1. An assignment of a patent, or of the invention upon which a
patent is subsequently granted to the assignee, though not required
to be under seal, works an estoppel as by deed, preventing the
assignor from denying the novelty and utility of the patented
invention when sued by the assignee for infringement. P.
266 U. S.
348.
2. This estoppel, however, distinct from any that might arise
in pais from special representation, while it estops the
assignor from denying the validity of the claims, does not prevent
him from narrowing or qualifying their construction by showing the
state of the art. Pp.
266 U. S.
350-352.
3. The estoppel is applicable to claims added by an assignee and
allowed by the Patent Office after the assignment which were
foreshadowed by the specifications sworn to by the assignor and
accompanying his application. P.
266 U. S.
353.
4. But it will not be enlarged by a claim originally made by the
assignor but so manifestly invalid that it was promptly rejected by
the Patent Office as embracing the prior art. P.
266 U. S.
354.
5. Patent No. 1,284,432, issued to the plaintiff as assignee of
O'Conor, covering a process of making composite electric insulation
materials by coating sheets of fibrous material, such as cardboard,
with adhesive binders and subjecting them to heat and pressure,
applies, as between assignor and assignee, to non-planiform
articles (Claims 11 and 12, added after assignment), but only where
the "two-step" procedure --
viz., application of heat and
high pressure to the superposed sheets and cooling them, and then
the baking of them under lower pressure -- is employed in the
manufacture. P.
266 U. S.
353.
288 F. 330 affirmed.
This is a writ of certiorari to the Circuit Court of Appeals for
the Sixth Circuit in a patent suit. The Westinghouse Electric
Company sued the Formica Company
Page 266 U. S. 343
charging it with infringement of Claims 11 and 12 of Patent No.
1,284,432, issued November 12, 1918, to the complainant as
assignee, on an application of O'Conor filed February 1, 1913. The
patent covered a process for making composite electric insulation
materials using paper, muslin, or other fibrous material. The
fabric was to be coated on one side with an adhesive liquid, such
as bakelite, a condensation product of phenol and formaldehyde. It
was then dried by passing it over a series of rollers in a
steam-heated oven. The thickness of the coating retained by the
paper was regulated by varying the distance between the two rollers
and by altering the viscosity of the liquid. The prepared paper was
cut into sheets of any desired size, and a plate built up to the
required thickness by placing the sheets together, with the
untreated side of each sheet next to the treated side of the
adjacent sheet. The built-up plate was then placed between thin
sheet steel plates on which had been rubbed a small amount of
machine oil. Any desired number of the steel plates carrying the
sheets of paper were placed between the platens of a hydraulic
press which had been previously heated by steam. The press was
closed, and pressure applied to as much as 800 pounds per square
inch. Steam heat was first applied, and then a cooling period
followed. The period of pressure and heat was varied in proportion
to the thickness of the plate according to a table set forth. The
effect was firmly to cement together the sheets of paper, and
further to impregnate the paper with the bakelite. Thus, the plate
was transformed into a hard and compact mass. After cooling, the
plates of insulation were removed from the press and clamped
between steel plates to prevent warping during the baking. The
plates were then placed in ovens, with an air pressure of 140
pounds per square inch and the temperature regulated between 100
and 140 degrees centigrade. These conditions were maintained
Page 266 U. S. 344
for approximately eight hours, when the plates were removed from
the oven and the finished product allowed to cool. The
specifications further said that, while the process was used for
plates, the material could be similarly produced in the form of
channel pieces or tubes that were cylindrical or rectangular in
cross-section or of other shape, as desired, by pressing in forms
of the proper shape. The resultant material had a specific gravity
of approximately 1.25, was practically nonabsorbent, even when
soaked in hot water, and was insoluble.
The first ten claims subsequently allowed in the patent referred
to the so-called "two-step" process -- namely, first, the
application of heat and pressure to the superposed sheets and
cooling them, and, second the baking of them under a lower
pressure.
The 11th and 12th claims, however, were as follows:
"11. The process of manufacturing a nonplaniform article which
consists in superposing a plurality of layers of fibrous material
associated with an adhesive substance that is adapted to harden
under the influence of heat and pressure into a substantially
infusible and insoluble condition, and molding the superposed
layers by means of a form of the proper shape while applying
pressure and heat to compact and harden the materials."
