Frischer & Co. v. Bakelite Corporation

GRAHAM, Presiding Judge, and Before BLAND, HATFIELD, GARRETT, As- Judges. sociate Presiding Judge. GRAHAM, appeal this court on This matter comes to Tariff Commission from the United State of section provisions under the Tariff Act of answer to foregoing Stat. complaint, in and 174-180'). right answer complainants any part the relief or prayed thereof Corpora^ O'n December Bakelite them was denied. In connection with tion, corporation organized under the laws answer various sworn statements were filed. Bros., of tbe Delaware, state of a co- Abse Said answer also contained motion partnership, principal place of busi- with its said order of declaring the President a tem York, ness in the Embed Art Cor- New porary embargo upon synthetic phenolic resin poration, corporation organized under products be rescinded and dissolved. Jersey, the state of New filed laws portion That consisting answer of said the United States Tariff com- Commission a motion set hearing before said Com plaint, oath, asking relief under said May mission 17, 1926-, and on that date competition section 316 from unfair duly was heard. The thereafter, motion was importation and and others sale beads May on 24, 1926, taken under advisement synthetic materials or phen- articles made of until decision of the matter on the mer resin, olic or Bakelite. its. hearing This on began the merits on April 10', 1926, On certain manufacturers May 24,1926, and thereafter, continued cigar cigarette holders, wit, and Kauf time, time to until completed. it was Bonde, mann York, Bros. of New Reiss- & complaint based, was part, upon Pipe Company, City, Premier of Union N. alleged violation patent rights of certain J., Co., Inc., S. M. Frank & York, of New involved in United patent States letters Nos. Demuth Co., York, Wm. & & H. New L. 942,700 and 942,809, both of which were is- Stеm, Inc., Brooklyn, and M. Linkman sued to Leo H. Baekeland 7, on December & Co., Chicago-, petitioned for leave to 1909, and which were owned join Bakelite complaint, said and that order Corporation at filing the time of the cigar might apply cover and made therein complaint with said Commission. cigarette synthetic phen and holders made of April 16, 1926, olic resin. On the said Com On 2, December 1926, the said Commis- set the matters mentioned in mission several reported sion to the President that said hearing May application 24,1926, said on patents would expire on 6, 1926, December gave public hearing. notice On of said and recommended that the temporary order day reported said same Commission of exclusion be modified to take effect at that that, pend and recommended the President On 7, 1926, by December time.. direction of ing completion investigation, arti the President, Secretary Treasury complained entry, cles of be forbidden in instructed customs exclude, officers to after provisions accordance of said sec 6, 1926, “only December products composed (f), tion subsection § of different colored synthetic sections of phenolic resin of (except C articles April 23, 1926, Form On the President issued made molding synthetic phenolic resin order, duly was circulated to when mixed materials) joined with other to- April 24, collectors of customs under date gether by applying phenolic a fusible 1926, directing synthetic con- phenolic resin produet densation joined, surfaces to C, of Form and all articles manufactured product which fusible converted to wholly thereof, except articles the infusible state means heat or heat synthetic molding phenolic made rеsin pressure.” T. Treas. Dec. D. when mixed with articles, other forbidden 519'. entry Thereafter, the United States. on into Secretary April 26,1926, Treasury, 18, 1926, respondents On December filed provisions pursuance said stat a motion proceedings dismissed, "that ute, instructed various or, alternative, collectors of cus reopened taking toms effect. T. same D. for the of further evidence with re May 12,1926, spect 715. On patent Treas. Dec. Frischer 1,424,738’. United States Inc., corporation organized patent August a under the This was issued & 1922, to York, Ganz, Redman, of the state of New Weith, laws Richard Lawrence Y. Archie J. doing Import Company, Brock, business as Randes P. Frank the time of said hear York, property of New Transatlantic Corporation. Watch & Clock of Bakelite was Co., Inc., corporation organized very appears under the from the record extended York, litigation of New paten laws of the state had occurred between the Western Pipe Company, corporation organ Company, Briar and the General tees Bakelite litigation laws of Illinois, ized state of which’ had resulted combina joint and filed appeared Company, their C’ondensite several tion the Red July respondents filed On and the Company, Products manol Chemical 35 as- petition for review and Cor their Company Bakelite into Bakelite General fully signments which will be more pat of error various operated under poration, 942,700, referred to hereinafter. ents, among said which were on 1,424,738. A decision 942,809, and Corpora- 14,1927, On Bakelite December hearing until was reserved to dismiss motion complainants filed original tion alternative had and the was (cid:127)on the merits dismissal of said herein their motion for a al hearing was an additional motion stating prop- appeal, grounds therefor two duly on Feb had hearing lowed, which was ositions, First, viz.: the United States continuing until same ruary 11,1927, Appeals and is of Customs Court hearing, ordering said completed. inferior, court, constitutional created ques therein the included said existing under and virtue competition, of unfair methods Constitution; second, article of the by way infringement of Unit things the various matters and involved 170,- 75,266 and trade-marks Nos. ed States only, appeal said administrative did 1,424,738. patent No. 772, well as of said controversy, constitute a case jurisdiction . hence this court thereof registrations said The first of trade-mark by Leo H. September was made hearing This motion came on for before “Bake- of the word and consisted Baekeland court, May 25, 1928, entered and on we prod- condensation applied was to lite,” and denying an said In Frisch order motion. re formaldehyde. The sec- phenol ucts of and Co., Inc., al., App. er & et 16 Cust. Ct. July 24/1923, and consisted ond was made grounds denial, T. D. 42827. The as stat applied “Bakelite” was word and also here, were, ed in the of the court namely, mouthpieces parts, pipes pipe and briefly, that the Court of Cus United States cig- cigar and parts, and bowl and bits Appeals toms was and is inferior constitu also holders. These trade-marks arette court, contended, tional as that the mat by Corporation time of at the owned Bakelite proceedings ters involved before the proceedings. these Commission, United under said States 174-180), consti §§ section 316 May 25, 1927, said On controversy, a case or therefore tute decision, deci public said made its fíléd and objec no constitutional seemed to be gen First, a consisting of three parts: sion jurisdiction of this in that tion to the сourt facts involved discussion of the law eral respect. controversy; findings second, Corporation and Thereupon fact; and, third, the Bakelite three recommendations might complainants petition filed their which the other President action to the as Supreme re a Court. This for of certiorari in the by premises. writ him the be taken 29, 1928. O. This writ was denied October by Thomas signed port Commissioner was Co., 278 Dennis, Corporation v. Frisher & P. Bakelite Chairman, Alfred Marvin, 556. Brossard, S. Ct. L. Ed. Bake- Com U. S. Chairman, and E. B. Vice time, Corporation, also, lite at the same the fol about thereto Appended missioner. Supreme petition filed in the its Dixon con “Commissioner Court lowing notation: prohibition. a After a return there- writ and dissents No. Recommendation curs in heard and the 942)809 matter came on to be to this findings as to Patents No. from May 20, parte Ex Recommenda denied petition 1,424,738, and No. ju Corporation, U. S. above, he doubts the Bakelite as 1 and No. tions Supreme deter 73 L. Ed. 789: Tariff Commission risdiction prohibition, did denying the Court, writ validity of contested mine theory United findings and recommen so said are involved leg- Appeals was and is Costigan dissented. of Customs Court Commissioner dations.” under arti- and not one created court notice that islative will take The court Constitution, and that therefore 3 of the said Com cle report was said the time objection to be no constitutional members, the sixth there could of six consisted mission court matters Nothing jurisdiction of this over being J. Lowell. Sherman member finally dis- nature. an administrative whether Com of record as appears matter, court did so posing de participated in .the said Lowell missioner plain that the it is Court ex words: “As findings, and recommendations cision, legislative and not a Appeals is not Customs stated. His name is cept hereinafter court, need for now there is no papers. constitutional attached inquiring proceeding under sec- whether Our attention is first called to a consti pend- question. Act now tutional of the Tariff is maintained ing controversy respondents it, within before is a case or that said section 316 is invalid because meaning attempted 2 of 3 of the it is an delegation section article to the President of Constitution, applies power which is granted Congress by to the proceed- if constitutional courts. Even of ar- controversy, case or court order such additional evidence to be Appeals, being legisla- Court of Customs taken before the commission in ‍​‌‌​‌​‌‌​​‌​​​​​‌​​‌​​‌‌​​​​​‌‌​​​‌‌‌‌‌​​​​​​​​‌‍such manner court, may jurisdiction tive he invested with upon, such terms and conditions as to the it, as is done section 316.” proper; seem that the commission 174-180), Section un may modify findings as to the facts or make proceedings had, der appears which these findings by evidence, new which, reason of additional supported by marginal evidence, in a note.1 if shall be except conclusive as to the facts that within appeal may such time and in such manner an (a) That “See. 316. unfair methods of com upon question questions taken aforesaid petition importation and unfair acts in the only; judgment of law of said court States, articles into the or in sale their final, except shall be owner, consignee, agent that the same shall be importer, sub- ject to review tendency United States either, is to de the effect or applied Oourt certiorari stroy injure industry, for within three substantially effi judgment months after such economically operated, of the United States ciently in the Unit Appeals. Oourt of Customs prevеnt the establishment ed monopolize “(d) industry, final That the of the commission restrain or such an or to States, are shall be transmitted with the record the Pres- (cid:127)trade and the United