United States v. American Bell Tel Co

• Decision Date: 10 May 1897
• Docket Number: No. 344,344
• Parties: UNITED STATES v. AMERICAN BELL TEL. CO. et al
• Court: U.S. Supreme Court

167 U.S. 224

17 S.Ct. 809

42 L.Ed. 144

UNITED STATES

v AMERICAN BELL TEL. CO. et al.

No. 344.

May 10, 1897.

[Syllabus from pages 224-226 intentionally omitted] On February 1, 1893, the United States filed in the circuit court of the United States in and for the district of Massachusetts a bill in equity against the American Bell Telephone Company and Emile Berliner, praying a decree to set aside and cancel patent No. 463,569, issued on November 17, 1891, to the telephone company, as assignee of Berliner. Upon amended pleadings and proofs the circuit court on January 3, 1895 (65 Fed. 86), entered a decree as prayed for. On appeal to the court of appeals for the First circuit, this decree was on May 18, 1895, reversed, and a decree entered directing a dismissal of the bill. 33 U. S. App. 236, 15 C. C. A. 569, and 68 Fed. 542. Thereupon the United States took an appeal to this court. A motion was made to dismiss the appeal for want of jurisdiction, which was denied (159 U. S. 548, 16 Sup. Ct. 69), and the case was argued upon the merits.

As stated by counsel for the appellant, four grounds for relief were presented and discussed in the circuit court. Those grounds are:

'(1) That the delay of the application in the office for thirteen years was, under the circumstances alleged in the bill, unlawful and fraudulent.

'(2) That a patent, issued November 2, 1880, upon a division of the original application, covers the same invention as that covered by the patent in suit, and exhausted the power of the commissioner as to that invention.

'(3) That the patent is not for the same invention which was described in the application as filed.

'(4) That, taking the application to date from the time when it was made by amendment to cover the invention described and claimed in the patent as issued, it was barred by public use for more than two years.'

By that court only the first two were considered, and the argument in the court of appeals was confined to those questions.

R. S. Taylor and Causten Browne, for appellant.

[Argument of Counsel from pages 227-237 intentionally omitted]

Page 237

Frederick P. Fish and Joseph H. Choate, for appellees.

Mr. Justice BREWER, after stating the facts in the foregoing language, delivered the opinion of the court.

This is a suit by the United States to set aside a patent for an invention as wrongfully issued. It is, we believe, the first

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case in this court in which upon proofs such an application has been presented. The right of the United States to maintain such a suit was affirmed in U. S. v. American Bell Tel. Co., 128 U. S. 315, 9 Sup. Ct. 90. The question now is whether upon the facts disclosed in this record the relief prayed for ought to be awarded. It becomes, therefore, a matter of moment to determine under what circumstances and upon what conditions the United States are entitled to have a patent, issued in due course of law, set aside and canceled.

Many cases have come to this court in which patents for lands have been sought to be set aside, and the rules controlling such suits have been frequently considered. Such decisions will naturally throw light upon the question here presented, though before adverting to them it may be well to note the difference between patents for land and patents for inventions. While the same term is used, the same grantor is in each, and, although each vests in the patentee certain rights, yet they are not in all things alike. The patent for land is a conveyance to an individual of that which is the absolute property of the government, and to which, but for the conveyance, the individual would have no right of title. It is a transfer of tangible property; of property in existence before the right is conveyed; of property which the government has the full right to dispose of as it sees fit, and may retain to itself or convey to one individual or another; and it creates a title which lasts for all time. On the other hand, the patent for an invention is not a conveyance of something which the government owns. It does not convey that which, but for the conveyance, the government could use and dispose of as it sees fit, and to which no one save the government has any right or title except for the conveyance. But for the patent the thing patented is open to the use of any one. Were it not for this patent, any one would have the right to manufacture and use the Berliner transmitter. It was not something which belonged to the government before Berliner invented it. It was open to the manufacture and use of any one, and any one who knew how could contrive, manufacture, and use the instrument. It conveyed to Berliner, so far as