"12. The process of manufacturing a nonplaniform article which
consists in superposing a plurality of layers of fibrous material
associated with a phenolic condensation product and molding the
superposed layers by means of a form of the proper shape while
applying pressure and heat to compact and harden the
materials."
It will be observed that there is no express provision or
requirement in the 11th and 12th claims for the "two-step" process
as an element. The defendants do not use the two-step process, but
do make nonplaniform articles.
The defenses were that the two claims were invalid for want of
novelty, or, if valid, must be limited to the
Page 266 U. S. 345
two-step process. A second defense was that complainant had been
guilty of laches estopping it from prosecuting the action, in that
it had known of the defendant's manufacture of its composition and
its large investment in the business without objection for four
years before the claims Nos. 11 and 12 were secured by the
defendant as assignee from the Patent Office, and did not sue for
three years thereafter.
In reply, the plaintiff urged that the defendant, being in
privity with O'Conor in the assignment and the infringement, was
estopped to dispute the validity of the 11th and 12th claims
construed according to the ordinary meaning of their language,
which, as it contended, did not require the two-step process.
The district court sustained the defense based on complainant's
laches, and dismissed the bill.
On appeal, the circuit court of appeals held that the defense of
laches could not be sustained. Coming to consider the defense of
estoppel, the court held that, on the facts, no estoppel arose as
to the claims sued on, and proceeding then to the merits found that
Claims 11 and 12 were invalid for lack of invention.
O'Conor was a mechanical engineer, and, after graduation from
college, entered the employ of the Westinghouse Company at a small
salary, with the understanding that he was to be allowed to work in
association with experienced engineers and gain experience in the
line of his profession, and that inventions made by him when in the
company's employ were to become the property of the company and to
be assigned by him to it. O'Conor made this invention and disclosed
it by written description to the company, which, through its legal
department, prepared his application for a patent and an
assignment, both of which he executed, receiving the nominal
consideration of one dollar. Thereafter, pending the
application
Page 266 U. S. 346
for the patent, O'Conor left the company's employ and associated
himself in business with two others in the manufacture of electric
insulating material in a partnership, which was thereafter
organized into a corporation known as the Formica Company, and its
stock divided between the partners. From 1913, the partnership and
succeeding company have been engaged in the manufacture and sale of
laminated products having a phenolic condensation binder. They have
made nonplaniform articles, as well as flat plates, openly and with
the knowledge and acquiescence of the Westinghouse Company from the
beginning in 1913 down to the time this suit was brought, July 6,
1920.
When the application for the patent here in suit was filed and
was assigned to the company, there were no claims based on a
distinction between flat plates and nonplaniform articles. But the
specifications signed by O'Conor contained the following:
"While the process above described is that used for making
plates, the insulating material may be produced in the form of
channel pieces or tubes that are cylindrical or rectangular in
cross-section, or of other shape as desired, by pressing in forms
of proper shape."
The art of making insulating material was well advanced when
O'Conor entered it. A Haefely patent, owned by the Westinghouse
Company when O'Conor began his experiments, was for a process for
making a hard material offering resistance to the electric current
out of paper covered with varnish, wound around a mandrel and
subjected to pressure and heat. The art also showed a forming press
by Haefely for pressure of flat articles for such a purpose. There
was a process patent to Thomson for making insulating material by
applying to paper sheets an earthy or mineral substance with
binding material, piling such sheets together and drying and
heating the resulting mass. Baekeland had
Page 266 U. S. 347
invented much in this art, and all before O'Conor. One of his
discoveries was that of the "bakelite" which O'Conor suggests using
in his process -- a combination of phenol and formaldehyde, a
viscous fluid resisting the electric current and attaining great
hardness under heat and pressure -- for use as a binder. Another
patent of Baekeland was for
"a composite cardboard consisting of superposed layers of paper
or the like combined with intermediate layers of an insoluble,
infusible condensation product of phenols and formaldehyde,"
in which he described his process as follows:
"I apply to the surface of any of the ordinary grades of paper,
or to asbestos paper, or the like a coating of a liquid
condensation product of phenols and formaldehyde of such character
that it is capable of transformation under the action of heat into
an insoluble and infusible body. For this purpose, I may use either
a liquid condensation product of the character described or a
solution of the same in alcohol or other appropriate solvent. This
layer is permitted to dry somewhat, when a second sheet of paper is
superposed upon the first and similarly treated, or the several
layers may be coated and preferably dried before being superposed.
