372 F.2d 969 | Ct. Cl. | 1967
delivered the opinion of the court:
Plaintiff is the exclusive licensee of several patents relating to the manufacture of “printed circuit” boards for electrical apparatus.
This suit is one of a series of more than ten patent infringement actions brought by Technograph in various jurisdictions throughout the country. See Technograph Printed Circuits, Ltd. v. Methode Electronics, Inc., 356 P. 2d 442, 443 (C.A. 7, 1966), cert. denied, 384 U.S. 950. In the District of Maryland, Bendix Aviation Corporation was charged with infringement of three patents, including Nos. ’960 and ’697.
Belying upon the Fourth Circuit’s decision, the United States moved for summary judgment as to Patent Nos. ’960 and ’697. The argument was that the patents are invalid on a number of grounds including obviousness in view of the prior art. The Court of Appeals’ judgment of patent invalidity was urged as having either res judicata or controlling effect. Plaintiff countered with allegations that the earlier decision “is grounded upon fundamental shortcomings of
The Government now renews its motion for partial summary judgment and asks the court, again, to hold that the plaintiff patentee should be collaterally estopped by the Bendix Aviation Corp. decision to relitigate the validity of the ’960 and ’697 patents even though the United States was neither a party, nor in privity with a party, to the prior judgment.. Alternatively, the defendant suggests that it was in privity with Bendix, the successful defendant in the earlier action.
Especially for patent litigation, a traditional element of the doctrine of collateral estoppel has been the requirement of mutuality of estoppel. According to the received view, for a judgment to prevent relitigation of an issue once decided, the estoppel of the judgment must ordinarily be mutual. (The conventional doctrine recognizes some exceptions). Since an adjudication of patent validity in one action is not binding in a second action against a different defendant, the rule tells us that a patentee in a second action should not be bound by an adjudication of invalidity in an earlier suit. The Government submits, however, that this iron law of mutuality of estoppel has been corroding for some years, and specifically asks us to follow Nickerson v. Pep Boys—Manny, Moe & Jack, 247 F. Supp. 221 (D. Del. 1965), in which the court rejected mutuality in a patent infringement action. At the Government’s request, and in the light of decisions of the past three decades, and of professional commentary, we review the relevant case law, investigate the direction and extent of the erosion in the requirement of mutuality, and explore the basic policies at the core of the doctrine of collateral estoppel as it applies in this court and to patent-validity litigation.
We must start by acknowledging that the last word from the Supreme Court has been an express reaffirmation of mutuality of estoppel for patent-validity litigation. In Triplett v. Lowell, 297 U.S. 638 (1936), as in the case at bar, the plaintiff had sued in a district court to restrain infringement of its patents. The court of appeals, on review, held each litigated claim invalid. Plaintiff subsequently brought a second suit against different defendants for infringement of claims held invalid in the first action. The Supreme Court unequivocally announced that “neither reason nor authority supports the contention that an adjudication adverse to- any or all the claims of a patent precludes another suit upon the same claims against a different defendant” (id. at 642). See, also, id. at 644, 645.
