Source: https://supreme.justia.com/cases/federal/us/326/249/
Timestamp: 2019-04-25 04:21:31+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 326 › Scott Paper Co. v. Marcalus Mfg. Co., Inc.
Scott Paper Co. v. Marcalus Manufacturing Co., Inc.
1. The nature and extent of the legal consequences of the expiration of a patent are federal questions, the answers to which are to be derived from the patent laws and the policies which they adopt. P. 326 U. S. 255.
2. An assignor of a patent is not estopped by virtue of his assignment to defend a suit for infringement of the assigned patent on the ground that the alleged infringing device is that of a prior art expired patent. Westinghouse Co. v. Formica Co., 266 U. S. 342, distinguished. Pp. 326 U. S. 250, 326 U. S. 257.
3. The application of the doctrine of estoppel so as to foreclose the assignor of a patent from asserting the right to make use of the prior art invention of an expired patent which anticipates that of the assigned patent is inconsistent with the patent laws, which dedicate to public use the invention of an expired patent. P. 326 U. S. 257.
4. The patent laws do not contemplate that anyone, by contract or any form of private arrangement, may withhold from the public the use of the invention of an expired patent, the public right to the enjoyment of which has been secured by the grant of a monopoly of the patented invention for a limited time. P. 326 U. S. 256.
In this patent infringement suit, the question is whether the assignor of a patent is estopped by virtue of his assignment to defend a suit for infringement of the assigned patent on the ground that the alleged infringing device is that of a prior art expired patent.
cutting edge at an angle with the plane of the cutter. Marcalus, while an officer and employee of petitioner, made the patented invention and assigned his patent application to petitioner for a valuable consideration. The patent issued on the application as filed, without amendment, after which Marcalus severed his connection with petitioner and organized respondent company, which he controls, and which, like petitioner, is engaged in producing and selling box blanks having a cutting edge.
In the present suit, brought by petitioner for infringement of the assigned patent, respondents defended on the ground that their accused machine is a copy of that of the expired prior art patent issued to Inman in 1912. The District Court gave judgment for petitioner, 54 F.Supp. 105, holding that, inasmuch as respondents were estopped by Marcalus' assignment of the patent to show its validity, they could not, by recourse to the prior art to show noninfringement, accomplish the same result by indirection. The Court of Appeals reversed, 147 F.2d 608, holding that the prior art may be resorted to by the assignor to measure the extent of anticipation for the purpose of limiting the claims of the assigned patent, and thus avoid infringement. Because of the identity patent-wise of the Inman Patent with the assigned patent and with the accused device, the court held that the claims of the assigned patent were limited to naught, and hence that there could be no infringement.
"that an assignor of a patent right is estopped to attack the utility, novelty, or validity of a patented invention which he has assigned or granted as against anyone claiming the right under his assignment or grant. As to the rest of the world, the patent may have no efficacy and create no right of monopoly, but the assignor cannot be heard to question the right of his assignee to exclude him from its use. Curran v. Burdsall, 20 F. 835; Ball & Socket Fastener Co. v. Ball Glove Fastening Co., 58 F. 818; Woodward v. Boston Lasting Machine Co., 60 F. 283, 284; Babcock v. Clarkson, 63 F. 607; Noonan v. Chester Park Athletic Co., 99 F. 90, 91."
Respondents, denying that the doctrine of estoppel can rightly be applied to patent assignments, also insist that the present case is not within the scope of the doctrine. Compare Buckingham Products Co. v. McAleer Mfg. Co., 108 F.2d 192, with Casco Products Corp. v. Sinko Tool & Mfg. Co., 116 F.2d 119. Both parties rely on the decision of this Court in the Formica case, supra, which, although stating that the assignor cannot deny the novelty and validity of the assigned patented invention, nevertheless held that the claims of a patent may be narrowed by reference to the prior art so as to restrict them to so much of the invention described by the specifications as is not exhibited by the prior art. Klein v. Russell, 19 Wall. 433, 86 U. S. 466-467; Garneau v. Dozier, 102 U. S. 230; Wollensak v. Reiher, 115 U. S. 87; Beidler v. United States, 253 U. S. 447; Mackay Co. v. Radio Corp, 306 U. S. 86, 306 U. S. 94. Cf. Hocking v. Hocking, 4 R.P.C. 255, 434, 6 R.P.C. 69; Clark v. Adie, 2 App.Cas. 423; Crosthwaite v. Steel, 6 R.P.C.190.
