United States v. American Bell Tel. Co.

32 F. 591, 1887 U.S. App. LEXIS 2804

• Court: U.S. Circuit Court for the District of Massachusetts
• Decided: September 26, 1887
• Status: Published

Opinion

Colt, J.

This is a demurrer to a bill in equity filed by the United States by direction of the solicitor general, acting as attorney general, against the American Bell Telephone Company and Alexander Graham Bell. The main purpose of the bill is to cancel two patents granted to Bell, relating to the art of transmitting speech by electricity, on the ground that they were obtained by fraud. The bill contains numerous allegations. We will refer to some of the more important in order to show its general character.

It charges that Bell was not the first inventor of the speaking telephone; that Phillip Reis, of Germany, and others, had previous to bis invention devised an apparatus for the transmission of speech by electricity; that at the time of issuing the first patent, which covers the process or method, Bell was not able to transmit articulate speech by the method or with the apparatus described in his application; that ho purposely framed his application and claim in ambiguous and general terms to cover antecedent and future inventions, and to deceive and mislead the examiner of the patent-office; that he did in fact mislead the examining officers of the patent-office, and caused them to regard his alleged invention as an improvement in telegraphy, and not as an invention of the telepbone; that Elisha Gray of Chicago filed a caveat in the patent-office on the same day that Bell filed bis application, but prior in point of time; that the claim in said caveat was for “the art of transmitting vocal sounds or conversation telegraphically through an electric circuit;” that the examining officer of the patent-office, contrary to the statute, communicated to Bell the fact and the date of the filing of said caveat, and the nature of-the claim contained therein; that thereupon Bell, by his attorneys, unlawfully and contrary to the fact obtained a determination of the patent-office that said caveat was filed after said application; that on or about the twenty-sixth of February, 1876, the examining officer did exhibit to Bell the drawings and caveat of Gray, and describe to him the construction and mode of operation of the telephone therein described, and that Bell did proceed without delay to make substantia] amendments of bis specification and claims; that such amendments relate to those parts of Bell’s invention which constitute the cardinal feature of his patent, to-wit, the transmission of sounds by gradual or un-dulatory changes in the electric current, as distinguished from alternate or pulsatory changes; that the second patent, No. 186,787, was obtained by fraud upon Amos E. Dolbear.

The bill prays that this court may decree that said patents are,«and have been since the date of scaling and delivery, null and void; that they were wrongfully procured to be issued by means of fraud, false suggestion, concealment, and wrong on the part of said Bell, and that the American Bell Telephone Company may be perpetually enjoined from setting up any right or claim under said letters patent, or from alleging the same in any court within the United States as evidence of any grant or right conferred on said Bell.

The-first and principal question raised by this demurrer is whether, in the absence of any specific statute, the. United States, by direction of the attorney general, can maintain a bill in equity to cancel a patent for an invention. The question is by no means free from difficulty, and the decisions of the courts in the few cases where the point has been raised are conflicting. Upon consideration we are of the opinion that tbe carefully considered decision of Judge Shepeey, of this circuit, in Attorney General v. Chemical Works, 2 Ban. & A. 298, post, 608, to the effect that the government, in the absence of any express enactment, has no power to bring a bill in equity to cancel a patent, is sound, and should be followed by this court in this case. Our whole patent system rests upon a constitutional provision and the statutes passed by congress. By article 1, § 8, of the constitution, congress has the power of securing, for limited times, to authors and inventors the exclusive right to their respective writings and discoveries, and to make all laws which shall be necessary and proper for carrying into execution this power. To the constitution and the acts of congress, therefore, and to these sources alone, we must look for the rights and remedies of patentees. Congress could have provided that the government should have the right to bring suit to cancel a patent for an invention on the ground of fraud, but congress has not seen fit to incorporate such a provision into the patent laws, and that is a sufficient answer to this bill. As was said by Mr. Justice Miller, in U. S. v. Railroad,, 98 U. S. 569, 616:

“Congress might also have directed the attorney general, either as part of this proceeding or as an independent one, to ask the court to declare the franchise of the company forfeited. It might have ordered a bill to inquire if the company was insolvent, and, if so, to wind up its affairs and distribute its assets. In short, there are many modes in which the legislature could have called into operation all the judicial powers known to the law. But it has not done so, and that is the constantly recurring answer to this bill.”

