Opinion ID: 692072
Heading Depth: 4
Heading Rank: 3

Heading: The Adjudication of Patent Validity

Text: 29 Before the passage of the Declaratory Judgment Act in 1934, a party concerned that its present or future activities might give rise to patent infringement liability had no legal or equitable procedure to test the validity of the patent at issue. Zenie Bros. v. Miskend, 10 F.Supp. 779, 781, 25 USPQ 153, 155 (S.D.N.Y.1935) (It is said that a suit by a private party who has no patent himself to declare a competitor's patent void is without precedent. The charge is true.); Borchard at 802-06; Note, Federal Jurisdiction Over Declaratory Judgment Proceedings in Patent Cases, 45 Yale L.J. 1287, 1289 (1936). The worried party could only wait for the patentee to bring an infringement suit and raise the patent's invalidity as an affirmative defense. 8 Patent validity simply was not litigated in isolation from an infringement claim. 30 As we noted in Arrowhead Indus. Water, Inc. v. Ecolochem, Inc., patent owners could threaten infringement suits without ever bringing them, engaging in a danse macabre, brandishing a Damoclean threat with a sheathed sword. 846 F.2d 731, 735, 6 USPQ2d 1685, 1688 (Fed.Cir.1988). Where the patentee had initiated a suit for infringement and subsequently decided to withdraw the claim prior to trial, the alleged infringer had no way to force the patentee to revive the infringement claim so as to allow for a determination of validity. Leach v. Ross Heater & Mfg., 104 F.2d 88, 91, 41 USPQ 558, 560-61 (2d Cir.1939). The only suit an accused infringer faced with the threat of an infringement action could bring was an action in state court for unfair competitive practices--namely, the patentee's bad faith attempts to destroy the party's business with groundless threats of infringement suits. See, e.g., Racine Paper Goods Co. v. Dittgen, 171 F. 631 (7th Cir.1909); A.B. Farquhar Co. v. National Harrow Co., 102 F. 714 (3d Cir.1900). But this action, even if successful, produced no ultimate decision on the question of validity, and thus fell short of what a declaratory judgment action for invalidity would eventually offer. Zenie Bros., 10 F.Supp. at 782, 25 USPQ at 156; Emack v. Kane, 34 F. 46 (C.C.N.D.Ill.1888). 31 American maintains its declaratory judgment action against Lockwood in order to test the validity of Lockwood's patents. Insofar as the validity of the patents is adjudicated, American's action resembles nothing so much as a suit for patent infringement in which the affirmative defense of invalidity has been pled, and Lockwood's right to a jury trial must be determined accordingly. 9 The primary difference between American's action and the infringement suit that would formerly have been required for an adjudication of validity is that the parties' positions here have been inverted, 10 and such an inversion cannot operate to frustrate Lockwood's Seventh Amendment rights. Beacon Theatres, 359 U.S. at 504, 79 S.Ct. at 953; Owens-Illinois, Inc. v. Lake Shore Land Co., 610 F.2d 1185, 1189 (3d Cir.1979) (If the declaratory judgment action does not fit into one of the existing equitable patterns but is essentially an inverted law suit--an action brought by one who would have been a defendant at common law--then the parties have a right to a jury.); James v. Pennsylvania General Ins. Co., 349 F.2d 228, 230 (D.C.Cir.1965) (The right to jury trial in a declaratory judgment action depends ... on whether the action is simply the counterpart of a suit in equity--that is, whether an action in equity could be maintained if declaratory judgment were unavailable--or whether the action is merely an inverted lawsuit.); Johnson v. Fidelity & Casualty Co., 238 F.2d 322, 324-25 (8th Cir.1956); Hargrove v. American Cent. Ins. Co., 125 F.2d 225, 228 (10th Cir.1942); Pacific Indemnity Co. v. McDonald, 107 F.2d 446, 448 (9th Cir.1939). 11 4. The Patentee's Right to a Jury Trial at Common Law 32 As we have demonstrated, the Seventh Amendment preserves to Lockwood the same right to a jury trial on the factual questions relating to validity in a declaratory judgment action that he would have enjoyed had the validity of his patents been adjudicated in a suit for patent infringement according to eighteenth-century English practice. 33 In eighteenth-century England, allegations of patent infringement could be raised in both actions at law and suits in equity. 2 Joseph Story, Commentaries on Equity Jurisprudence Secs. 930-34, at 236-39 (photo. reprint 1988) (13th ed. 1886); 5 Moore p 38.11-. Because an action at law for damages could not obviate the need for perpetual litigation over future acts of infringement nor ascertain the full extent of the injury done to one's interests by past acts of infringement, courts of equity gave a patentee the option of pursuing injunctions and accountings against alleged infringers. 2 Story at Secs. 932, 933. The choice of forum and remedy, and thus of the method of trial, was left with the patentee. Nineteenth-century American practice followed the same basic pattern. Marsh v. Seymour, 97 U.S. 348, 349, 24 L.Ed. 963 (1877) (Owners of a patent ... may seek redress for the unlawful use of the improvement which it secures, in the Circuit Court, by a suit at law or in equity, at their option....); Wise v. Grand Ave. Ry. Co., 33 F. 277, 278 (C.C.W.D.Mo.1888) (It is now settled that a patentee may sue either at law or in equity, according as the relief demanded is of a legal or equitable nature.). If the patentee sought only damages, the patentee brought an action at law; in such a case, the defense of invalidity was tried to the jury, assuming that a jury had been demanded. Battin v. Taggart, 58 U.S. (17 How.) 74, 85, 15 L.Ed. 37 (1854); Wood v. Underhill, 46 U.S. (5 How.) 1, 5-6, 12 L.Ed. 23 (1847). However, if the patentee facing past acts of infringement nevertheless sought only to enjoin future acts of infringement, the patentee could only bring a suit in equity, and the defense of invalidity ordinarily would be tried to the bench. Root v. Railway Co., 105 U.S. 189, 205-06, 26 L.Ed. 975 (1881). 12 Under both English and American practice, then, it was the patentee who decided in the first instance whether a jury trial on the factual questions relating to validity would be compelled. 34 We cannot, consistent with the Seventh Amendment, deny Lockwood that same choice merely because the validity of his patents comes before the court in a declaratory judgment action for invalidity rather than as a defense in an infringement suit. Lockwood is entitled to have the factual questions relating to validity in this case tried to a jury as a matter of right.