commerce hereby unlawful, the ident. found and when declared with, “(e) in addi dealt exist shall be President to tion That whenever the existence of law, provisions herein method or shall act be established1to the provided. after satisfaction of the President he shall determine the rate making “(b) exceeding duty, to assist the President nor That in of additional any per decisions under this section the than United less centum of the value of such hereby States Tariff authorized as in of of Commission is articles defined section 402 Title IV investigate any. alleged Act, act, to complaint violation hereof on this offset such method or which will upon imposed upon hereby under or oath initiative. and which is articles im- “(c) ported Act, or, he That the commission in this in what shall make such violation of investigation in of under and accordance shall be and find are extreme cases with such satisfied may promulgate give aforesaid, rules as it he shall and such no- unfair methods or acts as hearing, he shall deem the tice and afford such and when direct' that such articles as deemed require, proper im- rehearing shall the interests of ported by any United States commission such with person violating provisions opportunity evidence, written, to offer oral or may act, entry presentation be excluded from into deem sufficient for a full of this shall States, investigation; information of such of the facts in the action and involved such United Secretary testimony every President, investigation in of such shall Treasury shall, through proper officers, writing, transcript as- be reduсed to and a there- findings or refuse such en- of sess such additional duties recommendation of try; the President shall be the decision of commission the official record of the proceedings findings case, any in and in shall be conclusive. “ findings investigation (f) in That case where the such whenever President has reason sought copy section, a violation of this of the to believe that article is offered or show findings promptly entry shall be into the in mailed or delivered to be offered United States importer consignee articles; or section but has not information violation this Secretary supported satisfy thereof, findings, by evidence, him that such if sufficient to except Treasury .shall, request conclusive, rehearing shall his be writ- granted entry may ing) investiga- commission, except thereof until forbid 'and may that, necessary findings time tion the President deem within such after said shall appeals completed: Provided, Secretary may That made and such manner as from, permit Treasury may entry up- taken decisions of the under United States Board the bond Appraisers, appeal may penalties he of General be taken on such conditions and deem upon question questions adequate. or from said “(g) duty of law the United States Court Cus- That additional refusal importer Appeals entry consignee toms such this section shall continue ef- articles; that if it shall he fect until the President shall find and the instruct shown.to Secretary Treasury satisfaction of said court that further evidence that the condi- taken, should be that there tions led to the such addi- were reasonable which assessment of grounds such, duty longer entry for the failure to adduce evidence tional refusal ex- no proceedings commission, in the before the said ist.” analysis goods. An domestic protection of “The tide 1 of the Constitution: provides that it discloses of this section Taxes, lay To and collect shall Power have * * ” * competition and unfair unfair methods Duties, Imposts Excises. into the importation of articles closely recently very has point This tendency to de- Hamp engaged the attention economically injure substantially stroy or & v. United States, 14 Cust. Jr., ton, Co. States, are in the United operated industries ease, the App. 350, T. D. 42030. the Presi- provides that when unlawful. increas proclamation President had issued a methods or acts to dent shall find such dioxide, under upon barium duties satisfac- to his they are established exist and provisions of virtue of the rate, duty, tion, he shall determine Stat. Act limitations, are neces- within certain validity sec 154-159). The USCA §§ acts, and, when sary methods or to offset such challenged as an unconstitutional and find that there he shall be satisfied delegation acts, he methods extreme cases of unfair to be was found President. This contention excluded from shall such articles to be cause A upheld. merit statute tand entry The section States. into the United by the having granted certiorari writ of the President provides further that when Court, judgment of this court being of- articles are reason to believe that Jr., & v. Unit Hampton, was affirmed. entry in vi- sought offered for fered or to be 394, 48 States, 276 S. Ct. ed U. S. fully in- section, is not olation of said 72 L. Ed. embargo temporary formed, he cause 315, under consideration Section complet- investigation is until his attempts provide a Hampton Case, supra, until the embargoes are ed. to continue Such ar- impossible for remedy eases where it is ex- shall find that the conditions President growth prod- wholly'or ticles same, he require when isting longer compete with sim- uet of the United States.to Treasury Secretary of the shall instruct the foreign products from coun- ilar articles or same. to discontinue the' pro- tries, of differences in costs because provisions of section In our provides statute duction. In such cases the attempted delegation not constitute do thereby find it President “shall that when the Congress has legislative power. Here the Act do shown the duties fixed and acts to certain unfair methods declared pro- equalize costs the said differences in unlawful, has further declared that princi- and the duction the United States committed, cer- unlawful acts are when such country,” ascertain pal competing he shall applied. The statute remedies shall be tain or de- proclaim said increases differences provide shall es- does not that the President said equalize order creases in the duties in levy any rates, or any policy, or fix tablish is also production. in He differences cost by any embargoes. the stat- These fixed statute, in ease he shall find by authorized legislative ute and are the act itself by in- equalization be made that such cannot President, performing du- body. in his The decreasing specified, creasing the duties as body, fact-finding and no ties, does so as a imported cause said proclaim the same and applies principle than that which different be valued their American articles to Hampton applicable in the to be was held selling price, limitations. within certain Case, supra. provides that elements statute further certain fully Case, into Hampton we went In the by President into account taken subject, and it would authorities on this investiga- making findings, his again and com- repetition to citе be needless ascertaining tions to assist the President We therefore content upon them here. ment shall be production differences of costs excerpt we a brief of what ourselves with by Tariff Commis- the United States “Viewing said in conclusion: sec- said can be made sion, proclamation and that no light authorities and of these tion 315 investigation until shall have thereunder history, at once becomes evi- legislative its provides further been made. Congress has endeavored to ex- dent it is President determines that that when the legislative policy. general press therein pro- costs of shown that the differences in levy prod- upon imported policy is This longer exist, he changed or no duction have equalize the duties to differenc- ucts sufficient order. modify his former shall or terminate in the United States production es in cost competing countries from principal section and the pari materia with Section ordinary come. Under imports which such protect American intended to likewise specifical- are those circumstances, the duties promote further- and industries and to Commission, act; ly hut, only by whenever these named members three accomplish expressed pur- thereof, and on ground insufficient to the further he, pose, they precau- only within certain said by shall can be valid if made tionary maxima, de- increased or unanimous minima and consent of all members uncertainty accordingly. no creased There is Commission.” poli- congressional intent and here as to the The United States Tariff given to cy; attempted to be no discretion created the act entitled “An in- Act To policy determine what the the President to crease the revenue, and for purposes,” du- be; imposes upon him no shall approved Sept. 8, 1916, 700-709, 39 Stat. except powers him ties confers (19 795-798 USCA seq.). § 91 et That act capable of execu- law, if execute provides, in section 700 91), § proclaims President tion. When the the creation of a Commission to consist thereunder, the new rate change of rate members, six appointed by Presi- being duty result Comeinto does not dent not more three than shall whom proclamation, proclamation but the political members party. the same duty the law.” result from the rate of prescribes duties functions said Commission, provides vacancy “a point, the commenting this same on impair shall not right of remaining through Chief Court, speaking members to all exercise the duties of the com- supra, Justice, Hampton United mission.” The provides, act also Con- by counsel that conceded said: “It is 92), may, § that the Commission appli- officers gress use executive “by one members, or more of its policy aof declared cation and enforcement agents may designate, prosecute any as it in- such offi- authorize Congress and in law quiry necessary to its duties.” Nowhere congressional application cers the act or its amendments is ref- found equiv- by regulation enforce it declaration to necessary erence to the number members never But it is said alent to law. quorum business, constitute to do Con- -done where permitted provisions. aside from the above levy taxes power gress has exercised Commission, The United un make fix duties. The authorities customs law, der is not a tribunal, but an principle that The same no such distinction. administrative Its board. functions are those rate-making its permits Congress to exercise of a finding fact commission. United States declaring power in interstate commerce ex rel. v. United Com., App. States Tariff prevail in rule which shall D. Ops. Attys. 6 E.(2d) C. Gen. to a fixing rates, it to remit and enables 77 (1924). respect In that it is similar to body with! rate-making created in accordance Commission, Federal Trade which has justi- rates, fixing of such provisions been held to exercise the administrative fixing cus- for the provision fies similar delegated functions to it and tó be act If imported merchandise. toms duties judicial powers. Fed. Tr. Com. v. an. legislative act lay down shall Co., Kodak 274 U. Eastman S. Ct. intelligible principle person to which the 688, 71 L. Ed. 1238. body fix authorized to such rates directed governmental body conform, legislative a Where a to such action is not has been cre- delegation legislative power. by law, consisting per- ated of more of than one forbidden son, vary legislative, thought judicial, du- whether or admin- If it is wise the customs pro- istrative, necessary number according changing conditions of unless the con- ties by law, abroad, may quorum stitute a is fixed has usual- duction at home author- ly majority persons that of carry Executive been held a pur- Chief out this ize pose, body advisory constituting such shall constitute such with the assistance of a Tariff quorum may appointed congressional transact business for organized. authority.” jurisdictions is Some which it contrary discussing have held to the We are of is therefore great powers courts, legal of bulk of objection 316, no valid to said section as an authority is as stated. above This doctrine delegation unconstitutional of au- subject is also to the further limitation thority to the President. given authority jointly is where the sev- thirty-first assignment private matter of error, persons The of eral some persons jointly must upon by agency, appellant, one much insisted is as aet is other- follows: “31. That the their actions invalid. rule the Tariff ground authority public is of a na- void on when the Commission are that the wise may majority authority be ex- signed by ; a in such eases the same the ture

