Special Equipment Company v. Coe/Dissent Douglas

by William O. Douglas

United States Supreme Court

324 U.S. 370

Special Equipment Company  v.  Coe

 Argued: March 2-5, 1945. --- Decided: March 26, 1945

Mr. Justice DOUGLAS, with whom Mr. Justice BLACK and Mr. Jutice MURPHY concur, dissenting.

The right of suppression of a patent came into the law over a century after the first patent act was passed. In 1886 Judge Blodgett had ruled that a patentee 'is bound either to use the patent himself or allow others to use it on reasonable or equitable terms.' Hoe v. Knap, C.C., 27 F. 204, 212. In 1896 that rule was repudiated by the Circuit Court of Appeals for the Sixth Circuit in Heaton-Peninsular Button-Fastener Co. v. Eureka Specialty Co., 6 Cir., 77 F. 288, 295, 35 L.R.A. 728, where the court stated that a patentee's 'title is exclusive, and so clearly within the constitutional provisions in respect of private property that he is neither bound to use his discovery himself, no permit others to use it.' That theory was adopted by this Court in Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 28 S.Ct. 748, 52 L.Ed. 1122, decided in 1908. That was an infringement suit. One defense was that the patentee had suppressed the patent. The Court held, Mr. Justice Harlan dissenting, that suppression of the patent was no defense; that the patentee's 'right can only retain its attribute of exclusiveness by a prevention of its violation.' Id., page 430, of 210 U.S., page 756 of 28 S.Ct., 52 L.Ed. 1122.

I think it is time to be rid of that rule. It is inconsistent with the Constitution and the patent legislation which Congress has enacted.

Article I, Section 8 of the Constitution grants Congress the power 'to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.' Of the various enumerated powers it is the only one which states the purpose of the authority granted Congress. 'The Congress is given no general power to issue letters patent or to reward inventors as it will. An experience with grants of monopoly in England was fresh in the minds of the Fathers; the lesson had been underlined in recent differences with the Crown.' Hamilton, Patents and Free Enterprise (1941), p. 152, Temporary National Economic Committee, Monograph No. 31, 76th Cong., 3d Sess. The purpose 'to promote the Progress of Science and useful Arts' accordingly provides the standards for the exercise of the power and sets the limits beyond which it may not go. That purpose also provides the guide for the interpretation of patent laws enacted pursuant to that power.

It is a mistake therefore to conceive of a patent as but another form of private property. The patent is a privilege 'conditioned by a public purpose.' Mercoid Corp. v. Mid-Continent Co., 320 U.S. 661, 666, 64 S.Ct. 268, 271, 88 L.Ed. 376. The public purpose is 'to promote the Progress of Science and useful Arts.' The exclusive right of the inventor is but the means to that end. That was early recognized by this Court. See Pennock v. Dialogue, 2 Pet. 1, 19, 27 U.S. 1, 19, 7 L.Ed. 327; Kendall v. Winsor, 21 How. 322, 327, 328, 62 U.S. 322, 327, 328, 16 L.Ed. 165; Seymour v. Osborne, 11 Wall. 516, 533, 534, 78 U.S. 516, 533, 534, 20 L.Ed. 33. But the Paper Bag case marked a radical departure from that theory. It treated the 'exclusive' right of the inventor as something akin to an 'absolute' right. It subordinated the public purpose of the grant to the self-interest of the patentee.

The result is that suppression of patents has become commonplace. Patents are multiplied to protect an economic barony or empire, not to put new discoveries to use for the common good. ^[1] 'It is common practice to make an invention and to secure a patent to block off a competitior's progress. By studying his ware and developing an improvement upon it, a concern may 'fence in' its rival; by a series of such moves, it may pin the trade enemy within a technology which rapidly becomes obsolete. As often as not such maneuvers retard, rather than promote, the progress of the useful arts. Invariably their effect is to enlarge and to prolong personal privilege within the public domain.' Hamilton, op. cit., supra, p. 161. One patent is used merely to protect another. The use of a new patent is suppressed so as to preclude experimentation which might result in further invention by competitors. ^[2] A whole technology is blocked off. The result is a clog to our economic machine and a barrier to an economy of abundance.

