Appliance Co.v.Equipment Co.

U.S.Mar 2, 1936
297 U.S. 387 (1936)

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CERTIORARI TO THE CIRCUIT COURT OF APPEALS FOR THE SIXTH CIRCUIT.

No. 356.

Argued January 16, 1936. Decided March 2, 1936.

Section 4900 R.S., does not mean that a patentee who has not made the patented article may not recover for infringements committed before he gave actual notice of his patent to the infringer. Pp. 392, 397. 77 F.2d 159, reversed.

CERTIORARI, 296 U.S. 560, to review a decree reducing the recovery on an accounting for infringement of a patent. See also 25 F.2d 236.

Mr. Gilbert P. Ritter for petitioner.

It is especially to be observed that § 4900 R.S., provides for the giving of two notices, one to the public and the other to an infringer. The notice to the public, since it is required to be given by marking a tangible patented article, can only be given by a manufacturing patentee. The notice to an infringer is required to be given only in the event of a failure to mark the patented article. The two notices are related; the necessity of giving the actual notice to an infringer is dependent upon the failure to mark an article which has been made, that is to say, the necessity of giving it arises only upon a failure to notify the public that a patented article which has been made or vended is patented. This failure, therefore, is not a failure to manufacture but a failure, in case of manufacture, to give notice to the public by marking the article "patented," that is, a failure "to mark."

The statute does not require a non-manufacturing patentee to give any notice whatsoever to the public as to the existence of his patent, and as the giving of notice to an infringer is only required of him who fails to comply with the provisions of the statute respecting notice to the public, the statute does not require a non-manufacturing patentee to give notice to an infringer.

The purpose is to prevent an unwitting infringement by a member of the public who, seeing an article bearing no mark indicating that it is patented, proceeds to make other specimens of it. Robinson on Patents, Vol. III, § 902.

Letters patent recorded under R.S., § 4883, in the Patent Office, are "a record which is notice to all the world"; Sessions v. Romadka, 145 U.S. 29, 50; "all persons are bound to take notice of their contents." Boyden v. Burke, 14 How. 575, 582.

The policy of Congress in dealing with patents has been not to require the manufacture of patented articles. Section 4900 R.S., should be interpreted in harmony with that policy. Continental Paper Bag Co. v. Eastern Paper Bag Co., 210 U.S. 405, 429.

The right to recover damages for infringement is given by §§ 4919 and 4921, R.S. Being in derogation of that right, § 4900 R.S., should be strictly construed; and the phrase "failing to mark," appearing in the penalty clause, should not be interpreted as if it read "failing so to manufacture and mark."

Many patentees cannot lawfully manufacture articles patented to them without first obtaining a license under some patent owned by another.

Section 4900 R.S. and § 13 of the Patent Act of 1861, are identical in purpose and meaning.

The legislative history of § 4900 R.S., shows that Congress intended the existing law to remain unchanged in substance.

The decision of the court below is in apparent conflict with the interpretation placed on § 4900 R.S. by this Court; there is a diversity of opinion respecting the interpretation. Dunlap v. Schofield, 152 U.S. 244, 247-248; Campbell v. Mayor, 81 F. 182; Ewart v. Baldwin Co., 91 F. 262; Wagner v. Corn Products Refining Co., 28 F.2d 617; Van Meter v. United States, 37 F.2d 111, 113; Olsson v. United States, 72 Ct. Cls. 72, 103.

It has been decided in the following cases that § 4900 R.S. does not apply to a process patent, since the process is not susceptible of marking: Carnegie Steel Co. v. U.S. Mitis Co., 90 F. 829, affirming 89 F. 206; U.S. Mitis Co. v. Midvale Steel Co., 135 F. 103; Wagner v. Corn Products Refining Co., 28 F.2d 617. Cf. Parker Rust Proof Co. v. Ford Motor Co., 23 F.2d 502, and Churchward International Steel Co. v. Bethlehem Steel Co., 262 F. 438, which did not involve process claims.

The following cases have been found holding that the Section applies to all patentees regardless of whether the patented articles have ever been made or sold under the patent: Churchward International Steel Co. v. Bethlehem Steel Co., 262 F. 438; Son v. Pressed Steel Car Co., 21 F.2d 528; Van Meter v. United States, 47 F.2d 192; Flat Slab Patents Co. v. Northwestern Glass Co., 281 F. 51. Mr. M.K. Hobbs, with whom Mr. George I. Haight was on the brief, for respondent.

