General Talking Pictures Corporation v. Western Electric Company

• Decision Date: 02 May 1938
• Docket Number: No. 357,357
• Citation: General Talking Pictures Corporation v. Western Electric Company, 304 U.S. 175, 58 S.Ct. 849, 304 U.S. 546, 82 L.Ed. 1273, 37 USPQ 357 (1938)
• Parties: GENERAL TALKING PICTURES CORPORATION v. WESTERN ELECTRIC COMPANY, Inc., et al. *
• Court: U.S. Supreme Court

304 U.S. 175

58 S.Ct. 849

304 U.S. 546

82 L.Ed. 1273

GENERAL TALKING PICTURES CORPORATION

v WESTERN ELECTRIC COMPANY, Inc., et al.^*

No. 357.

Argued Dec. 13, 14, 1937.

Decided May 2, 1938.

Amended May 16, 1938.

Messrs. Samuel E. Darby, Jr., and Ephraim Berliner, both of New York City, for petitioner.

Mr. Merrell E. Clark, of New York City, for respondents.

Mr. Justice BUTLERdelivered the opinion of the Court.

Three suits were brought by respondents against petitioner in the District Court for the Southern District of New York to restrain infringements, based on different patents for inventions in vacuum tube amplifiers which have been used in wire and radio telephony, talking motion pictures, and other fields.In all there were in suit seven patents.The cases were tried together and are treated as one.The lower courts held one of the patents invalid, and that ruling is not challenged here.They con- curred in holding six of the patents valid and infringed by petitioner.D.C., 16 F.Supp. 293;2 Cir., 91 F.2d 922.This Court granted a writ of certiorari.302 U.S. 674, 58 S.Ct. 49, 82 L.Ed. -.

Under the caption 'Questions Presented' the petition for writ of certiorari submits the following:

'1.Can the owner of a patent, by means thereof, restrict the use made of a device manufactured under the patent, after the device has passed into the hands of a purchaser in the ordinary channels of trade, and full consideration paid therefor?

'2.Can a patent owner, merely by a 'license notice' attached to a device made under the patent, and sold in the ordinary channels of trade, place an enforceable restriction on the purchaser thereof as to the use to which the purchaser may put the device?

'3.Can an inventor who has filed an application for patent, showing and describing but not claiming certain inventions, obtain a valid patent for said inventions by voluntarily filing a 'divisional' or 'continuation' application for said unclaimed inventions more than two years subsequent to public use of the said unclaimed inventions by him or his assignee or licensee?'

The brief supporting the petition contains specifications of error relating to decision of two other questions.One is whether, by acceptance and retention of royalties paid by the licensed manufacturer, respondents acquiesced in the infringement and are estopped from maintaining the suit.The other is whether the patents upheld are invalid because of anticipation by, or want of invention over, the prior patented art.That brief is confined to the three questions definitely stated in the petition.But petitioner's brief on the merits extends to the additional questions reflected by the specification of errors.

1.Our consideration of the case will be limited to the questions specifically brought forward by the petition.Rule 38, paragraph 2,28 U.S.C.A.followingsection 354, contains the following: 'The petition shall contain only a summary and short statement of the matter involved and the reasons relied on for the allowance of the writ.A supporting brief may be included in the petition, but, whether so included or presented separately, it must be direct, concise, and in conformity with rules 26and27.* * * A failure to comply with these requirements will be a sufficient reason for denying the petition.'Evidently petitioner, by the 'Questions Presented,' intended to state the issues it deemed to arise on its 'statement of the matter involved,' for neither the petition nor supporting brief purport to apply for review of any other question.Whether included in the petition, or separately presented, the supporting brief is not a part of the petition, at least for the purpose of stating the questions on which review is sought.The specifications of error in that brief do not expand or add to the questions stated in the petition; they serve merely to identify and challenge rulings upon which is grounded ultimate decision of the matter involved.

