Adkins v. Lear, Inc.

CourtUnited States State Supreme Court (California)
Writing for the CourtMOSK; TRAYNOR
Citation67 Cal.2d 882,64 Cal.Rptr. 545,435 P.2d 321
Parties, 435 P.2d 321, 156 U.S.P.Q. 258 John S. ADKINS, Plaintiff and Appellant, v. LEAR, INCORPORATED, Defendant and Appellant. L.A. 29204--29207. . In Bank
Decision Date14 December 1967

Page 545

64 Cal.Rptr. 545
67 Cal.2d 882, 435 P.2d 321, 156 U.S.P.Q. 258
John S. ADKINS, Plaintiff and Appellant,
v.
LEAR, INCORPORATED, Defendant and Appellant.
L.A. 29204--29207.
Supreme Court of California.
In Bank.
Dec. 14, 1967.
Rehearing Denied Jan. 11, 1968.

Page 548

[435 P.2d 324] [67 Cal.2d 889] Rosenfeld, Meyer & Susman, Bellenson, Meyer, Rosenfeld & Susman, Peter R. Cohen and Gary A. Schlessinger, Beverly Hills, for plaintiff and appellant.

Christie, Parker & Hale, C. Russell Hale, Edwin L. Hartz and Kenneth C. Newell, Pasadena, for defendant and respondent.

MOSK, Justice.

John S. Adkins, an inventor and mechanical engineer, was engaged in the development and improvement of gyroscopes 1 for Lear, Incorporated, a manufacturer of gyroscopes and related mechanisms. Adkins brought this action against Lear, alleging in his first cause of action that prior to 1955 he had conceived certain inventions and made them available to Lear and that on September 15, 1955, he entered into a written agreement with Lear under the terms of which he granted Lear a license to use these inventions in products manufactured by it, in exchange for which Lear was to pay a stated percentage of the net sales price to Adkins as royalties on all products incorporating his inventions. It was averred that from September 10, 1957 onward, Lear had refused to pay royalties to adkins on numerous products which it manufactured and sold and for which royalties were required to be paid under the license agreement.

The jury found in favor of Adkins and awarded him damages in the amount of $904,474.49 for the period from January 1, 1955, to May 31, 1963. 2 A portion of this amount ($16,351.93) was based on a verdict directed by the trial court as to a product manufactured by Lear and designated as the 2156 gyro. A judgment on the jury's verdict was entered on May 4, 1964. Thereafter, Lear moved for judgment notwithstanding

Page 549

[435 P.2d 325] the verdict or, in the alternative, a new trial. (Code Civ.Proc. § 629.) 3 The trial court granted the motion [67 Cal.2d 890] for judgment notwithstanding the verdict, except as to the 2156 gyro, and it granted the motion for a new trial in the alternative as to all products involved in the action. Multiple appeals have been taken; that which involves the primary matters at issue between the parties, numbered L.A. 29204, will be discussed first. 4

L.A. 29204

The license agreement contained two provisions permitting its termination by Lear, and Lear purported to exercise its right to terminate under these provisions by a letter addressed to Adkins dated April 8, 1959. Reduced to its simplest terms, the fundamental questions we are called upon to decide are whether the agreement was validly terminated by Lear and (except as to the 2156 gyro) whether there is substantial evidence in support of Lear's claim that its products did not incorporate Adkins' invention. We determine that under a proper construction of the agreement Lear did not effect a valid termination and that not only is there no substantial evidence to support a determination that Lear did not use Adkins' invention in its products but that the record compels the conclusion that Lear did incorporate Adkins' invention in the instruments manufactured by it. The 2156 gyro will be discussed separately.

Before setting forth the facts, it may be helpful to summarize some fundamental principles and procedures relating to the instant case. The federal courts have exclusive jurisdiction over actions arising under patent laws (28 U.S.C.A. § 1338) but where a plaintiff seeks to enforce a patent licensing agreement the action 'is not a suit under the patent laws of the United States, and cannot be maintained in a federal court as such.' (Luckett v. Delpark, Inc. (1926) 270 U.S. 496, 502, 510, 46 S.Ct. 397, 399, 70 L.Ed. 703; Farmland Irrigation Co. v. Dopplmaier (1957) 48 Cal.2d 208, 217, 308 P.2d 732, 66 A.L.R.2d 590.) 5 Where such an action [67 Cal.2d 891] arises in a state court, the court may pass upon the meaning, scope, validity or infringement of the patent. (Lear Siegler, Inc. v. Adkins (9th Cir. 1964) 330 F.2d 595, 600.)

