Court Opinion

ID: 6917301
Source: CourtListenerOpinion
Date Created: 2022-07-23 22:47:13.899494+00
Date Added: 2024-06-11T16:06:42.269391
License: Public Domain

On Petition for Rehearing.
PER CURIAM.
The petition for rehearing was denied on December 9, 1958, and that action remains unchanged. The opinion accompanying such denial is, however, withdrawn and the following substituted in lieu thereof:
Appellant requests a reconsideration-of certain inquiries which influenced this Court’s findings that Seismograph, was “playing 'a cat and mouse’ game-with Hastings” which we characterized as “laden with deception, knavery, and misrepresentation.” We have carefully reconsidered such inquiries,1 and our views remain unchanged.
Appellant points out several technical errors appearing in this Court’s opinion which should, for the purpose of accur*25acy, be corrected. These technical errors appear in paragraphs beginning on page 10 and continuing through pages 11, 12, and 13 of the original slip opinion (263 F.2d 10, 11), which read as follows :
“On April 28, Dr. Piety and Dr. R. D. Snow (Phillips’ patent technician) visited Hastings at his office in Hampton, Virginia, and there were given a demonstration of a Raydist two-dimensional system which consisted of two fixed transmitters with the receiving set in a moving auto. The experiment was completely successful, the automobile being tracked within the accuracy of a few feet. An office memorandum by Piety and Snow about this visit stated that Raydist was the answer to their problem; that, heretofore, Hastings had concerned himself with tracking aircraft (with the airplane containing the transmitter as described in Bulletin R-19), but by using fixed transmitter stations, a large area of water could be surveyed accurately; that Hastings was a small company; that Hastings had had one patent application refused and now had one ready to file; and recommended that Phillips should negotiate to buy one surveying outfit and order others. This memorandum shows that Hastings gave vital, technical, patent, and business information to Phillips upon solicitation by Phillips.
“Four days after this visit (May 2), Phillips Petroleum decided in a conference that since all of Phillips’ geophysical prospecting work was being handled by Seismograph, ‘if Phillips were to buy a Raydist installation, it would very probably be turned over to the Seismograph Service Company * * * [and] that Seismograph Service Company be advised of the Raydist method and of Phillips’ interest in the use of such a method and apparatus and if Seismograph Service Company is interested they should then negotiate directly with Hastings Instrument Company.’ On the day after this decision, Piety and Hintze (head of geophysical exploration of Phillips) visited the office of Seismograph in Tulsa, Oklahoma, and discussed the Ray-dist system with G. H. Westby (President of Seismograph) and Dr. J. E. Hawkins (vice-president in charge of research and development) .
“The evidence is conflicting as to the extent and scope of information about Raydist which was divulged to Westby and Hawkins by Phillips’ officers. Dr. Hawkins emphatically insisted that the discussion was limited to Hastings’ ‘demonstration of the heterodyne principle of a single-dimensional system’ where a moving transmitter was moved between two fixed receiving stations x- » *;» w2rich was the system discussed in Bulletin R-19. But the preponderance of other evidence indicates, as the trial court found, that Phillips’ officers divulged and discussed the two-dimensional fixed transmitter system which was the basis of Hastings’ demonstration, and which is the heart of the ‘idea’ in this case. Piety’s testimony corroborated this finding when he stated that, ‘Everything that would have been of interest to them [Seismograph] or pertinent to a description of the system would have been given to them’ and further stated, ‘We described the demonstration.’
“About the same time, May 5th, Hastings’ patent counsel in Washington had determined that the Honoré patent No. 2,148,267 would be infringed by Raydist, and was attempting to locate the whereabouts of Honoré so as to obtain either a license or an assignment of his patent.
