Ensten v. Simon, Ascher Co

• Decision Date: 02 February 1931
• Docket Number: No. 46,46
• Citation: 51 S.Ct. 207,282 U.S. 445,75 L.Ed. 453
• Parties: ENSTEN et al. v. SIMON, ASCHER & CO., Inc
• Court: U.S. Supreme Court

282 U.S. 445

51 S.Ct. 207

75 L.Ed. 453

ENSTEN et al.

v SIMON, ASCHER & CO., Inc.

No. 46.

Argued Dec. 12, 1930.

Decided Feb. 2, 1931.

Messrs. O. Ellery Edwards, of New York City, and Harold Elno Smith, of Cleveland, Ohio, for petitioners.

[Argument of Counsel from pages 445-447 intentionally omitted] Mr. John F. Neary, of New York City, for respondent.

Mr. Justice McREYNOLDS delivered the opinion of the Court.

By an original bill presented to the District Court, Southern District of New York, November 9, 1929, petitioners sought to prevent respondent from further infringing Letters Patent No. 1,313,080, for improvements in knitted caps and to recover damages. They asked a preliminary injunction; affidavits were presented by both sides; the facts are not controverted.

It appears—

That the patent, 6 claims, issued to Louis H. Ensten August 12, 1919. In the first suit upon it-Ensten v. Rich-Sampliner Co., et al.-commenced in the District Court, Northern District of Ohio, an interlocutory decree dated May 24, 1922, adjudged claims 1, 3, 4 and 5 valid and infringed; claim 2 invalid.

That within 30 days the defendants appealed from so much of that decree as upheld the four claims; the complainant might have but did not appeal. The Circuit Court of Appeals approved the decree so far as challenged June 20, 1923; the validity of claim 2 was not before it. Rehearing was denied October 4, 1923; mandate issued October 18, 1923. 291 F. 1003.

That after such remittance the District Court ordered an accounting. The complainant offered to show damages to his exclusive licensee, Lion Knitting Mills Company. As that Company was not party to the cause, the Master rejected the offer; the court affirmed his action.

That on April 30, 1924, Ensten disclaimed as to claim 2 in the Patent Office. Thereafter, he and the Lion Knitting Mills Company presented a joint bill against the original defendants. A motion to dismiss because of unreasonable neglect and delay in making the disclaimer was sustained April 5, 1926, 13 F. (2d) 132-Judge Westenhaver. The Circuit Court of Appeals, May 9, 1927, 19 F. (2d) 66, held the second bill was in effect an amendment to the original one; declared the objection based upon failure to disclaim more promptly moot; reversed the decree of the District Court; and remanded the cause for appropriate proceedings. Subsequently, the parties settled their differences; the defendant paid substantial damages; and final decree went for the complainants November 1, 1928.

No facts except those above detailed are relied upon.

Having heard the parties to the present proceeding, the trial court held that Ensten, the patentee, unreasonably neglected and delayed to disclaim claim 2 after the District Court in Ohio had declared in invalid, denied an application for injunction and dismissed the bill.

The

Circuit Court of Appeals affirmed this action February 3, 1930, Ensten et al. v. Simon, Ascher & Co., 38 F.(2d) 71; called attention to the conflict between its views and those of the Circuit Court of Appeals, Seventh Circuit, Excelsior Steel Furnace Co. v. Meyer & Bro. Co., 36 F.(2d) 447, 449, and suggested the desirability of an authoritative determination of the controverted question of law.

The petition here for certiorari asked for the writ because the conflict of opinion in the two Circuits. The point contested below and differently ruled in the Circuit Courts of Appeals concerns the effect of the delay in disclaiming. According to the usual practice we will consider nothing else.

Determination of the issue presented must turn upon the construction and effect of sections 65 and 71,tit le 35, U. S. C. (35 USCA §§ 65, 71, Rev. St. §§ 4917, 4922; sections 7 and 9, Act of 1837, 5 Stat. 193), copied in the margin.¹

The first of these sections provides in substance that whenever, through inadvertence, accident, or mistake, and without any fraudulent or deceptive intention, a patentee has claimed more than that of which he was the original or first inventor or discoverer, he may be permitted to make disclaimer of such parts of the thing patented as he shall not choose to claim or hold by virtue of his patent. The other permits the patentee to maintain a suit on his patent, although through inadvertence, accident, or mistake, and without any willful default or intention to mislead the public, he has claimed some material or substantial part as an invention of which he was not the original or first inventor. He is deprived, however, of the right to recover costs, unless he has filed proper disclaimer before commencement of his suit. And it further provides: 'But no patentee shall be entitled to the benefits of this section if he has unreasonably neglected to delayed to enter a disclaimer.'