In patent litigation, the courts of appeals and the district courts have continued, with the one exception of the Nicker-son decision, to adhere to the Triplett rule — even though the very same court may dispense with the requirement of mutuality in other contexts. Judge Learned Hand, speaking for the Second Circuit, said, “it must not be forgotten that the decision of a single court, whether district, or court of appeals, does not settle the question [of patent validity]. It is the usual, if not universal, custom of practitioners if the stake is enough, not to rest content with a single decision of invalidity, but to seek another forum. * * *” Harries v. Air King Products Co., 183 F. 2d 158, 163 (C.A. 2, 1950); see also Gold Seal Importers, Inc. v. Westerman-Rosenberg, Inc., 133 F. 2d 192 (C.A. 2, 1943); Bechik Products, Inc. v. Flexible Products, Inc., 225 F. 2d 603, 606 (C.A. 2, 1955) ; Tatko Bros. Slate Co. v. Hannon, 270 F. 2d 571, 572 (C.A. 2, 1959), cert. denied, 361 U.S. 915. Similar declarations have been made in the First Circuit (Automatic Radio Mfg. Co. v. Hazeltine Research, Inc., 176 F. 2d 799, 808 (1949), aff'd, 339 U.S. 827 (1950)) ; Third Circuit (Urguhart v. Commissioner, 215 F. 2d 17, 20 (1954); see also, Pierce v. DuMont Laboratories, Inc., 156 F. Supp. 237, 239, 240 (D. Del. 1957)); Fourth Circuit (S. H. Kress & Co. v. Aghnides, 246 F. 2d 718, 720 (1957), cert. denied, 355 U.S. 889); Fifth Circuit (Park In Theatres, Inc. v. Waters, 185 F. 2d 193, 195-96 (1950)); Seventh Circuit (Aghnides v. Holden, 226 F. 2d 949, 950 (1955); Hazeltine Research, Inc. v. General Electric Co., 183 F. 2d 3, 6 (1950) ; Appleton Toy & Furniture Co. v. Lehman Co. of America, 165 F. 2d 801, 803 (1948)); and very recently by the District Court for the District of Columbia (Abington Textile Machinery Works v. Carding Specialists
In this court there is no square ruling in a patent case, but the guidelines drawn from non-patent litigation all point toward rejecting the estoppel defense here. We have adhered broadly to the principles of res judicata and collateral estoppel established by the Supreme Court. See Creek Nation v. United States, 168 Ct. Cl. 483 (1964). In discussing the objectives served by collateral estoppel, we have emphasized the interests of the actual parties to the prior litigation. Collateral estoppel, we have said, rests on “the need to avoid conflicting adjudications (involving the same parties)”; “if possible, the same parties should not be subject to conflicting determinations on the same point, both of which are binding.” Armstrong v. United States, 173 Ct. Cl. 944, 971-72, 354 F. 2d 274, 290-91 (1965). In other cases in which collateral estoppel 'has been invoked, the court made findings on the status of the party seeking to benefit. Thus, in one tax case, the court determined that plaintiif’s different legal identities in the first and second suits was “a difference in form only”, but, following the Sunnen rule, found collateral estoppel inapplicable because the cases involved identical but separable facts. Bryan v. United States, 162 Ct. Cl. 440, 443, 319 F. 2d 880,. 881 (1963). In a series of decisions involving back pay for dismissed government employees, the United States has been permitted to invoke collateral estoppel only after a finding of privity. In those instances a government employee would contest unsuccessfully his dismissal in a district court, naming the head of his agency or members of the Civil Service Commission as defendants. The employee then sues the United States in the Court of Claims alleging wrong
II.
In the non-patent field, several state and federal courts have moved away, in particular circumstances, from the rule of mutuality, and some commentary has urged its general abandonment.
This second effort to prove negligence is comprehended by the generally accepted precept that a party who has had one fair and full opportunity to prove a claim and has failed in that effort, should not be permitted to go to trial on the merits of that claim a second time. Both orderliness and reasonable time saving in judicial administration require that this be so unless some overriding consideration of fairness to a litigant dictates a different result in the circumstances of a particular case.
Concurring, Judge Goodrich indicated that the court’s opinion provided a rationale for depriving a patentee, suing for infringement, from having a day in court against a different defendant if the first suit had held the patent to be invalid; he would disagree with such a conclusion. Id. at 423. (Judge Goodrich’s views are in accord with the Restatement of Judgments, § 93, illus. 10 (1942)). He joined in the result, however, because he considered that the relationship between the operating company and the United States was sufficiently close so that “what binds one should bind the other and * * * what frees one should free the other as against the same plaintiff.” Ibid.