255 by majority. Cooley O’Connor, superintending a act, ecuted a v. a committee of town to 391, 398, 446; held, major 12 v. it was “A Wall. 20 L. Ed. Cowan is the whole necessary R. 590, 393, 34 L. Murch, quorum, 97 Tenn. 37 S. W. constitute a and a ma jority Pet.) quorum Bank, may 538; A. v. 33 U. S. such act.” Damon v. Briscoe Harbin, Granby, 95 118, 887; (Mass.) city 8 2 L. Ed. Austin v. Pick. 345. In a coun cil 598, 628; Tenn. 32 Bank v. Mount where an passed S. W. ordinance had been mak ing Tabor, Rep. 734; Ex a 87, requisite 52 36 Am. two-thirds vote of the Vt. same Grindley parte Rogers, 526; granting 7 a (N. Y.) permit, Cow. it was held that Attorney such 229; invalid, P. Gen ordinance Barker, v. 1 Bos. & Mayor, Davy, 212; legislation 2 v. absence of contrary,, eral v. Atk. Heiskell to the a ma 308; 125, 116, Rep. jority quorum permit. 65 Md. 4 A. 57 Am. of a issue such could 883. Porter, 79, Gitchell, 57, 383; State 14 N. E. State v. v. Ind. Vt. 96 A. Borough Belmar, Hutchinson v. 61 N. J. apparent four mem- It is therefore .Law, 443, 39 A. 643. quorum When a of a majority, Commission, Tariff. or a bers city present, majority council is a of that perform any could function entire whieh the quorum provided can elect an officer body perform. query could then arises: Cloherty law. Collopy v. (Ky.) 39 S. W. If four members can transact restriction, 431. In statutory the absence of Commission, business must all four general majority rule is that a of a coun findings, un- concur in order make valid cil or quorum, majority board is a and the der law? quorum can City act. Merrill v. Low authority legal It seems to us that both ell, 236 463, Mass. a 128 N. E. 862. Where contrary, and reason indicate the city composed eight council was aldermen necessary. majority quorum of a is all mayor, and a and the terms four aldermen concerned, uni Where courts are it has been expired, remaining where the four ascertain, formly held, so far as we can mayor aldermen met, and the and three of majority legally a clear of all constituted them official, voted for a certain elective members thereof shall concur or valid People election was valid. Wright, v. judgment except be entered 439, majority Colo. 71 P. 365. The quo of a Tate, Mugge no decision. v. 51 Fla. follow rum is all required that is adoption 603; Deglow Kruse, 57 255, 41 v. Ohio So. or passage of resolution or prop order 434, 477; N. R. St. E. Denver & R. G. erly arising city for the action of a council Burchard, 86 P. Co. v. Colo. body exercising other collective legisla 994; Appeal, Cas. 103 Pa. Ann. Madlem’s tive, judicial, or administrative functions. 584; Rees, Ohio, 21; Putnam v. Northern Huston, Thurston v. 123 Iowa, 157, 98 W.N. R., 166; R. 50 N. R. v. Concord R. H. John 637. The two-thirds vote each house whieh Ayers State, 271; Bensley son 1 Ga. v. ‍​‌‌​‌​‌‌​​‌​​​​​‌​​‌​​‌‌​​​​​‌‌​​​‌‌‌‌‌​​​​​​​​‌‍et v. required proposing an amendment al., 632; 32 Cal. Cent. R. R. Co. v. Ill. the Constitution is a vote of two-thirds of the Frazier, 47 Ill. 505. present, assuming presence members authority But the trend of modem is that quorum, not vote two-thirds of the courts, in collective other than even bodies membership, present entire and absent. Na though they may judicial authority, exercise Cases, tional Prohibition 253 U. S. majority per- quorum is sufficient to 40 Ct. Ry. L. Ed. M. P. body. form the The follow- function Kansas, 248 U. S. 63 L. S. Ct. point: are in if authorities “But the act Ed. R. A. L. requires one the exercise of discre- true, therefore, If as contended judgment, usually whieh case it is appellants, that but five of the Tar- members act, special provision unless termed a participated proceed- iff Commission in these made, persons to whom the is otherwise ings and that but three said members con- given, must confer to- meet and findings, curred in said we conclude that per- gether, present and be when the act is by three such concurrence members is suffi- majority formed, in of them which case a findings. cient to make valid or, act; after all them perform meet, majority by a is, however, showing been notified to There made have quorum having met will constitute a not them the record that Commissioner Lowell did perform act, hearings majority and ac- participate number to in such and sufficient authorities, statute, cording findings. modem the act The Tariff Act to some by legally done the direction or with Stat. USCA 174- be majority quorum 180), require findings does not concurrence signed. Lemon, language Martin v. Conn. The so assembled.” Commission (section (c), 176): the issue was the “That § 192. Where entry into the United investigation excluded from be every testimony in the shall transcript States: and a writing, reduced recommenda findings and thereof with the C, “Synthetic resin, form and phenolic the official tion of commission shall (ex- wholly thereof part articles made or in findings in the and proceedings record of the by synthetic cept molding articles made ” * * * The that certain fact case. phenolic mate- resin when mixed report, and signed said commissioners containing rials) proportion of free not, not, does Lowell did Commissioner that exceeding combined one-fifth of base showing con itself, and without body equimoleeular phenolie proportion of in such concur trary, prove he did not that employed pat- as described in United States findings of the findings. report and 942,809. ent No. the vari recite, repeatedly, that following “2. That the materials named matter, and steps ous taken entry and from articles excluded into made, are findings recommendations and States, namely: Commission; nothing There is those of the “Synthetic phenolie C, resin, form and pre this, and the in the to contradict record wholly part (ex- made or in аrticles thereof members sumption must be that all the cept by articles molding synthetic made point A is Scott Commission acted. case phenolie resin when mixed with other mate- Doug. (Mich.) Soc., Y. M. et al. v. Detroit rials) composed of different sections colored judges and three 119. There the Governor synthetic phenolie resin, C, form united property; convey certain were authorized bonding agent comprising phenolic judges, signed deed was product, condensation as described in United validity Governor, attacked No. patent 1,424,738. “In the ab ground. said: on The court following “3. That the named articles pre contrary, it will be proof sence entry from excluded into the United present Governor sumed that namely: touching Judges, grant consulted with the syn- wholly “Articles made inor Young Men’s conveyance to the Detroit phenolic resin, (except thetic C articles form Where an Society, question. lot in molding synthetic phenolic resin duty enjoined, and publie act of mixed materials), when with other unless un performed fact, presume, the law will clearly unmistakably shown means every directly contrary appears, less the name, of a distinguishing mark, inscription, validity give thing necessary was ob label, placed upon articles said or attached performance.” served thereto, that said articles are not made from t Downing Announcing the rule same synthetic phenolie resin, form C, manufac- (N. Y.) 178, 34 Am. Dec. Rugar, 21 Wend. tured Corporation, the Bakelite or unless reasonably said articles are otherwise dis- assuming, argument, sake of But for the tinguished so as to prevent confusion between must at least four commissioners the imported and the domestic articles on the findings in the Commis concurred part of purchasing publie.” having cannot sioner Lowell be considered findings twenty-five in number concurred, we Commissioner so believe that quotation here. are too voluminous concurrence, Dixon, special concurred by his is apparent from an examination of these findings the Commis in sufficient of the findings are, irrespective pur which are material sion herein validity to the in Dix proceeding. Commissioner poses volved, repeated findings of unfair methods quot concurrence, special hereinbefore on’s im competition dis No. ed, agrees recommendation pf portation synthetic phenolie and sale 1 and 2. al He sents recommendations C, resin, and articles made therefrom. form join findings upon patents so does not 13, inclusive, Findings patent refer 7 to 1,424,738,because doubts 942,809.and he Nos. having on patent expired This 942,809. No. deter jurisdiction of the Commission to having, and the President December validity patents. of these The rec mine the embargo impor on date, released follows: ommendations patent, described products tations of said that the President di- “It is recommended patent moot as to said become questions all Treasury Secretary of instruct rect the not be further considered. here, and will customs officers follows: 19, 22, Findings 1, 2, 3, 5, 6, 20, 21, 4, findings are, plainly, respond- that the and 23 following “1. named materials That the practices and guilty of unfair ents 7, have imported prior and articles to December

