Special Equipment Co. v. Coe

144 F.2d 497

• Court: Court of Appeals for the D.C. Circuit
• Decided: November 6, 1944
• Docket: 8466
• Status: Published

Opinions

ARNOLD, Associate Justice.

The alleged invention in this case is a machine which automatically cuts, peels and cores pears for canning. It consists of (1) a revolving turret in which the tops of the pears are “bobbed” or cut off, (2) a mechanism which transfers them to a splitting knife which cuts them in half, and (3) a second revolving turret in which the halved pears are peeled and cored. The machine has been highly successful. It has made it possible to double the annual pear pack since 1931 and materially reduced the cost of canned pears. About eighty per cent of all pears canned are prepared by this machine. A patent has been allowed on the entire machine.

This appeal is taken from the rejection of claims for a subcombination of the parts of a machine omitting the cutting knife. For convenience we will refer to the machine without the cutting knife as the partial machine, and the machine with the cutting knife as the complete machine. The trial court rejected the claims in effect because they did not represent a true sub-combination. It found that the cutting knife was an essential element to produce a useful result. It concluded, therefore, that the machine without the cutting knife was not the invention which was disclosed ¹ in the application, and that claims which left out the cutting knife did not actually describe the invention.

If it be true (1) that the subcombination does not produce a useful result, and (2) that only one invention is disclosed, to wit: the complete machine, the refusal of the subcombination claims here is justified. However, these propositions rest on a very slender foundation. In answering them the plaintiff showed motion pictures of the subcombination in actual operation without the cutting knife. It was clear that the result was far more useful than the old method of preparing fruit by hand. The only basis for the argument that the result was not useful rests on the fact that the work was done much better by the complete machine. In such twilight cases there is no real test whether or not the application discloses one invention or two distinct inventions. In this case it seems more plausible to say that the subcombination does produce a useful result and that two distinct inventions are disclosed in the’ application.

However, we need not decide this question because even(if we take appellant’s contention at its face value and assume that the claims for the subcombination present a distinct and useful invention, nevertheless we believe that a patent on that invention should be denied. The reason is that appellant’s purpose in making a distinct patent claim on the subcombination is not to stimulate the commercial development or financial return from that patent. Instead, the record shows that it is to be used to exploit and protect the patent monopoly of another related invention, to wit: the complete machine. There is no intention to make- or license others to make the partial machine because, although it is possible to use it without the cutting knife, it is not designed for such independent use. It is only an artificial and clumsy substitute for the complete machine. It requires that the fruit first be cut in half and then the two halves joined together by hand before they are inserted. There is no rhyme or reason for manufacturing such a partial machine when there is available the complete machine which does the cutting mechanically.

The only real value of a patent on this subcombination is to protect the patent on the complete machine. How important that protection may be in this case we cannot ascertain. Theoretically if the complete machine is adequately described in the specifications the sub-patent is not needed at all. If someone develops a new machine that imitates appellant’s machine too closely it will infringe the principal patent and the subcombination claim will be superfluous.

But the principle involved in approving patent claims whose only purpose is to protect other patent claims has far-reaching consequences.

It is a common technique, in what has become the organized business of getting patents, to surround a single invention with a number of patented claims on parts or aspects of that invention which the applicant has no intention of manufacturing or exploiting as distinct patents.¹ These are often called blocking or fencing patents. A good illustration of the idea we are trying to express is found in a memorandum of patent policy of a large concern investigated by the Temporary National Economic Committee, which reads as follows:

“In taking out patents we have three main purposes — -

“(a) To cover the actual machines which we are putting out, and prevent duplication of them. * * *

“(b) To block the development of machines which might be constructed by others for the same purpose as our machines, using alternative means. * * *

“(c) To secure patents on possible improvements of competing machines, so as to ‘fence in’ those and prevent their reaching an improved stage. * * * ”²

Another example of the same policy is found in the testimony of Mr. Charles Kettering before the Temporary National Economic Committee, who explained the practice as follows:

“Sometimes there are half a dozen ways of doing a thing after you start to do it. When you put your money on that way, you take out these auxiliary patents as sort of protective things you didn’t find yourself, and I think that is all right, too.”³

These, of course, are only examples— which may or may not have influenced this particular appellant — to illustrate the dangers inherent in the granting of blocking and fencing patents. The record does not show that appellant here expects to use its fencing claim aggressively. It may well be that its purpose is protection against the aggressive use of similar patents by others. Yet if this be so it is only another illustration of the danger of allowing such claims as distinct inventions. Once that practice is established claims multiply in all directions. The fact that some use them for aggression compels others to demand them for protection. The result of granting blocking or fencing patents is to create a maze of patent restrictions whose effect is to confuse and impede business competitors and inventors and to entrench some one corporation in the position of domination over an industrial technique.