“Within seven days after learning of the potentialities of the two-dimensional fixed transmitter sys*26tem in the heterodyne principle, explained to him by Piety and Hintze, Dr. Hawkins on May 11th roughly designed and demonstrated a two-dimensional fixed transmitter system. This design and demonstration was generally the same as the demonstration performed by Hastings for the Phillips officers and relayed to Hawkins. By the next day (May 12th), Hawkins sketched these discoveries and several variations thereof and had them notarized and on May 13th sent them with an explanatory letter to Richard D. Mason, Seismograph’s patent counsel in Chicago, for him to determine patentability. It is interesting to note that one of these disclosures was the same as the Honoré patent (the single-dimensional system), and one disclosure was a sketch of a two-dimensional system using three transmitters which was substantially the design of the fixed transmitter system demonstrated to Piety and Snow by Hastings. In this special delivery letter to Mason, Hawkins stated:
“ T am enclosing five disclosures relative to position determination by means of the heterodyne principle. If you will docket these as you suggested and study them over, we will get together as to what we will do with them after our visit to the Hastings people in Washington.’ ”
We modify those paragraphs to read:
“On April 28, Dr. Piety and Dr. R. D. Snow (Phillips’ patent technician) visited Hastings at his office in Hampton, Virginia, and there were given a demonstration of a Raydist fixed transmitter system which consisted of ‘small portable radio transmission stations at each of two points exactly a mile apart, along the shoulder of an arterial highway. A relay station, with P.M. transmitter, was located at an intermediate point. A station wagon in which the recording station was mounted was driven down the highway between the two transmitters.’ The experiment was completely successful, the automobile being tracked within the accuracy of a few feet. An office memorandum by Piety and Snow about this visit stated that Raydist was the answer to their problem; that, heretofore, Hastings had concerned himself with tracking aircraft (with the airplane containing the transmitter as described in Bulletin R-19), but by using fixed transmitter stations, a large area of water could be surveyed accurately; that Hastings was a small company; that Hastings had had one patent application refused and now had one ready to file; and recommended that Phillips should negotiate to buy one surveying outfit and order others. This memorandum also indicates that Phillips’ representatives and Hastings undoubtedly discussed the application of a two-dimensional fixed transmitter system to Phillips Gulf Coast Operations, stating:
“ ‘ * * *. The apparatus for Raydist would be much cheaper than that of Decca. In using either Raydist or Decca or Shoran, one would probably set up three radio transmitter stations up to forty miles apart along the shore. The area out in front of the three stations could then be surveyed very accurately. Each pair of radm transmission stations would be the foci of a system of hyperbolas. The dial on the servo unit of the Raydist recording station would indicate the location as a function of the intersection of an hyperbola of each system * *
This memorandum shows that Hastings gave vital, technical, patent, and business information to Phillips upon solicitation by Phillips.
“Four days after this visit (May 2), Phillips Petroleum decided in a conference that since all of Phil*27lips’ geophysical prospecting work was being handled by Seismograph and Petty Geophysical Engineering Company, ‘if Phillips were to buy a Raydist installation, it would very probably be turned over to the Seismograph Service Company or Petty for use [and], that Seismograph Service Company be advised of the Raydist method and of Phillips’ interest in the use of such a method and apparatus and if Seismograph Service Company is interested they could then negotiate directly with Hastings Instrument Company. As geophysical prospecting work is maintained in the highest possible secrecy, Phillips could not hope to exploit the use of Raydist in survey work for other companies.’ On the day after his decision, Piety and Hintze (head of geophysical exploration of Phillips) visited the office of Seismograph in Tulsa, Oklahoma, and discussed the Raydist system with G. H. Westby (President of Seismograph) and Dr. J. E. Hawkins (vice-president in charge of research and development).
“The evidence is conflicting as to the extent and scope of information about Raydist which was divulged to Westby and Hawkins by Phillips’ officers. Dr. Hawkins emphatically insisted that the discussion was limited to Hastings’ ‘demonstration of the heterodyne principle of a single-dimensional system where a moving transmitter was moved between two fixed receiving stations * * */ which was the system discussed in Bulletin R-19. But the preponderance of other evidence indicates, as the trial court found, that Phillips’ officers divulged and discussed a fixed transmitter system which was the basis of Hastings’ demonstration, and which is the heart of the ‘idea’ in this case. Piety’s testimony corroborated this finding when he stated that, ‘Everything that would have been of interest to them [Seismograph] or pertinent to a description of the system would have been given to them’ and further stated, ‘We described the demonstration.’