Still another noted departure from mutuality is Zdanok v. Glidden Co., 327 F. 2d 944 (1964), cert. denied, 377 U.S. 934, in which the Second Circuit allowed a group of plaintiff-employees suing their employer for breach of a labor contract to invoke estoppel to prevent the employer from relitigating the contractual issue decided against it in a prior action brought by another group of similarly-situated employees. Confining its ruling to “these cases” (id. at 947), the court
In appraising the current status of the mutuality requirement it is significant that the jurisdictions which have discarded it for certain purposes have clung to it for others. Despite the breadth of the majority Bruszewski opinion in 1950, the Third Circuit appears to follow Judge Goodrich with respect to a patent suit comparable to the one now before us. Despite a holding of patent invalidity in the first suit, the court finds it “well-settled that the [patentee] * * * remained free to assert infringement against others in the courts, and this freedom extends to the issue of the validity of their patent claims.” Urquhart v. Commissioner, supra, 215 F. 2d at 20. See, also, Pierce v. DuMont Laboratories, Inc., 156 F. Supp. 237, 239, 240 (D. Del. 1957) (declaring it “axiomatic” that the same patent can be the subject of successive litigations throughout various circuits, and the Triplett decision does not “leave a wide area for discretion * * *.”). A California appellate court, after Bernhard, likewise stated that “the law is well established that a decision adverse to a patent in one circuit is not binding on the courts of another in litigation upon the same patent between different parties.” Bettis Rubber Co. v. Kleaver, 104 Cal. App. 2d 821, 233 P. 2d 82, 85 (Dist. Ct. App. 1951). See, also, Nevarov v. Caldwell, 161 Cal. App. 2d 762, 327 P. 2d 111 (Dist. Ct. App. 1958) (distinguishing between use of estoppel by the plaintiff and by the defendant in the prior action). The Second Circuit, after Glidden, has indicated that in certain types of cases mutuality is still essential; at least in multiple accident litigation, “mutuality should not so quickly be discarded.” Berner v. British Commonwealth Pac. Airlines, Ltd., 346 F. 2d 532, 541 (1965) cert. denied, 382 U.S. 983 (1966). In particular, some courts have emphasized, in permitting unilateral estoppel, that the estopped party has no new evidence to produce. Nickerson v. Pep Boys—Manny, Moe & Jack, supra, 247 F. Supp. at 224; United States v. United Air Lines, Inc., 216 F. Supp. 709
From the course of decisions since Bernhard in 1942 it is clear to us that the courts have been moving cautiously, attending closely to the circumstances and needs of the particular case and type of litigation, rather than applying sweeping generalizations or the broad principle that “one day in court” is always enough. If appraisal of the factors pertinent to the concrete case plainly teaches that the prior judgment should be conclusive, mutuality may well be held unnecessary; but if that road is not the one clearly marked, relitigation will still be allowed. We, too, decline to ram the widest of breaches in the citadel of mutuality (to use Judge Friendly’s words in Glidden, 327 F. 2d at 954), and must therefore now inquire into the more limited question of whether in this patent litigation against the United States the Government should be permitted to estop the patentee by the latter’s prior loss in the Fourth Circuit.
III.
The conditioning factor is the continued adherence, as shown in Part I, supra, by the Supreme Court and the lower federal judiciary (except for one district judge) to the rule of mutuality for patent adjudication. If we are free at all to veer from that position, we should do so only for compelling reasons.
The prime reason given is that the patentee has had his full day in court and should not be suffered to reopen the identical issues by merely switching adversaries. Certainly the fact that the estopped party has already had his say is an important component of the doctrines of res judicata and collateral estoppel. But it is not the only component, and perhaps not the principal one. The doctrine also seeks to protect a litigant from the harassment and expense of having to repeat his opposition to the same adversary on an issue already canvassed. Edgar v. United States, supra, 145 Ct. Cl. at 12, 171 F. Supp. at 245. In addition, it stabilizes legal re-
Collateral estoppel, it is also said, saves the time of the courts by forestalling needless relitigation. In proper circumstances, the doctrine can, of course, be so utilized. But the fact that a party can waive the application of collateral estoppel suggests that the needs of judicial administration are, at best, of subsidiary value; and, surely, “the doctrine of judicial finality is not a catch-penny contrivance to dispose of cases merely for the sake of disposition and * * * [clearing up] dockets * * *.” IB Moore, Federal Practice, supra, at 1810. In each instance the question remains whether the new litigation is truly needless or redundant.