In the absence of controlling decisions on this subject it would seem apparent that to grant a patent for the purpose of blocking the development of machines which might be constructed by others is a violation of the constitutional provision that the patent law must promote science and the useful arts. Const. art. 1, § 8, cl. 8. The dangers of approving a principle which permits a patent monopoly to be extended by granting claims on distinct inventions, which the applicant has no intention of exploiting as distinct inventions, are apparent in the growth of modern monopolies based on patent control. Such patents are invalid for the same reason which condemns broad and misleading claims. That principle, as stated by Mr. Justice Bradley as early as 1872, is to protect the public from “ingenious attempts * * * to discourage further invention in the same department of industry * * *.”⁴

The blocking or fencing patent is actually an ingenious device to broaden the scope of the invention beyond the article or process which is actually intended to be manufactured or licensed, and thus comes within the principle of the rule laid down by ’Mr. Justice Bradley.

At one time the reasoning of the Paper Bag case⁵ could be used to support the present attempt to obtain one patent claim for the purpose of protecting another. In that case the defendant argued that the equitable remedy of injunction against infringement should be denied because of the plaintiff’s “unreasonable non-use” of the patent. Plaintiff did not manufacture and declined to license the patent in question, in order to protect his investment in another patented machine with which the suppressed patent competed. This use of the patent to aid in the exploitation of another patent was approved in the opinion. The only qualification was a suggestion that a different result might be reached had the evidence shown “a question of diminished supply or of increase in prices.”

From this decision it might be argued that a patent should be granted even if it appeared that the applicant’s purpose was not to manufacture but to protect another patent. If the use of the patent to suppress manufacture is proper, then the grant of a patent for that purpose may be equally proper. The fact that the Paper Bag case involved infringement is a distinction without a difference.

We do not follow the reasoning of the Paper Bag case because we believe that its principle, which is inconsistent with the constitutional provision that the patent law “promote science and the useful arts,” has been overruled by subsequent decisions. Indeed, it was the growth of monopoly restrictions which followed it that blew up the Paper Bag case till it burst. The Paper Bag case was decided at a time when, according to the Button Fastener case,⁶ it was supposed to be lawful to enlarge the scope of the patent monopoly by means of a tying clause to enable the patentee to control the price of unpatented articles used with the patent. The Paper Bag opinion rests largely on language taken from the Button Fastener case.

But, in 1917, in Motion Picture Patents Co. v. Universal Film Mfg. Co.,⁷ the Supreme Court overruled the cases which had formerly approved the use of a patent to control unpatented materials. The principle enunciated in the Motion Picture Patents case is broad enough to overrule the Paper Bag case. We can see no difference in principle between refusal to license unless unpatented materials are also taken (the practice condemned in the Motion Picture Patents case), and refusal to license or manufacture which was sustained in the Paper Bag case. The ultimate purpose is the same, the exploitation of a product outside the scope of the patent monopoly, and the means are the same, positive manipulation of the patent. In both cases the patentee has consciously framed a policy to so use his patent grant as to secure enhanced 'business advantages in a sphere which has no connection with the development of the particular invention which is patented. We ‘find no valid distinction between using a patent to exploit the business of selling unpatented materials and using it to exploit another invention or to promote a general business policy. Nevertheless, the Paper Bag case continued to be cited by courts until the decision in Ethyl Gasoline Corp. v. United States.⁸