The interpretation of the petitioner would mean that one who makes, sells, and gives to the public the benefit of his invention before the expiration of the seventeen years, is placed at a disadvantage in protecting his patent over one who maintains merely a paper patent. Congress did not intend any such fantastic result. See Flat Slab Patents Co. v. Northwestern Glass Co., 281 F. 51.

Every patent owner or licensee can give individual notice of infringement, one of the alternative methods provided, without trouble or expense.

If an article is marked, the accused infringer has notice as a member of the public. If an article is not or cannot be marked because not in existence, then special notice is required to the defendant.

Copying an article marked patented is of itself such notice. But mere knowledge of the existence of a patent is not notice of infringement.

The alternative method of notice provided in the statute and recognized by this Court in Dunlap v. Schofield, 152 U.S. 244, makes an entirely consonant and harmonious policy of the law.

The purpose of the statute is not that notice may be given of the issuance and existence of a patent, but to prevent innocent infringement; and this is accomplished in two ways, — by marking the article if made, for all to see; or by the sending of an accusing notice.

The legislative history of the section shows that Congress changed prior statutes respecting marking and notice, and intended to make the change it wrought. See Churchward International Steel Co. v. Bethlehem Steel Co., 262 F. 438; Flat Slab Patents Co. v. Northwestern Glass Co., 281 F. 51.

If the present edition of the statute meant that giving notice is imposed only on those who make or sell, there would have been no necessity for changing the earlier enactments of the statute.

The Act of August 29, 1842, required all patentees who made and vended to mark the patented articles and carried a penalty for not so doing. That provision made no reference to notice of infringement. This Act was followed by the Act of March 2, 1861, which contained the same requirement in respect to the marking of articles made or vended by any person. The 1861 Act made the first important change by denying the right to damages unless notice was given; but the Act was still limited to the patentees who made and vended. Then came the Act of July 8, 1870, now § 4900 R.S., which extended the provision requiring marking and notice to all patentees, as well as to persons who made and vended, thus making the second important change over the original enactment of 1842.

The decision below is in harmony with Dunlap v. Schofield, 152 U.S. 244, and with the decision of each Circuit Court of Appeals which has passed upon the question. Flat Slab Patents Co. v. Northwestern Glass Co., 281 F. 51; Flat Slab Patents Co. v. Turner, 285 F. 257; American Caramel Co. v. Mills, 162 F. 147; Van Meter v. United States, 47 F.2d 192; Enterprise Railway Equipment Co. v. Wine Railway Appliance Co., 77 F.2d 159; Son v. Pressed Steel Car Co., 21 F.2d 528; Churchward International Steel Co. v. Bethlehem Steel Co., 262 F. 438.


In 1922, respondent, Equipment Company, sued the petitioner for infringing certain patents. April 25, 1923, petitioner, Appliance Company, by counterclaim, charged that respondent had infringed its patents and asked for damages. The District Court dismissed both bill and counterclaim. The Circuit Court of Appeals held one of petitioner's patents valid and infringed and remanded the cause for an accounting.

The master reported (June 17, 1932) that profits amounting to $18,002.83 had been realized on the infringing device and recommended judgment for that sum. Of this total he attributed $5,490.77 to the period preceding the filing of the counterclaim and $12,512.06 to the subsequent one. The District Court approved; but the Circuit Court of Appeals, after citing many conflicting opinions by other Federal Courts, held no recovery could be had for anything done prior to the counterclaim. This ruling is challenged. To determine the issue, we must construe § 4900 R.S.; U.S.C. Title 35, § 49, which provides —

"It shall be the duty of all patentees, and their assigns and legal representatives, and of all persons making or vending any patented article for or under them, to give sufficient notice to the public that the same is patented; either by fixing thereon the word `patented,' together with the day and year the patent was granted; or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is inclosed, a label containing the like notice; and in any suit for infringement, by the party failing so to mark, no damages shall be recovered by the plaintiff, except on proof that the defendant was duly notified of the infringement, and continued, after such notice, to make, use, or vend the article so patented."

This section derives verbatim from § 38 of "An Act to revise, consolidate, and amend the Statutes relating to Patents and Copyrights," approved July 8, 1870, c. 230, 16 Stat. 198, 203, and has remained in force without change, presently important.