257 present legal questions them- thereby, or in- two validity upon not are at all based re- First, degree : of evidence is selves what question. validity patents in second, did findings; quired support said are that there having been concluded power and au- Tariff have Commission Tariff Com- findings before us valid pat- thority validity of the pass upon what consider important mission it becomes validity rights involved, ent or shall they sup- findings are, whether find and patent right such presumed? port in of law. These record, as a matter report findings, by the expressed as further regards question, As we are the first accompanying are, as mate- same, so far in that if there be the record here, appellants in substance, rial that the support substantial evidence in the vari synthetic engaged importation of are findings Commission, ous then such phenolic C, and articles resin, form findings should has been rule stand. This and therefrom, prepared are and uniformly applied by appeals this court conformity manufactured in with the method Court, from the Customs United States 1,424,- patent No. described United States concerning appraisement im matters complainant, now Bake- 738, owned ported goods, when this court is- authorized Corporation, lite which method consists and record, appeal, upon on examine joining together more col- two or different questions of law under sec ored sections of an and substantial- infusible 501, 1922, Act of Stat. ly phenolic product insoluble condensation 381). USCA § United States v. Vie substantially in such manner as to become Achelis, tor & App. Ct. Cust. D.T. homogeneous use of mechanical without the 42767; Happel McAvoy & v. United engaged means; Corporation is that Bakelite 16 Ct. Cust. App. 161, T. D. 42791; United products in the in the manufacture of these Co., States v. & App. Richard Ct. Cust. efficiently States and and economical- United 42216; T. D. & Metz Co. v. United operates industry; Bakelite ly the said States, 13 App. Cust. T. D. 41340. Corporation regis- is also the owner of the applied same rule has been to the re- mark and uses the tered trade “Bakelite” view of the оrders decisions and of the Fed- upon products; appellants same eral Trade Commission the Circuit Courts selling jobbers are same to and retailers Appeal provisions under the of an act en- in the United States than their Amer- at less titled “An Act To create a Federal Trade selling price value; and the said ican Commission, powers to define its and duties, commonly goods have been and sold are and for purposes,” approved Septem- retailers, purchase who the same 26, 1914, ber Stat. USCA § appellants “Bakelite”; the articles seq.). et The rule was stated in C. of ofC. goods public thus and sold to the have Minneapolis (C. v. Fed. A.) Tr. Com. C. upon marks them indicate that F. “In all follows: eases where Bakelite, public and that therefore the lodged had in administrative offi- purchases imported mate- confused power cers or boards to find facts and make rial, thinking it to be Bakelite made the orders, findings such and orders are conclu- complainant; importation sale sive supported when legal substantial evi- during patent articles life said dence.” 1,424,738 an unfair No. constitutes method also, Royal See, Bak. P. Co. v. Fed. Tr. competition tending unfair act in- (C. A.) 744; C. F. Fed. Com. Tr. Com. industry efficiently jure destroy Co., Curtis Pub. 260 U. v. 43 S. Ct. economically operated; appellants 408; Jersey 67 L. Ed. New Asbestos practiced any unfair method of com- (C. A.) 509; Co. Fed. Tr. Com. C. 264 F. any unfair act in said petition or committed Lehigh Valley R. Public Co. v. Service Com. except in violation of said importation, (D. C.) 272 F. Moir v. Fed. Tr. Com. goods right failing to mark patent said A.) F.(2d) (C. C. confusion be- manner as avoid imported articles; and domestic tween the question is concerned The second imported goods are that the fact that such right duty the Tariff Commission imported than the sold less validity pass involved prices product of the domestic does complainant Counsel for both herein. itself, not, competition unfair constitute respondents proceeded theory, act, within the statute. right court, that the Commission testimony much inspection upon the same preliminary pass As a to an ques before testimony, taken purpose record for the of ascer- concessionsof eoun- taining But, whatever the supported whether these tion. 258 law, clearly may be, equity, sel of that it admiralty; nor, we are on the right duty hand, the Tar- bring judicial was neither the nor the of can it the power as pass upon question iff which, nature, Commission to matter from its is subject complainants’ patents prop- a were whether determination.” erly issued not. In short, complainant when the introduced patents evidence, they its certified is, Tariff should The United Commission have prima been as merely administrative, treated of noted, we facie evidence have validity. their body. judicial powers. Lehnbeuter 105 fact-finding, Holthaus, has no v. It 94, U. S. 96, 26 pafc 939; of L. Ed. Fenton right pass validity he Co. v. upon the T. ent which has been issued Spec. Co., 216; Office 12 App. 201, C. by Office the Patent D. (C. Consol. Con. v. by Co. Hassam Pav. Co. right possessed only is a C. the courts of A.) 436; 227 F. R. Co. given by Supply R. v. Hart jurisdiction United States thereof (C. A.) 261, Steel C. 222 formerly F. 274. If original jurisdiction, law. This ex- no patents issued, such been by had in faet if ercised United Circuit Courts of the they by their by expired, terms States, enjoyed now Courts if some the District court of competent jurisdiction, judg- Court whose the United States and the ment binding upon would be March the District of Columbia. Commis- Act sion, had invalid, held them 256, 1091, c. 1160 3,1911, and such § Stat. facts had (28 shown, been 4921, these 41, 371; section Rev. St. circumstances USCA might have (35 Deener, by been considered the Commis- 70); § Cochrane v. sion, if the 780, existence of patents Ma- U. S. L. Ed. McCormick was ma- inquiry. terial This, however, Aultman, in our chine Co. U. S. judgment, as far juris- 42 L. was as the Ed. 875. Even where could legally go this respect. no diction is vested As denial Appeals in the Court of by respondents Columbia, as to the District of and now in this the issuance of and no court, attack made proceedings to review the Patent upon except them they that improvi- were patents, in the issuance was and it Office dently they issued, should opin- have treated expressly provided law: “But as-valid the Commission. case court in such ion or decision any person from preclude interested shall We have examined the voluminous rec validity right patent contest ord with care and are satisfied that there is called in court wherein the same substantial in support evidence of each find question.” St. Section Rev. ing of the Commission. This dis evidence 62). USCA § industry closed that conducted creating complainant, Nowhere in United the act Corporation, Bakelite was ef slight- ficiently States Tariff Commission there the and economically operated; purpose importers, to con- intimation that it was appellants, est importing were mate pass upon goods the va- rials jurisdiction fer selling them to retailers lidity patents, well un- matters which are the United States which were identical with goods within complainant derstood be cases and controversies and made meaning processes article complainant’s described in patent 1,424,738; provides, goods Constitution. The statute that these marked, were not (e), except as to country § Act their origin; that Commission, 176), goods being sold, dealers, by said conclu- evidence, gеnerally “if shall be supported throughout hardly be contended that “Bakelite”; they sive.” It would are called and billed pat- finding such; that a certain the Commission are sold at much than less would be considered product; ent was or not valid complainant’s the cost of that such adjudicata. may well doubted practices as res greatly reduced the sales of whether could confer complainant’s the tendency “Bakelite” have the jurisdiction upon administrative Com- destroying and effect and sub certainly, has not so. The stantially injuring industry; done the said

mission— Murray’s Curtis in Mr. Justice complainant statement uses name “Bakelite” as etc., Hoboken, registered Lessee v. How. duly trade-mark and has its 15 L. pertinent: same, Ed. “To avoid mis- registration is in full force and grave subject, we effect; complainant construction so Bakelite Cor think proper to con- poration large state we do not spent money sums of hr congress ju- sider ean advertising either withdraw product and its trade-name dicial cognizance any which, until, matter from its of “Bakelite” as a thereof, result nature, subject common fully is the suit name prod- identifies such “Bakelite”

259 complain- uets as said tion of the manufactures of law for Com- the and not for the ant; practices de- that the said of dealers is Gratz, mission. Fed. Tr. v. 253 U. S. Com. stroying the such trade-name 421, 427, usefulness 40 572, 993; Ct. 64 Ed. S. L. Stand- le- taking from complainant the said ard A.) Oil 273 (C. Co. v. Fed. Com. Tr. C. gitimate profits make which it is entitled to 478, F. 389; A. L. R. Tobacco Co. Am. because of expenditures; said (C. v. Fed. Tr. C. A.) F.(2d) Com. adequate remedy by in suits law exists 568, Fed. Tr. v. Curtis Co., Com. 260 U. S. equity; and will method which 580, 210, 43 S. Ct. 67 L. Ed. ease 408. Each industry save the from destruction is an em- of competition unfair must be determined bargo. facts, owing its own to the multifarious sought means which is to effectuate rеmaining question The for decision sole Co., schemes. Fed. Tr. Com. v. Beech-Nut sufficient, law, is whether such facts are in 150, U. S. S. Ed. 66 L. competition constitute “unfair methods of 307, 19 A. L. R. 882. importation and unfair in of articles into in States, the United their sale appellants importing material owner, importer, consignee, agent ei whieh infringement pat constituted an of the ther,” provided (a), in said section 316 rights, ent complainant Bakelite Cor 19' 174. § poration. The fact that respondents pur chased foreign the same in country a where 7456, H. R. which afterwards became their manufacture inwas accordance 1922, not, passed Tariff Act of did as it law, they may lawfully im pres- Representatives, House contain ported the country, same into this does not ent section 316. This section was inserted alter case. It has been held that where and, the Senate Committee Finance person was authorized, under the laws of originally reported Senate, provided to the Germany, product pur sell certain there, might designate any ex- that the President from thereby chasers him could not be author department independent ecutive establish- ized to sell the in articles in United States government, both, to investi- ment rights defiance of patentees any alleged gate report violation and their patent. United States The sale of articles findings in the same him.. As the bill States, the United under a United States Senate, passed the the United States patent, cannot be foreign controlled laws. finding Commissionwas substituted as a fact Graff, Boesch v. U. 10 S. Ct. agency complaint “on under oath or 33 L. Ed. 787. ,or department independ- the initiative of such