In the Ethyl case the defendant in an antitrust prosecution owned several patented claims related to the same basic invention, an anti-knock motor fuel. One claim was for the fluid, tetra-ethyl lead. Another patent claim covered the mixture of that fluid and gasoline. The defendant’s sole revenue came from the sale of the patented fluid. The mixture patent was used to aid the eploitation of the fluid patent. The Court struck down Ethyl’s system of exploitation. In the portion of his opinion headed “Scope of the Patent Monopoly” Mr. Justice Stone said:

“ * * * Such benefits as result from control over the marketing of the treated fuel by the jobbers accrue primarily to the refiners and indirectly to appellant, only in the enjoyment of its monopoly of the fluid secured under another patent. The licensing conditions are thus not used as a means of stimulating the commercial development and financial returns of the patented invention which is licensed, but for the commercial development of the business of the refiners and the exploitation of a second patent monopoly not embraced in the first. The patent monopoly of one invention may no more be enlarged for the exploitation of a monopoly of another, see Standard Sanitary Mfg. Co. v. United States, supra, [226 U.S. 20, 33 S.Ct. 9, 57 L.Ed. 107], than for the exploitation of an unpatented article, United Shoe Machinery Co. v. United States, supra, [258 U.S. 451, 462, 42 S.Ct. 363, 367, 66 L.Ed. 708]; Carbice Corporation v. American Patents Corp., supra, [283 U.S. 27, 31, 51 S.Ct. 334, 335, 75 L.Ed. 819]; Leitch Manufacturing Co. v. Barber Co., supra, [302 U.S. 458, 58 S.Ct. 288, 82 L.Ed. 371]; American Lecithin Co. v. Warfield Co., 7 Cir., 105 F.2d 207, or for the exploitation or promotion of a business not embraced within the patent. Interstate Circuit, Inc., v. United States, supra, 306 U.S. [208] at pages 228-230, 59 S.Ct. [467] at pages 475, 476, 83 L.Ed. 610.”⁹

We believe this language finally overrules what was left of the Paper Bag case. It declares that a patent can neither be used to protect another patent nor for the commercial development of other business of the patentee. Its proper function is limited to the development of the article or process covered by the claim. This conclusion is clearly the only one consistent with the constitutional mandate.¹⁰ And this conclusion would clearly forbid the applicant here to use his patent, if granted, to enlarge the scope of the patent on the complete machine and to exploit and secure the business carried on in connection with that patent.

It follows that a patent claim should not be granted where it appears that the patentee expects to use it not for manufacture and sale but to protect another patent claim. If the record shows that the patent claim is made for the unlawful purpose of protecting another patent it is an unlawful patent. This does not mean that the applicant must guarantee production of the article or process covered by the claim. It is impossible to guess the utility or commercial success of any patent, and non-use standing alone is not a positive illegal use.¹¹ It does mean that the applicant must have some expectation of exploiting his patent if he can, rather than using it for purposes condemned in the Ethyl case. To hold otherwise is to suggest that the Patent Office furnish the opportunity for future illegal restraints of trade.

The best protection against the issuance of blocking or fencing patents would be to require the applicant to set out the real purpose for which the claim was made. Such a rule would require evidence of intention to stimulate the commercial development and financial returns of the particular invention covered by the claim, and a negative showing that its purpose was not to protect some other patent or claim. At present no such inquiry is made by the Patent Office (perhaps on account of the Paper Bag decision) but its absence does not justify the court in ignoring a blocking purpose which, as in this case, is clear on the face of the record.

It should be noted that this decision does not deprive appellant of a reward for his ingenuity in devising the mechanism set out in the subcombination claims. All it does is to deprive him of a distinct patent right in that subcombination standing by itself. The same subcombination mechanism is set out in the claims on the complete machine which have been allowed. These claims which have been allowed on the complete machine are obviously not inventions distinct from each other but different ways of describing the single invention' of the complete machine.¹² They, therefore, establish no distinct patent rights but instead only outline the scope of the principal invention.

It is obvious that the more distinct patent rights an inventor can get on the parts of a machine the more power he has to handicap the inventive ingenuity of others who may use these same parts in more original ways. The question of how many distinctly patentable parts there are in a patent on a whole can never be determined with any certainty through the process of logic or analysis. It seems, therefore, a safe, practical test to limit the number of distinct patent rights in a single machine to those which the inventor expects to exploit separately, and not to suppress. Distinct patent rights should not be granted for the sole purpose of handicapping future inventors whose discoveries would not otherwise infringe the complete patent.

