3. Observations on Legislative Compulsory Licensing These cases raise several issues relating to the administration of the compulsory licensing provision of the Atomic Energy Act, such as the jurisdiction of the Administrator to determine the question of title in a situation like the Picker case, and the weight to be accorded a judicial determination of validity or invalidity in view of subsection 157 (c) (1) (B), relating to consideration of defenses in determining a reasonable royalty. In addition, there are potential issues as to the timing of the administrative proceeding in relation to collateral judicial proceedings and the proper scope of judicial review of the administrative determinations, to name a few. The fact of most significance to the basic compulsory licensing issue with respect to the compulsory licensing provisions of both the Atomic Energy Act and the Clean Air Act, however, may be their lack of use, if there is any correlation between use and effect. This lack of use is particularly striking with respect to the Atomic Energy Act in view of the length of time it has been in effect, the scope of the technology it encompasses, and the broad administrative discretion. embodied in the "primary importance" language of its compulsory licensing provision. It might be concluded, therefore, that a purely administrative proceeding such as compulsory licensing under the Atomic Energy Act will not necessarily result in greatly increased usage as over a judicial proceeding such as that of the Clean Air Act. E. Denial of the Injunction for Patent Infringement 1. Overview In his testimony for the Department of Justice regarding compulsory licensing on H. R. 11856 and 11857, which were forerunners of the Nonnuclear Energy Act, Mr. Kauper referred to the principle the federal courts have developed that an injunction will be denied where it would interfere 50/ with the health, safety, or welfare of the public. The judicial denial of the injunction and its adequacy to accomplish the objectives of compulsory licensing should therefore be examined. The statutory basis for the injunctive remedy for patent infringe ment is Section 283 of Title 35 of the United States Code, which provides: The several courts having jurisdiction of cases under right secured by patent, on such terms as the court deems Since the granting of an injunction is discretionary with the court, the court may deny an injunction51/ for patent infringement based on considerations of equity. The discretionary basis of the injunction itself may 50/ 51/ Hearings, supra note 1. The injunction referred to is that which may be granted after a holding that the patent is valid and infringed, as opposed to a preliminary injunction. Preliminary injunctions are generally unavailable in patent cases except in the most compelling circumstances. 8 Deller's Walker on Patents, 401-407 (1973 ed.). therefore be regarded as giving rise to a type of functional compulsory licensing in which the injunction is denied, and only an action for damages 52/ may be maintained. A significant class of cases in which courts have exercised their discretion to withhold injunctive relief for patent infringement is that in which the court deemed that an injunction would be harmful to the public health, safety, or welfare. For example, in City of Milwaukee v. Activated Sludge, Inc. 53/ entry of a permanent injunction against the city's infringement of patents relating to a method of sewage treatment was denied since it might result in disposal of raw sewage into Lake Michigan, thereby endangering the health of the surrounding communities. The possible availability of an alternative method of sewage treatment did not preclude this result. The court stated, "It is suggested that such harmful effect could be counteracted by chemical treatment of the sewage, but 52/ In no event less than reasonable royalty, 35 U.S.C. $284. where, as here, the health and the lives of more than half a million people are involved, we think no risk should be taken...."54/ 55/ In Vitamin Technologists v. Wisconsin Alumni Research Foundation,the subject of the patents involved was a method of making vitamin D, and the plantiff had refused to license the patents for practicing the process of preparing oleomargarine containing vitamin D. The testimony at the trial indicated that vitamin D in oleomargine was very beneficial to the public in providing a means of insuring ingestion of vitamin D particularly for preventing the disease of rickets in the poor. The court also took notice of the fact that the patents were controlled by Wisconsin dairy interests which had not granted any licenses in the United States and were obviously unlikely ever to do so. The court declared the patents invalid but left no doubt that an injunction would not have been granted even if the patents 56/ were valid. 541 Id. at 593. Similarly, in a suit against the Sanitary District of Chicago based on the same patents (Guthard et al. v. Sanitary District, 8 F. Supp. 329 (N.D. I11. 1934)), the court said, "No injunction shall be granted where the effect on the health and the lives of the people of the community served by the infringing devices will be of the serious character indicated by the record here." The relationship of the invention to the public health and safety is not the only determinant of whether an injunction will be granted or denied, however. Equitable relief is fashioned in accordance with equitable principles, such as laches and unclean hands, for example, and the equities do not always run in favor of the infringer, as illustrated in the case of FMC v. City of Greensboro, 208 F. Supp. 494 (M.D.N.C. 1962), rev'd on other grounds, 326 F. 2d 581 (4th Cir. 1964). These cases illustrate a form of compulsory licensing under existing laws in circumstances where a substantial public interest in the areas of health and safety would have been contravened by an injunction. In a number of older cases, injunctive relief has been denied on the basis of a less pressing public need and in areas less closely connected with public health and safety.57/ The courts seem to balance the seriousness of the public need against the nature of the patentee's interests in exercising their discretion. 571 The variety of such situations is illustrated in the following cases: In Ballard et al. v. City of Pittsburgh 12 F. 783 (C.C.W.D. Pa. 1882) an injunction was denied for paving slats since interference with the use of wooden pavements in the city of Pittsburgh would only operate injuriously upon the public without benefiting the complainants. In Bliss v. Brooklyn, Fed. Cas. No. 1544 (C.C.E.D.N.Y. 1871) an injunction against the city's use of fire hose couplings was denied since they were necessary for the daily use of the city in the prevention of fires, while in Bliss v. Gaylord Patent Coupling & Mfg. Co. et al., Fed. Cas. No. 1547 (C.C.S.D.N.Y. 1870), an injunction issued against the manufacturer of the hose coupling. In a case where a patent covered a series of spans and arches which supported a Baltimore, Maryland viaduct, a decree that the structure be destroyed was denied, while an injunction against future infringements was granted, Thatcher v. Mayor of Baltimore, 219 F. 909 (D. Maryland 1915). In some cases where there would be impracticality or hardship in complying with an injunction, it has been denied, Nerney v. New York, NH. and H. R. Co., 83 F. 2d 409 (2nd Cir. 1936); Hoe et al. v. Boston Daily Advertiser Corp. 14 F. 914 (C.C.D. Mass. 1883); Electric Smelting & Aluminum Co. v. Carborundum Co., 189 F. 710 (C.C. Pa. 1900); but not always, "especially if there be no pretense that he (the infringer) has proceeded in ignorance of the patentee's inventions." Hussey v. Whitley, Fed. Cas. No. 6950 (C.C.S.D. Ohio 1860); where the public welfare or convenience is involved, rather little hardship has been required for denial of an injunction, McCreery Engineering Co. v. Massachusetts Fan Co., 180 F. 115 (D. Mass. 1910); Blake v. Greenwood Cemetary, Fed. Cas. No. 1497 (E.D.N.Y. 1377). |