conference, sec- ent establishment.” In this The same is true as registered to the trade- form in appears tion assumed the which it marks Corporation. of Bakelite monop- Senate, In reporting the law. bill to the oly in ease of a United patent more States is report of the Finance Committee states: extensive, but there is no sufficient reason provision “The relating to*unfair methods holding monopoly trade of a competition importation goods ‍​‌‌​‌​‌‌​​‌​​​​​‌​​‌​​‌‌​​​​​‌‌​​​‌‌‌‌‌​​​​​​​​‌‍complete. mark less imported Where enough prevent every type and form broad goods were marked with a French trade- practice is, therefore, more of unfair mark, held could not be sold adequate protection industry American United States when such mark was the antidumping country than statute the plaintiff same as the trade-mark has ever had.” Ownership goods the United States. does right carry spe- to sell them with a having statement, In view this Bourjois cific mark. Katzel, objects & express mind that one of the U. S. S. Ct. L. Ed. title, in its Tariff Act stated A. L. R. encourage “to the industries of the United States,” very pur- obvious was the that it very The Tariff ably Commissionhas give industries of the pose succinctly described the conditions confront- only the benefit of the fa- United complainants proceeding laws and' conditions be found in vorable following language: present- “The situation country, protect also indus- ed the manufacture in being unfairly deprived tries infringing quite of articles differ- advantage permit of the same and them to importation presented from that ent grow develop. such articles made case abroad. constitutes unfair com- What methods of of the sale articles manufactured in the petition ultimately or unfair ques- infringing acts is manufacturer United States necessary unfair ceive is not a element in proceeded against can be thus competition. The is whether there Domestic practice source. be reached at its through is actual confusion. Fed. Tr. v. Balme means Com. patentees no effective (C. A.) F.(2d) 23 imported of C. 615. It has been held preventing sale of courts patent infringement that where a their defendant in violation of merchandise suit patent of of to dis- knew the existence rights. are forbidden officers Customs person infringing same, that another concerning importations. was close information 1131, person supplies and sells such 1923, to with- Regulations Articles Customs infringer operate out is delivered which could not such merchandise 1323. When same, may frequent- purpose with the intent and custody that such from be and customs infringed should ly throughout article be used means of is distributed supplies, said a such confront defendant in the States. The difficulties which assists infringing rights through contributory seeking use thereto. patentee to enforce his A presumption arises practically insurmountable. is such intent the courts are when the only adapted article so sold required proceed against each in- to He is infringing Henry use. selling infringing Co., arti- v. 224 dealer Dick dividual 1, 33-48, U. S. 364, 645, S. cles, which would lead to a multi- Ct. 56 L. Ed. of course 1913D, Ann. Cas. plicity all of suits with likelihood that little infringing could reached. The dealers point A ease Lilly & Co. Warner v. small cost of the suits with the numerous Co., & S. U. S. damages may recovered amount of L. goods Ed. 1161. In that case were made discourages one suit resort and sold to dealers misrepre- against Moreover, decree obtained courts. sentation of the origin character or binding upon dealer would have effect one no product. testimony however, The discloses, chang- simple expedient others, and of many passing instances of drug- off retail ing consignees effect of a decree when gists petitioner’s of preparation when re- Unless, therefore, secured would be nullified. spondent’s preparation was called for. The for- be invoked to reach the held: deception Court “That no place impor- eign time and of articles practiced dealers, on the retail by forbidding entry into the United tation they exactly they knew getting, what were those the facts States of articles consequence. no wrong in de- rights particular in a ease found violate signedly enabling the palm dealers off manufacturers, domestic such of domestic preparation as that of respondent. * * * remedy.” adequate manufacturers have One who induces another to commit a fraud and furnishes the means consum- unfair methods of com The essence mating equally guilty it is liable palming off of the petition consists injury.” person of an one for that merchandise of person wrongdoer “That a is a who so fur Cordage v. Puritan Works other. Samson another means of A.) nishes with the consummat Cordage (C. 211 F. L. R. Mills C. long part 1107; Trin fraud 1915F, Paint Co. v. A. Standard competition.” of unfair Fed. Tr. v. Asphalt Co., 446,461, 31 Ct. Com. 220 U. S. S. idad Broadway Co., 536; Rouss Winstead U. S. S. Ct. 456, 55 Charles L. Ed. Ed. 729. Even if dealers (C. A.) 300 F. 706. It 66 L. Co. v. Winchester C. they buying a rec understand doubted, inspection of this counterfeit cannot be genuine product, respondents the manufacturer goods which the not a ord, that enjoined selling continuously being the counterfeit will importing sold were were goods purpose such dealers with the and ex Cor it to as the Bakelite purchasers patent pectation it shall used dealers poration, in violation not its to deceive consumer. Coca v. rights right of its Cola Co. to the exclusive use Gay-Ola (C. A.) Co. 200 F. 720. This constituted unfair methods C. trade-name. deprived complainant competition this appellants im- engaged were rights which the laws privileges synthetic portation phenolic resin sale country gave it. this patent rights. complainant’s in violation of respond- such is, however, It have been obvious to contended that the must them guilty goods being “Bakelite,” and that personally were sold as ents!were origin they purchasers being competition; or methods of were misled to the goods. In case burden rested responsible cannot be held for what others importers pur- goods imported have done see it that deceived and sold to A effort chasers should not be confusion them. deliberate to de- constitutionality of pass upon court goods that their goods, and mark to so Act of 1922 the Tariff result. Samson should not confusion for that 174-180), it not Mills, Cordage Cordage Puritan v. Works holding this court the former decision Elgin Nat’l Ill. Watch supra; Watch Co. v. controversy, case, abe L. 270; 45 Co., 665, 674, 21 Ct. U. S. Supreme Court did sense. Inasmuch as the Light Prest- 365; Acetylene Co. v. Ed. Auto I pass upon question, take Rathbone, (C. A.) 264 F. O-Lite Co. C. portion of the decision Range Co. Champion & Steel Sard hearing, be must, of purposes for this 258; (N. S.) (C. F. 37 L. R. A. A.)C. 189 adjudicata, and, accepting res treated so as Bayer (D. 272 Drug C.) Co. v. United opinion might it, my whatever Mfg. 505, 515; Singer Mfg. v.Co. June F. court, acqui- of I I then been member Co., 1002, 41 L. Ed. U. S. S. Ct. upon necessity passing our of esce, 118. first now for the question constitutional rulings assigned upon of the Error is re- presented time tó under circumstances us evidence, admitting Commission in certain quiring not decision. was involved It hearsay, in fail claimed to be and Supreme matter Court review of the ing Corpora to order the books of Bakelite to. referred respondents ex be exhibited for tion to majority agree I am with the unable amination. There was no in these re error proper in their conclusion it re- and deem always spects. in were books spectfully my to state own views. open inspection the Commission majority con section to be hold any purpose this is Full and and sufficient. stitutional, basing holding their almost whol permitted free cross-examination as ly upon the decisions and the efficiency economy all details of Supreme Court of United in States operation complainants’ business. Hampton, of W. & United Jr., case J. Co. v. require not The law does or intend one App. States, 350; Id., Cust. U. complains who under statute must dis 348, 72 S. 48 S. Ct. In 624. L. Ed. respondent. close all his trade secrets to the constitutionality case the section We find no error of law the 154-159), commonly known of the United States Tariff Commission here- as the “flexible tariff of the Tar provision” in, are therefore affirmed. iff Act of was sustained. Affirmed. my opinion In there are certain differ- ences, fundamental nature, their LENROOT, Judge, par- Associate did not distinguish the two sections. ticipate. By 315 the President of the Unit charged ed States with certain is adminis Judge (dissent- GARRETT, Associate performance duties in the trative of which ing). provided it is shall have he the assist held, This court has heretofore making ance of Tariff Commission in in proceedings instant or constitute ease con finding vestigations and facts. Both the troversy under in a sense and the Commission President limited are of the Unit article Constitution finding. questions No strictly to of law fact Co., re Frischer & Inc., ed In et States. determination; to them for are submitted no al., 16 In App. Ct. Cust. 191. that same theory applied. Upon or to be it held decision was that this court anwas an ascertainment of “differences in сosts of * * * inferior constitutional court. When these production wholly of articles questions Supreme carried before growth part product of the United States, Court tribunal wholly like similar articles the former competing did not decide issue but reversed growth product or in * * parte Ex this court Bake the latter. countries,” President * Corporation, 279 U. lite S. Ct. put into authorized effect certain tariff 411, 73 L. Ed. was held to 789. It be imma provided specifically duties in the law. terial whether constituted case or con production differences cost These are troversy or so far this court’s author capable court to held be ascertain ity provides it as review statute theoretically actually; if not ment, Congress, concerned. anticipating that such facts could and would holding ascertained, provided Under this Court, definite regard them, I courts held this necessary applied under should for this delegation try, monopolize or to not to restrain trade hereby limi of the constitutional contravention commerce the United unlawful, declared when found tation. with, President exist shall dealt ad- 315 ex- that section be here noted provisions law, dition to pressly provides proclamation shall no provided.” hereinafter until the President issued ba 178) investigation the Tariff paragraph (e) § there has been provides made which remedy Commissionis Commission. The Tariff the President required indispensable,,part act,” administrative when the “unfair method or machinery enforcing being No paragraph (a) that section. denounced defined, provision is for the administra- “shall his satis- be established” to levy- faction, stand- fact tion of section While this determine direct the bearing ing alone, perhaps, duties, of certain additiоnal or “in what constitutionality, he shall question of it becomes eas- satisfied extreme find understanding real importance for an es or acts methods aforesaid” embargo It will be fur- to excluding of two nature the sections. direct an the offend- require ing does not entry ther noted that section from Unit- merchandise into the (Italics mine.) the ed or even authorize recommendations States. 