In this connection, it is revealing that the postulate of “no more than one day in court” has not been allowed to dominate the principles of res judicata and estoppel even as between the very same parties. Several protective rules guard against the possibility that the former adjudication may have been erroneous, and permit reconsideration in a later action. For an issue to be conclusive, it must not only have been litigated in the prior suit, but also determined and not obiter to the judgment. Oklahoma v. United States, 146 Ct. Cl. 185, 194, 173 F. Supp. 349, 354 (1959). Ordinarily, only a final judgment will be given res judicata effect. In tax litigation at the least, collateral estoppel cannot be invoked between the same parties “if the relevant facts in the two cases are separable, even though they be similar or identical,” or if there had been
For patent litigation there is a special reason why relitigation is not automatically banned as needless or redundant, and why error should not be perpetuated without inquiry. Patent validity raises issues significant to the public as well as to the named parties. Sinclair & Carroll Co. v. Inter-chemical Corp., 325 U.S. 327, 330 (1945). It is just as important that a good patent be ultimately upheld as that a bad one be definitively stricken. At the same time it must be remembered that the issue of patent validity is often “as fugitive, impalpable, wayward, and vague a phantom as exists in the whole paraphernalia of legal concepts. * * * If there be an issue more troublesome, or more apt for litigation than this, we are not aware of it.” Harries v. Air King Products Co., supra, 183 F. 2d at 162 (per L. Hand, C.J.). Because of the intrinsic nature of the subject, the first decision can be quite wrong, or derived from an insufficient record or presentation.
The theory of unilateral estoppel would, however, bite sharply into the current process for sustaining good patents
IY.
Like considerations counsel great caution in discarding mutuality for cases brought against the Government in this court. Particularly in the fields of taxation and of pay claims by federal personnel it is common for the Government, having lost in one court or in one case, to try to sustain its position in another court or another case, without asking immediately for Supreme Court review. In tax matters, for
V.
There are also two narrower grounds, more specific to this case, for rejecting the defendant’s estoppel defense. The first is that the plaintiff has affirmatively declared that it possesses and expects to present new material which was not used in the earlier litigation in Maryland and the Fourth Circuit. As we have noted, the only case countenancing unilateral estoppel on patent-validity puts aside instances where additional evidence is to be proffered. Nickerson v. Pep Bogs—Manny, Moe & Jack, supra, 247 F. Supp. at 224. In its recent Technograph opinion, the Seventh Cir
The other special ground is that, in the current state of the law, this plaintiff had every justification for believing that it would be able to pursue its claim against different defendants regardless of the judgment rendered in the first suit to be concluded. This is the teaching of the Supreme Court; and the practice of multiple suits in patent litigation has long been recognized by the inferior courts. See Part I, supra. Consistently with this understanding, Technograph filed more than ten patent infringement suits in various courts and against different defendants. The Seventh Circuit has already upheld its right to sue in that area, despite the loss in the Fourth Circuit. Unlike the defendant in Zdanok v. Glidden Co., supra, Technograph did not designate the Fourth Circuit adjudication as its “test case”, and “everyone [did not] expect[ed] their rights to be governed by the court’s interpretation * * *” in the first case. 327 F. 2d at 953, 956. We should not tell the plaintiff, at this stage, that defeat in his first suit now bars him from prosecuting the action against the United States in this court, Cf. Berner v. British Commonwealth Pacific Airlines, Ltd., supra, 346 F. 2d at 540-41.
vi.
Secondarily, defendant contends that it is in privity with Bendix, the defendant in the Fourth Circuit suit in which the ’960 and ’697 patents were held invalid with regard to Bendix’s production for all purposes but governmental use. The Government argues that, as a customer of Bendix, it should be subrogated to that manufacturer’s right to assert that the prior adjudication is conclusive in a subsequent suit brought by the same patentee. It relies upon the theory of Kessler v. Eldred, 206 U.S. 285 (1907), and the rule of General Chem. Co. v. Standard Wholesale Phosphate & Acid Works, Inc., 101 F. 2d 178 (C.A. 4, 1939) and Western Electric Co. v. Hammond, 135 F. 2d 283 (C.A. 1, 1943). We decline to decide this issue, at the present phase of the case, because the appropriate facts are not before us. Plaintiff
A trial will be necessary in any event. Even if we were to adopt the Government’s contention that it is in privity with Bendix and should therefore benefit from the latter’s Fourth Circuit judgment, the Government is not excused from all possible liability to plaintiff. The Bendix decision would affect the Government’s rights and duties only insofar as it is a customer of that manufacturer. As shown in the preceding parts of this opinion, the Government cannot use that decision as a general defense to a charge of patent infringement. It must still answer Technograph’s claim with respect to equipment purchased from the Hewlett-Packard Company, which plaintiff also alleges infringes its patents. Hewlett-Packard has not been party to any final judgment adjudicating its purported infringement of plaintiff’s patents.
