try, published, patented, or disclosed in a filed U.S. patent application which subsequently issues as a patent, and thus is not prior art under Sections 102(a) or (e), be treated? Because "secret" prior invention, even if derived from another, ought not be viewed as Section 103 prior art if it has been abandoned, suppressed, or concealed, the use of such prior invention should be limited to the conditions set forth in Section 102(g) regardless of whether the prior invention has been made in this country and regardless of whether there has been any "admission," express or implied. Such is probably too much to hope for, however. Why should the district courts or the Office worry about statutory constraints set forth in Section 102(g) when it is so much easier to rely on an express or implied "admission” a la Fout and its ancestry?123 Unfortunately, as Stiefel has suggested in a different context,124 to pose the question is to answer it. Nonetheless, it would be wise to recall certain of the concerns expressed by Judge Rich in Hellsund in 1973: The opinion declines to consider what, if any, statutory basis exists for using an applicant's admission as establishing “prior art" under $103. By refusing to consider §102(g) or to relate the use of the admission of prior invention . . . to it in any way, the opinion discards safeguards carefully written into §102(g) to prevent the use of prior abandoned, suppressed, or concealed inventions as "prior art."125 [Emphasis in the original.] Although these concerns were raised in the context of "admissions," they apply equally well to the use of Section 102(f) prior invention as Section 103 prior art. They are as valid today as they were in 1973. 123 Chisum has argued that “nothing can be prior art under Section 103 without a statutory basis in Section 102." 52 Wash. L. Rev. at 26. But as the C.C.P.A. expressly stated in Fout: This court has recognized that section 102 is not the only source of section 103 prior art. [Footnote omitted.] Valid prior art may be created by the admissions of the parties. 213 U.S.P.Q. at 535. This is an open invitation to the Office and district courts to rely on “admissions,” express or implied, and to ignore the statutory constraints set forth in Section 102. 124 Stiefel, op cit., 61 J.P.O.S. at 743. 125 177 U.S.P.Q. at 174. APPENDIX 6 THE "DECENT BURIAL" OF PATENT LICENSEE ESTOPPEL. In 1845 a patentee granted to licensees the right to manufacture a machine for ginning cotton and wool and received'in return a right to a percentage of their profits. The licensees breached the contract and claimed, as a justification, that the patent was invalid.' The Supreme Court held that the licensees were estopped from asserting this defense, thereby establishing the doctrine of licensee estoppel. In June 1969, the doctrine was repudiated in Lear, Inc. v. Adkins.3 This note will briefly explore the doctrine, the rationales offered to support it, and the exceptions created to bypass it. An examination will then follow of the Lear case and its possible influence on future patent agreements. Estoppel Prior to Lear, Inc. v. Adkins Estoppel has most often arisen in two distinct but closely related situations involving the transfer of patent rights estoppel of an assignor and estoppel of a licensee. In the assignment of a patent the inventor ostensibly transfers to the assignee all rights under his patent, retaining nothing for himself save the right to receive royalties. If after the assignment the inventor commences or continues to manufacture the patented device, he presumably is guilty of infringement, and his assignee is given a federal cause of action against the inventor. Numerous federal courts have held that the inventor may not defend on the basis that his invention was invalidly patented.' A patent license, however, is a transfer to another of a limited right under the patent to manufacture, use, or sell the patented device at a prescribed royalty, free from a claim of infringement by the inventor." The inventor retains title to the patent 1. Kinsman v. Parkhurst, 59 U.S. (18 How.) 289 (1855). 2. Id. at 293. 3. 395 U.S. 653 (1969). 4. Assignee and licensor estoppel cases have arisen less frequently. See, eg, StubnitzGreene Spring Corp. v. Fort Pitt Bedding Co., 110 F.2d 192 (6th Cir. 1940) (licensor estoppel); Brown v. L.V. Marks & Sons Co., 64 F. Supp. 352 (E.D. Ky. 1946) (assignee estoppel). 5. See 4 A. DELLER, WALKER ON PATENTS § 335 (2d ed. 1965) [hereinafter cited as [MILER]. 6. 35 U.S.C. § 271 (1964). 7. See, e.g., Faulks v. Kemp, 3 F. 898 (C.C.S.D.N.Y. 1880). 