The condensation product may be applied to one or both sides of the
sheets. The desired number of sheets having been assembled, the
composite article is compacted by pressure, with or without the aid
of heat. Heat is now applied in order to effect the transformation
of the condensation product into an insoluble and infusible body.
"
Page 266 U. S. 348
MR. CHIEF JUSTICE TAFT delivered the opinion of the Court.
The important question in this case is the operation of the
principle of estoppel on the character of defense to which the
assignor of a patented invention is limited in a suit for
infringement by the assignee. We may first usefully consider the
rule that should obtain where the assignment is made after the
issue of the patent, and then the difference in the rule, if any,
where the assignment was made before the granting of the
patent.
Congress, under its power to secure for limited times to
inventors the exclusive right to their discoveries, has enacted
laws conferring such an exclusive right by patent after an
application with specification of the invention and claims therefor
and a favorable decision by the Commissioner of Patents. The patent
of the exclusive right against the public carries with it a
presumption of its validity.
Agawam Woolen Co. v.
Jardon, 7 Wall. 583;
Blanchard
v. Putnam, 8 Wall. 420;
Miller v. Eagle Mfg.
Co., 152 U. S. 186;
Boyd v. Janesville Hay Tool Co., 158 U.
S. 260. It is not conclusive, but the presumption gives
the grant substance and value. By § 4898, Rev.Stats., every
such patent or any interest therein shall be assignable in law by
an instrument in writing, and the patentee or his assigns or legal
representatives may in like manner grant and convey an exclusive
right under his patent to the whole or any specified part of the
United States. The section further provides that an assignment,
grant, or conveyance shall be void as against any subsequent
purchaser or mortgagee for a valuable consideration, without
notice, unless it is recorded in the Patent Office within three
months from the date thereof. While a seal is not required to make
an assignment legal,
Gottfried v. Miller, 104 U.
S. 521, there seems to be no reason why the principles
of estoppel by deed should not apply to assignment of a patent
right in accordance with the
Page 266 U. S. 349
statute. Its purpose is to furnish written and recorded evidence
of title and to protect the purchaser of the title as recorded for
value without notice. It was manifestly intended by Congress to
surround the conveyance of patent property with safeguards
resembling those usually attaching to that of land. This Court has
recognized the analogy between estates in land by estoppel and the
right to enjoy a patent right in the use of an article conveyed by
one without authority but who acquires it by subsequent conveyance.
Gottfried v. Miller, 104 U. S. 521;
Littlefield v.
Perry, 21 Wall. 205.
There are no cases in this Court in which the application of the
principle of estoppel as by deed to the conveyance or assignment of
patent property has been fully considered. But there are many in
the reports of the circuit and district court decisions and in
those of the circuit court of appeals. They began as early as 1880,
in
Faulks v. Kamp, 3 F. 898, and were followed by a
myriad. The rule supported by them is that an assignor of a patent
right is estopped to attack the utility, novelty, or validity of a
patented invention which he has assigned or granted as against
anyone claiming the right under his assignment or grant. As to the
rest of the world, the patent may have no efficacy and create no
right of monopoly, but the assignor cannot be heard to question the
right of his assignee to exclude him from its use.
Curran v.
Burdsall, 20 F. 835;
Ball & Socket Fastener Co. v.
Ball Glove Fastening Co., 58 F. 818;
Woodward v. Boston
Lasting Machinery Co., 60 F. 283, 284;
Babcock v.
Clarkson, 63 F. 607;
Noonan v. Chester Park Athletic
Co., 99 F. 90, 91. There are later cases in nearly all the
Circuit Courts of Appeal to the same point. In view of the usual
finality of patent decisions in the circuit courts of appeal, this
Court will not now lightly disturb a rule well settled by 45 years
of judicial consideration and conclusion in those courts.
Page 266 U. S. 350
The analogy between estoppel in conveyances of land and estoppel
in assignments of a patent right is clear. If one lawfully conveys
to another a patented right to exclude the public from the making,
using, and vending of an invention, fair dealing should prevent him
from derogating from the title he has assigned, just as it estops a
grantor of a deed of land from impeaching the effect of his solemn
act as against his grantee. The grantor purports to convey the
right to exclude others, in the one instance, from a defined tract
of land, and in the other, from a described and limited field of
the useful arts. The difference between the two cases is only the
practical one of fixing exactly what is the subject matter
conveyed. A tract of land is easily determined by survey. Not so
the scope of a patent right for an invention.
