Court Opinion

ID: 9443975
Source: CourtListenerOpinion
Date Created: 2023-08-03 19:36:45.085448+00
Date Added: 2024-06-11T17:29:39.849859
License: Public Domain

CLARK, Circuit Judge
(dissenting).
While exactly parallel cases are hard to discover, I think the rationale of the decisions holding a patent licensee es-topped to deny the validity of the patent supports also the grant of remedies to prevent such sharp business practices as defendants here indulged in.
There are two lines of pertinent authority. Absent any elements of “passing off,” or other unfair conduct, a licensee, though he cannot deny the validity of the patent, is free to assert non-infringement and to show prior art in support of his defense.1 But where a patentee has forestalled competition by holding himself out to the world as operating under the protection of a patent, he will not be heard to assert that the patent did not in fact apply.2 Where a licensee has thus claimed protection, the same considerations are applicable and the resulting appropriation of the pat-entee’s good will raises additional equities.3 As against his patentee the case for estopping a licensee is even stronger, for by paying royalties on the license agreement and thus signifying his acquiescence he not only has gained patent protection against the world, but also has forestalled the licensing of potential competition with himself. Accordingly, where the licensee purports to operate under the license and the patentee elects to sue on the agreement, the li*310censee is estopped to deny infringement.4
As my brothers point out, existing authority for the estoppel doctrine involves situations where the license remains in effect and the licensee continues to assert a connection with the patentee. But I do not see why the presence of these factors should weaken the powerful thrust of the doctrine. Thus the second factor surely is not an absolute condition (nor does the opinion so claim). Or if it is, it is in substance satisfied here. Plaintiff, Dr. Bucky, was an expert of international renown in the field of roentgenology. His fame was largely responsible for the rapid acceptance of the accused camera. The similarity between “Coreco-Bucky,” the original trade name, and “Coreco,” the name in use when suit was brought, coupled with the trial court’s finding of “passing off,” 5 refutes any contention that defendants have announced to the world that the relationship is severed.
Nor can plaintiffs’ cancellation of the license agreement be deemed controlling (except perhaps to indicate the appropriateness or duration of injunctive relief) where, as here, the cancellation was induced by the licensee’s breach. From December, 1944, until March, 1949 (a few months before the commencement of this action), defendants held an exclusive license under the patent and paid royalties thereon. Plaintiffs were completely precluded from seeking alternative means of exploiting their monopoly, and any doubts as to the desirability of this arrangement were lulled by defendants’ acquiescence in the relationship. Defendants have gained a four-year lead over any competitor Dr. Bucky may now seek to license. The injustice of now letting defendants disclaim the relationship is apparent.
Furthermore, until 1949, defendants asserted to the world that their camera was protected by Dr. Bucky’s patents and avoided competition from outsiders. They have sought and received substantial benefits from the very relationship which they now assert is unnecessary.
True, it was plaintiffs who technically cancelled the agreement. Because of this, my brothers deem it “peculiarly improper” to allow relief. In my opinion, so to hold is to reward defendants’ recalcitrance. It was they who first repudiated the relationship and refused to-pay royalties. Thus this decision is an invitation to all in defendants’ shoes to-do their utmost to provoke a patentee to-cancel his license.
I would affirm.

. Midland Steel Products Co. v. Clark Equipment Co., 6 Cir., 174 F.2d 541, certiorari denied 338 U.S. 892, 70 S.Ct. 243, 94 L.Ed. 548; Galion Iron Works & Mfg. Co. v. J. D. Adams Mfg. Co., 7 Cir., 105 F.2d 943; Pressed Steel Car Co. v. Union Pac. R. Co., 2 Cir., 270 F. 518, 524; cf. Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 268 U.S. 342, 45 S.Ct. 117, 69 L.Ed. 316.

. Collis Co. v. Consolidated Machine Tool Corp. of America, 8 Cir., 41 F.2d 641, certiorari denied Consolidated Machine Tool Corp. of America v. Collis Co., 282 U.S. 886, 51 S.Ct. 90, 75 L.Ed. 781; Piaget Novelty Co. v. Headley, 2 Cir., 108 F. 870, 873. Nor is Collis any the weaker because the estoppel was worked in the course of a trade-mark suit. The issue was squarely presented and passed on.

. See the reasoning of Judge Swan in Limbershaft Sales Corp. v. A. G. Spalding & Bros., 2 Cir., 111 F.2d 675, 677.

. Cold Metal Process Co. v. McLouth Steel Corp., 6 Cir., 170 F.2d 369, 379; Kant-Skore Piston Co. v. Sinclair Mfg. Corp., 6 Cir., 32 F.2d 882, certiorari denied 281 U.S. 735, 50 S.Ct. 249, 74 L. Ed. 1150; Sproull v. Pratt & Whitney Co., C.C.S.D.N.Y., 97 F. 807.

. Supporting evidence in the testimony and exhibits makes this finding immune from attack as “clearly erroneous.” F.R. 52(a).