Document: 395 U.S. 653 89 S.Ct. 1902 23 L.Ed.2d 610 LEAR, INCORPORATED, Petitioner,v.John S. ADKINS. No. 56. Argued Nov. 20 and 21, 1968. Decided June 16, 1969. [Syllabus from pages 653-654 intentionally omitted] C. Russell Hale, Pasadena, Cal., for petitioner. Lawrence G. Wallace, Washington, D.C., the United States, as amicus curiae, by special leave of Court. Peter R. Cohen, Beverly Hills, respondent. Mr. Justice HARLAN delivered opinion 1 In January 1952, John Adkins, an inventor mechanical engineer, was hired Lear, Incorporated, purpose solving a vexing problem company had encountered in its efforts to develop gyroscope which would meet increasingly demanding requirements aviation industry. The is essential component navigational system all aircraft, enabling pilot learn direction altitude his airplane. With development faster airplanes 1950's, more accurate gyroscopes were needed, gyro industry consequently casting about new techniques satisfy this need economical fashion. Shortly after Adkins hired, he developed method construction at company's California facilities improved accuracy low cost. Lear almost immediately incorporated Adkins' improvements into production process substantial advantage. 2 question that remains unsettled case, eight years litigation courts, whether will receive compensation Lear's use those has subsequently patented. At every stage lawsuit, sought prove that, despite grant patent Patent Office, none sufficiently novel warrant award monopoly under standards delineated governing federal statutes. Moreover, obtained means fraud on Office. response, argued since entered licensing agreement with it obliged pay agreed royalties regardless validity underlying patent. 3 Supreme Court unanimously vindicated inventor's position. While court recognized generally manufacturer free challenge patent, held 'one oldest doctrines field law establishes so long licensee operating license estopped deny licensor's suit agreement. theory doctrine should not be permitted enjoy benefit afforded while simultaneously urging forms basis void.' 67 Cal.2d 882, 891, 64 Cal.Rptr. 545, 549, 435 P.2d 321, 325—326 (1967). 4 Almost ago, last o nsideration doctrine, also invoked estoppel right licensor idea reality part public domain. Automatic Radio Manufacturing Co. v. Hazeltine Research, Inc., 339 827, 836, 70 894, 899, 94 L.Ed. 1312 (1950). We granted certiorari present 391 912, 88 1810, 651, reconsider rule light our recent decisions emphasizing strong policy favoring competition ideas do merit protection. Sears, Roebuck & Stiffel Co., 376 225, 84 784, 11 661 (1964); Compco Corp. Day-Brite Lighting, 234, 779, 669 (1964). I. 5 very beginning parties' relationship, rudimentary one-page provided although '(a)ll ideas, discoveries, inventions, etc., related * vertical gyros become property Adkins,' promised might 'on mutually satisfactory royalty basis.'1 As soon labors yielded tangible results, quickly became apparent further steps taken place rights firmer basis. On February 4, 1954, filed application Office effort gain protection improvements. same time, lengthy period negotiations conclude clearly establish amount paid. 6 These finally bore fruit September 15, 1955, when parties approved complex 17-page contract carefully conditions upon if 'the refuses issue claims (contained original application) or such issued invalid, then any events option shall have forthwith terminate specific affected entire Agreement *.' § (2 App. 138). 7 contractual language indicates, final decision patentability invention time concluded. Indeed, until 5, 1960. This delay source character procedures. regulations require make judgment invention's application.2 sometimes happens early stage, far common find certain applicant's may patentable, others been fully anticipated earlier developments art. situation, does attempt separate wheat chaff own initiative. Instead, rejects application, giving amendment narrows claim cover only aspects are truly novel.3 It often happens, however, even amended, finds some remaining unpatentable. When occurs, agency again issues rejection subject amendment.4 And h e continues Examiner either grants concludes could possibly Office's records.5 Thus, made took average than three before administrative acting two four times.6 8 progress obtain followed typical pattern. initial ambitious constructing rejected claim, well subsequent amendments, progressively narrowed scope protected. Finally, drastically assert design apparatus used achieve novel.7 1960 granting 17-year modest claim. 9 During attempting convince novelty convinced never continue contributed substantially art gyroscopy. 1957, twice, announced searched files found believed discovery. result, stated no longer large number producing plant Grand Rapids, Michigan (the gyros). Payments continued smaller produced gyros) they too terminated April 8, 1959. 