# United States v. Glaxo Group Ltd./Dissent Rehnquist

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[p64] MR. JUSTICE REHNQUIST, with whom MR. JUSTICE STEWART and MR. JUSTICE BLACKMUN concur, dissenting.
The Court has undertaken to substitute its judgment for that of Congress in the initiation of novel procedures for the determination of patent validity, and in so doing [p65] has blandly disregarded the procedural history of this case.

## I

There is neither statutory nor case authority for the existence of a general right of either private individuals or the Government to collaterally challenge the validity of issued patents. In the Patent Act of 1790, Congress provided that private citizens could, upon motion alleging fraudulent procurement, prompt a district court to issue to a patentee an order to show cause why his letters patent should not be repealed. A substantially identical provision was carried over in the Patent Act of 1793. But the Patent Act of 1836 contained no provision for such individual actions although it increased the number of statutory defenses in infringement actions. The effect of this omission was determined by Mowry v. Whitney, 14 Wall. 434 (1872), to be the preclusion of private actions to cancel patents, even when fraudulently procured.
As part of the rationale in Mowry, the Court reasoned that the equitable suit for cancellation of a patent because it was fraudulently procured was a substitute for the writ of scire facias and, accordingly, it should have the same limitations. In dictum, the Court stated: "The fraud, if one exists, has been practiced on the government, and as the party injured, it is the appropriate party to assert the remedy or seek relief." Id., at 441. When the United States later sued to set aside two patents issued to Alexander Graham Bell subsequent to several [p66] purported acts of fraud by him on the Patent Office, this Court relief heavily on the dictum in Mowry, supra, in recognizing the right of the Federal Government to sue for the cancellation of letters patent obtained by fraud:
   "That the government, authorized both by the Constitution and the statutes to bring suits at law and in equity, should find it to be its duty to correct this evil, to recall these patents, to get a remedy for this fraud, is so clear that it needs no argument...." United States v. Bell Telephone Co., 128 U.S. 315, 370 (1888) (Bell I).
The Government asserts that the breadth of this holding was established in the dictum in United States v. Bell Telephone Co., 159 U.S. 548 (1895) (Bell II), wherein the Court upheld its appellate jurisdiction in such patent cancellation cases. There, it was stated:
   "In United States v. Telephone Company, (128 U.S. 315), it was decided that where a patent for a grant of any kind issued by the United States has been obtained by fraud, by mistake or by accident, a suit by the United States against the patentee is the proper remedy for relief, and that in this country, where there is no kingly prerogative but where patents for land and inventions are issued by the authority of the government, and by officers appointed for that purpose who may have been imposed upon by fraud or deceit, or may have erred as to their power, or made mistakes in the instrument itself, the appropriate remedy is by proceedings by the United States against the patentee." Id., at 555.
But in United States v. Bell Telephone Co., 167 U.S. 224 (1897) (Bell III), the Court characterized the above-quoted language as a "general statement" of the power [p67] of the Government to maintain a suit and, again in dictum, limited its effect, saying:
   "But while there was thus rightfully affirmed the power of the Government to proceed by suit in equity against one who had wrongfully obtained a patent for land or for an invention, there was no attempt to define the character of the fraud, or deceit or mistake, or the extent of the error as to power which must be established before a decree could be entered cancelling the patent. It was not affirmed that proof of any fraud, or deceit, or the existence of any error on the part on the part of the officers as to the extent of their power, or that any mistake in the instrument was sufficient to justify a decree of cancellation. Least of all was it intended to be affirmed that the courts of the United States, sitting as courts of equity, could entertain jurisdiction of a suit by the United States to set aside a patent for an invention on the mere ground of error of judgment on the part of the patent officials. That would be an attempt on the part of the courts in collateral attack to exercise an appellate jurisdiction over the decisions of the Patent Office, although no appellate jurisdiction has been by the statutes conferred...." Id., at 269.
The plain import of the Bell cases is that the authority of the Government to bring an independent action to cancel a patent is confined to the traditional equitable grounds of fraud, mistake, and deceit. The Government makes two arguments to support its position that it should not be as limited here. It contends that since this is an antitrust action, its right to attack the validity of the patent is established by the rationale of United States v. United States Gypsum Co., 333 U.S. 364 (1948), and is therefore not subject to the limitations of Bell III. Alternative, it argues that Bell III has been so undercut [p68] by subsequent decisions, including Gypsum, that it should no longer be followed.
In Gypsum Co., supra, the Court stated in "deliberate dicta" that the Government may challenge the validity of a patent which has been asserted by an antitrust defendant to be a defense to the Government's claim of antitrust violations. It reasoned that in a suit to vindicate the public interest by enjoining violations of the Sherman Act, the United States should have the opportunity, similar to that afforded licensees in an action for royalties, to show that an asserted shield of patentability does not exist. Id., at 386-388.
The Bell cases enunciate the range of the Government's authority, quite independent of any other litigation it may have with a patentee, to attack a governmental grant from the Patent Office obtained by the sort of fraud or mistake there described. The Gypsum doctrine, on the other hand, sprang from the right of the Government as a civil plaintiff under the antitrust laws to assert the invalidity of a patent grant set up as a defense to its civil complaint. Since a private licensee may attack the validity of a patent that is made the basis of an action against him for royalties, the Government should, equally, have the right to attack a patent that is set up as a defense by the patentee in the Government's action.
The Government's claim here essentially falls between these two limited grants of authority. A claim of lack of patentability, without more, is not within the Government's authority qua government to set aside a patent for fraud or mistake. And since the decision of the merits of the Government's claim of antitrust violation against these appellees in no way required the court to determine the validity of their patents, the reasoning of Gypsum is not applicable. The Government may, therefore, prevail only if we are to blur the distinction between [p69] these separate grants of authority, and extend such authority to circumstances that are within the rationale of neither.
Certainly, it is true, as the Court states, that there is a public interest favoring the judicial testing of patent validity and the invalidation of specious patents. See, e.g., Blonder-Tongue v. University Foundation, 402 U.S. 313, 343-344 (1971); Lear, Inc. v. Adkins, 395 U.S. 653, 657, 664 (1969). For when a patent is invalid, "the public parts with the monopoly grant for no return, the public has been imposed upon and the patent clause subverted." United States v. Singer Mfg. Co., 374 U.S. 174, 197, 199-200 (1963) (WHITE, J., concurring).
Significant recognition is given to this interest by both the Bell and Gypsum doctrines. Additional authority resides in the Government to obtain judicially decreed restrictions on patent monopoly in appropriate cases where the defendant's antitrust violations have consisted, at least in part, of patent misuse. International Salt Co. v. United States, 332 U.S. 392 (1947); Hartford-Empire Co. v. United States, 323 U.S. 386 (1945); Morton Salt Co. v. G.S. Suppiger Co., 314 U.S. 488 (1942). But the sort of roving commission that the majority now authorizes whereby the Government may request a court to invalidate any patent owned by an antitrust defendant that in any way related to the factual background of the claimed antitrust violation cannot be regarded as a reasonably necessary extension of any of these principles. It is, therefore, more properly the creature of statute than of judicial innovation.