event, preclude the assignor charged as an infringer from narrowing or qualifying their construction by reference to the prior art, saying, 266 U.S. at 266 U. S. 351: "The distinction may be a nice one but seems to be workable." It accordingly, by reference to the prior art, interpreted the claims by narrowing them to a two-step process, shown by the specifications, which the court found to be the assignor's advance over the prior art, but which was not in terms embodied in the claims. The Court thus sustained the defense of noninfringement by restricting the claims by reference to the prior art and by holding in effect that the invention assigned was not as broad in scope as the claims would otherwise on their face define it to be.
Petitioner, pointing to the logical embarrassment in applying a doctrine which forbids the assignor to deny validity of the patented invention for want of novelty, but nevertheless allows him to narrow its scope by reference to the prior art in order to save his accused device from infringement, insists that the court below has resorted to the prior art not for the purpose of narrowing the claims and distinguishing from the prior art something which the assignor invented, but for the purpose of destroying the claims because anticipated. This is said to be precisely the same, in purpose and effect, as to deny invention for want of novelty. It is urged that the permission thus given to respondent assignor to show want of novelty which he is estopped to deny is to disregard the estoppel by which, by hypothesis, he is bound.
Formica case, they urge that the claims of the patent may nevertheless be narrowed to a machine embodying the additional Minor features not found in the Inman machine, and infringement may thus be avoided.
But, in the circumstances of this case, we find it unnecessary to pursue these logical refinements or to determine whether, as respondent asks, the doctrine of estoppel by patent assignment as stated by the Formica case should be rejected. To whatever extent that doctrine may be deemed to have survived the Formica decision or to be restricted by it, we think that case is not controlling here. For other considerations are dispositive of this case, in which, unlike Formica, the accused machine is precisely that of an expired patent. Neither in that case nor in any other, so far as we are advised, was the doctrine of estoppel applied so as to penalize the use of the invention of an expired patent. That, we think, is foreclosed by the patent laws themselves.
Revised Statutes, §§ 4886, 4884 as amended, 35 U.S.C. §§ 31, 40, provide for the grant of a patent for a term of seventeen years to any person who has invented a "new and useful art, machine, manufacture, or composition of matter." The grant is conditioned upon the filing of an application in the patent office describing the invention and the manner of making and using it. R.S. § 4888 as amended, 35 U.S.C. § 33. Revised Statutes, §§ 4895, 4898, 35 U.S.C. §§ 44, 47, authorize the assignment of an invention while the application for a patent is pending, and of the patent rights to the invention after the patent has issued. Section 24(7) of the Judicial Code, 28 U.S.C. § 41(7), confers on district courts of the United States jurisdiction of cases arising under the patent laws, and R.S. § 4921 as amended, 35 U.S.C. § 70, gives the district courts authority to entertain suits to restrain infringement and for recovery of any resulting damage from the infringement of any right secured by the patent grant.
"To promote the Progress of Science and useful Arts, by securing for limited Times to . . . Inventors the exclusive Right to their . . . Discoveries."