The Act of February 7, 1927, c. 67, 44 Stat. 1058, amended 4900 R.S. by inserting "Provided, however, That with respect to any patent issued prior to April 1, 1927, it shall be sufficient to give such notice in the form following, viz: `Patented,' together with the day and year the patent was granted" immediately after the words "like notice" and before "and in any suit."

Section 4901, R.S.; U.S.C. Title 35, § 50, penalizes the use of unauthorized marks upon manufactured articles "for the purpose of deceiving the public." Sections 4919 and 4921, R.S.; U.S.C. Title 35, §§ 67 and 70, permit recovery of damages for infringement of any patent.

Section 4901, R.S.; U.S.C. Title 35, § 50. "Every person who, in any manner, marks upon anything made, used, or sold by him for which he has not obtained a patent, the name or any imitation of the name of any person who has obtained a patent therefor without the consent of such patentee, or his assigns or legal representative; or
"Who, in any manner, marks upon or affixes to any such patented article the word `patent' or `patentee,' or the words `letters-patent,' or any word of like import, with intent to imitate or counterfeit the mark or device of the patentee, without having the license or consent of such patentee or his assigns or legal representatives; or
"Who, in any manner, marks upon or affixes to any unpatented article the word `patent,' or any word importing that the same is patented, for the purpose of deceiving the public, shall be liable, for every such offense, to a penalty of not less than one hundred dollars with costs; one-half of said penalty to the person who shall sue for the same, and the other to the use of the United States, to be recovered by suit in any district court of the United States within whose jurisdiction such offense may have been committed."

The parties agree that issuance of a patent and recordation in the Patent Office constitute notice to the world of its existence. Boyden v. Burke, 14 How. 575, 582; Sessions v. Romadka, 145 U.S. 29, 50.

Neither petitioner nor another with its consent has ever manufactured or vended an article under the infringed patent. No actual notice of infringement was given respondent prior to the counterclaim.

Counsel for petitioner affirm that under § 4900, whenever a patented article is made or vended by one of those therein specified it becomes his duty to give sufficient notice to the public "that the same is patented" either by placing thereon or upon the label the word "Patented." Also, that, as penalty for failure therein, the defaulter is deprived of the right to recover damages for infringement, except upon proof that after notice, the defendant continued to make, use or vend. This construction, it is said, correctly we think, gives effect to every word in the section and carries out the legislative purpose.

Counsel for respondent submit —

Section 4900 requires a patentee or patent owner, whether or not he makes or vends, to give notice in one of the two alternative methods, (marking the article, or giving actual notice to the defendant) as therein specified. By plain language, the duty to give notice of infringement is imposed without limitation upon "all patentees and their assigns and legal representatives." Then the statute proceeds and imposes this upon "all persons making or vending any patented article for or under them." The duty to give notice is required not only of patentees and their assigns and legal representatives, but also the duty is imposed upon all persons making or vending under them. The purpose is not that notice may be given of the issuance and existence of a patent, but to prevent innocent infringement; and this is accomplished in two ways — by marking the article, if made, for all to see; or by sending an accusing notice. The section clearly does say that the three classes of persons named therein, (1) patentees, (2) assigns and legal representatives, and (3) all persons making or vending patented articles for or under them, must either mark the article of the patent in accordance with the statute or give notice to the accused infringer. Alternative methods of giving notice are provided by the statute; so no hardship is worked upon him who does not make and sell and no lack of harmony with other provisions of the patent laws exists. If the present edition of the statute means that giving notice is imposed only on those who make or sell, there would have been no necessity for changing the earlier enactments of the statute. The whole matter could have been disposed of by saying "all persons who make or vend patented articles."

Obviously, but for § 4900, a patentee might recover for all damages suffered through infringement without giving prior actual notice to the infringer. That section subtracts something and creates an exception.

If respondent's position is correct, process patents and patents under which nothing has been manufactured may be secretly infringed with impunity, notwithstanding injury to owners guilty of no neglect. Only plain language could convince us of such an intent.

The idea of a tangible article proclaiming its own character runs through this and related provisions. Two kinds of notice are specified — one to the public by a visible mark, another by actual advice to the infringer. The second becomes necessary only when the first has not been given; and the first can only be given in connection with some fabricated article. Penalty for failure implies opportunity to perform.

If the word "patentees" is not qualified by "making or vending any patented article," the section would seem to impose on such persons a duty to the public impossible of performance when no article is made or vended by them. Also, if these words do not qualify patentees, then the words "same" and "thereon," are not easily understood.