## II

Although the Court purports to limit its holding to avoid giving the Government such a roving commission, the range of the new authority is pointed up by the facts in this case.
[p70] The Government submitted its case to the District Court in three motions for partial summary judgment on the very narrow issue that the vertical restrictions on the resale of bulk-form griseofulvin constituted per se violations of the antitrust laws under the Schwinn doctrine. United States v. Arnold v. Schwinn & Co., 388 U.S. 365 (1967). Although common bulk-form griseofulvin is the subject of a British manufacturing patent owned by Glaxo, it is neither patented nor patentable in the United States.
The two patents that this Court is now authorizing the government to challenge bear no relationship whatsoever to the illegal restraint found. The ICI patent relates one to the dosage form of the drug. The majority states that "it is clear from the evidence that the ICI dosage-form patent... gave the appellees the economic leverage with which to insist upon and enforce the bulk-sales restrictions imposed on the licensees." Ante, at 60-61. But no such evidence was submitted in the Government's statement of undisputed facts that accompanied its motions for partial summary judgment on the restraint-of-alienation issue. And no such fact was included in the District Court's findings of undisputed or ultimate facts. The District Court found precisely the opposite:
   "Plaintiff has not shown on this record that defendants' current licensing practices are related to the adjudged antitrust violation nor are they methods to circumvent the prohibition of restraints on resale...." 328 F.Supp. 709, 713.
[p71] Since the Court's factual assumption as to economic leverage is completely contrary to the finding of the District Court, presumably the Court without saying so is holding that finding to be clearly erroneous. Yet the only support for such a holding, to which the Court refers, is an unverified statement contained in the Government's argument to the District Court on this issue. While the Government has an impressive batting average in this Court as an antitrust litigant, it has not heretofore had the benefit of having unverified assertions of its counsel treated as being of sufficient evidentiary weight to upset a considered factual finding of the District Court in which that argument was made. Nothing in the antitrust laws or in the Federal Rules of Civil Procedure exempts the Government from having to make its case in the trial court in the same manner as any other litigant. The Court's conclusion that there "can be little question that the patents involved here were intimately associated with and contributed to effectuating the conduct that the District Court held to be a per se restraint of trade in griseofulvin," ante, at 62, is thus reached only by a substantial departure from the settled usages of appellate review.
Similarly, the other patent which the Government may now have declared invalid was not even granted until 1967, and it, too, relates to the dosage form of the drug. Since the restraints on alienation were imposed in the early 1960's, there cannot be a plausible contention that it in any way provided "economic leverage" for the antitrust violations. Thus, the scope of the new authority [p72] extends to any patent that happens to be present in a patent-licensing agreement that contains a restraint on alienation in a different market, regardless of its relationship to such restraint.
Since there is no congressional authorization for the challenge by the Government to the validity vel non of patents without regard to the relationship to antitrust violations, and since there was no proved relationship between these violations and the patents in question, I would affirm the judgment and orders of the District Court. I therefore dissent.

## Notes

* ↑ 1 Stat. 109. For an excellent review of the history briefly summarized here, see Cullen & Vickers, Fraud in the Procurement of a Patent, 29 Geo. Wash. L. Rev. 110 (1960).
* ↑ 1 Stat. 318.
* ↑ 5 Stat. 117.
* ↑ The majority inaccurately states that the lower court sustained the allegations in the complaint that appellees had unreasonably restrained trade by prohibiting the licensee from selling or reselling bulk-form griseofulvin. In fact, the District Court only found that the restraint on reselling bulk-form griseofulvin constituted the per se antitrust violations found.
* ↑ This total lack of proof of any relationship also defeats for me the granting of compulsory licensing of the United States patents. Compulsory licensing is a recognized remedy in patent misuse cases, see, e.g., International Salt Co. v. United States, 332 U.S. 392 (1947), Hartford-Empire Co. v. United States, 323 U.S. 386 (1945), but here the District Court specifically found there was no patent misuse or other abuse of patent rights.