There is nothing in the lower courts' decision on either of the added questions to warrant review here.Whether respondents acquiesced in the infringement and are estopped depends upon the facts.Granting of the writ would not be warranted merely to review the evidence or inferences drawn from it.Southern Power Co. v. North Carolina Pub. Serv. Co., 263 U.S. 508, 44 S.Ct. 164, 68 L.Ed. 413;United States v. Johnston, 268 U.S. 220, 227, 45 S.Ct. 496, 69 L.Ed. 925.Moreover, the decision on that point rests on concurrent findings.They are not to be disturbed unless plainly without support.United States v. Chemical Foundation, 272 U.S. 1, 14, 47 S.Ct. 1, 6, 71 L.Ed. 131;United States v. McGowan, 290 U.S. 592, 54 S.Ct. 95, 78 L.Ed. 522;Alabama Power Co. v. Ickes, 302 U.S. 464, 58 S.Ct. 300, 82 L.Ed. 374.There is evidence to support them.Nor would the writ be granted to review the questions of anticipation and invention that petitioner argues, for as to them there is no conflict between decisions of circuit courts of appeals.Layne, etc., Corp. v. Western Well Works, 261 U.S. 387, 393, 43 S.Ct. 422, 423, 67 L.Ed. 712;Keller v. Adams-Campbell Co., 264 U.S. 314, 319, 320, 44 S.Ct. 356, 357, 358, 68 L.Ed. 705.Cf.Stilz v. United States, 269 U.S. 144, 147, 148, 46 S.Ct. 37, 38, 70 L.Ed. 202.The writ did not issue to bring up either of these questions.Crowell v. Benson, 285 U.S. 22, 65, 52 S.Ct. 285, 298, 76 L.Ed. 598.

One having obtained a writ of certiorari to review specified questions is not entitled here to obtain decision on any other issue.Crown Cork & Seal Co. v. Gutmann Co., 304 U.S. 159, 58 S.Ct. 842, 82 L.Ed. —- decided this day.Petitioner is not here entitled to decision on any question other than those formally presented by its petition for the writ.

2.The respondentAmerican Telephone & Telegraph Company owns the patents.Amplifiers having these inventions are used in different fields.One, known as the commercial field, includes talking picture equipment for theaters.Another, called the private field, embraces radio broadcast reception, radio amateur reception, and radio experimental reception.The other respondents are subsidiaries of the Telephone Company and exclusive licensees in the commercial field of recording and reproducing sound; during the time of the infringement alleged, they were engaged in making and supplying to theaters talking picture equipment including amplifiers embodying the inventions covered by the patents in suit.The petitioner also furnished to theaters talking picture equipment including amplifiers which embody the invention covered by the patents in suit.Respondents' charge is that by so doing petitioner infringes them.

The American Transformer Company was one of a number of manufacturers holding nonexclusive licenses limited to the manufacture and sale of the amplifiers for private use, as distinguished from commercial use.These licenses were granted by the Radio Corporation, acting for itself and the respondentTelephone Company, and were assented to by the latter.The Transformer Company's license was expressly confined to the right to manufacture and sell the patented amplifiers for radio amateur reception, radio experimental reception, and home broadcast reception.It had no right to sell the amplifiers for use in theaters as a part of talking picture equipment.

Nevertheless, it knowingly did sell the amplifiers in controversy to petitioner for that use.Petitioner admits that the Transformer Company knew that the amplifiers it sold to petitioner were to be used in the motion picture industry.The petitioner, when purchasing from the Transformer Company for that use, had actual knowledge that the latter had no license to make such a sale.In compliance with a requirement of the license, the Transformer Company affixed to amplifiers sold by it under the license a notice stating in substance that the apparatus was licensed only for radio amateur, experimental and broadcast reception under the patents in question.To the amplifiers sold to petitioner outside the scope of the license, it also affixed notices in the form described, but they were intended by both parties to be disregarded.

Petitioner puts its first question in affirmative form: 'The owner of a patent cannot, by means of the patent, restrict the use made of a device manufactured under the patent after the device has passed into the hands of a purchaser in the ordinary channels of trade and full consideration paid therefor.'But that proposition ignores controlling facts.The patent owner did not sell to petitioner the amplifiers in question or authorize the Transformer Company to sell them or any amplifiers for use in theaters or any other commercial use.The sales made by the Transformer Company to petitioner were outside the scope of its license and not under the patent.Both parties knew that fact at the time of the transactions.There is no ground for the assumption that petitioner was 'a purchaser in the ordinary channels of trade.'

The Transformer Company was not an assignee; it did not own the patents or any interest in them; it was a mere licensee under a nonexclusive license, amounting to no more than 'a mere waiver of the right to sue.'De Forest Co. v. United States, 273 U.S. 236, 242, 47 S.Ct. 366, 368, 71 L.Ed. 625.Pertinent words of the license are these: 'To manufacture * * * and to sell only for radio amateur reception, radio experimental reception and radio broadcast reception. * * *' Patent owners may grant licenses extending to all uses or limited to use in a defined field.Providence Rubber Company v. Goodyear, 9 Wall. 788, 799, 800, 19 L.Ed. 566;Game-wall Fire-Alarm Telegraph Co. v. Brooklyn, C.C., 14 F. 255;Dorsey Rake Co. v. Bradley Co., 7 Fed.Cas. pp. 946, 947, No. 4,015;Robinson on Patents, §§ 808, 824.Unquestionably, the owner of a patent may grant licenses to manufacture, use, or sell upon conditions not inconsistent with the scope of the monopoly.E. ...