Uihlein v. General Electric Co.

• Decision Date: 08 April 1931
• Docket Number: No. 4391.,4391.
• Citation: 47 F.2d 997
• Parties: UIHLEIN et al. v. GENERAL ELECTRIC CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

47 F.2d 997 (1931)

UIHLEIN et al. v. GENERAL ELECTRIC CO. et al.

No. 4391.

Circuit Court of Appeals, Seventh Circuit.

January 24, 1931.

On Rehearing, April 8, 1931.

James M. Sheean, of Chicago, Ill., Arthur J. Hudson, of Cleveland, Ohio, and Louis Quarles, of Milwaukee, Wis., for appellants.

Frank Parker Davis, of Chicago, Ill., Alex D. Salinger, of Boston, Mass., Frank J. Seabolt, of Schenectady, N. Y., and Ernest F. Mechlin, of Washington, D. C., for appellees.

Before ALSCHULER, EVANS, and SPARKS, Circuit Judges.

EVANS, Circuit Judge.

This appeal involves a contest between inventors, who dispute as to which is the first discoverer of certain "improvements in electrical furnaces." The suit, authorized by section 4915, Rev. St. (35 USCA § 63), was to secure the issuance of letters patent to Messrs. G. and B., joint inventors, whose application for letters patent was denied by the Commissioner of Patents. Appellants, who were defendants in the District Court, are all interested in patent No. 1,490,732 issued to one Callaghan, which covers the same combination for which G. and B. made application for a patent. The two applications were copending, and an interference was declared. The issue — who was the first discoverer — was tried and decided in favor of C. to whom the above-numbered patent was issued.

Appellants contested appellees' suit, and by counterclaim sought to enforce the C. patent and obtain the usual decree for an injunction and an accounting due to infringements thereof. Upon the trial of the issues presented by these pleadings, the District Court found for appellees and entered a decree directing the Commissioner of Patents to issue a patent to appellees and dismissed appellants' counterclaim. This appeal followed.

Disposition of this appeal turns on the answer to the question, Who was entitled to a patent on the combination described in the two copending applications in the Patent Office? To settle this question two issues of fact necessitate an answer: (a) Who first discovered the new combination for which C. obtained the patent; and (b) if C. was the first discoverer, did he abandon his discovery before the patent to him was issued?

As the District Judge found for appellees, it is necessary, for appellants to prevail, that they satisfy us that C. was entitled to a favorable answer to both questions.

The history of the contest in the Patent Office is important. B. and G. filed their application first, to wit, June 5, 1918. C. filed his application October 23, 1918. C. fixed the date of his discovery as about September 15, 1917. G. and B. asserted the date of their invention was March 14, 1918, and actual reduction to practice, July 10, 1918. The dates submitted by G. and B. are not disputed. Controversy exists over the date of C.'s discovery.

The Examiner of Interferences in the Patent Office found C.'s date of discovery to be September 15, 1917. On three successive appeals the same issue was decided by the Board of Examiners in Chief, the Commissioner of Patents, and the Court of Appeals of the District of Columbia in the same way.

The question of abandonment, i. e., the issue of diligence, was found in favor of C. by the Examiner in the Patent Office and by the Court of Appeals of the District of Columbia. The Commissioner and also the Board of Examiners in Chief in the Patent Office found C. had not been diligent.

The District Judge in this suit found against C. on both issues.

There was small difference in the testimony presented at the five trials. While counsel for appellants asserted that additional evidence was presented to the District Court, we cannot believe it accounted for the difference in the findings.

The quantum of proof required to justify the court in setting aside the patent is stated in Morgan v. Daniels, 153 U. S. 120, 14 S. Ct. 772, 773, 38 L. Ed. 657, as follows:

"Upon principle and authority, therefore, it must be laid down as a rule that where the question decided in the Patent Office is one between contesting parties as to priority of invention, the decision there made must be accepted as controlling upon that question of fact in any subsequent suit between the same parties, unless the contrary is established by testimony which in character and amount carries thorough conviction. Tested by that rule the solution of this controversy is not difficult. Indeed, the variety of opinion expressed by the different officers who have examined this testimony is persuasive that the question of priority is doubtful, and if doubtful the decision of the Patent Office must control."