As between the owner of a patent and the public, the scope of
the right of exclusion granted is to be determined in the light of
the state of the art at the time of the invention. Can the state of
the art be shown in a suit by the assignee of a patent against the
assignor for infringement to narrow or qualify the construction of
the claims and relieve the assignor from the charge? The Circuit
Court of Appeals for the Seventh Circuit, in
Siemens-Halske
Electric Co. v. Duncan Electric Co., 142 F. 157, seems to
exclude any consideration of evidence of this kind for such a
purpose. The same view is indicated in subsequent decisions of that
court.
Chicago Co. v. Pressed Steel Car Co., 243 F. 883,
887;
Foltz Smokeless Furnace Co. v. Eureka Smokeless Furnace
Co., 256 F. 847. We think, however, that the better rule, in
view of the peculiar character of patent property, is that the
state of the art may be considered. Otherwise, the most
satisfactory means of measuring the extent of the grant the
government intended and which the assignor assigned would be denied
to the court in
Page 266 U. S. 351
reaching a just conclusion. Of course, the state of the art
cannot be used to destroy the patent and defeat the grant, because
the assignor is estopped to do this. But the state of the art may
be used to construe and narrow the claims of the patent, conceding
their validity. The distinction may be a nice one, but seems to be
workable. Such evidence might not be permissible in a case in which
the assignor made specific representations as to the scope of the
claims and their construction, inconsistent with the state of the
art, on the faith of which the assignee purchased; but that would
be a special instance of estoppel by conduct. We are dealing only
with the estoppel of an assignment based on the specifications and
claims without special matter
in pais.
Mr. Justice Lurton, when Circuit Judge, speaking for the Circuit
Court of Appeals of the Sixth Circuit in
Noonan v. Chester Park
Athletic Co., 99 F. 90, 91, used this language:
"It seems to be well settled that the assignor of a patent is
estopped from saying his patent is void for want of novelty or
utility, or because anticipated by prior inventions. But this
estoppel, for manifest reasons, does not prevent him from denying
infringement. To determine such an issue, it is admissible to show
the state of the art involved, that the court may see what the
thing was which was assigned, and thus determine the primary or
secondary character of the patent assigned, and the extent to which
the doctrine of equivalents may be invoked against an infringer.
The court will not assume against an assignor, and in favor of his
assignee, anything more than that the invention presented a
sufficient degree of utility and novelty to justify the issuance of
the patent assigned, and will apply to the patent the same rule of
construction, with this limitation, which would be applicable
between the patentee and a stranger. "
Page 266 U. S. 352
And he cites the following cases as sustaining this view:
Circuit Court of Appeals, First Circuit.
Ball & Socket
Fastener Co. v. Ball Glove Fastening Co., 58 F. 818;
Babcock v. Clarkson, 63 F. 607;
Martin & Hill
Cash-Carrier Co. v. Martin, 67 F. 786, 787. Since the
Noonan case, the view thus announced has been approved in
the Circuit Court of Appeals of the Second Circuit in
Plunger
Elevator Co. v. Stokes, 212 F. 941, 943; of the Third Circuit
in
Roessing-Ernst Co. v. Coal & Coke By-Products Co.,
219 F. 898, 899;
Piano Motors Corp. v. Motor Player
Corporation, 282 F. 435, 437; of the Fourth Circuit in
Leader Plow Co. v. Bridgewater Plow Co., 237 F. 376, 377;
of the Sixth Circuit in
Smith v. Ridgely, 103 F. 875;
Babcock & Wilcox Co. v. Toledo Boiler Works, 170 F.
81, 85;
United States Frumentum Co. v. Lauhoff, 216 F.
610;
Schiebel Toy & Novelty Co. v. Clark, 217 F. 760,
763; in the Eighth Circuit in
Moon Hopkins Co. v. Dalton
Co., 236 F. 936, 937, and of the Ninth Circuit in
Leather
Grille & Drapery Co. v. Cristopherson, 182 F. 817.
We have been speaking of the application of estoppel in the
assignment of patents after they have been granted and their
specifications and claims have been fixed. The case before us,
however, concerns assignment of an invention and an inchoate right
to a patent therefor before the granting of it which, after the
assignment at the instance of the assignee, ripened into a patent.