We think the history of patent legislation under the constitution tends to show that congress never intended this power to be exercised under the present law. The act of April 10, 1790, (1 St. 109,) was the first statute passed on the subject of patents. Section 5 of the act provided that where a patent was obtained surreptitiously or upon false suggestion, the judge of the district court, upon affidavit being filed, should grant a rule to. show cause why process should not issue to repeal the patent. By section 10 of the act of February 21, 1793, (1 St. 318,) the time was extended from one to three years after issuing the patent for instituting proceedings before the judge of the district court for its repeal. In addition to the proceeding under section 5, the act of 1790 also provided by section 6 that in an action for the penalty the defendant might set up certain defenses to the patent. By section 6 of the act of 1793, these defenses were greatly enlarged. It thus appears that by the Acts of 1790 and 1793, where a patent was obtained surreptitiously or upon false suggestion, a process might issue for its repeal in the nature of a scire facias at common law. In Ex parte Wood, 9 Wheat. 603, Mr. Justice Story, in construing section 10 of the act of 1793, declared that the jurisdiction given to the court is not general and unlimited, but is confined to cases where the patent was obtained surreptitiously or upon false suggestion, and that the object of the statute was to provide some means to repeal patents so obtained, which were the cases where a sdre facias issued at common law; and, further, that “as the patents are not enrolled in the records of any court, but among the rolls of the department of state, it was necessary to give some directions as to the correct time and manner of instituting proceedings to repeal them.” It does not appear that Judge Story recognized any jurisdiction of this court to entertain suits to cancel patents independent of the express provisions of the statute law. On the contrary, he deemed it necessary that congress should give directions as to the time and manner of instituting proceedings to repeal.

The next important legislation on this subject was the act of July 4, 1836, (5 St. 117,) which, with some amendments not important here to consider, remains the law to-day. This act established a patent-office with a commissioner, chief clerk, and examiners, and directed them to examine all applications for patents, and to grant only those which possessed the elements of patentability. In this act, wherein congress created a complete patent system, it was not deemed necessary to retain the old proceeding to cancel a patent found in the Acts of 1790 and 1793. After observing the working of the old law for more than 40 years, congress deliberately eliminated this provision in the new act, and it may be presumed substituted provisions which in its opinion afforded better security to the public as well as to the patentee.

The design of the new law was to. have such proceedings taken, and such an examination made before a patent was granted, as to guard against the issuing of invalid patents, and so prevent the abuses complained of under the old system. In Butterworth v. U. S., 112 U. S. 50, 5 Sup. Ct. Rep. 25, it is held that the proceedings in the patent-office are essentially judicial in their character, and, further, that the framework of the system excludes any appellate power not therein specifically provided for, — such as an appeal to the secretary of the interior. But congress did not stop here. By section 15 of the act a defendant in an infringement suit may set up various defenses to the validity of the patent; he may show that for the purpose of deceiving the public the description and specification filed by the patentee was made to contain less than the whole truth relative to his invention, or more than was necessary to produce the desired effect, or that he had surreptitiously and unjustly obtained a patent for that which was invented by another, or that the invention had been described in some public work prior to his invention, or that he was not the first and original inventor, or that the invention had been in public use or on sale with the consent of the pat-entee prior to his application. By section 16 an applicant, having been refused a patent on the ground that it would interfere with an unexpired patent previously granted, was permitted to file a bill in equity in the circuit court, and try the question whether or not he was entitled to a patent; or in the case of two interfering patents any party interested might bring a bill in equity against the other party in the circuit court, and the court may cancel either patent in whole or in part. By these several provisions of the act of 1836 it would seem that congress thought the public as well as the patentee were sufficiently protected without retaining the old proceedings to cancel a patent found in prior acts.

