Court Opinion

ID: 9651230
Source: CourtListenerOpinion
Date Created: 2023-08-23 16:10:51.956871+00
Date Added: 2024-06-11T13:25:36.903774
License: Public Domain

CLARK, Circuit Judge
(dissenting).
Several years ago the individual parties herein were in the same dispute as to the plaintiff’s patent which is here repeated. The resulting litigation was terminated by the District Court in 1939 by a decree which adjudged the patent “good and valid in law as to each of the claims thereof.” The decree then went on to recite that plaintiff had waived an injunction and an accounting, giving as reason therefor the defendants’ representations that “they have merely furnished to others printing plates employing the invention” without making or selling them and that they “have no intention of making, using or selling such ‘printing plates.” This final adjudication of the appropriate court, made with the parties before it, is now treated as a nullity as to these same parties both by the court below and by my brethren herein. The only variant is that defendants have resorted to the transparent cover for their renewed actions of a corporation — an artifice which has been properly rejected as of no moment by both courts. Other than that this is a suit involving patents, I do not discover just what the grounds are for thus disregarding a formal court decree.
Of course we all have come to recognize a new climate of opinion as to patents— one which stresses the desirability of prompt invalidation of doubtful patents. But the very facility with which this can be done makes it unnecessary to resort to doubtful new principles of law to get rid of inconsequential patents. That this patent may have a small scope of operation against only these two individuals would seem a less evil than that they should be able to repudiate their agreement of settlement and flout the court’s decree. So far as this represents an agreement, it is a more solemn one than the ones held no bar to a claim of patent invalidity; it is an accord and satisfaction of a bona fide dispute, not an agreement forced upon one in restraint of trade or an estoppel implied from accepting a license. So far as it is a court decree, it is more than merely a consensual affair, both because it is a court act and because, moreover, it was entered not only upon consent of the solicitors for the respective parties, but also “on the pleadings and pro*487ceedings herein,” which included the extensive deposifion upon oral testimony'of Milton Berg. The subject matter of this disposition was the defendants’ activities in selling printing plates, as I shall discuss below. Hence the judgment was fully on the merits and thoroughly final.1
Let us consider the various suggestions for the invalidation of this judgment. That it was called a “consent decree” is not enough. A judgment entered upon concessions of fact by the parties is as binding, as obviously it should be, as a judgment entered upon the court’s acceptance of one of two conflicting stories told from the witness stand. United States v. Swift & Co., 286 U.S. 106, 52 S.Ct. 460, 76 L.Ed. 999; cf. General Elec. Co. v. Hygrade Sylvania Corp, D.C.S.D.N.Y., 61 F.Supp. 476, 491, 492; Heiser v. Woodruff, 66 S.Ct. 853, 857. And here the decree was entered only after the giving of testimony by the important defendant on the point which was at issue between the parties.
Next it is said that the decree cannot stand because there was no finding of infringement. This seems to me a most unfortunate statement in both its branches, sure to come back to plague us in the future. First, there was infringement. In the decree, defendants represented that they “furnished” the patented printing plates to others; and this was fully explained by Berg in his deposition that he furnished some plates to one Louis Tutman, or as he put it: “He got a few plates that I left him when I was working for Duxback. Later on when I switched [employers] I still came up to sell him equipment which I was interested to sell. He never got a bill and there was never paid any money to me or anybody at the Alumo Company, or any place at all, not only for this particular plate, but for any plates at all:” I suggest it is highly novel doctrine that infringement is avoided by failing to collect a bill for the infringing product. Compare Patent Tube Corp. v. Bristol-Myers Co., D.C.S.D.N.Y., 25 F.Supp. 776; Scott & Williams, Inc., v. Hemphill Co., D.C.S.D.N.Y., 14 F.Supp. 621. The fact that the parties did spar as to the wording of the decree, and plaintiff finally allowed defendants their costs, seems to me no more than the natural steps in negotiations where each party tried to preserve what it could of both form and substance. It is, of course, the decree by the court which is the binding document.
