Court Opinion

ID: 9444904
Source: CourtListenerOpinion
Date Created: 2023-08-03 21:15:38.340562+00
Date Added: 2024-06-11T17:30:03.618930
License: Public Domain

COLE, Judge.
I respectfully dissent from the decision of the majority in this case.
An analysis of what has happened in the case will indicate the primary reason for my disagreement. In effect, a patent owner, upon a showing that a product lit*446erally described by his claims has been imported and sold in the United States, has obtained from the Tariff Commission a recommendation for an order that all articles which infringe his patent, or are made by a process which infringes his patent, be excluded from the United States.
As far as I can see from a reading of the majority opinion, there are no circumstances under which an owner of a United States patent could not get— without submitting to a validity contest —such a recommendation, whenever he can show that literally infringing articles are being imported and sold. There has been no inquiry into the validity of the patent, nor into the prior art to limit the claims. There has been no finding of actual injury to the patent owner; the mere fact that there have been substantial sales has been found sufficient to establish a tendency to injure sufficient to support an exclusion order. There has been no finding of fraud or deceit on the part of the importer. So far as appears from this case, all that is necessary to get an exclusion recommendation from the Tariff Commission is (1) that there be an owner of a United States Patent; and (2) that there be importations and sales of an article which infringes (either by itself or by the process by which it was made) the literal wording of the patent claims. It might be wondered if step (2) is really necessary, since the recommended order (quoted in the majority opinion) still leaves to the customs officials the duty of determining whether each imported article infringes the patent. Apparently, the question of infringement would have to be determined anew on each importation, and, if so, there would seem to be no reason to undergo the expense of a hearing before the Tariff Commission. The Commission could simply recommend the exclusion of any article which infringed, or was made by a process which infringed, the patent. Then, if there were actually no infringing articles being imported, no one would be harmed by the order.
Carrying the majority opinion to its logical conclusion, the only function of the Tariff Commission is to determine whether the complaining American manufacturer has a patent. In other words, it seems fair to conclude that section 337 has been construed to mean that any article which infringes, or is made by a process which infringes, the claims of a United States patent, may be barred from importation into the United States, upon the mere application of the patent owner. While Congress undoubtedly has the power to enact such a law, certainly, if such a meaning was intended, Congress would have said so in such clear language as the situation deserves. It seems to me that a result such as has been reached in this case was clearly outside the contemplation of Congress in enacting the statute.
While the obvious and irreconcilable consequences of the decision are sufficient upon which to base this dissent, I here briefly point out some of the difficulties overlooked by the majority opinion.
First, we are encountered with the question of whether mere literal infringement without more is an unfair method of competition or an unfair act in importation. In domestic infringement cases, it has been generally held that infringement alone is insufficient to support a count of unfair competition. See Unit Const. Co. v. Huskey Mfg. Co., D.C., 241 F. 129, and R. R. Donnelley & Sons Co. v. Haber, D.C., 43 F.Supp. 456. While this court has sustained recommendations of the kind here involved in the Frischer, Orion, and Northern Pigment cases cited in the majority opinion, there are important differences between those cases and the instant case. In the first two — Frischer and Orion — definite holdings- of “palming off” as well as infringement were made, and the recommendations were cleai’ly based in part at least on such holdings. While the Northern Pigment case also involved facts other than infringement, there are statements in the court’s opinion therein which suggest that infringement alone *447might be enough to establish unfair competition. This latter case so far as it relates to process claims was overruled in Amtorg Trading Corp., 75 F.2d 826, 22 C.C.P.A., Customs, 558, T.D. 47583, in a lengthy opinion which discusses unfair methods of competition but does not seem to rule definitely on whether infringement alone is one of them.
It can be said, therefore, that this court has not yet approved a recommendation under section 337 based on infringement alone. At best there is merely some dicta tending toward that conclusion, but other contrary dicta are also present in the same group of decisions. I prefer to embrace the statement of Chief Judge Garrett in his very able dissenting opinion in the Frischer case that he knew of no case in which infringement alone had been held to constitute an unfair method of competition.
Second, there is the problem of the validity of the patent, and the scope of the claims. It must be admitted that our earlier decisions have held that the Tariff Commission is not free to inquire into the validity of the patent. However, that does not necessarily mean that the Tariff Commission should not look at the prior art to determine the proper scope of the claims for the purpose of resolving the question of infringement. Furthermore, it is to be seriously questioned whether, in the circumstances of this case where no actual or impending damage has been shown, the Tariff Commission should not have suspended its proceedings to await the outcome of the declaratory judgment suit filed by importer (referred to in the majority opinion and now pending in the Southern District of New York). Its action in proceeding with this rather extraordinary remedy when the actual damage to the patent owner could be adequately recompensed in the declaratory judgment suit, seems extremely dubious, if not an abuse of discretion. The outcome of that case would conceivably result in complete justice to all parties. Indeed, since in that ease the entire question of validity and infringement could be litigated and disposed of, the outcome of that case would be more likely to secure complete justice than these proceedings. If that case should be resolved favorably to complainant here, the decision should be of inestimable value to the Tariff Commission in the event the section 337 proceeding were still deemed desirable.
Third, it is to be questioned whether the phrase in section 337 that there must be a “tendency * * * to * * * substantially injure an industry” has not received a broader interpretation than the statute contemplated. In this case no actual loss of sales has been shown. Instead, mere conjectural and conceivable loss of sales has been held to have a tendency to substantially injure an industry. From the context, coupled as the phrase is with “to destroy,” it would seem that Congress contemplated a crippling injury, one which verged on the brink of destruction, rather than, as here indicated, a mere competitive nuisance.
Fourth, it is to be noted that the “industry” protected here is the industry of making synthetic star rubies and sapphires — which industry is apparently conducted solely by the patent owner, Linde Air Products Co. Normally, one manufacturer does not make an industry. Perhaps the inquiry made by the Tariff Commission should have been whether the importations had a tendency to substantially injure the domestic synthetic gem industry, rather than considering only complainant’s business. Even admitting that the sales of the imported article have a tendency to substantially injure Linde, the sole American producer of star rubies and sapphires, it does not follow that the domestic synthetic gem industry as a whole is substantially injured.
At this time I do not wish to do more than note my disagreement with the conclusion reached by the majority, and to indicate some of the possible underlying misapprehensions which may have been the cause of the error. That there is er*448ror, I have no doubt, as the result reached here is so inconsistent with the wording of the statute as to be plainly wrong.
O’CONNELL, Judge, concurs in this dissent.