Section 4895 of the Revised Statutes authorizes the granting of a
patent to the assignee of the inventor. The assignment must be
first entered of record in the Patent Office, and in all such cases
the application must be made and the specification sworn to by the
inventor. It is apparent that the scope of the right conveyed in
such an assignment is much less certainly defined than that of a
granted patent, and the question of the extent of the estoppel
Page 266 U. S. 353
against the assignor of such an inchoate right is more difficult
to determine than in the case of a patent assigned after its
granting. When the assignment is made before patent, the claims are
subject to change by curtailment or enlargement by the Patent
Office, with the acquiescence or at the instance of the assignee,
and the extent of the claims to be allowed may ultimately include
more than the assignor intended to claim. This difference might
justify the view that the range of relevant and competent evidence
in fixing the limits of the subsequent estoppel should be more
liberal than in the case of an assignment of a granted patent. How
this may be we do not find it necessary to decide. We can well be
clear, however, that if it is proper to limit the estoppel
available for an assignee after patent as against his assignor by
reference to the state of the art,
a fortiori is such
reference relevant where the estoppel is sought by the assignee
before patent. In the light of this conclusion, we must now turn to
the facts to which it should be applied.
The art which O'Conor entered was that of a composition of
materials for insulating purposes, of leaves of fibrous material
like paper superposed one on another and united by an adhesive
binder coating the leaves, subjected to heat and pressure and
hardened into a compact mass and rendered capable of high
resistance to the electric current. In the specification of his
patent, he disclosed his idea of the defect of the then art, which
he proposed to remedy by his process, as follows:
"Heretofore, insulation material such as cardboard composed of
layers of paper glued together has proved more or less
unsatisfactory because of various defects such as absorption of
moisture from the atmosphere, inability to resist heat and chemical
action, and lack of physical strength. Insulating material . . .
must be free from these defects, and in addition must possess high
dielectric strength. "
Page 266 U. S. 354
He proposed to achieve his purpose by use of paper or cardboard
which was sold for such purpose, by a binder of bakelite or phenol
and formaldehyde, also well known for such use, by hydraulic
pressure of 800 pounds and steam heat, followed by cooling and then
by baking in an oven at high heat and low pressure. There was
indeed nothing new in O'Conor's invention but the two-step of
pressure and heat, cooling and baking. If this two-step process was
new, and the estoppel requires us to hold, as against O'Conor, that
it was, his assignee had a right to claim the application of it as
new not only to flat articles of composition, but also to
nonplaniform articles as in the 11th and 12th claims, for, though
O'Conor had not made such a claim, his original specification
foreshadowed it as reasonable. In view of the art, however, it is
very clear that the 11th and 12th claims must be read to include as
an essential element of the combination therein claimed, the
two-step process. Without this, there was nothing new in them in
the field to which they applied.
The 11th and 12th claims were made by the company as assignee
after O'Conor had left the company's employ, and were not allowed
until four years after O'Conor had participated in the making of
the composition herein complained of, and, for three years
thereafter, the company made no objection to his continuing the
manufacture. But it is said the assignee was entitled on O'Conor's
original specifications to base claims which did not contain as an
element the two-step process because the sixth of his original
claims was even broader than the 11th and 12th claims as
subsequently made and allowed. It was as follows: "The process of
manufacturing insulating material which consists in superposing
layers of coated paper and applying heat and pressure thereto."
This was promptly rejected by the Patent Office, as it must have
been in the then state of the art. It was so absurdly broad and
all-inclusive as almost to
Page 266 U. S. 355
indicate that it was made to be rejected. O'Conor's signature to
such a claim under the circumstances, of course, does not estop him
when in fact it was not allowed, and certainly should not be used
to bolster up a broad construction of the 11th and 12th claims
when, as we have said, the state of the art must limit them.
We are clear, then, that the estoppel of the 11th and 12th
claims against O'Conor does not extend to a single-step process
such as he has participated in as partner, stockholder, or officer,
and if it does not affect him,
a fortiori does it not
affect the respondent company.
This result makes it unnecessary for us to consider the
objections that the Formica Company is not affected by an estoppel
which would operate against O'Conor, or that the alleged nominal
character of the consideration moving to O'Conor cannot support an
estoppel.
Decree affirmed.
