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has entered an appearance, although in default for want of pleading, he is entitled to notice before final decree is entered.
[Ed. Note.-For cases in point, see Cent. Dig. vol. 38, Patents, § 166.)
In Equity. On application for final decree.
LANNING, District Judge. The bill of complaint in this cause is filed under the provisions of section 4915 of the Revised Statutes (U. S. Comp. St. 1901, p. 3392). The defendant has entered appearance, but has not answered the bill. On. December 26, 1906, an order that the bill be taken pro confesso was entered under the provisions of equity rule No. 18. Application is now made by the complainants for a final decree. Section 4915 is as follows:
"Whenever a patent on application is refused, either by the Commissioner of Patents or by the Supreme Court of the District of Columbia upon appeal from the Commissioner, the applicant may bave remedy by bill in equity; and the court having cognizance thereof, on notice to adverse parties and other due proceedings had, may adjudge that such applicant is entitled, according to law, to receive a patent for his invention, as specified in his claim, or for any part thereof, as the facts in the case may appear. And such adjudication, if it be in favor of the right of the applicant, shall authorize the Commissioner to issue such patent on the applicant filing in the Patent Office a copy of the adjudication, and otherwise complying with the requirements of law. In all cases, where there is no opposing party, a copy of the bill shall be served on the Commissioner; and all the expense of the proceeding shall be paid by the applicant, whether the final decision is in his favor or not.”
The question now presented for consideration relates to the practice that should be observed where no answer has been filed to such a bill. The court is asked, as the designated agent of the government, to grant to the complainants a monopoly of an invention by authorizing the Commissioner of Patents to issue a patent for the invention described in the bill of complaint. The case is therefore not like an ordinary suit in equity between private parties. The government itself has an interest in the suit, and it is the duty of the court to pass upon the merits of the application, and not to give to the complainants, as a mere matter of course, the decree for which they pray. That this is so seems clear from the reasoning of the Supreme Court in the case of Hill v. Wooster, 132 U. S. 694, 10 Sup. Ct. 228, 33 L. Ed. 502. In that case issue was joined, voluminous proofs were taken, and the complainant received a decree in his favor adjudging that he was entitled to receive a patent for the invention described in his application, notwithstanding the contrary conclusions reached in interference proceedings before the examiner of interferences, the examiners in chief, and the Commissioner of Patents. It seems that the only question considered by the Circuit Court related to priority of invention as between the parties to the interference proceedings, but the Supreme Court said:
"The provision of section 4915 is that the Circuit Court may adjudge that the applicant 'is entitled, according to law, to receive a patent for his invention, as specified in his claim, or for any part thereof, as the facts in the case may appear,' and that, if the adjudication is in favor of the right of the applicant, it shall authorize the Commissioner to issue the patent. It necessarily follows that no adjudication can be made in favor of the applicant unless the al. invention for which a patent is sought is a patentable invention. The ion between the parties on this bill cannot be concluded by solely deterg an issue as to which of them in fact first made a cabinet creamery. ermination of that issue alone in favor of the applicant, carrying with it does, authority to the Commissioner to issue a patent to him for the s in interference, would necessarily give the sanction of the court to the tability of the invention involved. The parties to the present suit appear ve been willing to ignore the question as to patentability in the present and to have litigated merely the question of priority of invention, on the mption that the invention was patentable. But neither the circuit court this court can overlook the question of patentability.” he court then examined the claims set forth in the complainant's
and adjudged that the decree of the Circuit Court should be resed on the ground that there was no patentable invention in what the mplainant had set up in his bill. Gandy v. Marble, 122 U. S. 432, Sup. Ct. 1290, 30 L. Ed. 1223, is also a case in which a bill was d under section 4915. The defendants were the Secretary of the terior and the Commissioner of Patents. Neither of the defendants peared. Their default was entered, and full proofs, including a copy the proceedings in the Patent Office, were thereafter taken. This eems to indicate the correct practice, for, as was said in that case, 1though “the proceeding by bill in equity, under section 4915, on the efusal to grant an application for a patent, intends a suit according to he ordinary course of equity practice and procedure, and is not a echnical appeal from the Patent Office, nor confined to the case as made in the record of that office, but is prepared and heard upon all competent evidence adduced and upon the whole merits, yet the proceeding is, in fact, and necessarily, a part of the application for the patent." And in Morgan v. Daniels, 153 U. S. 124, 14 Sup. Ct. 772, 38 L. Ed. 657, in a proceeding brought under section 4915, it was further said:
“But this is something more than a mere appeal. It is an application to the court to set aside the action of one of the executive departments of the government. The one charged with the administration of the patent system had finished its investigations and made its determination with respect to the question of priority of invention. That determination gave to the defendant the exclusive rights of a patentee. A new proceeding is instituted in the courts a proceeding to set aside the conclusions reached by the administrative department, and to give to the plaintiff the rights there awarded to the defendant.