316, apparently, au- Commission; section Paragraphs (e), (b), (d) and of section recommendations, if does not it thorizes (19 176, 177) USCA §§ make mandatory. Again, court ac- make them possible bringing but of mandatory not the In part of section 315. provided as a tion is the Tariff Commission and the Court of Cus- express is made for provision section Appeals toms Supreme and the Court Appeals and of Customs the Court action equation; the Tar- United into the Supreme States, of Court the United the iff Commission “to assist in the President may upon by only in as be acted such eases “any investigating making any decisions” Tariff Commission. the alleged complaint violation hereof moment, however, point whieh upon initiative,” For the the oath or its courts the in emphasize is that section findings to desired to and recommendations it is review Congress and authorized upon law of or the Commission “a government questions (Italics mine.) sim- only.” branch executive of lam the law facts under which to ascertain ply (c), (d), If paragraphs, (b), these it was for this applied, and that should be entirely eliminated from section following numerous courts, reason para- there still remain in the other would to sustain authorities, able found themselves graphs complete or act law. The Presi- always to duty the courts being of it; required is or an dent not to wait every legislative branch of give acts to as investigation Tariff Commission, constitutionality. of presumption administering (19 is in the case section 15A-159), issuing direc- before Supreme 316, whieh the section When embargo. tions or relative to additional duties supra, said “is Case, in Bakelite Court may He information obtain sat- analyzed, drawn,” carefully happily not compe- unfair mind as to his what me, to that Con- isfies apparent, it seems must according his of what tition to idea gone much further in dele- gress has therein phrase means, what the facts and ascertain authority lawmaking sought than gating are, or sources whatsoever source 315. section in go went regard. chooses consult or he 17A-180) (19 USCA §§ In assistance of the Tariff Com- When the me to be committed seems there of, however, mission is or availed invoked the authori- of the United States President and, my opin- in body must find facts findings only duty making of of ty and questions ion, of law. must determine also Paragraph (a) of of the act law. fact but This court- report. These are embodied 174) “That meth- reads: unfair § questions to review the can then be invoked competition of ods appeal of an can law then States, into the of United importation articles Supreme con- certiorari, Court owner, importer, con- sale or in their fined, confined, court course, of agent either, the effect signee, or ten- questions of law. substantially destroy which is to dency industry, efficiently providing injure Manifestly by ac- and economi- the court cally Congress or to its intent operated, evidenced dele- gate prevent authority such an indus- to make to the Commission establishment findings law; otherwise, it a vain tation of United States” did articles into the thing upon law mean? must providing review What conduct court elements questions present in order importation only. in an act may questions render it unfair? same certainly What the Commission does meaning words, “or be asked as to the charged what the President is their in connection with sale,” what acts may finally responsibility doing. He imported must the sale of an be shown article do it with or aid. without the Commission’s unfair? make the sale classifiable without, If he does it is no court re- provided. findings one, law view His both has not said. Some say. finally, ques- and fact final. If Com- are the aid President must Are invoked, mission is done only, finding similar to the dif- tions fact thereby case, making possible production instant a lim- ference cents dollars review, costs, opinion opin- court dis- ited regard President matters — by competent findings both the con- Commission when ion which declared courts, as to ? make his own stitutional becomes law levy fact, and of additional and duties, direct the Trade the ease Federal if he he embargo, declare Gratz, Federal Trade 5 of Com finds “extreme.” the case September mission Act of This 45), is one incident was involved. S. § features so USCA U. difficulty statute 64 L. Ed. In dis creates proceeding cussing under it in a case such as Court said: “The it the competition’ that at bar. Our has not the force words 'unfair method decision law; expressed effect of their exact conclusion defined statute mean reversal, using dispute. courts, in the is for terms affirmation or in It is the ultimately procedure, customary commission, nomenclature in court as the to determine nothing, they binding means far include.” so as individuals matter of "law what legal in any and, is appar- sense concerned In the instant the words “unfair ease ently, if the shall Court take the competition” and methods of “unfair jurisdiction by provided statute, for it the importation of articles into the United case, pronounce in this or some similar and spe States” not defined with more judgment upon as the merits is this court quoted than eifieness were words in the doing, greater binding will effect have Act, but, Federal Trade Commission unlike judgment By our at law than own. as own force law, (19 the latter section 316 174- USCA §§ judgment can exercise no 180) leaves executive to define it to the them. over control un- the actions executive happen True such cases be investi as der section. by reported upon gated by the Tariff repeat, In seems well 315, it Commissionthis court clothed with author is in various were in the. laws which cited ity questions law, to review and the sustaining court decisions its constitution- Supreme may also do this writ Court ality, legislating; Congress did the certiorari, but of both courts be, or was, declared what un- should law may disregarded, legal be so far as force specific capable being ader facts state of concerned, inherent in them is and in eases purely ascertained facts. The elements as upon by not acted the Tariff Commission production that were to enter into the eost provision by any is review there no court. expressed; nothing, held, were The Federal Trade Commission Act ip theory as to what consti- left by held been constitutional decisions outposts legislative The tuted the law. Appeals United States Court of Circuit set; intent and limitations Sears, the Seventh Circuits. both and Sixth clearly were held to be defined. & Trade Roebuck Co. v. Federal agree cannot situation exists I (C. A.) C. 258 F. 6 A. L. R. toas therefore this Ass’n National Harness Mfrs. v. Federal by Hampton decision, is case controlled (C. A.) 268 F. Trade Commission C. decisions authorities. therein cited courts But was true because the held that pаragraphs (a) (e) Let of section judicial legislative authority nor neither 178) §§ to. looked delegated body. to that In the former been portions pertinent this discussion have The was pointed restraining out that “the case quoted supra. merely is provi order the commissioners day do The What “unfair sional. trader is entitled his words methods * * * ” competition and unfair impor- acts in court. ' jure” opens belief, opinion, reads: ease the door to syllabus the second A speculation. Concerning question of authority Trade Com- given Federal “The industry “efficiently whether an and eco- of com- methods determine what mission many provi- nomically operated,” and, exist given employs, there trader petition opinions according different standard such methods sionally, to determine whether by person considering it. unfair, subject review the mind of the It is right ju- importations conceivable on the commission that there courts, not confer does tendency might or admin- whose sale powers, an effect dicial or invalid executive Const, monopolize arts. restrain or commerce contrary to “to authority, ‍​‌‌​‌​‌‌​​‌​​​​​‌​​‌​​‌‌​​​​​‌‌​​​‌‌‌‌‌​​​​​​​​‌‍trade istrative States,” although is a the commis- the United 3, in the fact that view of subject theory by only many con- subscribed to determination is not sion’s certainly by frequently true, verse is most review, only courts.” but but is enforceable monopolization restraint and trade (Italics mine.) present weighty ques- commerce quite some de- said: commission’s “The Congress, sure, tions of law. has de- questions final. is not termination of these acts, fined these latter but terms only right re- give a does the statute Not regarded heretofore these acts have been by ag- thereon, upon application view questions as prеsenting of law to be deter- Appeals grieved trader, to a Court Circuit govern- mined branch of the commission’s but'the ment and Even the executive. if these commission, order not enforceable accepted defined, phrases re- the other order of court.” main without statutory definition. Com- in the Federal Trade difference finding the Tariff Act meaning Act section 316 of After of the different mission 174-180), phrases limitation, far as so contained in of 1922 the words applying determining applied by must then be whatever Pres- immediately concerned, happens administering becomes man- ident the sec- law tion, former it determined en- he what constitutes “un- ifest. determines judiciary; latter, by competition sale,” fair methods and no forced factors are established in executive. to measure or an act. test language is directed to that But attention “ * * * reads: of the section which reported are There decisions of the some destroy tendency or of which is to effect or Supreme which Court of the United States efficiently substantially injure industry,, an authority decidedly present seem to me to economically operated, in the United applicable more in the ease bar than is at States, prevent or the establishment to reasoning Hampton Case. Refer- monopo- or industry, or to restrain particularly ence v. United States lize and commerce United trade Grocery Co., 81, Cohen 255 41 Ct. L. U. S. S. are argued And these it is States.” 300, 298, 516, 1045; 65 L. Ed. 14 A. L. R. think I cannot so. Sure- definition. words Weeds, States, 109, Inc. 255 v. United U. S. they ly of limitation. are words 306, 537; L. 41 S. Ct. 65 Ed. and Small Co. might be seek to denounce all acts that did not Sugar Refining Co., 233, v. Am. U. S. unfair, only might but those that considered 69 L. S. Ct. Ed. tendency or the result in- have the effect or language In those cases certаin Otherwise, the word “unfair" would dicated. 10, August Food Control ofAct carefully so inserted before not have been 276), 22, Stat. as amended October “methods” and “acts.” I do not the words 297), commonly Stat. known as Lever quoted clause last is intended to think the Act, act, was involved. 4 of Section acts, what is to constitutes but define passed measure, as war time contained those the section

