Carter-Wallace, Inc. v. United States

• Decision Date: 15 May 1974
• Docket Number: No. 322-67.,322-67.
• Citation: 496 F.2d 535
• Parties: CARTER-WALLACE, INC. v. The UNITED STATES.
• Court: U.S. Claims Court

496 F.2d 535 (1974)

CARTER-WALLACE, INC. v. The UNITED STATES.

No. 322-67.

United States Court of Claims.

May 15, 1974.

George B. Finnegan, Jr., New York City, attorney of record, for plaintiff; Jerome G. Lee, John D. Foley, George P. Hoare, Jr., Morgan, Finnegan, Durham & Pine, Edward J. Ross, Louis A. Mangone, Breed, Abbott & Morgan, New York City, Douglas B. Henderson, Finnegan, Henderson, Farabow & Garrett, Washington, D.C., of counsel.

James A. Curley, Washington, D.C., with whom was Acting Asst. Atty. Gen. Irving Jaffe, for defendant; A. David Spevack, Washington, D.C., of counsel.

Before COWEN, Chief Judge, and DAVIS, SKELTON, NICHOLS, KASHIWA, KUNZIG and BENNETT, Judges.

KASHIWA, Judge.

This is a suit under 28 U.S.C. § 1498¹ to recover reasonable and entire compensation for alleged unauthorized use by the United States of plaintiff's patent. The patent in suit, United States Patent No. 2,724,720, "Dicarbamates of Substituted Propane Diols," owned by plaintiff, covers three chemical compounds. One of these compounds is a drug known as meprobamate, and its unauthorized use by the Government is alleged to infringe claim 4 of the patent in suit.

The petition herein charges infringement of both claims 1 and 4.² Claim 4 reads "2-methyl-2-n-propyl-1, 3-propanediol dicarbamate," which is a chemical compound or drug with the generic name "meprobamate." Meprobamate and combination drug products containing meprobamate have been sold by plaintiff and others under various trademarks, including "Miltown" and "Equanil." Defendant is alleged to have infringed claim 4 of said patent by the manufacture by defendant or for defendant and by delivery to and acceptance by defendant and by the use of defendant of said meprobamate, all without license of plaintiff, the owner. Plaintiff filed administrative claims with the following departments and agencies:

Department of Defense

(a) Defense Supply Agency

(b) Department of Air Force

(c) Department of Army

(d) Department of Navy

General Accounting Office

Veterans Administration

No action was taken on said administrative claims so plaintiff filed this suit on September 14, 1967. Defendant in its initial answer, filed March 29, 1968, asserted the usual defenses of invalidity and non-infringement. However, on June 11, 1970, defendant was permitted to file its first amended answer which added further defenses based on unenforceability of the patent because of alleged violations by plaintiff of sections 1 and 2 of the Sherman Act, 15 U.S.C. §§ 1, 2, and "misuse of its patent * * * to secure a monopoly beyond the scope of the patent." Plaintiff filed a motion to strike the new defenses. This court allowed the motion as to certain paragraphs and denied the motion as to others in an opinion rendered October 15, 1971, Carter-Wallace, Inc. v. United States, 449 F.2d 1374, 196 Ct.Cl. 35. The case was remanded to a trial judge for further proceedings consistent with the opinion. Trial before the trial judge started on May 5, 1971.

Just about the time said trial before the trial judge started, the Supreme Court, on May 3, 1971, decided Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (hereinafter "Blonder-Tongue"). Shortly after Blonder-Tongue, on February 18, 1972, a case in which plaintiff herein was also plaintiff, Carter-Wallace, Inc. v. Davis-Edwards Pharmacal Corp., 341 F.Supp. 1303, was decided by Judge John F. Dooling, Jr., of the United States District Court of the Eastern District of New York (hereinafter "district court"), holding claim 4 of Patent No. 2,724,720, the identical claim and patent involved in this case, invalid. Because of Blonder-Tongue and Judge Dooling's said decision of invalidity, defendant on April 13, 1972, filed its second amended answer alleging a further affirmative defense as follows:

34. Plaintiff is estopped to assert against defendant that U.S. Patent No. 2,724,720, directed to meprobamate, is valid because that patent was held invalid in other litigation in a federal court to which plaintiff was a party.

35. Plaintiff is estopped to assert against defendant validity of claim 4 of U.S. Patent No. 2,724,720 because that claim has been held invalid by the United States District Court for the Eastern District of New York in an action entitled Carter-Wallace, Inc. v. Davis-Edwards Pharmacal Corp., 70 C 369, in a final order dated February 18, 1972.