I fully agree with the concurring opinion of Mr. Justice Miller which states the same principle with a slightly different emphasis.

For these reasons the judgment of the court below will be

Affirmed.

1 Cf. the use of a process patent to extend the monopoly of another patent in Ethyl Gasoline Corp. v. United States, infra note 8.

2 Hearing, Temporary National Economic Committee, Investigation of Concentration of Economic Power, Part 2, p. 776 (Exhibit No. 125) (1939); 75th Cong., 3d Sess.

3 Ibid., p. 345.

4 Carlton v. Bokee, 1872, 17 Wall. 463, 471, 472, 21 L.Ed. 517.

5 Continental Paper Bag Co. v. Eastern Paper Bag Co., 1908, 210 U.S. 405, 28 S.Ct. 748, 52 L.Ed. 1122.

6 Heaton-Peninsular Button-Fastener Co. v. Eureka Specialty Co., 6 Cir., 1896, 77 F. 288, 35 L.R.A. 728.

7 1917, 243 U.S. 502, 37 S.Ct. 416, 61 L.Ed. 871, L.R.A.1917E, 1187, Ann.Cas. 1918A, 959.

8 1940, 309 U.S. 436, 60 S.Ct. 618, 84 L.Ed. 852.

9 Ibid., 309 U.S. at page 459, 60 S.Ct. at page 626, 84 L.Ed. 852.

10 Motion Picture Patents Co. v. Universal Film Mfg. Co., 1917, 243 U.S. 502, 510-511, 37 S.Ct. 416, 418, 61 L.Ed. 871, L.R.A.1916E, 1187, Ann.Cas. 1918A, 959:

“3d. Since Pennock v. Dialogue, 2 Pet. 1, 7 L.Ed. 327, was decided in 1829, -tbis court has consistently held that the primary purpose of our patent laws is .not the creation of private fortunes for 'the owners of patents, but is ‘to promote the progress of science and the useful arts’ (Constitution, art. 1, § 8), —an object and purpose authoritatively expressed by Mr. Justice Story, in that decision, saying:

“ ‘While one great object [of our pat-en' laws] was, by holding out a reasonable reward to inventors and giving them an exclusive right to their inventions for a limited period, to stimulate the efforts of genius, the mail, object was “to promote the progress of science and useful arts.” ’

“Thirty years later this court, returning to the subject, in Kendall v. Winsor, 21 How. 322, 16 L.Ed. 165, again pointedly and significantly says:

“ ‘It is undeniably true, that the limited and temporary monopoly granted to inventors was never designed for their exclusive profit or advantage; the benefit to the public or community at large was another and doubtless the primary object in granting and securing that monopoly.’

“This court has never modified this statement of the relative importance of the public and private interests involved in every grant of a patent, even while declaring that, in the construction of patents and the patent laws, inventors shall be fairly, even liberally, treated. Grant v. Raymond, 6 Pet. 218, 241, 8 L.Ed. 376, 384; Winans v. Denmead, 15 How. 330, 14 L.Ed. 717; Walker, Patents, § 185.”

11 As was said by Judge Aldrich, sitting in the Circuit Court of Appeals, in his dissenting opinion in Continental Paper Bag Co. v. Eastern Paper Bag Co., 1 Cir., 1906, 150 F. 741, 745:

“Simple nonuse is one thing. Standing alone, nonuse is no efficient reason for withholding injunction. There are many reasons for nonuse which, upon explanation, are cogent, but when acquiring, holding, and nonuse are only explainable upon the hypothesis of a purpose to abnormally force trade into unnatural channels — a hypothesis involving an attitude which offends public policy, the conscience of equity, and the very spirit and intention of the law upon which the legal right is founded — it is quite another thing.”

12 Rule 41 of the Patent Office reads in part as follows: “ * * * where several distinct inventions are dependent upon each other and mutually contribute to produce a single result they may. be claimed in one application: * * * ” However, in a large number of cases the theory that the different claims are distinct inventions is pure fiction. The court must recognize that such claims often do not create distinct patent rights.