Food Machinery & Chem. Corp. v. Walker Process Equip., Inc.

• Citation: 335 F.2d 315
• Decision Date: 14 August 1964
• Docket Number: No. 14466.,14466.
• Parties: FOOD MACHINERY AND CHEMICAL CORPORATION, Plaintiff-Appellee, v. WALKER PROCESS EQUIPMENT, INC., Defendant-Appellant.
• Court: United States Courts of Appeals. United States Court of Appeals (7th Circuit)

335 F.2d 315 (1964)

FOOD MACHINERY AND CHEMICAL CORPORATION, Plaintiff-Appellee, v. WALKER PROCESS EQUIPMENT, INC., Defendant-Appellant.

No. 14466.

United States Court of Appeals Seventh Circuit.

July 15, 1964.

Rehearing Denied August 14, 1964.

Edward A. Haight, Chicago, Ill., Louis Robertson, Arlington Heights, Ill., John W. Hofeldt, Daniel F. Webb, Jr., Chicago, Ill., for defendant-appellant, Haight, Simmons & Hofeldt, Chicago, Ill., Darbo, Robertson & Vandenburgh, Arlington Heights, Ill., of counsel.

Sheldon O. Collen, R. Howard Goldsmith, Chicago, Ill., Charles W. Ryan, Chicago, Ill., for plaintiff-appellee, Dressler, Goldsmith, Clement, Gordon & Ladd, Friedman, Koven, Salzman, Koenigsberg, Specks & Homer, Chicago, Ill., of counsel.

Before CASTLE, KILEY and SWYGERT, Circuit Judges.

KILEY, Circuit Judge.

The questions before us are whether the district court erred in striking, for failure to state a claim upon which relief could be granted, Rule 12(b) (6), Fed.R.Civ.P., the second amended counterclaim of Walker Process Equipment, Inc., which alleges that Food Machinery and Chemical Corporation violated the federal anti-trust laws by maintaining and enforcing a patent which was obtained through fraud upon the Patent Office; and whether the district court abused its discretion in refusing to award Walker attorney fees after dismissing, with prejudice, Food Machinery's infringement suit on the latter's motion. We think the court did not err in either ruling.

The second amended counterclaim alleged that Food Machinery "illegally monopolized interstate and foreign commerce by fraudulently * * * obtaining and maintaining" Lannert patent No. 2,328,655. The fraud alleged was that Food Machinery had knowingly made a false statement under oath to the Patent Office when it filed the patent application and stated that it "does not know and does not believe the same the invention claimed in the application was * * * in public use or on sale in the United States for more than one year prior to this application;" when it knew that more than one year prior to its application it had sold and installed equipment containing the combination claimed in the patent; and that the acts complained of deprived Walker of profitable business it would otherwise have had, listing several specific orders it lost because of the patent in suit. Walker requested an award of treble damages, punitive damages, costs, attorney fees and expenses.

The court, in an oral opinion, found that Walker was attempting to use the issue of fraud to do indirectly what it could not do directly, i. e., procure a cancellation of the patent in suit; and concluded no claim was stated upon which it could grant relief.

Walker's suit is based on the theory that since it is illegal under the anti-trust laws to extend the protection of a legally issued patent to obtain a monopoly on an unpatented product, Mercoid Corp. v. Mid-Continent Investment Corp., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376 (1944), it should be illegal to secure a monopoly on an unpatentable product by use of a fraudulently obtained patent. Walker candidly admits it "knows of no anti-trust case which has involved the exact violation of the anti-trust laws" alleged in its counterclaim. It concedes that under Mowry v. Whitney, 81 U.S. (14 Wall.) 434, 20 L.Ed. 858 (1871), only the government may "annul or set aside" a patent, but it...