The nature and extent of the legal consequences of the expiration of a patent are federal questions, the answers to which are to be derived from the patent laws and the policies which they adopt. Cf. Sola Electric Co. v. Jefferson Co., 317 U. S. 173, 317 U. S. 176; Steele v. Louisville & N. R. Co., 323 U. S. 192, 323 U. S. 204, and cases cited. B y the patent laws, Congress has given to the inventor opportunity to secure the material rewards for his invention for a limited time, on condition that he make full disclosure for the benefit of the public of the manner of making and using the invention, and that, upon the expiration of the patent, the public be left free to use the invention. See Special Equipment Co. v. Coe, 324 U. S. 370, 324 U. S. 378. As has been many times pointed out, the means adopted by Congress of promoting the progress of science and the arts is the limited grant of the patent monopoly in return for the full disclosure of the patented invention and its dedication to the public on the expiration of the patent. Grant v. Raymond, 6 Pet. 218, 31 U. S. 241-242; Gill v. Wells, 22 Wall. 1; Bauer v. O'Donnell, 229 U. S. 1; Motion Picture Co. v. Universal Film Co., 243 U. S. 502, 243 U. S. 510-511, and cases cited.
expired patent, he would deprive himself and the consuming public of the advantage to be derived from his free use of the disclosures. The public has invested in such free use by the grant of a monopoly to the patentee for a limited time. Hence, any attempted reservation or continuation in the patentee or those claiming under him of the patent monopoly, after the patent expires, whatever the legal device employed, runs counter to the policy and purpose of the patent laws. And, for the same reason, a stranger, such as respondent Marcalus, cannot, by securing and assigning a patent on the invention of the expired Inman patent, confer on petitioner any right to deprive the public of the benefits of the free use of the invention for which the public has paid by the grant of a limited monopoly.
By the force of the patent laws, not only is the invention of a patent dedicated to the public upon its expiration, but the public thereby becomes entitled to share in the goodwill which the patentee has built up in the patented article or product through the enjoyment of his patent monopoly. Hence, we have held that the patentee may not exclude the public from participating in that goodwill or secure, to any extent, a continuation of his monopoly by resorting to the trademark law and registering as a trademark any particular descriptive matter appearing in the specifications, drawings, or claims of the expired patent, whether or not such matter describes essential elements of the invention or claims. Kellogg Co. v. National Biscuit Co., supra, 305 U. S. 117-120,; Singer Manufacturing Co. v. June Manufacturing Co., 163 U. S. 169, 163 U. S. 185.
form of private arrangement, may withhold from the public the use of an invention for which the public has paid by its grant of a monopoly and which has been appropriated to the use of all. The rights in the invention are then no longer subject to private barter, sale, or waiver. Cf. Philips v. Grand Trunk R. Co., 236 U. S. 662; Midstate Horticultural Co. v. Pennsylvania R. Co., 320 U. S. 356, 320 U. S. 361; Brooklyn Bank v. O'Neil, 324 U. S. 697, 324 U. S. 704. It follows that the patent laws preclude the petitioner assignee from invoking the doctrine of estoppel as a means of continuing as against respondent, his assignor, the benefit of an expired monopoly, and they preclude the assignor from estopping himself from enjoying rights which it is the policy of the patent laws to free from all restrictions. For no more than private contract can estoppel be the means of successfully avoiding the requirements of legislation enacted for the protection of a public interest. Compare Pittsburgh &c. Ry. Co. v. Fink, 250 U. S. 577, 250 U. S. 583, with Louisville & Nashville R. Co. v. Mottley, 219 U. S. 467, 219 U. S. 476-477; New York Central R. v. Gray, 239 U. S. 583, 239 U. S. 586-587; Norman v. Baltimore & O. R. Co., 294 U. S. 240, 294 U. S. 304-305, 294 U. S. 309-310, and cases cited. The interest in private good faith is not a universal touchstone which can be made the means of sacrificing a public interest secured by an appropriate exercise of the legislative power. The patent laws preclude us from saying that the patent assignment, which they authorize, operates to estop the assignor from asserting that which the patent laws prescribe -- namely, that the invention of an expired patent is dedicated to the public, of which the assignor is a member.
with the patent laws which dedicate to public use the invention of an expired patent. The assignor has a complete defense to an action for infringement where the alleged infringing device is that of an expired patent.
"that an assignor of a patent right is estopped to attack the utility, novelty or validity of a patented invention which he has assigned or granted as against any one claiming the right under his assignment or grant."
The fact that the prior art is evidenced by an expired patent does not seem significant to him. Consequently, he would reverse.