The supreme court have decided that a defendant in an infringement suit is not limited to the statutory defenses. He may show that the commissioner has exceeded his power in granting or reissuing a patent, or that the patented thing does not amount to a patentable invention. Mahn v. Harwood, 112 U. S. 354, 5 Sup. Ct. Rep. 174; Gardner v. Herz, 118 U. S. 180, 6 Sup. Ct. Rep. 1027. As the law now stands it is difficult to conceive of a good defense to a patent which cannot be raised in an infringement suit. In Rubber Co. v. Goodyear, 9 Wall. 788, and Mowry v. Whitney, 14 Wall. 434, it was held that the question whether the extension of a patent had been improperly obtained could not be inquired into in an infringement suit, but the statute relating to extensions has been repealed, except as to patents granted prior to March 2, 1861.

The intent of congress is further shown by the fact that although repeated attempts have been made to amend the law so as to give some process by which an invalid patent may be vacated, the legislature has refused to act. In the present condition of the law there would seem to be no necessity for invoking the power assumed by this bill, and the course of legislation not only fails to show any intention on the part of congress to clothe the government with this power, but rather goes to show its intentional exclusion. If. the power of the government to cancel a patent for an invention exists, it must be by implication, and it must spring, from the general principles of equity jurisprudence; and here it becomes important to inquire into the history and character of this power and the procedure under it in England. In England the patent system was based upon the royal prerogative. The grant of a patent was a matter of grace and favor, and the crown might annex to the grant any conditions it pleased. The causes for which a patent may be revoked are stated in the proviso to be, if the grant is contrary to law, or prejudicial or inconvenient to her majesty’s subjects, or if the invention was not new, or not invented by the patentee. Hind. Pat. 264. In England the power to revoke a patent was in its nature sovereign. The proceeding for avoiding and canceling a patent was by writ of scire facias taken in the common-law side of the court of chancery, being the court in which the patent issued. Scire facias lay to repeal a patent in three cases:

(1) When the king by his letters patent granted the same thing to several persons, the first patentee shall have a scire facias to repeal the second patent.

(2) When the king granted a thing upon false suggestion, he may by his prerogative jure reyis have a scire facias to repeal his own grant.

(3) When the king has granted anything which by law lie cannot grant, he, jure regis, for the advancement of justice and right, may have a scire facias to repeal his own letters patent. 4 Inst. 88. Hind. Pat. 234.

To quote from the opinion of Judge Shepley in the Rumford Chemical Works Case:

“As the letters patent issued under the great seal, and the enrollment of every patent remained of record in the court of chancery, the lord chancellor, in the common-law court of chancery, or, in the words of Sir Edward Coke in the fourth Institute, the ‘ one ordinary coram domino rege in cancellaria, wherein the lord chancellor or lord keeper of the great seal proceeds, according to the right line of the laws and statutes of the realm, — secundum legem et consuetudinem Anglice,’ has power to hold plea of scire facias to repeal letters patent undef the great seal, and to cancel the patent, and also the enrollment of it. King v. Butler, 3 Lev. 221; 2 Vent. 344. * * * These legal proceedings were in the office called ‘ The Petty'Bag,’ the office of the court of chancery in which all common-law proceedings of the court were carried on, all the pleadings and other common-law proceedings being entitled ‘In the Petty Bag Office in Chancery.’ The action of scire facias was not only a remedy provided by law for the crown in behalf of the public, but also for any subject of the crown who could show that a void or illegal patent operated to'his prejudice. Thus, in Butler’s Case, before cited, Lord Chancellor Finch said: ‘ Where a patent is granted to the prejudice of the subject, the king of right is to permit him, upon his petition, to use his name for the repeal of it.’ .Every person is presumed to have such an interest in a patent for an invention that, if he alleges that it is illegal or void, he is entitled, as of right, to a soire facias in the name of the queen, in order to repeal it. Queen v. Aires, 10 Mod. 354; Queen v. Ballivos, 1 P. Wins. 207; Vin. Abr. ‘Prerogative,’ T. b.; U. b. 8. Such proceedings were always in the name of the crown. ‘ The only means which the law provides for the repealing of letters patent ’ (for inventions) ‘ is by action of scire facias at the suit of the queen,’ (Hind. Pat. 64,) and, as we have seen, this was a quasi eomuion-law proceeding, with the right of trial by jury. This right and this mode of proceeding were preserved by the express provisions of the modern statutes, which, while providing for a new seal to patents, and for filing the specifications in such office as the now commissioners might designate, also enacted that ‘ the writ of scire facias shall lie for the repeal of any letters patent issued under this act in the like case as the same would lie for the repeal of letters patent which may now be issued under the great seal.’ No instance can be found, it is believed, of any other proceeding in England than a htaire facias to repeal letters patent for an invention. It is contended in the case at bar that tho case of the Attorney General v. Vernon, 1 Vern. 277, is an authority for the repeal of letters patent by a bill in chancery. But this case was without a precedent, and has never been followed in England, and cannot be claimed to be a precedent for a bill in equity to repeal letters patent for an invention which issue under the great seal and are recorded in chancery.”

