to the Circuit Court of Appeals Petitioner assigned no error with" reference to them and the Circuit Court 6f Appeals did not consider them ‘* #8 © © © The grounds as- -erted for the allowance of certiorari are inadequately supported by the record, * * *.” (323 U. S. 328-9.) "It was early established by this Court that no appeal . lics from the -retusal of the Court below to open a_ former decree, (Brockett v. Brockett, 2 Howard 228:. “MeMicken v. Perin, 1% Howard 507): that the granting — or refusal, absolute or. conditional, uf a rehearing in ea? yl ee ae ee A iy equity as of a new*trial at law, rests in the discretion ._ of the Court in which the case has been heard or tried, 2 and is not a subject of appeal. An appeal wifl not Jie . from a refusal to open,a prior decree and gyant.a re- heating; nor from a refusal to open a judgment, (Willis eo ‘Davis, 184 Fed. &89, C.C.A. 6). eet . _ The dissenting opinion of Judge Denman. [I1, 63-65] is predicated upon the statement therein that: " fs “The district ‘court entertained a motion gr the. ‘decision of that dominant issue and its ailyerse “de- cision adjudicated it finally, except for an account- ‘ing. Its’ order was a final decision, except foflgan — accounting. Thére was nothing else for the lower court to do. ; 7 | “I dissent from the holding that the denial of - thatymotion is ot a final decision on the dominant ““qssue ‘because it was presented in such ‘a’ motion. This is a clear case of obscuring in the ‘form. the ‘ essence of what, under. our order, the lowér court undertook and did.” [II, 64; 156 Fed. (2d) at 346. | It is to be ‘noted that Judge Denman ignores the fact ~ ‘that the amendment (Sec. 227 (a)) makes no reference whatsoever to a “Uecision” or a “tinal decision”. This amendment grants a right of -appeal only from a “decree” wiich ‘is final except for the ordering of an accounting. . In 1941, the District Court. entered such decrees in these cases. On July 11, 1944, Petitioner filed his’ Notices of Appeal therefroty. These. appeals were determined versely to Petitionér, the Court of Appeals affirming | 1 decrees. The right of Petitioner to appeal from the: er of the District Court denying Petitioner’s- nfftion - to vaeate these decrees, ete., is not determined by the mere’ aie ee RET Jeane te. / . formeof the proceeding. The question to be deternfined is what right of appeal has Congress provided. Whether Upap appeal from the final decrees in These cased, Pet: tioner may still raise this pyrported defense is not befo¥e this Court, at this time. As said in the majority opinion of the: Court of .Appeaks | 11, Gl; 156 Fed. (2d) 345]: Pi * the order appedied from is not a decree,. final’ or otherwise. A denial of a motiongto modify a judg- nut and a denial of a motion to dismiss.a complaint is not a final decree within §227(a).” It was not the purpose or intent*of. Congress to abrogate this rule or decision.. It provided ‘for an immediate appeal (within — - thirty days)’ from such a decree. It did not provide in. “such “amendment ( Sec. | 227(a )). as was provided in. ‘original Sec. 227 (Sec. 129, Judicial Code), an appeal ‘ from an Arder granting or denying; dissolving, etc. /—~ ; The-fight. of appeal granted by Sec. 227 (a) does not. ‘depend upon any dominant issue. Congress’ purpose and intent by such enactment created an exception to its’ long-established policy that all litigsble questions: aris- ing in a case should be disposed of in a single appeal. By such amendatory statute (Sec. 227(a)), and for the sole a stated, an appeal in patent in-. iringement cases wat provided from “a decree which is tinal except for the ordering of an accounting, “* * * provided * such appeal be taken within thirty days from the entry of such decree * * *” In construing such stat- ute, it would be no more correct to interpolate therein -a” ‘dominant issue respecting patent misuse or Anti-Monopoly law violation than to interpolate any other defense. © This Court denied Petitiofier’s Petition for Certiorari to review the. second question presented in the Petition (Pet. p. 2), x —l4— i. e.