10 1960, brought lawsuit Superior He jury both patented failure these breach 1955 quasi-contractual obligations. Although raise invalidity defense, trial judge directed verdict of.$16,351.93 gyros, holding questioning different approach came considering gyros. Noting claimed designs independently instructed recovery satisfied novel, within meaning laws. returned $888,122.56 gyros,8 motion notwithstanding verdict, finding completely prior art.9 Neither side split decision, appealed District Appeal, adopted quite approach. terminating obligations entirely 1959, desired recover damages date 'relegated action infringement' courts. 52 795, 806. So pre-1959 concerned, required Cal.Rptr., 809. 12 Once sides appealed, Court, yet another presented. Appeal's conclusion gave Since still effect, concluded, relying we already quoted, barred propriety grant. Cal.2d, 907, P.2d, 336. court's adherence estoppel, without qualification. After noting independently, tested contention 'whether what being built (in Michigan) springs entirely' (emphasis supplied) 913, 564, 340. Applying test, fact 'utilized throughout question,' 915, 565, 341 reinstated jury's $888,000 branch case. II. 13 Court's solely matter state law, open us raised reliance bar proving dedicated welfare law.10 State aware writing clean slate. considered line cases reaching back middle 19th century. Before deciding role case future, is, then, desirable consider played past. A. 14 roots celebrated tradition, one century manner. decided Sherman Act clear power owner constituted limited exception general competition. Kinsman Parkhurst, 18 How. 289, 15 385 (1856).11 Curiously, second cited supporting points opposite direction. St. Paul Plow Works Starling, 140 184, 803, 35 404 (1891), did lower courts admit licensee's evidence showing pattented device novel. A unanimous merely where there conflicting novelty, reverse upholding patent's validity. next year, inequitable refused injunction enforce promise contest 'It important repressed worthless patents, patentee really valuable protected Pope Gormully, 144 224, 632, 636, 36 414 (1892). 16 1905 citing Pope's powerful argument, States Harvey Steel 196 310, 25 240, 49 492, applied revived supra, declared, prolonged analysis, rule.' U.S., 899. holding, majority ignored teachings series rendered during 45 decided. period, each rely privielge created permit judicial scrutiny grnat. Long decided, eroded 'general rule,' but evernarrowing set circumstances. B. 17 first stringently situation patentee's equities compelling presented arrangement. Westinghouse Electric Formica Insulation 266 342, 117, 69 316 (1924), framed govern recurring arises owner, assigning sum, because contains ideas. appeals traditionally defense infringement ground improper 'sell keep thing,' Faulks Kamp, Cir., F. 898, 902 (1880). Nevertheless, imposed limitation radically inconsistent premises rule' based. assignor directly attack reference art, introduce narrow 'The distinction nice seems workable.' 351, S.Ct., 120: Workable not, result proved anomaly: old defend extend inclusion owner's products; other hand, all, successfully launch direct seemed forbid. incongruity position compelled least carry reasoning logical conclusion. 1940 Seventh Circuit show thus royalties. Casco Products Sinko Tool 116 F.2d 119. Scott Paper Marcalus 326 249, 66 101, 90 47 (1945), similar Circuit's, undermining done. Scott, attempted assignee product copy expired invoke laws frustrated information statutes, all. Chief Stone, go beyond precise who asserted simply copying Nevertheless impossible limit compass. If forbids attempts why lacked technical journal obvious knowledgeable art? Frankfurter's dissent indicated, id., 258—264, 105—108, answers questions. undermined 19 profoundly antithetic principles estoppel. Sola Jef erson 317 173, 63 172, 87 165 (1942), license's price-fixing provisions permitting clause per se illegal existence valid countenanced compromising principle. But went further: clause, avoid paying invalid. Five later, 'anti-trust exception' given extensive Katzinger MacGregor cases.12 Here licensors collect their mere enough bring question. Thus agreements contained restrictions arguably antitrust laws, dead letter. Frankfurter, dissent, further, concluding done repudiate rule: 'If vital ninety now deprived life, ought give decent burial.' 