Legal Document

382 U.S. 172 86 Supreme Court Reporter 347 15 United States Reports Lawyer’s Edition 2d Series KF101.8 U54 247 WALKER PROCESS EQUIPMENT, INC., Petitioner,v.FOOD MACHINERY AND CHEMICAL CORPORATION. Number 13. Argued Oct. 12, 13, 1965. Decided Dec. 6, Charles Judge Merriam, Chicago, Ill., for petitioner. Daniel M. Friedman, Washington, D.C., the States, as amicus curiae. Sheldon O. Collen, respondent. Mr. Justice CLARK delivered opinion of Court. 1 The question before us is whether maintenance and enforcement a patent obtained by fraud on Patent Office may be basis an action under § 2 Sherman Act,1 therefore subject to treble damage claim injured party 4 Clayton Act.2 respondent, Food Machinery, & Chemical Corporation (hereafter Machinery), filed this suit infringement its 2,328,655 covering knee-action swing diffusers used in aeration equipment sewage treatment systems.3 Petitioner, Walker Process Equipment, Incorporated Walker), denied counterclaimed declaratory judgment that was invalid. After discovery, Machinery moved dismiss complaint with prejudice because had expired. then amended counterclaim charge 'illegally monopolized interstate foreign commerce fraudulently bad faith obtaining maintaining * well knowing it no patent.' It alleged sworn neither knew nor believed invention been public use more than one year prior filing application when, fact, within such time. further asserted existence deprived business would have otherwise enjoyed. prayed Machinery's conduct declared violation antitrust laws sought recovery damages. District granted motion dismissed along Walker's counterclaim, without leave amend prejudice. Appeals Seventh Circuit affirmed, 335 Federal Reporter, 2nd 315. We certiorari, 379 957, 85 657, 13 553. concluded procured violative Act provided other elements necessary case are present. In event provisions available party. I. 3 As reaches us, allegations practiced upon Government resulting suffered taken true.4 We, therefore, move immediately consideration legal issues presented. Both which appears curiae, argue if thereafter exclude from market through 'threats suit' prosecution suit, proof establish prima facie Act. On hand, says monopoly monopolization cannot equated; removal protection grant fraudulent procurement does not automatically result offense. lower courts seem bar infringement, Precision Instrument Mfg. company versus Automotive Maintenance Co., 324 806, 65 993, 89 L.Ed. 1381 (1945), but invalidity. expressed proposition, 'only government 'annul or set aside' patent,' citing Mowry Whitney, 14 Wall. 434, 20 858 (1872). went state 'decided, hinted turned original affirmative action, instead equitable defense. Since admits anti-trust theory depends ability prove Office, follows second failed relief could granted.' F.2d, at 316. II. 5 concluded, first, barred rule only sue cancel annul patent. true there statutory authority private annulment invocation powers court might often patentee 'to innumerable vexatious suits aside his Mowry, supra, 81 441. But reason applies here. Act, laws. While patent, directly seek patent's annulment. gist since enjoy limited exception prohibitions must answer section damages those any monopolistic claim. Nor can interest protecting patentees 'innumerable suits' frustrate assertion rights conferred remembered we deal special class patents, i.e., intentional fraud. 6 Under decisions person sued challenge validity various grounds, including procurement. E.g., (1945); Hazel-Atlas Hartford-Empire 322 238, 64 997, 88 1250 (1944); Keystone Driller General Excavator 290 240, 54 146, 78 293 (1933). need await threatened patentee; tested Declaratory Judgment 28 Code KF62 2201 (1964 ed.). See Kerotest C—O Two Fire Equipment 342 180, 185, 72 219, 222, 94 200 (1952). At same time, recognized attack misuse rights. See, e.g., Mercoid Mid-Continent Investment 320 661, 268, 376 (1944). To permit coupled violations accords these long-recognized procedures. also promote purposes so Instrument, 816, 998: 7 'A very nature affected interest. (It) general against monopolies right access free open market. far-reaching social economic consequences give paramount seeing spring backgrounds inequitable kept their legitimate scope.' III. 8 knowingly willfully misrepresenting facts Office. Proof sufficient strip exemption laws.5 By token, good furnish complete This includes honest mistake effect installation patentability—so-called 'technical fraud.' 9 attempt monopolize part trade appraise exclusionary power illegal terms relevant product involved. Without definition way measure lessen destroy competition. device—knee-action diffusers—used systems comprise There effective substitutes device do infringe matter proof, amount Walker. 10 respondent points out, has clearly articulated based concept per se illegality circumstances, issue premature. summarized White Motor 372 253, 83 696, 738 (1963), area carefully limited. reluctant extend bare pleadings absent examination consequences. 11 However, even though fails stage litigation, believe should remanded clarify offer thereon. trial allege market, dominance patented therein, injurious enforcement, rather ground alone analyzed data. Indeed, yet offered disposition below. view considerations, novelty paucity guidelines decided cases, deficiency deemed crucial. Fairness requires remand opportunity make claims specific, fraud, violation. 12 Reversed remanded. HARLAN (concurring). N Immigration Nationality Decisions join Court's opinion. deem appropriate, however, add few comments what my Brother written first impression allay possible misapprehension reach decision. hold today treble-damage which, maintained two conditions satisfied: (1) shown willful defendant or, applicant, he enforcing knowledge manner obtained; (2) all proved. Conversely, cause made out plaintiff: showed invalidity arising, example, judicial finding 'obviousness,' factors sometimes compendiously referred fraud'; procurement, thereof defendant; (3) established actual defendant's 16 recognize rationale underlying decision, aimed course achieving suitable accommodation between differing policies hold, do, instituted recover guise deliberate thought impinge policy encourage inventions disclosure. Hence, improper monopolies, remedies allowed room full play. not, patents another turn voidable numerous technicalities attending issuance chill disclosure fear vexations punitive suits. remedy carried nonfraudulently 17 These contrasting once serve justify our present holding mark limits application. 26 Statutes-at-Large 209, ed.): 'Every who shall monopolize, combine conspire persons, among several nations, guilty misdemeanor *.' 38 731, 'Any property anything forbidden therefor district resides found agent, respect controversy, three-fold him sustained, cost reasonable attorney's fee.' issued name inventor, Lannert. previously assigned employer, Chicago Pump Company, division Machinery. New Wrinkle, Inc., 371, 376, 350, 352, 96 417 conclusion equal force assignee maintains enforces infirmity.

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