—whether Respondents herein had( illegally” misused ‘the’ patent so as to bar an accounting in this suit. Re- spon@ents’ patent gxpired. prior to this. Court’s dismissal of the first Writ of Certiorar® here This defense ‘or issue had not been properly raised, litigated or passed upon by the District Gourt or the*Court of Appeals; and the grounds for the allowance of certiorari were not ade- quately supported by the record. The Court of Appeals ‘after hearing full argument.of Peti igioner’s Motion for modification of its decree, etc. | 1102-04], merely granted Petitioner's alternative motitn to .reliéve the Distr ict Court from the binding effects of dts“ mandate, and er- mitted the District Court at its discretion. to hear the motion. Pétitioner did not move in the Distrigt Court to amend its Answér,* did not move for a new trial or re- hearing, declined to introduce any evidence in an attempt to show that any restraint resultant from the restrictions contained in the license agreement unreasonably suppressed -compétition. The cas¢ as- presented to the Court of Ap- peals contained nothjng new’ in. the record except Peti; tioner’s motion addressed to. the discretion of the Dis- trict Court, the District Court’s denial thereof and the Findings of Fact and Conclusions of Law made by the pistriet Court to comply with the Mateas v. Fred Har: wy decision if the Court .of Appeals determined it was. - ~ applicable. Upon this record, Respondents urge thag- this - -Court’s dismissal of the7irst Writ. of Certiorari ended the case, except for the accountings: ordered by the original ewig vanced decrees. The mandate of this Court re- *After the District Court had: orally «denied petitioner's motion, petitioner orally moved for permission to amet ul its answer, 1-50. i s L ait a e manded the cause without direction ty the lower court.. There ‘was ho need.of such direction. The interlocutory + decrees stood affirmed. The only thing left was the ac- counting. , . . . “ “* : The record in this case does not establish the dominant issue referred to by Judge Denman. There has been no litigation of such issue. In United States v. Addyston Mipe & Stegl Co., 85 Fed. og C.C.A. 6, the then Circuit Judge (later Chief Just : Tait rendered an opifiion oft referred’ to as a classical statement of*the law with refer- cence. to. covenants in partial restraint of trade, saying: 2 8 “> “For the reasons given, ‘then, covenants in partial” restraint f thade are generally upheld as valid when they are agreements (1) by the seller of property or business not to. compete with the ‘buyer in such a @vay as to derogate from Me value of the property or business sold: (2) byAYetiring “oat not to com- rtner pending thes pete with the firm; (3) by a 1 partnership hot to do anything to interfere, by com- petition or otherwise, with the businéss of the firm: (4) by. the buyer of property not to use the ny in competition with the business retained by” seller; and (5) by an. assistant. servant, or el not « to compete with his master’ or employer after the expiration of his time of s¢rvice. Before such agree- ments are upheld, however, the court must find that* the restrafnts attempted thereby are reasonably neces- sary (1, 2, and 3) to the enjoyment by the buiyer of the property, goad will, or interest in the partner- ship bought; or (4) -to the legitimate ends of the existing partnership; or (5) to the prevention of possible injury to the business of the seller from use ‘ by the buyer of the thing sold; or*(6) to protection tfom the danger of loss to the employer's business % -% ~~ ie caused by the unjust use on the part of the employe of the confidential knowledge acquired in ‘such busi- ness.” In the absence of any proof that any restriction con- “tained in the license agreement has unduly or unreason- ably” restricted competition, the so-referred-to dominant ‘issue vanishes, Respondents submit that this Court by ips 7 dismissal OK the first Petition for Certiorari intended to put th®&® case at an end. If, however, in order to determine the jurisdictional question involved herein, this Court should desire to go further into what the record establishes with reference to ‘Wisproving Petitioner’s’ contention that Respondents have illegally used their patent or violated the Anti- Monopoly laws, the Findings of Fact and Conclusions: of Law made afid stated by the District Court {1, 20-26] clearly. set forth the facts. The record herein is abso- lutely bare of any facts, respecting any effect on the public of the challenged provisions of the license agree-, a ment. Petitioner's Brief herein (p. 7) refers to a collateral coe e | VI, 1170- 01. ] This motion was that the Court | © f Appeals recall its mandate and decide the question of ° patent misuse set forth in appeal No. 11,122. In Peti- tioner’s Brief accompa y my this motion, Petitioner urged: ‘The Pocedure which this Court apparently