It is difficult to see how that use of patents can be reconciled with the purpose of the Constitution 'to promote the Progress of Science and the useful Arts.' Can the suppression of patents which arrests the progress of technology be said to promote that progress? It is likewise difficult to see how suppression of patents can be reconciled with the provision of the statute which authorizes a grant of the 'exclusive right to make, use, and vend the invention or discovery.' Rev.Stat. § 4884, 35 U.S.C. § 40, 35 U.S.C.A. § 40. How may the words 'to make, use, and vend' be read to mean 'not to make, not to use, and not to vend'? Take the case of an invention or discovery which unlocks the doors of science and reveals the secrets of a dread disease. Is it possible that a patentee could be permitted to suppress that invention for seventeen years (the term of the letters patent) and withhold from humanity the benefits of the cure? But there is no difference in principle between that case and any case where a patent is suppressed because of some immediate advantage to the patentee.

I think it is time to return to the earlier, and I think the true, philosophy of the patent system. We should not pass on to Congress the duty to remove the private perquisites which we have engrafted on the patent laws. This Court was responsible for their creation. This Court should take the responsibility for their removal. I would adopt the view of Hoe v. knap, supra. In a case like the present (Butterworth v. Hoe, 112 U.S. 50, 61, 5 S.Ct. 25, 30, 28 L.Ed. 656), as in infringement suits (Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 492-494, 62 S.Ct. 402, 405, 406, 86 L.Ed. 363) the Court sits as a court of equity. It should withhold its aid from a patentee who has employed or plans to employ the patent not to exploit the invention but to suppress it in order to protect another patent or otherwise. ^[3] Cf. Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 459, 60 S.Ct. 618, 626, 84 L.Ed. 852. If that purpose were clear, a patent should not issue in the first instance. If it has been issued and not cancelled and the patent has been suppressed, any one should be permitted to use it at least on payment of reasonable royalties. In that way the constitutional objective will be more nearly realized-the product of he inventive genius of the human mind will be put to work in the economy.

Mr. Justice RUTLEDGE, dissenting.

I would affirm the judgment. But I do not reach the interesting and important questions debated by the Court's opinion and my dissenting brethren. They are of such a character that, in my opinion, they should not be determined in the absence of a record presenting facts and issues making this necessary. In this case the facts do not so clearly present the issues of 'fencing' and 'blocking' that decision upon them is required or appropriate.

Those issues were not raised or considered until the case reached the Court of Appeals. Evidence concerning intent to suppress was not received inthe District Court and petitioner is entitled to its day in court upon that question, unless it has conceded it. The record, as this Court's opinion indicates, is not clear that the concession has been made with the effect of admitting that petitioner had no intention to exploit the patent. If, as the trial court found, the machine without the splitting knife would not 'produce any useful result,' this fact together with the assertion of the claims relating to the full combination, or with it and the concessions apparently made in the Court of Appeals, might be sufficient to sustain that court's conclusion that the only purpose of the alleged invention was to 'fence' or 'block.' But the Court of Appeals expressly rejected the trial court's finding in this respect and a showing of motion pictures here, such as took place in the Court of Appeals, appeared to demonstrate conclusively that the machine not only works without the cutting knife, but produces a highly useful result if the pears are split before being placed in the machine for bobbing, peeling and coring. Whatever foundation might have been found, therefore, to support the conclusion of intent to fence or block, in the machine's lack of capacity to produce any useful result, disappears from the case.

The record, however, discloses another ground which was considered in the Patent Office and the District Court, wholly sufficient to dispose of the case and requiring affirmance of the judgment. This was that the claims in issue are too broad to cover the invention. No one of the claims specifies or indicates that the pears must be pre-split in order for the invention to be used or to produce a useful result. With commendable candor, counsel conceded this in the argument here, and indeed the claims on their face require the concession. Patents are not to be granted upon claims which do not accurately describe the invention and all of its essential features. These claims are stated in language broad enough to include whole pears. Admittedly the machine will not work, without the knife, as to them. In my judgment therefore the claims are too broad. The Patent Office and the District Court so found. The question is open and was presented in the Court of Appeals and here. Accordingly I would affirm the judgment.

Notes

1. For illustrations see Investigation of Concentration of Economic Power, Hearings, Temporary National Economic Committee, Pt. 2 (1939), pp. 345, 776; Hamilton, op.cit., supra, pp. 46, 47, 59.
2. The vice is the same as the practice, consistently condemned by this Court, of writing into the claims broad, general specifications. As stated by Mr. Justice Bradley in Carlton v. Bokee, 17 Wall. 463, 471, 472, 84 U.S. 463, 471, 472, 21 L.Ed. 517, 'We think it proper to reiterate our disapprobation of these ingenious attempts to expand a simple invention of a distinct device into an allembracing claim, calculated by its wide generalizations and ambiguous language to discourage further invention in the same department of industry * * *.'
3. These situations are to be distinguished from the case of the inventor who though he has an expectation of exploiting the patent has not yet arranged the necessary financing, or, for other reasons, has not yet been able to go into production.