329 416, 428. D. federal, hedged impact creating exceptions indicated recognition broader policies pointing contrary licensees payments, contract, once third party proves See, e.g., Drackett Chemical Chamberlain 853 (6 1933). Some gone hold notify repudiating agreement, terms, invalidity. Note, Doctrine Licensee Repudiation Law, Yale L.J. 125 (1953); Ellis, Licenses 328 (3d ed., Deller 1958). century, actually sold products incorporating See Forkosch, Estoppel Temp.L.Q. 515, 529, n. (1947).13 III. 21 uncertain status accommodate competing demands contracts patents. purchaser promises later becomes dissatisfied bargain made.14 requires, circulation good unless supra; faced basic conflict policy, land naturally intermediate somehow remain responsivet concerns worlds failure. Rather creative compromise, chaos proceeding premises. renewing search acceptable ground, must merits arguments properly advanced 22 simplify matters greatly most licenses negotiated. contrast manufacturers issued. makes monopoly,15 potential access enter owner. Consequently, gains benefits chooses First, accepting avoided necessity defending expensive able afford one. Second, unchallenged deter compete licensee.16 Under ordinary received enforcement tests standard good-faith commercial dealing, satisfactory. For simple ignores seeking assistance behalf. Consider, example, through difficult perceive faith requires him Compare Walker Process Equipment, Inc. Food Machinery Corp., 382 86 347, 247 (1965). 24 Even cases, involving conscious wrongdoing, compelling. represents legal reached predicated factors reasonable men can differ widely. Yet reach ex parte proceeding, aid interested seem unfair places issue, especially buttressed presumption attaches consistent letter cannot say spirit seeks balance promisor promisee accord faith. Surely weigh heavily balanced against interest full Licensees onlyi ndividuals economic incentive muzzled, continually tribute would-be monopolists justification. think plain way negotiation 26 itself clouded history, regarded sound respect 'estoppel' overruled. 27 us, presents complicated context. out outset return compensation. 28 gained licensee. issues, requesting protection, statute confidence.17 hopes secret deal himself, publicize world large. By promising immediate learned published details core bars enforcing regulating unpatented idea.18 29 takes extreme argue privileged accruing ultimately argues (1960—1977), regard accept broad argument. 30 inventors negotiate al applications pending thereby disabling strongest worthless. somewhat appealing licensor, difference justify impairment overriding policy. 31 Nor argument support portion post-patent royalties, terms provide paid 'patent invalid,' 6, determined suggested allowed comply 32 controlling State's rooted principles. decisive significantly challenging 33 requirement aims Enforcing provision additional devise conceivable dilatory tactic postpone day reckoning. reason encourage tactics way. cost prosecuting slow-moving proceedings inevitable appeal many deterrent effect particularly severe scientific fields rapid rate. areas, obsolete term expired. believe replace near little initiate proceedings, freed liability Lastly, undermine reasons, payment invalidity.19 34 much one, squarely raises whether, extent, protect owners inventions willing disclose adde §§ precision, venerable sufficient answer based law. know awarded pre-patent previously established period. Our today will, course, theoretical predict extent reevaluation revolutionize particular regard. consideration, though underlies phase controversy, define any, act Given difficulty importance task, undertaken have, focused inquiry, future. remand, reconcile review IV. inappropriate pass Not fail petition certiorari, unequivocal manner necessary proper adjudication relevant analysis. efforts, 'entirely' upheld 'Lear utilized question.' 341. conclusion, express belief 'significant step forward' 37 court, making statement, intended explicated Graham Deere 383 1, 684, 545 (1966). Surely, concerned benefited degree. context, address attacking instance. 38 vacated remanded opinion. 39 ordered. 40 Judgment remanded. 41 BLACK, whom THE CHIEF JUSTICE DOUGLAS join, concurring dissenting part. 42 I concur except said Part III, C, What reserve future t someone claiming discovery disclosing pending, His reservation see it, (1964), Brother Harlan concurred saying—contrary held—'I impose 'copying' itself.' Compco, 239, 783. Consequently joining kind qualification decisions. 43 entertain expressed authorize invention, exacting One may, wishes, private arrangements self-styled 'inventors' discoveries secret, rather them, run counter plan tightly regulate national narrowly limiting monopoly, among individuals, approval State. 44 WHITE, applicable U.S.C. 1257 empowers writ '(f)inal judgments decrees highest title, right, privilege immunity specially up Constitution, treaties statutes of, commission authority exercised under, States.' disputes jurisdiction ruled therefore attacks here. my view, here correctly it. 46 determine necessarily follow questions come focus valid. second, invalidated, collection otherwise collectible purport decide However, jurisdictional matter, neither place, affirming denying, accordance prevented utilizing teaching There or, was, reserved contract. hd dictated render unnecessary disposition Southwestern Bell Telephone Oklahoma, 303 206, 212—213, 58 528, 530, 82 751 (1938). 