intended to follow as manifested’ in its opinion of March 14, 1945 (148 F (2d) 525.) was: to holil /the appeal open until the ww Ge rh) question of patent misuse could first .be determined by the District Court.” [VII, 1171.) » | ‘The decree of the Court of Appeals [R. VH, pp. 1168-9] contains no words reserving jurisdiction’ of, the case." ‘Respondents’ attorney Wired the Court of Appeals agreeing to’ submission of this motion without argument, “stating: ; i, Se ee Will yh -pleaseé advise the Court that my position om motien is that if the Court intended by its original order to reserve jurisdiction on former appeal to review District Court decision on alleged patent misuse defense then Appellee has no objec- ‘tion to court so holding., However, in absence a any indic(a)tion in, original order to that effect, | am of the opinion that Court has now-no power to entertain motion to recall mandate. (Citing cases. ) * = # [R. VIIL,-p.-1176.] Thus the significange is clear that the Court of Appeals’ order denying such motion is based upon its construction ot its decree [R. VII, pp. 1168-9] that it did not intend to reserve’ jurisdiction on the case so that it “might re- view the decision of the District Court in that respect” (alleged ‘patent misuse defense) as asserted by Petitianer | Rk. VIL, pp. 1170-1] ; that, it Was not the intention of the Court of Appeals to “hold oper the appeal until the patent misuse could: be first’ determined by the District Court” [RO VIE, p. Tia]; and that the Court of Appeal “ud not order the “reopening of the case’ foil et. D. x ‘Conclusion. ‘At is ; eelbneitol hibligiteeid that the deetsion of’ the g Court of Appeals dismissing for want of: ae ea Peti- tioner’s appeals frony the District Court's order of ‘June 5, 1945, should be affifmed. Tes, ‘ ‘ espectfully submitted, neneeice S. Lyon, S LeoNaArp S, LYON, ~~ Mark L. Herron, Attorneys for Respondents. SUPREME COURT OF THE UNITED STATES © 5° No. 755 —Ocrosen Tana, 1946, : On “Writ of Cer- Ira J. McCullough, Petitioner, tiorari .to the a ER United States Kammerer Corporation and Baash- Circuit Court of Ross Tool ewe. | Appeals for the } Ninth Circuit. [ April 28 1947.] ' Mr. JUSTICE Buack pe dite the. atte of the Court. : In an earlier phase of this patent infringement suit a patent. owned by respondent Kammerer was held valid and infringed by the petitioner. An accounting for profits and damages was ordered. 39 F. Supp. 213: The Cir- cuit Court of Appeals affirmed. 138 F, 2d 482.° We granted certiorari to consider whether a license agreement _ between respondents Kammerer and Baagh-Ross con- tained restrictions which were contrary to publie policy and unlawful so as to bar recovery against pétitioner. On oral argument of the.case here it. developed that no find- ings of fact had been made by the District. Court on this issue,gnor had the question been presented to or passed on by the Cireuit Court of Appealqy We therefore dis- - missed the writ of certiorari. 323 U.S. 327. -On.remand, the Circuit Court of Appeals did not dis- ‘urb its original affirmance of the District Court’s holding that the patent was valid and infringed. But on motion gf the petitioner, the court amended.its judgment of iffirmance so as to authorize the District Court to “enter- ‘ain & moties or motions . . . to modify or set aside its order or orders for .. . damages and accountings thereof, and take such action as it may determine” concerning pe- ~S ® . \ \ \ \ \ 2. MeCULLOUGH v. KAMMERER CORP.. | titioner’s contention that respondents’ unlawful use of the patent should bar all recovery for infringement. 148 F. 2d 525.526. Thereafter the petitioner presented a motion- to the District Court in which he alleged respondents had, - -eontrary to the public interest, used the patent to restrain ‘trade, fix prices, and suppress competition. Relying on these allegations, petitioner asked the Court to stay the accounting and to render a final judgment dismissing the coinplaint on the ground that respondents had illegally : misused the patent. Without introducing further evi- dence both parties submitted the motion to the District Court on -facts already in the record. After an argu-. ment, the Court made extensive findings of fact against petitioner, concluded that his.defense had not been estab- - lished, and entered an order denying his motion to stay the - accounting and to enter a final judgment dismissing the ‘complaint. The Circuit Court of Appeals dismissed peti- tioner’s appeal from the District Court's disposition of ‘his motion on the ground that the District Court’s order was “not a decree, final.or otherwise.” 