It appears, therefore, that tho power to cancel a patent in England was in the nature of a royal prerogative, and that the proceeding was by writ of scire fueias. It is admitted that this form of chancery proceeding is not in use in this country, and it is equally true that the prerogative rights of the crown of England have not descended upon the president of the United States. With us the people are the source of power, and each branch of the federal government can exercise only those powers which are delegated to it by the people, and are found in tho constitution and tho statutes. Tho constitution does not give the federal judiciary any of tho powers which were exercised in England by the chancellor as the representative of the king, and by virtue of the king’s prerogative as parens patrias.

“ When this country achieved its independence, the prerogatives of tho crown devolved upon the people of the states; and this power still remains with them, except so far as they have delegated a, portion of it to the federal government. The sovereign will is made known to ns by legislative enactment. The state as sovereign is parens pa trim. * * * The courts of the United States cannot exercise any equity powers except those conferred by acts of congress, and those judicial powers which the high court of chancery in England, acting under its judicial capacity as a court of equity, possessed and exercised at the time of the formation of the constitution of the United States. Powers not judicial, exercised by the chancellor merely as the representative of the sovereign, and by virtue of the king’s prerogative as parens patria, are not possessed by the circuit courts. ”

Such is the language of the supreme court in Fontain v. Ravenel, 17 How. 369-384.

The decisions of the federal courts respecting patents for lands are not in our opinion applicable to patents for inventions. In the case of land the government is the owner of property, and if that property is fraudulently conveyed it has the same right as an individual to recover it back. Its rights and remedies are the same as a private citizen’s in such a case. But in issuing letters patent for an invention, to quote Judge Shepley:

“Nothing is granted which belonged before to the United States. The issue of letters patent is in compliance with an act of congress. The rights and remedies of the parties are dependent solely on the statute enactments, and do not grow out of any previous ownership of the supposed subject of the grant, as in the ease of a conveyance of lands.”

The cases cited bearing on the question of the power of the government to bring in this suit, are Rubber Co. v. Goodyear, 9 Wall. 788; Mowry v. Whitney, 14 Wall. 434; Attorney General v. Chemical Works, supra; U. S. v. Gunning, 18 Fed. Rep. 511, and 23 Fed. Rep. 668; U. S. v. Frazer, 22 Fed. Rep. 106; U. S. v. Colgate, 21 Fed. Rep. 318; Mahn v. Harwood, 112 U. S. 354, 5 Sup. Ct. Rep. 174. The question has never been directly before, nor passed upon by, the supreme court, though the plaintiff insists that certain dicta of that court in Rubber Co. v. Goodyear and Mowry v. Whitney recognize the existence of this power. Rubber Co. v. Goodyear and Mowry v. Whitney were cases of extended patents, and the court decided that the question whether an extended patent had been obtained by fraud was not open in an infringement suit. In these cases the court did not decide that the government, through the attorney general, could bring a bill for the purpose of vacating a patent; that point was not before the court for determination. All the court said was, and this is the extent of the dictum, that no one but the government, either in its own name or in the name of its appropriate officer, could institute judicial proceedings to cancel a patent, except in the cases provided for in section 16 of the act of July 4, 1836. The ease of Mahn v. Harwood was upon a reissued patent, and the majority of the court held that the defense of laches in applying for a reissue could be set up in an infringement suit. Mr. Justice Miller, in a dissenting opinion, takes the position that this cannot be done, inasmuch as congress, by statute, has specifically mentioned the five defenses that may be raised in an infringement suit, and he then goes on to say that congress intended all other causes for impeaching a patent should be prosecuted in the usual mode of scire facias, or bill in chancery brought by the proper law officers of the government to set it aside.