48 indication, inference, urged overrode precluded pay. defenses consideration absence bargained-for question, nothing record indicating contended unenforceable law.1 below 'specially claim' event 'final judgment' doubt issue. exists, characteristic practice refuse pronouncements 50 McGoldrick Compagnie Generale Transatlantique, 309 430, 60 670, 849 (1940), recognizing New York tax unconstitutional burden interstate commerce, prohibited impost duty imports exports, saying: '(I)t exceptional coming Court) considers petitioner appellant pressed passed below. (D)ue appropriate relationship decline affecting there.' Id., 434, 672. 51 Wilson Cook, 327 474, 663, 793 (1946), denied government contractor implied constitutional Federal Government taxation State, declined placed forbidden States. Courtw 'not consider' Arkansas it,' measure arose 483, 668. Cf. Dewey Des Moines, 173 193, 197—198, 379, 380, 665 (1899). relied including People rel. Cohn Graves, 300 308, 317, 57 466, 469, 81 666 (1937), said: 'In reviewing shown there, arising constitution presented.' timely 'Questions rehearing late Station WOW Johnson, 120, 128, 65 1475, 1480, 2092 (1945). 'Since urged, appear instance here.' CIO McAdory, 325 472, 477, 1395, 1398, 1741 obtains probably certainly arise court. NAACP Alabama, 357 449, 466—467, 78 1163, 1173—1174, 1488 (1958); Hudson Distributors, Eli Lilly 377 386, 394—395, 1273, 1279, 394 53 Wholly aside considerations relating relationships Rule 23(1)(c), states '(o)nly forth fairly comprised therein court.' Flournoy Wiener, 321 253, 259, 548, 551, 708 (1944). None comes close addresses itself—an declared nevertheless interposes 54 poor waiving Rules. withstand attack. enforceability grounded addressed themselves prompt Third, briefed nor seriously views surely flushed deals piecemeal basis.2 Like validity, consequences submitted appeal. treated 906, 335; refer CFR 1.111 1.106 1.112 1.113 Seidel, General Practitioner Should Know About Law Practice 61 (A.L.I.1956). amended superseded successful amendment, purposes stipulated May 31, 1963. cause actio wrongfully appropriated trade liable theories. choose between tort claims. aspect judge's decision. time. adequately preserve agree. true ask entirely, seek persuade carve principle sweeping doctrine's vitality completely. argued, escape announcing repudiated contract's terms. Respondent's Cross-Appellant's Opening Brief Cases Nos. 28624 30089, 110—111. merits: relies authoritiesh olding notice though, termination, thereafter (See, Armstrong Shell Cal. (1929) 98 Cal.App. 769, 778—779, 277 P. 887). sets circumstances termination occur. above, complied order cancellation.' 899—900, 555, 331, 15. wrong. doing so, implications contention, vindicate, appropriate, relief grounds chose advance below, recognized, 656, stake. enforced thorough Eureka Bailey Wall. 488, 209 (1871), overcome 'very presumption' obligations, how action. Dale Tile Hyatt, 46, 756, 683 (1888), affirmed invoking involved Edward Chicago Metallic 394, 424, 91 374 (1947); 402, 421, 380 (1947). addition works text, detailed explication Cooper, Challenge Validity: Case Private Good Faith vs. Public Policy, W.Res.L.Rev. 1122 (1967), Kramer, To Deny Validity—A Slender Reed, N.Y.U. Intra.L.Rev. 237 (1968). Corbin, Contracts 127 (1963); Treece, Trademark Cases, Iowa L.Rev. 525, 528 530 1.11, 1.13 Of value depend exclusive nonexclusive licenses, charged serves barrier entry. 122 provides: 'Applications patents kept confidence concerning applicant Congress Commissioner.' unequivocally guarantee that: 'Pending preserved secrecy conduct business Office' divulge contents. 1.14(a) contend publicized consideration. Doerfer, Limits Trade Secret Imposed Antitrust Supremacy, 80 Harv.L.Rev. 1432 (1967); Secrets, 62 Nw.U.L.Rev. 956 (1968); Adelman, Secrets Pre-emption—the Aftermath Sears J.Pat.Off.Soc. 713 Policy Preemption: U.Chi.L.Rev. suggests retroactively concluded announced. decisions, owner—even decision—could confidently continuing doctrine. likely existing legitimate relationships. public's elimination specious prejudiced retroactive today's brushes characterizing decides representing 'more problem.' here, refers interposed collecting invalidated Whether invalid shoehorned licensee-estoppel stretch imagination included litigated wanted entitled itself, legally terminated. Appeal noted: concedes described operate agreement.' 805. 109. flatly proscribes 'all invalidity.' Ante, 674. pre-1960 left apparently pre-issuance post-issuance stand fooi ng Such valid, recoverable; post-1960 attributable headstart over rest preissuance disclosure idea? Today's inflexible, recoverable represent idea; indistinguishable Brulotte Thys 379 29, 85 176, 178, 99 also, 34—39, 180—182 (dissenting opinion). possibility serve indicate wisdom refraining pronouncement now, rigid drawing, parties.

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