156 F. 2d 343, 345. We hold that the appeal was erroneously dismissed. The Act of February 28, 1927, 44 Stat. 1261, 28 U.S.C. § 227a, provides that “wher in any ‘suit in equity for the infringement of letters patent for inventions, a decree is rendered which is final except forthe ordering of an accounting,’ an appeal may be taken from such decree to theircuit court of appeals. . . .” -The object of this 1927 amendment to §129 of the Judicial Code was to make sure that parties could take appeals in patent equity infringement suits without being compelled to await a final accounting. The reports of the Congressional com- _ mittees ofi the measure called attention to the large ex- penses frequently involved in such accountings and the _ losses ineurred where recoveries were ultimately denied. ney 4 McCULLOUGH v. KAMMERER CORP. 3. by reversal of decrees on the merits.’ And see Brick v. A. I. Namm & Sons, Inc., 21 F. 2d 179. It was for this reason that Congress authorized departure in this type of case from the usual practice under which appeals are | not allowed until rendition of a final judgment which disposes of all phases of -a a See Catlin v. United States, 324 U.S. 229, 233. . Nor do the unusual sivesenatelione under’ which this . codes was “rendered make it any the less appealable. Whether or ndt the District Court would have had author- ity on its own motion to reopen the proceedings to consider the alleged misuse of the patent, see Marconi Wireless Telegraph Co. v. United States, 320 U.S. 1, 47-48, it was proper for it tg do so after the Circuit Court of Appeals - . amended its judgment as it did. After reopening the *The House Committee on Patents expressed the belief that the legislation “is needed to prevent a great burden of expense to I:tigants in actions to determine the validity of patents, wliere an accounting is involved. .. . Under present procedure appeals may be taken from - the interlocutory deeree upholding the patent hut not until a full ac- counting has been made to the court. Under this bill such appeal can be taken from such interloeutory decree .. . so as to obviate the cost of an accounting in the event the case is reversed on appeal. Ya Rep. No. 1896, 69th Cong., 2d Sess. 1 (1927). The Senate Committee emphasized the same expense incident to conducting an accounting before the merits had been determined on appeal. It: apparently went on the assumption that § 129 already authorized appeals prior to accounting from an injunction against infringement. It wanted to permit an appeal prior to accounting whether there was an effective injunction outstanding or not, even - though a patent had expired making inappropriate au injunction — against its continued violation. Sen. Rep. No. 1319, 69th Cong., 2d Sess..1 ( 1927). This case presents the precise situation which the Senate Committee thought the Act was designed to avoid in that it happens here that the patent has expired. But both reports indicate that the purpose of the Act was to permit appeals whenever everything but an ‘ac- counting had been accomplished. —- - ——_ « 4 McCULLOUGH v. KAMMERER CORP. case, the District Court gave full consideration to the question presented by the motion and decided it upon the mer:ts.. See Bowman .v. Loperena, 311 U. 8. 262s, - : There was then nothing that remained to be done except’ -to conduct an accounting. . Therefore, the resulting order falls squarely within § 129 as amended. ‘The fact thatthe _ Court designated its action as an “order” rather than a - “decree” is not of crucial significance. See Rule 54, Rules of Civil Procedure. For though called an “order,” its binding effect in disposing of the question before it is the same as though it had been entitled a “decree.” . Nor is the order rendered non-appealable because one appeal had | _ already been taken, any more than it would have been had the first decree been reversed in toto and this order . entered after the reversal. Since the order. denying peti- tioner’s motion for a judgment of dismissal of respondents’ claim is, within the-meaning of § 129, “final except for the scieitaes of an accounting,” it is So AEEIE, ras mA : . Reversed. - # ‘Judgment’ as used in these rules includes a decree and any order esp acsntn denehl Rule 54, F. R. C. P. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386450_0212%3A8. Public record. Not legal advice.