"is based on a promise to refrain from competition and is not ancillary either to a contract for the transfer of good will or other subject of property. . . ."
See generally, as to the validity of contracts not to compete, 76 Pa.L.Rev. 244, 257 ff.; Handler, Cases and Materials on Trade Regulation, 102-150.
something to another in saying, "[w]hat I have sold you is worthless," even though he did not expressly promise that what he sold had worth. T he obvious implications of fair dealing in commercial transactions have been part of our law for at least a hundred years. And it would be surprising indeed if the law made a difference whether what was purported to be sold was a diamond, or a secret process for manufacturing a commodity, or a patented machine.
conscience of equity has thus enforced binds only an assignor who seeks to use the courts to defeat that which he purported to sell. It merely restricts one person, the assignor, from denying that he sold a patent when he purported to sell it, leaving the whole rest of the world free to assail the validity or novelty of the patent.
To be sure, the patent legislation does not, in so many words, formulate this doctrine of fair dealing between assignor and assignee. But patent legislation, like other legislation -- and indeed like all compositions, -- impliedly contains presuppositions which need not be spelled out precisely, because they are taken for granted. The fair intendment of a patent assignment authorized by Congress is as much to be respected as the same meaning explicitly stated. Patent legislation is part of the great body of law. Familiar equitable doctrines, applicable to the whole domain of law and unquestioned as part of the judicial process, are infused into specific enactments dealing only with the specific problems that call for specific formulation. If warrant in the language of Congress had to be found for all adjudications made by this Court in litigation involving patents, no inconsiderable volume of decisions drawn from general equitable principles ought never to have been made and should be undone.
in the case of a patent, Congress has ready means of undoing that which has always been part of the patent law, as is true of other provisions which, in its wisdom, may call for change. This doctrine, voluminously applied in the Law Reports, has never been questioned by Congress in the successive enactments amending the patent law. Only very recently, bills dealing with this subject have been introduced, but have not yet been acted upon. See, e.g., H.R. 97 and H.R. 3462, 79th Cong., 1st Sess. (1945); H.R. 3874, 78th Cong., 1st Sess. (1943). The place for reconsidering the policy which this Court, more than twenty years ago, characterized as "a rule well settled by forty-five years of judicial consideration," Westinghouse Co. v. Formica, supra, at 266 U. S. 349, is the Congress. That forum is not confronted with the stark alternatives of either adhering to the rule or wiping it out, but has the wide range of legislative discretion in considering what is good and what is bad in the rule, and fashioning legislation appropriate to the diversified aspects of the problem.
Happily, law is not so divorced from ethical standards that a hitherto unquestioned principle of fair dealing should be deemed hostile to any branch of the law. But, if the principle of fair dealing as between the assignor and the assignee of a patent that has for so long been part of the patent law is to be repudiated judicially, it is better to do so explicitly, not by circumlocution.
"It may be granted that these two claims [in controversy] were properly readable upon the specifications and drawings of the application signed by O'Connor [the assignor] -- that is to say, in the language of the Patent Office, that he had the right to make these claims. Nevertheless they expressed a conception of the invention which rested solely on the 'nonplaniform' shape of the article, and was in this respect broader than any claim which O'Connor had drafted, and, if the prior Baekeland patent had been known to O'Connor, as it became known to his assignees when it later compelled them to abandon the original broad claims, he probably never would have claimed as his the invention thus formulated. The record does not support the inference that O'Connor either expressly or impliedly represented to the Westinghouse Company [the assignee] that he was the inventor of the process defined in these two claims, and hence the claim of estoppel must fail."
"that such restraints tended to give . . . the beneficiary of such restraints, a monopoly of the trade, from which he had thus excluded one competitor, and by the same means might exclude others."
Taft, J., in United States v. Addyston Pipe & Steel Co., 85 F. 271, 279, modified, 175 U. S. 175 U.S. 211. Neither consideration is pertinent here.

References: v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 § 4888
 § 33
 § 41
 § 4921
 § 70
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v. 
 v.