limit which denounces language: hereby “That it is made unlaw Congress omitted Had the word unlawful. * * * any person willfully ful for to make subsequent might “unfair,” then clauses any unjust charge or rate if accept even unreasonable definition. But we constitute handling dealing any description definition, or with them as words neces conspire, questions saries; combine, agree, still remain inherent in or ar * * * person range seems must with other phrases (e) which it to me be deter- prices only. exact for mined as and not as excessive necessaries. matters facts * * * Any person violating any regarded of a business can be Destruction “tendency thing fact, destroy” provisions upon of this section as a conviction something “Substantially exceeding shall fined $5,000 more. thereof requires in- carry brought before years, out in eases imprisoned for the statute* or be not more than two * * * * * *” vividly portrayed. them are or both. from consideration Inc., in “That it results Weeds, Cohen & Co. and were before which we have stated that dicted, charged having violated sec repugnancy us was to the Constitu void tion. In the Case the indictment Cohen . question. open is not United States quashed by the United States District Court 219-220, 23 Ed. Reese, 214, L. the ground language act v. U. S. Brewer, 563; v. S. Constitution, U. repugnant and the 190; 538, 35 L. Todd v. government appealed Supreme Court, 11 S. Ed. to the 278, 282, 15 In the United S. S. Ct. U. affirmed District Court. 889, 39 Ed. 982. And Weeds involved thе L. see United States Case the also indictment Sharp, 1041,1043 conspiracy phrase v. 27 Fed. Cas. the other addition to Cas. [Fed. Ry. 16264]; Chicago & No. Northwestern the section. District Court over Dey (C. C.) ruled v. 35 F. 1 L. R. ease, defendant’s demurrer and Co. 744; C.) 52 (C. A. Tozer Supreme certiorari was carried to the United States v. Court, 917, 919, 920; Capital F. United States v. reversed it the same ground Co., App. 19 Ann. as that which the Traction D. Cohen Case C. Pennsylvania involving was affirmed. Several other cases Cas. United States R. question similarly disposed Co., 208, 237-238, same R. 37 Ct. were of. U. S. 61 L. Ed. 251.” Court, Cohen Case the speaking through White, Justice It is true Chief said: prose criminal cutions, subsequent but the Small Case remaining “The inquiry, sole therefore, was a action individuals, civil between in certainty uncertainty is the text in volving solely liability aon question, is, whether the words ‘that contract, civil again and the court held hereby made unlawful person will- unconstitutional, saying: statute * * * “The de fully any unjust make or un- fendant attempts distinguish those cases charge reásonable handling rate or or deal- they because prosecutions. were criminal any necessaries,’ in or with constituted a But adequate distinction. The fixing by Congress of an ascertainable stand- ground principle of the decisions was not guilt ard adequate per- to inform such as to be applicable pros to criminal sons accused violation thereof of the na- ecutions. It was not the criminal penalty ture and cause of against the accusation them. invalid, that was held but the exaction of obe not, That we are of opinion, so clear- dience to a rule or standard whieh was so ly results their mere statement as to vague really and indefinite as rule

render subject wholly elaboration on the un- Any or standard all. of ex means nеcessary. Observe that the section forbids action, declaring such as the transaction un specific or definite act. It confines the lawful or stripping a participant rights his of subject-matter investigation which it it, equally within the principle of essentially authorizes to no element inhering They those cases. have been so construed in the transaction provides. as to which it applied by other courts in proceed civil It open, leaves therefore, the con- wildest ings. Chemicals, Standard etc., Corporation inquiry, scope ceivable of which no one Waugh Chemical Corporation, 231 N. Y. can foresee of result which no one 51, 54, 131 566,14 N. E. L.A. R. Dun can adequately foreshadow guard or against. man v. South (Tex. Texas Lumber Co. fact, Civ. we see no reason to doubt the sound- App.) 252 S. W. 275. In ness of first of observation of the court below citations, opinion these Appeals its to the Court of that, attempt effect of New to York, referring to enforce the section this ruling would be to court’s the exact equivalent carry of an Grocery to out a Case, effort stat- Cohen well said: ‘The merely ute which in penalized ground terms placed on which judgment pun- ap ished public plies, all detrimental to and with like consequences, inter- to civil unjust est when and unreasonable suits as The prohibition in the esti- well. was declared mation jury. nullity of the court and vague And this because too to intelligi be abstraction, not mere duty finds ble. No dem- standard abundant been estab * * * onstration in the cases us, now before since lished. The judges variant views briefs these conflicting cases the quoted re- of District Courts were as evi the. sults which have from painstaking arisen dence of absence standard. If this attempts enlightened judges seeking is the rationale of decision, to its cense the testi- attempting review prosecu Without to quences not limited to criminal are mony justifies the con- full, I to be feel that it prohibition as A so indefinite tions. alleged patent question clusion if prohibition “which unintelligible is not a infringement from case were eliminated governed. It is not a rule can conduct virtually proceedings an end. would be at all; merely and en at exhortation ” treaty.’ certainly if the al- be true This would (a) para- Passing paragraph from infringe- leged trade-mark.complications or (19 graph (e) §§ section 316 USCA these eliminated, ments were also and as to embargo 178), it is be observed that an pro- appear proper latter it would only “in what be declared the President 526 of the would to invoke section cedure are extreme 141-143) he shall satisfied Tariff Act of 1922 §§ find as aforesaid.” cases of unfair methods or acts rather 174- than section 180). fully (Italics mine.) That situation could at least be dealt with recourse to “section is no standard fixed There to de- even methods so as by which to measure majority opinion that: “Find- recites unfair, ings two, statute one, termine the Tariff [of Commission] the three, four, leaves it to degree five, six, nineteen, twenty, unfairness and adds twen- ty-one, say twenty-two twenty-three are, constitutes not what executive plainly, findings respondents un- degree of that but what unfairness guilty, practices of unfair Surely the absence fairness is. validity all invalidity at based opinion of law variableness standard patents question.” inevitable, and is extreme is to what by con- except declared as it be is not law I agree entirely cannot is an ac- authority; Legislature in stitutional curate construction of certain of these find- construing judiciary making it, it. ings. 2Nos. particular specifically 3 in refer to owned way one the Bakelite Cor- whichever seems to me that It poration, ownership and this I understand vitality give turns in the effort to findings. essential feature open himself he finds sea of. Others of the enumerated do not deal statutory chart opinion with no individual but, with unfair all, disregarding practice light- legislative congressional compass, no finding this, appears No. which inbe buoy. house, or beacon or general summing nature up or con- must be a be enforced If the statute clusion, reads follows: “That articles something is the determination synthetic made of phenolic resin, C, form therein. Congress has written imported have not been the United into lawmaking delegation of seems me to by any respondent therein own- sold law-finding (for in power this instance er, importer, consignee, either, agent so, in its essen- lawmaking), and will be the “bakelite”; apart marked regard elements, I fundamental tial and patent rights violation no such parts the Con- being repugnant those owner, importer, consignee, agent of ei- authority to limit stitution practiced any unfair method of ther has Congress and competition or committed act courts. synthetic importation of articles made uncertain, indefinite anomalous, C, other failure phenohe resin, form than the conspicuously il- 316 is of section unmistakably character clearly distinguish such to predom- the appears to by what lustrated syn- made of imported articles from articles constitutional (aside from the resin, C, issue form phenolic inant manufactured thetic case. reasonably in the instant involved Corporation, question) Bakelite as to the imported confusion between the avoid inquiry toas is found in the issue That part pur- articles on the the domestic enacting §§ USCA section whether (Italics mine.)” chasing public. Congress to 174r-189) was it the.intent wrought infringements bring alleged patent majority of the decision is to The effect foreign merchandise importation contemplates treating hold that section pro- similar merchandise compete infringement constituting alleged patent with to patented arti- “unfair competi- the United States one method duced in at least purview “unfair meth- “unfair one of the acts” therein within or de- cles, tion” they and unfair acts At same time hold that in competition nounced. ods of the Tariff Commission articles” declared unlawful. where the aid importation of cases publie general standpoint of sec- From the is invoked in the administration mind the authority therefore, keeping body wholly policy, tion, that appreciate institutions, one can spirit in- of our pass upon validity patents to the Tariff majority solely feeling of the volved; authority is vested that this that when, having determined can Commission courts; in the the Commission and that 316 to jurisdiction under section pat- they, go (a) no determine had further than that methods, investigations issued, they make (b) expired, ents had not patent rights granted under (c) arising had not invalid been held go fur- they felt to competent jurisdiction, laws, themselves entitled “some court of validity judgment binding upon whose the ther and consider and would be determine Commission,” patent. They “Manifestly there that of said: effect is to hold patent. prima infringement mere