The Second Circuit, on November 14, 1972, unanimously affirmed the district court's decision. Carter-Wallace, Inc. v. Otte, 474 F.2d 529. A petition for rehearing was filed by plaintiff but rehearing was denied, 474 F.2d 547. Plaintiff sought review by the Supreme Court; certiorari was denied on June 4, 1973, 412 U.S. 929,³ 93 S.Ct. 2753, 37 L. Ed.2d 156.

Defendant, after filing its second amended answer, filed a motion for summary judgment based on Blonder-Tongue and the district court's decision of invalidity. Defendant's motion for summary judgment is allowed for reasons hereafter stated.

In Technograph Printed Circuits, Ltd. v. United States, 484 F.2d 1383, 202 Ct. Cl. 867, decided October 17, 1973, this court, in making its initial application of Blonder-Tongue, resulting from a decision of invalidity with relation to certain claims of Patent No. 2,706,697 and other patents relating to manufacture of electric circuit components in Technograph Printed Circuits, Ltd. v. Bendix Aviation Corp., 218 F.Supp. 1 (D.Md. 1963), aff'd per curiam, 327 F.2d 497 (4th Cir. 1964), cert. denied, 379 U.S. 826, 85 S.Ct. 53, 13 L.Ed.2d 36, held as follows:

We have considered the extensive briefs and written arguments of the parties on the Blonder-Tongue question, and the opinions of Judges Watkins and Will and of the Courts of Appeals for the Fourth and Seventh Circuits. We agree fully with the holdings that under Blonder-Tongue plaintiffs are estopped by the Bendix decision. Plaintiffs make the same arguments before us as were made in the Fourth and Seventh Circuit litigations. There is no need for further briefing or for oral argument, and it would be needless repetition for us to spread out again the persuasive reasons given in the opinions filed in the other courts. On the basis of those opinions, we hold plaintiffs estopped from contesting the invalidity of all the claims of patent \'697 which are in issue. It follows that there can be no recovery under patent \'697 and the petition with respect thereto is dismissed. Footnote omitted. 484 F. 2d at 1384, 202 Ct.Cl. at 869-870.

Prior to Blonder-Tongue, in situations such as that presented herein where plaintiff is shown to have suffered in another court an adverse adjudication of invalidity of the same patent, courts uniformly followed the decision of the Supreme Court in Triplett v. Lowell, 297 U.S. 638, 56 S.Ct. 645, 80 L.Ed. 949 (1936), which held:

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. While the earlier decision may by comity be given great weight in a later litigation and thus persuade the court to render a like decree, it is not res adjudicata and may not be pleaded as a defense. * * * 297 U.S. at 642.

Blonder-Tongue modified Triplett as follows:

* * * it is apparent that the uncritical acceptance of the principle of mutuality of estoppel expressed in Triplett v. Lowell is today out of place. Thus we conclude that Triplett should be overruled to the extent it forecloses a plea of estoppel by one facing a charge of infringement of a patent that has once been declared invalid. Emphasis supplied. 402 U.S. at 350.

But in modifying Triplett, the Supreme Court suggested guidelines to be considered by courts where the defense of estoppel by reason of a prior adjudication of invalidity is raised by one facing a charge of infringement, as follows:

Moreover, we do not suggest, without legislative guidance, that a plea of estoppel by an infringement or royalty suit defendant must automatically be accepted once the defendant in support of his plea identifies the issue in suit as the identical question finally decided against the patentee or one of his privies in previous litigation. Rather, the patentee-plaintiff must be permitted to demonstrate, if he can, that he did not have a "fair opportunity procedurally, substantively and evidentially to pursue his claim the first time." Eisel v. Columbia Packing Co., 181 F.Supp. 298, 301 (Mass. 1960). This element in the estoppel decision will comprehend, we believe, the important concerns about the complexity of patent litigation and the posited hazard that the prior proceedings were seriously defective.

Determining whether a patentee has had a full and fair chance to litigate the validity of his patent in an earlier case is of necessity not a simple matter. In addition to the considerations of choice of forum and incentive to litigate mentioned above, certain other factors immediately emerge. For example, if the issue is nonobviousness, appropriate inquiries would be whether the first validity determination purported to employ the standards announced in Graham v. John Deere Co., supra, 383 U.S. 1, 86 S.Ct. 684, 15 L. Ed.2d 545 whether the opinions filed by the District Court and the reviewing court, if any, indicate that the prior case was one of those relatively rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit; and whether without fault of his own the patentee was deprived of crucial evidence or witnesses in the first litigation. But as so often is the case, no one set of facts, no one collection of words or phrases, will provide an automatic formula for proper rulings on estoppel pleas. In the end, decision will necessarily rest on the trial courts\' sense of justice and equity.

We are not persuaded, therefore, that the Triplett rule, as it

...