The real test is laid down in the first sentence of the quotation. The last sentence is an unfortunate expression. It has been construed by counsel as stating a self-applicable test for courts. We cannot believe the court meant to say that a difference of opinion in the Patent Office conclusively negatived complainant's allegation that he was the first inventor in a suit authorized by this section of the statute. 35 USCA § 63.

In short, we are of the opinion that the District Court was right in its assumption that it was not bound by the departmental decisions, even though the testimony before those tribunals was similar to that presented in the District Court. The statute, which gave to the litigants the right to present the case anew to the District Court after it was finally closed in the Patent Office, imposed upon the District Judge the obligation of hearing the evidence and determining the issues in the light of the rule laid down by the Supreme Court, but not controlled by the decisions of the Patent Office tribunals.

It would serve no useful purpose to narrate all of the evidence bearing on this issue or discuss all phases of it. There were several witnesses who testified, and who were examined and cross-examined. There was little serious conflict in their testimony. Appellants' contentions were, in the main, well supported by their witnesses. Two, Callaghan and Uihlein, were interested in the outcome. The others were disinterested and apparently men of character and standing.

There was nothing inherently improbable about the testimony of Callaghan. Nevertheless, if his testimony alone made out appellants' case, we would hardly be justified, in view of his interest, in refusing to accept the finding of the District Court. But the testimony of his corroborating witnesses is strongly persuasive of the facts as asserted by C. In short, we can hardly find C. to be a willful falsifier without branding the other witnesses similarly. These other witnesses were all credible witnesses — responsible parties. They were not interested in the outcome of the litigation. They were not disputed by other witnesses, and their story, far from being incredible, appears entirely reasonable.

Our conclusion is that the evidence was not sufficient, under the rule announced in Morgan v. Daniels, supra, to overcome the force of the finding of the Court of Appeals of the District of Columbia on this issue, supported as it is by the conclusion of three other fact finding tribunals.

Diligence. Was C. diligent in securing a patent for his invention?

Diligence ordinarily involves a mixed question of fact and law. Perhaps, it would be more accurate to say it is a question of fact, the determination of which often necessitates the application of a principle of law. The mental process by which diligence is determined necessitates a disposition of the fact controversy, if any. After the fact has been found, it must be tested by a standard of care fixed by law or created by the court in accordance with certain rules of law. And the result of this test determines the absence or existence of diligence.

Examining the statute (35 USCA § 31), we find some light on what constitutes diligence on the part of an inventor. The conditions upon which a patent may be obtained are there stated. The inventor is entitled to a patent, other named conditions appearing, "unless the same is proved to be abandoned."

Abandonment may be established in two ways. One is by the express declaration of the inventor to the effect that no monopoly is sought or desired. The other way is to introduce evidence from which the court may find that abandonment is implied. In other words, there may be an express abandonment or an implied or constructive abandonment. Controversy arises most frequently out of an infringer's effort to establish an abandonment by showing the inventor has been guilty of laches. It is in reference to this phase of implied abandonment that courts use the word "diligence." If the inventor has failed to diligently proceed with the reduction of his idea to practice or to diligently prosecute his application for a patent, courts have found therein the basis of an implied abandonment.

We find the facts regarding this issue, like the other issue, hardly in dispute. C.'s discovery was made about September 15, 1917. He did not apply for a patent until October 23, 1918. He first made drawings in August, 1918. Our inquiry, therefore, must be directed to ascertaining whether his failure to apply for a patent for thirteen months after discovery, or the failure to make drawings for eleven months, was satisfactorily explained.

C. was a mechanic, married and supporting a wife and seven children. He had no independent means and earned $4.48 a day, part of the time, and $6.40 a day during the latter part of this period. To make application for a patent, he borrowed the necessary money of Uihlein, his superior officer.

The cost of building a furnace of the character here under consideration was such as to preclude the possibility of C.'s constructing one. His invention, moreover, was only an improvement in furnaces and could be readily understood without building an entire furnace.

But it is argued that he could have made sketches, drawings and written descriptions. Had he done so, proof of the first issue, the date of his...