can be facie evidence conclu- of an invalid becomes patent validity sive for It of a purpose the section. follows that investigation.” be an essential element of the logic holding I assume that of this necessarily error, leads if error conclusion that on the be, President, executing section, majority Commission, like- does power authority wise without not lie to determine principle abstract law as- patent validity. assuredly by them, general This must be serted but assump- true, once, Congress for to hold otherwise would it at intended 316 to section me, seems to bring (as judicial the section it is commit I think brought by President, already other matters in- recited) and, President, through the disputably ban, brought beneath the them when constitutional his aid adminis- tering since would be a attempt declared it. to clothe power the Executive with the to make law. seems me that the fact that Con- disagree gress I do not with the as to in the Tariff conclusion Act of 1922 enacted sec- other, lack any of authority in tribunal than tion 526 (19 141-143) making §§ specifically authorized courts to import determine unlawful to might merchandise which patent validity, when ap- infringe this doctrine is trade-marks of citizens of the Unit- plied under we are at once ed and did not in 316 (19 brought strange anomalous 174-180), situa- elsewhere, specifical- tion whereunder additional duties ly, general terms, any provision make levied, embargo or an declared, based touching importation of merchandise patent whieh, upon a claim of ex- complete infringe might whieh held citizens by competent authority, may amination States, argues strongly the United most void, found to be null and been to have that it purpose attempting had no to deal very beginning. so from the species therein with that of international subject-matter commerce, the whole I where, am unable to find in section general was left determined under the any or in other whieh Congress act ever has country. “patent” laws of the If the word any purpose passed, evidenced do appears anywhere Act, in the Tariff it has thing that, for can- and, reason, I my escaped search. agree majority enacting al- the section it mind The attention of this court has been leged patent infringements should dealt directed arising ease time in with under it. I feel that had it intended to our courts where it has been held that this, provision, way, do in some would infringement mere of a patent, unaccompa- assuring legal definite and facts, nied constitutes unfair com- finding upon any question patent validity petition. raised. depends In so far as the instant up- ease sys- purpose patent patent infringement, therefore, of our The essential the ma- public by encouraging jority court, if benefit the pro- tem is to decision when of men genius develop ceeding and wit new under section 316 things effect, bring system mankind’s would into legal and useful benefit proposed enjoyment, country to the as an be accom- act of unfair competition, by giving inventors practice, method, to who an plished secure element which nei- species monopoly Congress patents a for a limited ther court has ever hereto- Congress has pur- such; that, but never fore to be period, too, evinced a declared while give protection holding body favor or pose to the except appeal to whieh the patents. who comes to be hold valid to us those to deter- validity alleged mine alleged the of the to be infringe to patents, his follows infringed, and, assume, agreeing Congress I while apply intended to importations, to neither this nor the President of the as constituting unfair practices, elements authority. United States has which were not mentioned at in or hinted the statute and which no court has ever hereto- As it, I patent pro- understand laws fore to held be such. wholly upon ceed theory pat- that letters prima ent constitute facie evidence Whether the proceedings regard- here be patentee patent, to ed, entitled and I as the majority of the case, know of infringement no where of a Tariff declares, general as “a in- patent subject-matter was pro- of the quiry public interest,” rather than as a ceeding, which holds that the certificate “contest between an individual American the Patent Office validity, is conclusive of as manufacturer individual importer,” majority opinion holds here in is- those not does and cannot alter the fundamental sue to be for purposes proceeding. of this which, elements in legal sense, must pres- ent to constitute practices. unfair trade Had It is true if it should be held that Congress wished patent infringement to be- require statute finding does come an element to specially dealt with President, and him, upon those who aid under the laws, customs it could have so of validity, prima aside from the specifically provided, as it did in facie trade-mark presumption, effect would undoubt- matters section (19 edly be USCA 141- bring §§ to it into immediate conflict 143). with the Constitution, but that is not the fault or responsibility of this court. my personal From experience study in the ample power to deal question by with the of this case I am convinced that much making itself whenever it elect confusion which seems to its have attended so. do consideration on grown all sides has out of the, perhaps unnatural, disposition Trade-mark infringement, when found treat 174-180) courts, §§ enters into the law unfair com- being, in legal its fundamental petition, patent aspects, all infringement, standing fours with alone, has 154- been otherwise treated and dealt 159), the so-called provision, “flexible” them. I have endeavored herein to differentiate relating In the innumerable decided eases two. competition, fraud and deceit must study legislation history in order to A shown establish it. Congressional in- as disclosed the’ Record competition essentially “Unfair consists Senate, dicates that in the wherein both sec- of a trade or business in such conduct originated, tions the Senators did themselves express or im a manner as that there is appear was differentiate them. There representation goods plied busi practically analysis of or debate goods one man are the or business of ness of elaborately section 316. Section 315 was de- Eng. Ency. (2d) Am. & Law 345. another.” vitally bated amended .was on the wrong in unfair com “The essence of the Language inserted, Senate floor. of- goods of sale of the petition consists amendments, fered as probably proved which or vendor for those of an manufacturer one deciding feature enabled the courts conducts its busi if defendant so ; and uphold constitutionality.2 its goods palm off as those not to ness language No giving definitions fails.” Howe action Scale complainant, the declaring what should constitute the unfair Benedict, 198 Wyckoff, & U. Seamans Co. v. methods denounced as unlawful in section 609, 614, 49 L. Ed. 972. 118,140, 25 S. Ct. it, 316 were inserted into and so it was left ease, I think instant it cannot In the hazy and indefinite form. any alleged argued patent successfully disposition seems to be a treat There any alleged responsible for infringement Commissionunder function goods. If in “palming off” of deceit deceit, being analogous to its function occurred, it did not constitute fringement Apparently as a result of disposi legal right of a ‍​‌‌​‌​‌‌​​‌​​​​​‌​​‌​​‌‌​​​​​‌‌​​​‌‌‌‌‌​​​​​​​​‌‍held was the violation ut b argument spent much time laws, general which the patentee space much is devoted briefs to the remedy. country provide a subscribe- to doctrine that I cannot the amendment The amendments might for pat- because it be difficult simply offered reference were Senator I. I make Lenroot, L. conceived ample obtain what he entee Judge now an Associate of this iswho against importers foreign goods redress court. it was interesting study, Tariff full effect question report whether but the findings, procedure is accomplish really valid intended Commission constitutes my not, confess, altogether I clear to yet since were six members of the Commis by only signed understanding. findings sion and the majority opinion this three of them. The begin- theory Under the announced in the entirely an court deals with this ning namely, dissent, the instant I am con satisfactory manner, so far as proceedings controversy, a ease or constitute pre could be cerned; if the same issue but sought from the purely I have to deal with it section 315 a proceeding sented in a under legal standpoint and in a sense. an in question might exist, different because majority opinion same. has done the an vestigation by theory If this be erroneous and it prerequisite action under indispensable contemplated that should it from we deal with it. standpoint economic and as board rath- court, 316 it does er than as a proceeding In a under section then I should wish-con- siderably any legal enlightenment upon be of conse- more seem to me to vital several quence Tariff Com- the involved assuming how the factоrs before signed many responsibility mission are how of its in connection with it. members, except probably this court ány except report could not review majority. In the ultimate result it would not consequential legally function because the ad- purely the Commission under 316 is visory affirmatively nega- and is neither nor tively binding upon the Executive or one LALANNE F. R. ARNOLD & CO. else. Appeal Patent No. 2267. precisely The decision of this is in Appeals. Court of Customs and Patent category report, the same as the Commission’s April 10, 1930. legal so far as any effect is We concerned. only function under section eases appeals where the Tariff Commission body. come to fromus There is con- any authority upon us ferred similar Appeals conferred the Circuit Court of United States in Federal Trade Commission Act. paragraph (e) is true that of sec- 176) § statement “judgment (of made said court Appeals) final,” except Customs shall be subject possible review the Su- preme Court, It, what does that mean? least, not mean does that of itself that judgment pronounced law must control the by any possible If Executive’s action. con- that, struction it could be held mean then Executive, desire, should he proceed findings through make some other agency Commission, than the Tariff through agency whatever, and the matter particular reach the cannot courts section. my knowledge So far as history country extends, portion of our of section 316 provides for a court review, steps under certain circumstances, of looking taken toward administrative or Hugo Blum, Mock and Asher action, action, executive of that both of advance City (Charles congressional legislative Allen, New York R. of New pro- totype. novelty City, counsel), appellant. of it alone York renders it an

Case Details

Case Name: Frischer & Co. v. Bakelite Corporation

Court Name: Court of Customs and Patent Appeals

Date Published: Apr 10, 1930

Citation: 39 F.2d 247

Docket Number: 3009

Court Abbreviation: C.C.P.A.