8. See 4 DELLER § 381. 375 and may retain the right to manufacture, sell, or license the patent to others. A patent license is a contract, and a cause of action thereunder will normally arise under state law if the licensee breaches by nonpayment of royalties." In the past, courts have refused to permit a licensee to assert the invalidity of the licensed patent when he is sued for nonpayment of royalties." Real property law served the courts well as a rationale for the estoppel doctrine." A grantor conveying property by deed is estopped from claiming any title inconsistent with the deed or from denying a material fact in the deed." Analogously, if one conveys a potential right to exclude the public from an invention, he is prevented from derogating from the transferred title by claiming patent invalidity." Similarly, when a landlord leases property and puts the tenant in possession, the latter is estopped to deny that the landlord had good title in a suit for rent." Under the same rationale, a licensee was prohibited from asserting patent invalidity in a suit for royalties under a licensing agreement.' But just as an evicted tenant could contest the validity of the landlord's title in an action for past rent," the courts held that a licensee could test the validity of the patent in a suit for royalties where he showed an "eviction," such as a prior judgment of invalidity of the patent at issue." By invoking the estoppel doctrine, courts have sought to prevent unfair dealings between the parties. Thus in one case involving a licensee's denial of the validity of his licensor's patent, the Court held that after entering into the agreement and manufacturing under 9. Id. § 380. 10. See, eg,, United States v. Harvey Steel Co., 196 U.S. 310 (1905). 11. See Treece, Licensee Estoppel in Patent and Trademark Cases, 53 Iowa L. REV. 525 (1967). 12. See 6 R. POWELL, REAL PROPERTY § 937 (1969). 13. See, eg, Westinghouse Elec. & Mfg. Co. v. Formica Insulation Co., 266 U.S. 342, 350 (1924). 14. See, e.g.. Goode v. Gaines, 145 U.S. 141 (1892). 15. See, e.g.. Barber Asphalt Paving Co. v. Headley Good Roads Co., 284 F. 177 (D. Del. 1922). 16. See, e.g., Merryman v. Bourne, 76 U.S. (9 Wall.) 592 (1869). 17. See, eg. Drackett Chem. Co. v. Chamberlain Co., 63 F.2d 853, 854 (6th Cir. 1933). The assignee of certain patents licensed the right to use the patents in the grocery trade to licensee. Both the assignee and licensee joined in an infringement action against a third party. and the court found that the patent was invalid. It was then held in a suit for royalties by the assignee against the licensee that the previous judgment constituted the eviction, releasing the licensee from his obligation to pay royalties. Id. See also White v. Lee, 14 F. 789 (C.C.D Mass. 1882). it, a strong presumption arose that the claim of patent invalidity was made to avoid payment of the agreed upon royalties." This rationale was present also in the majority opinion by Justice Holmes in United States v. Harvey Steel Co.," where it was found unjust to allow the licensee to use the process introduced to him by the patentee and permit him later to claim invalidity, thereby allowing an escape from royalty payments. Similarly, in Faulks v. Kanıp," when an assignor attempted to assert invalidity of the patent after assignment, the Court in order to reach a just result, found an implied warranty that the assignor had title to what he conveyed." Since they were primarily concerned with the equities of the contracting parties, these Courts neglected the public policy considerations inherent in the federal law of patents. Several exceptions to the estoppel doctrine arose.? 23 As stated previously, the licensee was not estopped if he was "evicted."24 Another exception permitted an assignor being sued by his assignee for infringement to narrow the claims of the patent in question by evidence tending to show the state of the art, so long as this narrowing did not nullify the patent in an attempt to deny infringement. The Supreme Court, in Westinghouse Electric & Manufacturing Co. v. Formica Insulation Co.," reasoned that if the state of the art was not examined, courts would be deprived of the best means of measuring what the patent included." 18. Eureka Co. v. Bailey Co., 78 U.S. (11 Wall.) 488, 491-92 (1870). But see Handler, Antitrust: 1969, 55 CORNELL L. Rev. 161, 186-88 (1970). 19. 196 U.S. 310 (1905). The patent holder entered into a contract with the government for the use of his patented process and later brought suit for royalties. The government asserted invalidity as a defense even though there had been no prior determination of patent invalidity. 