It is something in the nature of a suit to set aside a judgment, and as such is not to be sustained by a mere preponderance of evidence. Butler y. Shaw (C. C.) 21 Fed. 321, 327. It is a controversy between two individuals over a question of fact which has once been settled by a special tribunal, intrusted with full power in the premises. As such it might be well argued, were it not for the terms of this statute that the decision of the Patent Office was a finality upon every matter of fact.
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."
These authorities make it clear, I think, that before granting a final decree I should have before me a copy of the proceedings in the interference cases, with any other competent evidence the complainants may wish to offer. And after the proofs shall have been taken and the complainants are ready to apply for a final decree the defendant, since he has entered appearance, will be entitled to not ce for the reason that he is entitled to be heard concerning the form of the decree. Southern Pacific R. Co. v. Temple (C.C.) 59 Fed. 17.
An order will be made referring the cause to a master to take proofs.
CILLEY V. UNITED SHOE MACH. CO.
In an action under section 7, Anti-Trust Act July 2, 1890, c. 647, 26 Stat. 209 [U. S. Comp. St. 1901, p. 3202], to recover damages for injury alleged to have been caused to plaintiff by reason of contracts made by defendant in restraint of trade or commerce among the several states or with foreign nations, and an attempt by defendant to monopolize such trade or commerce, or a part thereof, in violation of said act, it is not sufficient to frame the declaration in the language of the statute, but the nature and substance of the contracts relied upon, and the substantial facts alleged to constitute an attempt at monopoly must be pleaded to enable the court to determine whether they are in violation of the statute, and to enable the defense to properly prepare to meet the charge.
At Law. On demurrer to declaration. Merritt & Merritt, for complainant. Wm. H. Coolidge and C. A. Hight, for defendant. COLT, Circuit Judge. This is a suit brought under the provisions of Act Cong: July 2, 1890, 26 Stat. 209, c. 647 (U. S. Comp. St. 1901, p. 3202], in which the defendant is charged with making contracts in restraint of trade or commerce among the several states or with foreign nations, and with an attempt to monopolize such trade or commerce, whereby the plaintiff has been injured in his business and property. Section 7 of the act provides as follows:
“Any person who shall be injured in his business or property by any other person or corporation by reason of anything forbidden or declared to be unlawful by this act, may sue therefor in any circuit court of the United States in the district in which the defendant resides or is found, without respect to the amount in controversy, and shall recover three-fold the damages by him sustained, and the costs of suit, including a reasonable attorney's fee."
Among the things forbidden or declared unlawful by the act are "every contract
in restraint of trade or commerce among the several states or with foreign nations," and every "attempt to monopolize” such trade or commerce.
The case was heard on demurrer to the amended declaration. The grounds of demurrer on which the defendant relies are the following:
"(2) The declaration is insufficient in that it is too uncertain, vague, and indefinite to enable the defendant to know of what it is accused, of what damage the plaintiff has suffered, and to what it should direct its defense.
“(3) The declaration fails to set forth with substantial certainty the substantive facts necessary to show that the defendant has been guilty of anything forbidden or declared to be unlawful by the anti-trust act."
