Gray Tool Co. v. Humble Oil & Refining Co., 12990.

• Decision Date: 19 January 1951
• Docket Number: No. 12990.,12990.
• Citation: 186 F.2d 365
• Parties: GRAY TOOL CO. v. HUMBLE OIL & REFINING CO.
• Court: U.S. Court of Appeals — Fifth Circuit

186 F.2d 365 (1951)

GRAY TOOL CO. v. HUMBLE OIL & REFINING CO.

No. 12990.

United States Court of Appeals Fifth Circuit.

January 19, 1951.

Homer T. Bouldin, Houston, Tex., for appellant.

J. Vincent Martin, Houston, Tex., for appellee.

Before HUTCHESON, Chief Judge, and McCORD and BORAH, Circuit Judges.

HUTCHESON, Chief Judge.

Its suit for patent infringement dismissed on motion for summary judgment, plaintiff is here insisting: that this is another of those all too numerous instances of the misuse of the summary judgment procedure to cut a trial short; that here, as so often before, it has served only to prove that short cutting of trials is not an end in itself but a means to an end, and that in the conduct of trials, as in other endeavors, it is quite often true that the longest way around is the shortest way through.¹

Appellant points to the abortion, by failure to use it, of the great record of seven printed volumes, aggregating more than three thousand pages, accumulated in preparation for the trial on the merits of the issues tendered by the pleadings. Pointing, too, to the fact that the judgment, if it had been affirmed, did not dispose of, it only delayed, their determination,² appellant insists that this is a clearer case than Hawkinson's was for the application of the principles there announced.

We agree both because, being a patent suit, this was, under the rules laid down in that case, not a case for the use of summary judgment procedure, and because, treating this as though it were an ordinary private law suit, the record wholly fails to support the court's conclusion that, as matter of law and not of fact, the defense of misuse of the patents had, in some degree, been made out.

Upon the first point, what was said in that case of the misuse of summary judgment procedure in patent suits³ was not said as mere "shadow boxing in vacuo". It was said precisely and with the definite purpose to avoid just such misuse of it as is here presented. The use of it here for shortcutting the trial did not, it could not, accomplish that result, because it did not, it could not, dispose finally of the issues tendered. All that it could possibly accomplish was, by setting up a temporary road block, to postpone the determination of the merits of plaintiff's suit and thus cause the trial to drag its already slow length still further along.

Filed May 13, 1947, the complaint was that, with full knowledge of the inventions of plaintiff's patents obtained by consultation with plaintiff, defendant had deliberately, wrongfully, and persistently infringed them. The prayer was for a decree: adjudging plaintiff's patents valid and infringed; enjoining further infringement of them; requiring an accounting for gains, profits and advantages; and awarding damages, actually, exemplary, and statutory.

On December 20, 1948, more than eighteen months after the filing of the suit and the accumulation of the mass of matter, testimony, exhibits, admissions, etc, the record presents, the defendant, on the ground that plaintiff was here attempting to use the patents in suit to establish a monopoly on equipment not covered by the patents and that the defendant had already been subjected and would be further subjected to great expense in preparation for the trial moved, under Rule 56 of the Rules of Civil Procedure, for a summary judgment dismissing the complaint.

On January 24, 1949, plaintiff filed its answer, supported by affidavits, setting out that there were real and material issues of fact requiring hearing and determination on a trial and that the motion should be denied.

On April 1, the motion came on for argument, whereupon the defendant, as a part of its argument, filed a written statement which purported to show that its defense of patent misuse was established, as matter of law, by plaintiff's pleadings and admissions, and plaintiff, as part of its argument, filed a written statement in reply.

On April 19, nearly two years after the filing of the complaint, the district judge filed a brief memorandum, 92 F.Supp. 722, 726, to which was attached the statements of plaintiff and defendant above referred to. In it without pointing to any fact in the record in support of his general conclusion, he declared: "An examination and consideration of the record and defendant's contentions convinces me that defendant is right and that the record shows that plaintiff is, as defendant contends, attempting to establish a monopoly, etc., or had done so * * * I think the record in this case shows it to be indisputably true that plaintiff is misusing the patents in suit and the Motion for Summary Judgment will * * * be granted."

It is quite plain that in so concluding and adjudging, the court erred. The premise, upon which defendant's statement, apparently adopted by the trial court as correct, and, therefore, the memorandum and order rest, is that plaintiff has judicially admitted, beyond its power to deny, and, therefore, the record establishes not as matter of fact but as matter of law, that plaintiff has been using its patents and was attempting in the suit to use them to prevent other manufacturers of like standard material from selling it to defendant or to others.

This premise finds no support in the record. There was no pleading or prayer that defendant be enjoined from purchasing from others. There was no evidence that it had ever objected to the sale of material by its competitors or taken any steps or action to prevent them from doing so. There was positive and uncontradicted evidence: that it had not been, and was not, interested in doing so; that its salesmen were carefully instructed to make use as far as possible of any available material their customers had on hand; and that its only purpose in bringing this suit was to prevent the defendant from infringing plaintiff's patents.

While there was evidence that plaintiff had not undertaken any comprehensive system of granting licenses, there was clear and positive evidence that this was not done in order to obtain a monopoly but for wholly different reasons, and there was evidence that plaintiff had offered licenses to defendant and others. The defense of misuse of patents, like other unclean hands defenses, is not, as defendant seems to think, a matter of the letter of bare bones facts: it is a matter of their spirit, the intent with which they are done. A judge may not, on a motion for summary judgment, draw fact inferences as to plaintiff's purpose or intention in respect to obtaining a monopoly. Such inferences may be drawn only on a trial.

Nothing in the pleadings, in the evidence given, or in the admissions made by plaintiff, established as matter of law that it was misusing its patents in an attempt to obtain a monopoly in violation of the applicable rule. Indeed, we are of the opinion that the evidence hardly tends to support such a finding, and that, if we were reviewing the finding as one of fact, we ought perhaps, in the present state of the record, to set it aside as clearly erroneous.

The case as a whole, made by the pleadings, the evidence, and the exhibits in the seven volume record, and by plaintiff's affidavits in opposition to the motion, is peculiarly one for determination, not by summary judgment but on the merits and by trial, if desired, "on oral testimony, with the opportunity to examine and cross-examine witnesses in open court * * * often been acclaimed as one of the persistent, distinctive, and most valuable features of the common-law system",⁴ including for many years, in this country, trials in equity.

As plaintiff presented its case below, and, as appellant, presents it here, defendant is not merely an infringer of the patents but an arch contriver in doing so, in that, under the seal of confidential disclosures, it deliberately went about to obtain information to more effectively pirate plaintiff's invention, with the result that, through the use of the information plaintiff has furnished it, defendant has itself obtained a monopoly in the field covered by plaintiff's patents.

It will not do to say, as appellee did below and does here, that this, as well as all else that plaintiff brings forward and relies on, is immaterial. If what plaintiff charges is true, defendant, in seeking a continuing immunity from suit, while it blithely continues to practice the arts of piracy, and in making broad its phylacteries, while pointing its finger at plaintiff as unclean, is not a Daniel come to judgment, but Satan quoting scripture to his purpose.

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