VII
Neither does the court consider it appropriate to determine the validity of the ’960 and ’697 patents on this motion for partial summary judgment. To grant defendant’s motion, there must be no genuine issue as to any material fact. That is not our case. We agree with the Seventh', Circuit’s decision dismissing a motion for summary judgment
The Government’s renewed motion for partial summary judgment is denied and the case is returned to the trial commissioner for proceedings on the merits.
Technograph Printed Electronics, Inc. of Winston-Salem, North Carolina, is exclusive licensee under the patents in issue and owns all substantial rights in those patents; Technograph Printed Circuits, Ltd. is a nominal party. For convenience we shall simply refer to “plaintiff” or “Technograph.”
That Benrlim suit specifically excluded any manufacture by Bendix for the united States since a district court lacks jurisdiction to adjudicate such liability. Por such misuse, “the owner’s remedy shall be by action against the United States in the Court of Claims * * —the remedy now sought. 28 U.S.C. § 1498 (1964).
Plaintiff has suggested that since the Maryland District Court had no jurisdiction to try, or the Fourth Circuit to consider, the claim -which it makes in this court, the prior judgment cannot be conclusive as to any issue in this proceeding. It is well-established, however, that, assuming the presence of
The Triplett decision accorded with the Court’s previous statements in non-patent cases. See Bigelow v. Old Dominion Copper Mining & Smelting Co., 225 U.S. 111, 127, 131 (1912) ; Keokuk & Western R.R. v. Missouri, 152 U.S. 301, 315, 317 (1894) ; Cromwell v. County of Sac, 94 U.S. 351, 352, 353, 354, 360 (1876) ; and citations in 1B Moore, Federal Practice ¶0.412(1), at 1804 n.10 (2d ed. 1965). The Nickerson opinion, supra, 247 F. Supp. at 222, criticized Triplett as not resting “upon too solid a foundation”, primarily because the Court cited Mast, Foos & Co. v. Stover Mfg. Co., 177 U.S. 485 (1900), and Sanitary Refr. Co. v. Winters, 280 U.S. 30, 35 (1929) — two decisions dealing with comity, not res judicata or collateral estoppel. But Mr. Justice Stone, it seems to us, used those eases only with respect to his statement that “the earlier decision may by comity be given great weight in a later litigation and thus persuade the court to render a like decree” (297 U.S. at 642), not as support for the holding on collateral estoppel.
I.e. beyond tbe accepted exceptions from the requirement,
Tbe late Professor Brainerd Currie is most notable among those -who “have come * * * to bury the requirement, not to praise it * * See Currie, “Mutuality of Collateral Estoppel: Limits of the Bernhard Doctrine,” 9 Stan. L. Rev. 281, 322 (1957); and his later article, “Civil Procedure: The Tempest Brews,” 53 Calif. L. Rev. 25 (1965). The defenders of the rule include Moore & Currier, “Mutuality and Conelusiveness of Judgments,” 35 Tul. L. Rev. 301 (1961) ; IB Moore, Federal Practice ¶0.412(1), at 1801 (2d ed. 1965) ; Von Moschzisker, “Res Judicata,” 38 Yale L.J. 299 (1929). The 1965 Currie article and Professor Moore’s treatise provide extensive listings of state and federal cases discussing this issue.
In Kurlan v. Commissioner, 343 P. 2d 625, 628 (1965), the Second Circuit also set forth, and appeared to rely upon, the particular circumstances.
In the personnel field a well-known example comes from this court’s history. In United States v. Moser, 42 Ct. Cl. 86 (1907), a naval officer sued the united States for retirement pay, his right of recovery depending upon whether his attendance as a cadet at the Naval Academy during the Civil War constituted “service during the Civil War” within the meaning of a federal statute. Moser’s first suit was decided in his favor, as were three subsequent cases in which the court held that, by reason of its decision in the first Moser case, the question was res judicata. 58 Ct. Cl. 164 (1923), aff’d, 266 U.S. 236 (1924). Between^ the first and second Moser cases’, however, another claimant brought suit under the identical statute. The court heard the case anew, and an additional statute, conclusively stating that Academy attendance did not constitute “service during the civil war,” was brought to the court’s attention ; that plaintiff was denied relief. Jasper v. United States, 43 Ct. Cl. 368 (1908). If the second claimant were allowed to invoke the prior Moser judgment and estop the defendant from relitigating the “service” issue, the erroneous Moser decision would have been unnecessarily perpetuated without possibility of correction.