In this circuit, in the case of Attorney General v. Chemical Works, the question was fairly presented and decided in the learned and carefully considered opinion of Judge Shepley, and the conclusion reached that the power sought to be invoked by this bill does not exist in the absence of a specific statute.

In U. S. v. Gunning, a bill was brought to repeal tlio Gunning patent. It was demurred to oil the ground of want of authority in the plaintiff to bring, or the court to entertain, the suit, and for want of equity. Judge Wallace overruled the demurrer. This case is in direct conflict with Attorney General v. Chemical Works.

In U. S. v. Frazer, 22 Fed. Rep. 106, a bill was brought to cancel two patents on the ground that the defendant falsely and fraudulently made oath that the alleged improvements had not been before known or used, when in fact they had been publicly known and used more than two years prior to the application therefor. Judge Blodgett, in sustaining the demurrer, said:

“It is true that it is an imposition on the patent-office to falsely make an affidavit that a device for which a patent is asked has not been known and used prior to the invention thereof by the applicant for the patent. Such conduct may justly be said to be fraudulent; but it Is a fact which goes to the validity of his patent, and may be pleaded by any person against whom the pat-entee brings suit; and it seems to me that it would be better to leave the litigation of questions like this, which constitute a defense in patent cases, to the parties directly interested, rather than that the government should lend its name to a suit really in tho interest only of certain private parties. The practice here inaugurated will, if followed, transfer nearly all litigation on patents, except mere questions of fact as to infringement, to the office of the attorney general, instead of leaving it in the hands of the persons directly interested. * * * I do not intend to be understood as holding that a bill in chancery will not lie in any case to annul a patent obtained by fraud, but. only that this bill does not, in my opinion, make such a case as requires or authorizes the United States to allow the use of its name to fight out a contest between these individuals. ”

The opinion of Judge Blodgett would seem to be that if the attorney general can bring a bill to cancel a patent in any case, he cannot bring such a bill on grounds which constitute a defense in infringement cases, and the language of Mr. Justice Miller in Mahn v. Harwood would appear to go no further than to suggest that a bill might lie by the proper law officers of the government to cancel a patent in those cases where the statutory defenses do not apply. It would seem, then, that if this power exists its exercise should be limited to cases wliere the statutory defenses fail to reach the case. To hold otherwise would turn patent litigation largely into the hands of the government, which plainly was not the intention of the present law. Rubber Co. v. Goodyear and Mowry v. Whitney were cases of extended patents, where the extension was obtained by alleged fraud or false swearing in the patent-office, and that defense under the statute could not he set up in an infringement suit.

But that is not the case now before us for consideration. The main grounds on which the validity of the Bell patents are attacked in this bill can be raised in an infringement suit. Among the defenses provided by section 4920 of the Revised Statutes, in any action for infringement, are:

First. That for the purpose of deceiving tlio public the description and specification filed by the patentee in the patent-office was made to contain less than the whole truth relative to his invention or discovery, or more than is ñecos-sary to produce the desired effect. Second. That he had surreptitiously or unjustly obtained the patent ior that which was in fact invented by another who was using reasonable diligence in adapting and perfecting the same. Third. That it had been patented or described in some printed publication prior to his supposed invention or discovery. Fourth. That he was not the original or first inventor or discoverer of any material or substantial part of the tiling patented.

The necessity which might possibly arise in some cases for the exercise of this power by the government seems to be wanting in the present case.

The question of power raised by this bill is an important one, and 'in view of the conflict of authority it can only be definitely settled by the supreme court. It is manifestly our duty in the present case, unless clearly satisfied that Judge Shepley was wrong, to follow the law as established in this circuit in the most learned and exhaustive opinion to be found on the subject.

The demurrer to the bill is sustained, and the bill dismissed.