“About this same time, May 5th, Hastings’ patent counsel in Washington had determined that the Honoré patent No. 2,148,267 would be infringed by Raydist, and was attempting to locate the whereabouts of Honoré so as to obtain either a license or an assignment of his patent.
“Within seven days after learning of the potentialities of the fixed transmitter system in the hetero-dyne principle, explained to him by Piety and Hintze, Dr. Hawkins on May 11th roughly designed and demonstrated a fixed transmitter system which was generally the same as the demonstration performed by Hastings for the Phillips officers and relayed to Hawkins. By the next day (May 12th), Hawkins sketched these discoveries and several variations thereof and had them notarized and on May 13th sent them with an explanatory letter to Richard D. Mason, Seismograph’s patent counsel in Chicago, for him to determine patentability. It is interesting to note that one of these disclosures was the same as the Honoré patent (the single-dimensional system), and one disclosure was a sketch of a two-dimensional system using three fixed transmitters which was substantially the system discussed in the office memorandum of Piety and Snow made concerning their visit to Hastings. In this special delivery letter to Mason, Hawkins stated:
“ T am enclosing five disclosures relative to position determination by means of the heterodyne principle. If you will docket these as you suggested and study them over, we will get together as to what we will do with them after our visit to the Hastings people in Washington.’ ”
Appellant forcefully urges that, “it is to be noted that in this case of first impression in this Circuit the panel rendering the decision has laid down standards of business morals and ethics as a matter of equity jurisprudence where no equitable relationship between the parties was found to exist. The decision imposes obligations, existent only in con*28fidential relationships, upon parties dealing wholly at arms’ length, and thus hold serious implications in its disregard for this basic distinction in adjudging the business conduct of such parties.” We felt that appellant’s conduct in its business dealings with Hastings Instrument Company was so flagrantly inequitable as not to require legal citations, and that the principles and authorities had been amply discussed in paragraphs editorially numbered 14 through 18 of the district court’s opinion, as found in D.C., 135 F.Supp. 342, 354-355, with which discussion we agree.
 Appellant insists that the part of this decision reversing the District Court’s denial of attorneys’ fees is in direct conflict with the holding in Graham v. Jeoffroy Mfg., Inc., 5 Cir., 1958, 253 F.2d 72, 78. That case was carefully considered in connection with our original opinion and was cited in footnote 11 thereto. It does not conflict with our present decision. One purpose of authorizing the court in exceptional cases to award reasonable attorneys’ fees to the prevailing party2 is “to enable the court to prevent a gross injustice to an alleged infringer.”3 This vexatious and unjustified litigation required appellees to incur liability for considerable attorneys’ fees. There could hardly be an instance of a more gross injustice to an alleged infringer. Even under the strict rule of Graham v. Jeoffroy Mfg., Inc., supra, the District Court clearly erred in refusing to award reasonable attorneys’ fees to the appellees.
The petition for rehearing is therefore denied.
On Second Petition for Rehearing.
PER CURIAM.
The Court granted Seismograph Service Corporatidn leave to file a second petition for rehearing in the above styled and numbered causes. The same having been carefully considered, it is hereby denied.

. “A. What is the significance of Seismograph’s receipt of information from Phillips?
“B. What ethical or equitable duty did Seismograph violate by not ‘reciprocating the good faith disclosures of Hastings’?
“O. What obligation did Seismograph have to advise Hastings of its decision to-proceed independently?
“D. By reason of what relationship, with Hastings was Seismograph obligated to refrain from acquiring the Honoré rights when it received knowledge of Hastings’ interest in them ?”

. 35 U.S.C.A. § 285.

. Senate Report No. 1503, U.S.Code Cong. Serv. at page 1387.