A patent is, of course, presumed to be valid until the presumption has been overcome by convincing evidence. 6 Ordinarily, a party will attempt to demonstrate the invalidity of a patent by showing that it has been anticipated by the prior art or that it is obvious or without utility. However, one of the oldest doctrines in the field of patent law establishes that so long as a licensee is operating under a license agreement

Page 550

[435 P.2d 326] he is estopped to deny the validity of his licensor's patent in a suit for royalties under the agreement. The theory underlying this doctrine is that a licensee should not be permitted to enjoy the benefit afforded by the agreement while simultaneously urging that the patent which forms the basis of the agreement is void. (See 4 Walker on Patents (Deller 2d ed. 1965) p. 607.) This doctrine does not prevent one who is not a licensee from challenging the patent's validity.

The license agreement in the present case was, insofar as is relevant here, based not on an existing patent issued to Adkins but on his application for a patent which the parties believed would eventuate in the issuance of a patent.

A patent application generally consists of a drawing of the invention, the specifications, and the claims. 7 The specifications are a description of the invention, the manner in which it is constructed, and the objects it is intended to achieve. They ordinarily include an introductory clause identifying the field in which the invention is made, a recitation of the advantages of the invention and the state of the prior art, a brief description of the drawings and its parts, and, in the case of a machine, the manner in which it operates.

The claims follow the specifications. The claims must point out the subject matter which the applicant regards as his invention, and they are 'the real measure of the invention.' [67 Cal.2d 892] The drafting of claims is a highly specialized and difficult undertaking. The practice is to include both very broad claims and claims of a more restricted type. Frequently, an applicant will state his claims as broadly as is feasible in order to obtain as wide a monopoly as he can, gradually narrowing them to precisely describe his invention as the broader claims are rejected. (See 2 Walker on Patents (Deller ed. 1937) p. 770.) The subject matter of the claims may describe a machine or apparatus designed to perform some function, sometimes called an 'apparatus claim,' or a method or process of achieving a particular result independent of the machine which produces it, sometimes called a 'method claim.'

The prosecution of the application before the United States Patent Office will, except in very unusual cases, consist of at least one rejection of some or all of the claims of the application on the ground that a search has indicated they have been anticipated by prior inventions, and the subsequent amendment of the claims or specifications by the inventor. (See Seidel, What the General Practitioner Should Know About Patent Law and Practice (1956) A.L.I. p. 60.) He may then file an amendment which will alter the prior claims, cancel them, or add new claims. However, he may not enlarge the disclosure of the application as initially filed by adding new matter in an amendment. (35 U.S.C.A. § 132.) The issuance of a patent necessarily means that the Patent Office did not consider the amendment to constitute new matter in violation of the patent laws, and its determination in this regard is entitled to special weight. (Helm Products v. Lake Shore Manufacturing Co. (7th Cir. 1955) 227 F.2d 677, 679.) The process of rejection and amendment continues until either allowance or final rejection of the claims. A rejection is presumably designated as final if the examiner concludes that there is little likelihood that the application can be amended in such a manner that the issuance of a patent would be justified. This procedure of rejection and amendment is so commonplace that one authority has stated that most patent attorneys view with some misgivings those rare instances in which an application is allowed without amendment because it raises the possibility that the applicant has failed to state his claims as broadly as he could have and that a still broader claim might have been allowed, defining the invention (and thus the protec [435 P.2d 327] tion

Page 551

afforded by the patent) in a manner broader and more advantageous to the applicant. (Seidel, op. cit. supra, p. 48.)

[67 Cal.2d 893] An application may not claim more than one distinct invention, and a patent may be issued for one invention only. If the examiner at the Patent Office discovers that more than one invention is disclosed by an application he will require a 'division,' i.e., the applicant must limit his claims in the application to only one of the inventions but may file a separate application for each of the other inventions disclosed by the original application. It also happens that, after filing an application, the inventor may discover improvements which involve additional subject matter over the original disclosure and which cannot be added by amendment because they constitute new matter. He may then file another application, called a 'continuation application' in which he may claim both the disclosure of the original application and the new improvements.