Section 5, Act of August 29th, 1842, c. 263, 5 Stat. 544, declared, that it shall be an offense to place the word "patent" or "letters-patent" on any unpatented article with intent to deceive the public and prescribes a penalty recoverable by action.

"Sec. 6. . . . That all patentees and assignees of patents hereafter granted, are hereby required to stamp, engrave, or cause to be stamped or engraved, on each article vended, or offered for sale, the date of the patent; and if any person or persons, patentees or assignees, shall neglect to do so, he, she, or they, shall be liable to the same penalty, to be recovered and disposed of in the manner specified in the foregoing fifth section of this act."

The Act of March 2, 1861, c. 88, 12 Stat. 249, provided —

"Sec. 13. . . . That in all cases where an article is made or vended by any person under the protection of letters-patent, it shall be the duty of such person to give sufficient notice to the public that said article is so patented, either by fixing thereon the word patented, together with the day and year the patent was granted; or when, from the character of the article patented, that may be impracticable, by enveloping one or more of the said articles, and affixing a label to the package or otherwise attaching thereto a label on which the notice, with the date, is printed; on failure of which, in any suit for the infringement of letters-patent by the party failing so to mark the article the right to which is infringed upon, no damage shall be recovered by the plaintiff, except on proof that the defendant was duly notified of the infringement, and continued after such notice to make or vend the article patented."

Section 38 of the Act of July 8, 1870, supra, became § 4900, R.S. Section 39 — now § 4901, R.S. — is in the margin, ante, p. 393.

By the Act of 1842 (the earliest here important) "all patentees and assignees of patents" were required to mark "each article vended or offered for sale" and defaulters were subjected to a money penalty. The Act of 1861 directed that "in all cases where an article is made or vended by any person under the protection of letters-patent, it shall be the duty of such person to give sufficient notice to the public that said article is so patented, etc." It penalized default by taking away the right to recover damages, except, etc. The Act of 1870, prepared by the Commissioners to Revise the Statutes (Act June 27, 1866, 14 Stat. 74) made it the duty of "all patentees, and their assigns and legal representatives, and of all persons making or vending any patented article for or under them, to give sufficient notice to the public that the same is patented," etc. and penalized default as did the Act of 1861.

Congressional Globe, Vol. 43, Part 5, pp. 2679-2684.
Congressional Globe, Vol. 43, Part 5, pp. 2679-2680.
Congressional Globe, Vol. 43, Part 5, p. 2680.

All these acts reveal the purpose to require that marks be put on patented articles for the information of the public. They undertook to specify those charged with the duty to attach such marks. In this regard, the meaning of the Act of 1861 is not open to question. The different language found in the Act of 1870 was intended, we think, to delimit the term "a person under the protection of letters patent," to describe the members of the class more definitely, and not to impose a new and different burden upon non-producing patentees. We find nothing adequate to support the notion that such patentees were deprived of the right theretofore existing to claim damages from an infringer unless and until he could be run down and served with actual notice.

The Circuit Court of Appeals erroneously sustained the respondent's position, because of the different language found in the Act of 1870. It said:

"The earlier statute provided `that in all cases where an article is made or vended by any person under the protection of letters-patent, it shall be the duty of such person to give sufficient notice to the public that said article is patented, . . .' ( 12 Stat. 249.) That statute required any person making or vending an article under the protection of letters-patent to give the notice, whereas the present one requires that notice be given by all patentees and their assigns and legal representatives, and also, by all persons making or vending the patented article. Thus under the earlier statute a patentee who did not make or vend the article was not required to give the notice, but under the present statute the patentee, his assigns and legal representatives must give it, whether they do or do not make or vend the article. This is the only difference between the two statutes, and in our opinion the amendment to the old statute as embodied in the new requires the patentee or his assignee who does not make or vend the article to give notice of the patent and limits the recovery for infringement thereof to damages sustained thereafter."

Under the interpretation which we accept, § 4900, R.S., provides protection against deception by unmarked patented articles, and requires nothing unreasonable of patentees. By admission, the Act of 1861 did not require a patentee who did not produce to give actual notice to an infringer before damages could be recovered; and there is nothing in the language or history of the Act of 1870 sufficient to indicate an intent to alter his position in this regard. This conclusion is in harmony with the language of Dunlap v. Schofield, 152 U.S. 244, 247.

The challenged judgment must be reversed. The judgment of the District Court is affirmed.

Reversed.