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respects rights in the instrument itself, nothing that he did not have theretofore. The only effect of it was to restrain others from manufacturing and using that which he invented. After his invention he could have kept the discovery secret to himself. He need not have disclosed it to any one. But in order to induce him to make that invention public, to give all a share in the benefits resulting from such an invention, congress, by its legislation made in pursuance of the constitution, has guarantied to him an exclusive right to it for a limited time; and the purpose of the patent is to protect him in this monopoly, not to give him a use which, save for the patent, he did not have before, but only to separate to him an exclusive use. The government parted with nothing by the patent. It lost no property. Its possessions were not diminished. The patentee, so far as a personal use is concerned, received nothing which he did not have without the patent, and the monopoly which he did receive was only for a few years. So the government may well insist that it has higher rights in a suit to set aside a patent for land than it has in a suit to set aside a patent for an invention. There are weightier reasons why the government should not be permanently deprived of its property, through fraudulent representations or other wrongful means, than there are for questioning the validity of a temporary monopoly or depriving an individual of the exclusive use for a limited time of that whose actual use he claims to have made possible, and which, after such time, will be open and free to all. Bearing in mind this distinction, let us inquire upon what conditions the government may maintain a suit to set aside a patent for land.

These suits may be conveniently grouped in three classes: First, where, the government being the only party interested, the patent is charged to have been obtained by fraud in representations or conduct; second, where the land by appropriate reservation is not subject to patent, but is, nevertheless, erroneously patented; third, where the land, though subject to patent in the ordinary administration of the land office, is patented to the wrong person either through fraud or by reason of mistake or inadvertence. In the first class are the following

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cases; U. S. v. Hughes, 11 How. 552; U. S. v. Throckmorton, 98 U. S. 61; U. S. v. Atherton, 102 U. S. 372; Moffat v. U. S., 112 U. S. 24, 5 Sup. Ct. 10; U. S. v. Minor, 114 U. S. 233, 5 Sup. Ct. 836; Maxwell Land-Grant Case, 121 U. S. 325, 7 Sup. Ct. 1015; Colorado Coal & Iron Co. v. U. S., 123 U. S. 307, 8 Sup. Ct. 131; U. S. v. San Jacinto Tin Co., 125 U. S. 273, 8 Sup. Ct. 850; U. S. v. Iron Silver Min. Co., 128 U. S. 673, 9 Sup. Ct. 195; U. S. v. Hancock, 133 U. S. 193, 10 Sup. Ct. 264; U. S. v. Trinidad Coal & Coking Co., 137 U. S. 160, 11 Sup. Ct. 57; U. S. v. Budd, 144 U. S. 154, 12 Sup. Ct. 575; San Pedro & Ca non del Agua Co. v. U. S., 146 U. S. 120, 13 Sup. Ct. 94. In the second are these: U. S. v. Stone, 2 Wall. 525; Leavenworth, etc., R. Co. v. U. S. 92 U. S. 733; McLaughlin v. U. S., 107 U. S.526, 2 Sup. Ct. 802; Western Pac. R. Co. v. U. S., 108 U. S. 510, 2 Sup. Ct. 802; Mullan v. U. S., 118 U. S. 271, 6 Sup. Ct. 1041. And in the third the following: Hughes v. U. S., 4 Wall. 232; U. S. v. Beebe, 127 U. S. 338, 8 Sup. Ct. 1083; U. S. v. Marshall Silver Min. Co., 129 U. S. 579, 9 Sup. Ct. 343; U. S. v. Missouri, K. & T. Ry. Co., 141 U. S. 358, 12 Sup. Ct. 13; U. S. v. Southern Pac. R. Co., 146 U. S. 570, 13 Sup. Ct. 152.

The second and third classes are not paralleled in this case, for it is not claimed that there was no invention, or that the patent issued to the wrong party. The decisions in those classes need not be considered. The first class comprises all cases in which the land, though subject to patent and therefore within the jurisdiction of the land department, was charged to have been patented in consequence of fraudulent representations or conduct on the part of the patentee. The representations may have been as to the matter of right or the matter of quantity. The patentee may have been entitled to no land, or to less, or a different tract than that patented. In any event, fraud was the basis of the relief sought, and as fraud, actual or constructive, in the issue of the patent, is the burden of this suit, we will quote from the opinions in some of these cases. In the Maxwell Land-Grant Case, Mr. Justice Miller, delivering the opinion of the court, said (page 381, 121 U. S., and page 1029, 7 Sup. Ct.):

'We take the general doctrine to be that when in a court of equity it is proposed to set aside, to annul, or to correct a

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written instrument for fraud or mistake in the execution of the instrument itself, the testimony on which this is done must be clear, unequivocal, and convincing, and that it cannot be done upon a bare preponderance of evidence which leaves the issue in doubt. If the proposition, as thus laid down in the cases cited, is sound in regard to the ordinary contracts of private individuals, how much more should it be observed where the attempt is to annul the grants, the patents, and other solemn evidences of title emanating from the government of the United States under its official seal. In this...