In order properly to apply these Sections consideration must be given to the provisions touching review of inter- locutory decrees by Federal courts. Formerly, federal practice permitted appeals only from final decrees. Section 7, Act March 3, 1891, 26 Stat. 828, empowered Circuit Courts of Appeals to review an interlocutory decree granting or continuing an injunction. Ex parte National Enameling Co., 201 U. S. 156, 26 S. Ct. 404, 50 L. Ed. 707.Thi § section was modified by Act of 1895, c. 96, 28 Stat. 666, and by Act of June 6, 1900, 31 Stat. 660. And the Act of April 14, 1906, 34 Stat. 116, amended it to read thus:

'Sec. 7. That where, upon a hearing in equity in a district or in a circuit court, or by a judge thereon in vacation, an injunction shall be granted or continued, or a receiver appointed by an interlocutory order or decree, in any cause an appeal may be taken from such interlocutory order or decree granting or continuing such injunction, or appointing such receiver, to the circuit court of appeals.'

The Judicial Code, Act March 3, 1911, 36 Stat. 1134, provided:

'See. 129. Where upon a hearing in equity in a district court, or by a judge thereof in vacation, an injunction shall be granted, continued, refused, or dissolved by an interlocutory order or decree, or an application to dissolve an injunction shall be refused, or an interlocutory order or decree shall be made appointing a receiver, an appeal may be taken from such interlocutory order or decree granting, continuing, refusing, dissolving, or refusing to dissolve, an injunction, or appointing a receiver, to the circuit court of appeals, notwithstanding an appeal in such case might, upon final decree under the statutes regulating the same, be taken directly to the Supreme Court: Provided, That the appeal must be taken within thirty days from the entry of such order or decree. * * *'

See Act of 1925, § 227, title 28, U. S. C. (28 USCA § 227) which further enlarged the right.

Did the patentee Ensten unreasonably neglect or delay to make disclaimer of claim 2 after May 24, 1922, when the District Court in Ohio declared it invalid? He disclaimed April 30, 1924; and only the facts narrated above are relied on the explanation or excuse.

Under the early accepted general rule a patent with an invalid claim was wholly void, and this defect effectually barred suit upon it. Congress undertook to modify this by sections 7 and 9, c. 45, Act of 1837, 5 Stat. 193. In substance these became sections 4917 and 4922, Revised Statutes, and 65 and 71, Title 35, U. S. C. (35 USCA §§ 65, 71). The two sections 'are parts of one law, having one general purpose, and that purpose is to obviate the inconvenience and hardship of the common law, which made a patent wholly void if any part of the invention was wrongfully claimed by the patentee, and which made such a defect in a patent an effectual bar to a suit brought upon it.' Hailes v. Albany Stove Co., 123 U. S. 582, 8 § Ct. 262, 266, 31 L. Ed. 284; Sessions v. Romadka, 145 U. S. 29, 41, 12 S. Ct. 799, 36 L. Ed. 609. Construed together they 'enact that where a patentee claims materially more than that which he was the first to invent, his patent is void, unless he has preserved the right to disclaim the surplus; and that he may fail to preserve that right, by unreasonable neglect or delay to enter a disclaimer in the Patent Office.' Walker on Patents (6th Ed.) § 254.

The statute is remedial; the intent is to aid the inventor free from wilful default or intention to mislead the public by permitting him to avoid the consequence of inadvertence, accident or mistake through prompt disavowal of the apparent right to exclude others from something improperly included in the words of his grant. Escape is permitted only to one who acted originally in good faith and who has complied with the prescribed conditions. 'The same principle which forbids a patentee to assert a right to more than he has actually invented compels him to disavow the right as soon as he discovers that it has been unjustly claimed. Unreasonable delay in disclaiming is thus tantamount to an original fraudulent claim, and through it the patentee loses the privilege of making the amendment by which alone his patent could be saved. The question of unreasonable delay is a question for the court, upon the facts as found either by its own investigation or the verdict of a jury. Delay begins whenever the patentee becomes aware that he has claimed more than e h as invented or described. In cases where the excess is not apparent at once upon the inspection of the patent by the patentee, the allowance of his claim by the patent office raises such a presumption in its favor that he may rely on its validity until a court of competent jurisdiction decides that it is broader than his real invention.' Robinson on Patents (1890) Volume II, page 284.

The petitioners say that after Judge Westenhaver by interlocutory decree declared claim 2 invalid the patentee had several options. He might have made disclaimer immediately; he might have appealed from the interlocutory decree within 30 days; he might have awaited the final decree and appealed from that; he might have sued...