But second, even were there no infringement, the decree would not be void upon collateral attack. Although it has been cited for diverse and sundry things — since it did cover considerable ground — the only case holding the question of validity “moot,” absent a showing of infringement, is Cover v. Schwartz, cited in the majority opinion,. Even as far as it went (which was to hold that we lacked jurisdiction of an appeal where the plaintiff-appellant conceded noninfringement), that decision has made confusion and complexity out of matters which should be simple. It is conceded, as it must he, that a defendant may counterclaim for a declaratory judgment as to the patent. Altvater v. Freeman, 319 U. S. 359, 63 S.Ct. 1115, 87 L.Ed. 1450.2 But there is nothing in the Altvater case which says that a plaintiff cannot likewise ask for a declaratory judgment against adverse claims, thus leaving nothing to the Cover doctrine except lack of a proper prayer for judgment, which is made specifically unnecessary under Federal Rules of Civil Procedure, rule 54(c), 28 U.S.C.A. following section 723c. When Sinclair & Carroll *488Co. v. Interchemical Corp., 325 U.S. 327, 65 S.Ct. 1143, 89 L.Ed. 1644, stressed the desirability of a decision as to the validity of a patent even where noninfringement is found, I had hoped that this would be the end of the confusing restrictions upon the full and, free adjudication of patent cases implicit in the Cover case, which, as I am informed, have embarrassed district judges. See also the powerful criticisms of the case in 52 Yale L.J. 909; Borchard, Challenging “Penal” Statutes by Declaratory Action, 52 Yale L.J. 445, 449, n. 10; and 1 Moore’s Federal Practice, 1942 Cum.Supp. 133-135. Here, however, we find these restrictions expanded to the extreme point of justifying collateral attack. But I have seen no case which says that, when a court has gone on to- decide a question now asserted to have been “moot,” its judgment is a nullity between the parties. Indeed, the idea is contrary to settled conceptions of res judicata. McCormick v. Sullivant, 10 Wheat. 192, 23 U.S. 192, 6 L.Ed. 300; Chicot County Drainage Dist. v. Baxter State Bank, 308 U.S. 371, 376, 378, 60 S.Ct. 317, 84 L.Ed. 329; Jackson v. Irving Trust Co., 311 U.S. 494, 503, 61 S.Ct. 326, 85 L.Ed. 297; Heiser v. Woodruff, supra; Ripperger v. A. C. Allyn & Co., 2 Cir., 113 F.2d 332, certiorari denied 311 U.S. 695, 61 S.Ct. 136, 85 L.Ed. 450.
It seems to me therefore that we must come back to some peculiar doctrine applying only against patentees. If so, I think we ought to come out directly and so state. But it certainly would be odd to say, without one word of-support in procedural rules and statutes, that only one contesting a patent can seek and obtain a declaration or other judgment as to validity without a finding of infringement. This, I fear, is another illustration of a not unusual judicial habit, that of warping procedural rules, at the sacrifice of their general utility, to meet what are conceived to be the exigencies of a particular situation. There seems no reason why a patentee should not be allowed to seek a -declaratory judgment like any other litigant, or why a judgment for the defendant in such a suit is not as effective a procedure in restricting patents as would be a judgment on a defendant’s counterclaim. And the queries become the more insistent when the attack is made by defendants collaterally upon a decree as much their own as it is plaintiff’s.
It is true that in Mercoid Corp. v. Mid-Continent Inv. Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376, the Supreme Court held the doctrine of res judicata in patent cases to be limited by the public policy against monopoly or illegal restraint of trade. The Court was there sharply divided, and the reaches of the decision cannot yet be considered clearly defined. But it seems as yet clearly limited to agreements illegal because of the anti-trust laws; the majority of the Court refused to press their holding beyond that point. 320 U.S. at pages 670, 671, 64 S.Ct. 268, 88 L.Ed. 376. I see no reason to extend it to an ordinary agreement of compromise, without taint of illegality, which is carefully embodied in a formal court decree.

 Defendants felt driven to make other objections to the decree, which were overruled below and are not noticed here, such as that their solicitor was not authorized to consent and that costs were not taxed; the latter is clearly unnecessary under cases such as Fowler v. Hamill, 139 U.S. 549, 11 S.Ct. 663, 35 L.Ed. 266, The Washington, 2 Cir, 16 F.2d 206, and other cases cited in Second Preliminary Draft of Proposed Amendments to Rules of Civil Procedure, May, 1945, Rule 58, note, p. 67.

 The interpretation here placed upon Electrical Fittings Corp. v. Thomas & Betts Co, supra, 307 U.S. 241, 59 S.Ct. 860, 83 L.Ed. 1263, seems to me unsound, particularly in the light of later cases. That case is actually authority for extension, not contraction, of appellate jurisdiction; the decision below, denying jurisdiction, Thomas & Betts Co. v. Electrical Fittings Corp., 2 Cir., 100 F.2d 403, was reversed to achieve a result just to the defendant under the circumstances. See also United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 229, 63 S.Ct. 165, 87 L.Ed. 232, and Sinclair & Carroll Co. v. Interchemical Corp., 325 U.S. 327, 65 S.Ct. 1143, 89 L.Ed. 1644.