naterial averments of the declaration may be summarized as
The plaintiff is a manufacturer of shoe machinery, and is en1 manufacturing and selling a machine for sole leveling and for ing, known as the “Universal Leveler.” The plaintiff has interests in patents on these machines, and is the owner of es manufactured under these patents. The defendant is enboth in manufacturing and buying shoe machinery, and now and controls the shoe machinery necessary to that part of the acture of boots and shoes known as bottoming. The defendas made divers contracts and agreements with a great number nufacturers of boots and shoes, to the plaintiff unknown, throughe several states and in foreign countries.” By the terms of these icts and agreements, such manufacturers are bound to use no inery except such as is furnished to them by the defendant. By erms of these contracts and agreements the use by such manurers of the plaintiff's machines is prohibited and prevented if such ufacturers use any one or more of the machines furnished by the ndant. These contracts and agreements are contracts in restraint rade or commerce among the several states and with foreign nas, and are forbidden by the act of Congress of July 2, 1890. And, her, the defendant, contrary to the provisions of this act, is attempt
to monopolize a part of the trade or commerce in shoe machinery ong the several states, and with foreign nations "by endeavoring divers means and methods unknown to the plaintiff to compel or luce all manufacturers of boots and shoes throughout the several ates, and in foreign countries, to lease or otherwise to acquire shoe achinery from the defendant alone, and to enter with the defendant to contracts and agreements as aforesaid; and by trading and disosing throughout the several states and in foreign countries of cerain of its shoe machinery of which it has sole control to the manuacturers of boots and shoes, by means of contracts, agreements, writen leases, and other instruments; the terms of which are unknown to the plaintiff, but in which are contained divers agreements and conditions made by and between the defendant and its several customers and lessees substantially as follows, to wit: That the several customers and lessees will thereafter acquire shoe machinery from the defendant alone; that the several customers and lessees will not use any machines acquired from the defendant in any part or process of the manufacture of any boot or shoe if any other part or process of such manufacture shall have been done or performed by or upon any machine not acquired from the defendant," which "contracts, agreements, written leases, and other instruments the defendant, by divers means and methods unknown to the plaintiff, has compelled such manufacturers to execute and the agreements and conditions thereof and therein to observe and keep."
The declaration then alleges that these manufacturers constitute the sole market for the sale of the plaintiff's machines. The declaration further alleges that, by reason of these contracts, agreements, written leases, and other instruments, customers are prevented from buying or leasing the plaintiff's machines, that by these means the plaintiff has been deprived of the right to an open market, and prevented from
selling or leasing his property, and that thereby his business has been destroyed, and his property rendered of no value.
It will be observed that the contracts in restraint of trade set forth in the declaration are described as “divers contracts and agreements with a great number of manufacturers of boots and shoes throughout the several states and in foreign countries,” by the terms of which such manufacturers are bound to use no shoe machinery except such as is furnished by the defendant, and are prohibited from using the plaintiff's machines if they use the machines furnished by the defendant. It will also be observed that the attempt to monopolize trade or commerce set forth in the declaration is described as endeavoring, “by divers means and methods unknown to the plaintiff," to compel all manufacturers to acquire shoe machinery from the defendant alone, or, “by means of contracts, agreements, written leases, and other instruments," to acquire shoe machinery from the defendant alone, and not to use any machines acquired from the defendant if any other part or process in shoe manufacture shall be done on any machine not acquired from the defendant.
It is manifest that these averments are of the most general character. No specific reference is made to any contract or contracts in restraint of trade entered into by the defendant, and no definite description is given of the terms of such contract or contracts. The declaration is also wanting in any definite description of the acts or contracts which constitute an attempt to monopolize trade or commerce. Presumably the defendant has made many contracts with manufacturers, and, before being required to plead, it is entitled to know upon what contracts the plaintiff relies, and the nature of those contracts. So, also, the defendant is entitled to have pointed out the substantial facts upon which the plaintiff bases his allegation of an attempt to monopolize trade or commerce; and, if this attempt to inonopolize is founded upon contracts or leases, the material parts of these contracts or leases should be set forth in the declaration.
Again, the declaration alleges that the plaintiff is the owner of certain interests in patents relating to shoe machinery. It also alleges that the defendant owns and controls certain shoe machinery. These and other allegations in the declaration indicate that the defendant's control of shoe machinery is also based upon patents. If the defendant's contracts with manufacturers are based upon patent rights, this fact should appear, because contracts with respect to patents are, as a general rule, outside the doctrine of restraint of trade, both at common law and under the federal statute.
In my opinion, the averments in this declaration are too uncertain, vague, and indefinite to enable the defendant properly to prepare its defense, or to enable the court to determine whether the alleged offenses are within the statute.
Under the act of July 2, 1890, it is not sufficient to frame the declaration in the words of the statute. The statute does not set forth the elements of the offenses which are forbidden; and, further, there may be contracts in restraint of trade between the states or with foreign countries, and attempts to monopolize such trade or commerce, which are not within the statute. These circumstances make it imperative