If the applicant is satisfied with the claims which have been allowed he may cancel those which have been finally rejected. If he is dissatisfied with the final rejection he may taken an appeal to the Board of Appeals or, in certain limited circumstances, may attempt another amendment. (37 C.F.R. § 1.116.) At the time of the prosecution of the application involved in the present case, the average patent application had a...

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19 practice notes
  • People ex rel. Dept. Pub. Wks. v. Hunt
    • United States
    • California Court of Appeals
    • November 28, 1969
    ...an unmistakable abuse of discretion of the part of the trial court in granting a new trial. (Citation.)' (Adkins v. Lear, Inc. (1967) 67 Cal.2d 882, 919, 64 Cal.Rptr. 545, 568, 435 P.2d 321, 344 (Judgment vacated on other grounds), Lear, Inc. v. [2 Cal.App.3d 164] Adkins (1969) 395 U.S. 653......
  • Bendix Corporation v. Balax, Inc., No. 71-1483.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • January 6, 1973
    ...The Supreme Court of California in Lear had described the estoppel doctrine as "one of the oldest doctrines in the field of patent law." 67 Cal.2d 882, 891, 435 P.2d 321, 325 15 Although such a holding may seem to fly in the face of the Supreme Court language that "Lear must be permitted to......
  • Holiday Matinee, Inc. v. Rambus, Inc., No. H026142.
    • United States
    • California Court of Appeals
    • May 27, 2004
    ...agreements, notwithstanding the existence of incidental patent issues. (Id. at p. 217, 308 P.2d 732; see also Adkins v. Lear, Inc. (1967) 67 Cal.2d 882, 890-891, 64 Cal.Rptr. 545, 435 P.2d 321; H.J. Heinz Co. v. Superior Court (1954) 42 Cal.2d 164, 172-173, 266 P.2d 5; Rogers v. Hensley (19......
  • Lear, Incorporated v. Adkins, No. 56
    • United States
    • United States Supreme Court
    • June 16, 1969
    ...enjoy the benefit afforded by the agreement while simultaneously urging that the patent which forms the basis of the agreement is void.' 67 Cal.2d 882, 891, 64 Cal.Rptr. 545, 549, 435 P.2d 321, 325—326 (1967). Almost 20 years ago, in its last o nsideration of the doctrine, this Court also i......
  • Request a trial to view additional results
19 cases
  • People ex rel. Dept. Pub. Wks. v. Hunt
    • United States
    • California Court of Appeals
    • November 28, 1969
    ...an unmistakable abuse of discretion of the part of the trial court in granting a new trial. (Citation.)' (Adkins v. Lear, Inc. (1967) 67 Cal.2d 882, 919, 64 Cal.Rptr. 545, 568, 435 P.2d 321, 344 (Judgment vacated on other grounds), Lear, Inc. v. [2 Cal.App.3d 164] Adkins (1969) 395 U.S. 653......
  • Bendix Corporation v. Balax, Inc., No. 71-1483.
    • United States
    • United States Courts of Appeals. United States Court of Appeals (7th Circuit)
    • January 6, 1973
    ...The Supreme Court of California in Lear had described the estoppel doctrine as "one of the oldest doctrines in the field of patent law." 67 Cal.2d 882, 891, 435 P.2d 321, 325 15 Although such a holding may seem to fly in the face of the Supreme Court language that "Lear must be permitted to......
  • Holiday Matinee, Inc. v. Rambus, Inc., No. H026142.
    • United States
    • California Court of Appeals
    • May 27, 2004
    ...agreements, notwithstanding the existence of incidental patent issues. (Id. at p. 217, 308 P.2d 732; see also Adkins v. Lear, Inc. (1967) 67 Cal.2d 882, 890-891, 64 Cal.Rptr. 545, 435 P.2d 321; H.J. Heinz Co. v. Superior Court (1954) 42 Cal.2d 164, 172-173, 266 P.2d 5; Rogers v. Hensley (19......
  • Lear, Incorporated v. Adkins, No. 56
    • United States
    • United States Supreme Court
    • June 16, 1969
    ...enjoy the benefit afforded by the agreement while simultaneously urging that the patent which forms the basis of the agreement is void.' 67 Cal.2d 882, 891, 64 Cal.Rptr. 545, 549, 435 P.2d 321, 325—326 (1967). Almost 20 years ago, in its last o nsideration of the doctrine, this Court also i......
  • Request a trial to view additional results

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