20. Id. at 318-19. 21. 3 F. 898 (C.C.S.D.N.Y. 1880). 22. "[I]n justice (assignors] ought not to be heard to say that they had it not and did not sell it, and to be allowed to derogate from their own grant by setting up that it did not pass." Id. at 904. St. Paul Plow Works v. Starling, 140 U.S. 184 (1890), is often cited to support the same proposition, but in that case the lower court admitted evidence concerning the novelty of the patent, and this admission was not held to be error by the Court. 23. See Cooper, Estoppel to Challenge Patent Validity: The Case of Private Good Faith vs. Public Policy, 18 W. RES. L. Rev. 1122, 1138-54 (1967). 24. See note 17 supra and accompanying text. 25. 266 U.S. 342, 351 (1924). 26. [But] the result proved to be an anomaly: if a patent had some novelty Formica permitted the old owner to defend an infringement action by showing that the invention's novel aspects did not extend to include the old owner's products; . . . if a Courts further limited the estoppel doctrine where counter veiling public policy considerations warranted protection. In Sola Electric Coy Jefferson Electric Co " a licensing agreement stipulated that the prices, terms, and conditions of sale throughout the licensed territory should not be more favorable to the licensee's customers than those set by the patentee. The patentee sought recovery. of unpaid royalties and an injunction to restrain subsequent sales not made in accordance with the contract. The Supreme Court held that the doctrine of estoppel was in conflict with the prohibitions against price fixing of the Sherman Act and refused to apply estoppel since the invalidity of the patent would necessarily render the agreement illegal. Similarly, the Court has also held that it would be against the policy of the patent laws to estop an assignor from asserting in an infringement suit the defense that the assigned patent was a copy of an expired one, since a patent becomes part of the public domain upon its expiration." Furthermore, the Supreme Court has declined to grant injunctive relief to enforce a contract wherein the licensee agreed not to contest the validity of the patent, reasoning that the public interest in eliminating worthless patents was as important as the patentee's interest in protecting his monopoly. These numerous 30 patent had no novelty at all, the old owner could not defend successfully since he would be obliged to launch the direct attack on the patent that Formica seemed to forbid. Lear, Inc. v. Adkins, 395 U.S. 653, 665 (1969). But see Casco Prods. Corp. v. Sinko Tool & Mfg. Co., 116 F.2d 119 (7th Cir.), cert. denied. 312 U.S. 693 (1940) (scope can be narrowed even if patent reduced to a nullity). See also Ball & Socket Fastener Co. v. Ball Glove Fastening Co., 58 F. 818, 823 (1st Cir. 1893). 27. 317 U.S. 173 (1942). 28. "Local rules of estoppel which would fasten upon the public as well as the petitioner the burden of an agreement in violation of the Sherman Act must yield to the Act's declaration that such agreements are unlawful, and to the public policy of the Act which in the public interest precludes the enforcement of such unlawful agreements." Id. at 177. See also MacGregor v. Westinghouse Elec. & Mfg. Co., 329 U.S. 402 (1947); Edward Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394 (1947). Here the licensors sought only to collect royalties but the Court held that the existence of the price fixing clause was enough to bring the validity of the patent into question. 29. See Scott Paper Co. v. Marcalus Mfg. Co., 326 U.S. 249 (1945). The assignee acquired a patent from the assignor who later made use of the patent. As a defense to the assignee's suit for infringement, the assignor asserted that the patent was a copy of an expired patent and therefore a part of the public domain at the time he allegedly infringed. Interpreted narrowly, the case establishes another exception to the doctrine of estoppel which arises when the patent allegedly infringed was based on a prior-expired patent. Interpreted broadly, however, the case could have been read to overrule estoppel in that all invalid patents are part of the public domain, whether they are invalid because they are copies or otherwise. The same policy that warranted another exception to the doctrine of estoppel also would seem to have warranted repudiation of the doctrine. 30. See Pope Mfg. Co. v. Gormully, 144 U.S. 224 (1892). The patentee-plaintiff licensed |