United States v. Singer Manufacturing Company/Concurrence White

Mr. Justice WHITE, concurring.

There are two phases to the Government's case here: one, the conspiracy to exclude the Japanese from the market, and the other, the collusive termination of a Patent Office interference proceeding pursuant to an agreement between Singer and Gegauf to help one another to secure as broad a patent monopoly as possible, invalidity considerations notwithstanding. The Court finds a violation of § 1 of the Sherman Act in the totality of Singer's conduct, and intimates no views as to either phase of the Government's case standing alone. Since, in my view, either branch of the case is sufficient to warrant relief, I join the Court's opinion, except for footnote, 1, with which I disagree.

As to the conspiracy to exclude the Japanese, there is involved, as the Court points out, more than the transfer of the patent from one competitor to another; implicit in the arrangement is Singer's undertaking to enforce the patent on behalf of both itself and Gegauf. Moreover, Singer was the dominant manufacturer in the American sewing machine industry and was acquiring a patent which dominated the multicam field, an aspect of this case which in itself raises serious questions, in my view, and which is saved by the Court for future consideration. See p. 189, supra.

More must be said about the interference settlement. In 1956, Singer's 'Harris' multicam zigzag reissue-patent application was pending in the United States Patent Office; Gegauf had an application pending at the same time covering substantially the same subject matter, but enjoying a nine-day earlier priority date. See 35 U.S.C. § 119. In the circumstances, it appeared to Singer that, between Singer and Gegauf, Gegauf would have a better claim to a patent on the multicam zigzag, at least on the broad and thus more valuable claims. But it was by no means certain that either of them would get the patent. In cases where several applicants claim the same subject matter, the Patent Office declares an 'interference.' This is an adversary proceeding between the rival applicants, primarily for the purpose of determining relative priority. But a party to an interference also can, by drawing additional prior art to the attention of the Patent Office which will require the Office to issue no patent at all to anyone, see 37 CFR §§ 1.232, 1.237(a); cf. 35 U.S.C. §§ 101 102, prevent his rival from securing a patent which if granted might exclude him from the manufacture of the subject matter. 35 U.S.C. § 154. Gegauf, after Singer approached it to negotiate an agreement before the Office declared an interference, feared that Singer might in self-defense draw to the attention of the Patent Office certain earlier patents the Office was unaware of, and which might cause the Gegauf claims to be limited or invalidated; Singer 'let them know that we thought we could knock out their claims but that in so doing we were probably going to hurt both of us.'

The result was that in April 1956 Singer and Gegauf entered a general cross-licensing agreement providing that the parties were not to attack one another's patent applications 'directly or indirectly,' not to do anything to restrict one another's claims in patents or applications, and to facilitate the allowance to one another of 'claims as broad as possible.' In August 1956 the Patent Office declared the anticipated interference. Singer and Gegauf settled the interference pursuant to their prior agreement: Singer withdrew its interfering claims and in April 1957 the Patent Office dissolved the interference proceeding before it had ever reached the litigation stage. 37 CFR § 1.262. Eventually the Gegauf patent issued and was sold to Singer as part of the concerted action to exclude the Japanese which is involved in the first branch of the case, supra, p. 197.

In itself the desire to secure broad claims in a patent may well be unexceptionable-when purely unilateral action is involved. And the settlement of an interference in which the only interests at stake are those of the adversaries, as in the case of a dispute over relative priority only and where possible invalidity, because of known prior art, is not involved, may well be consistent with the general policy favoring settlement of litigation. But the present case involves a less innocuous setting. Singer and Gegauf agreed to settle an interference, at least in part, to prevent an open fight over validity. There is a public interest here, see Mercoid Corp. v. Mid-Continent Inv. Co., 320 U.S. 661, 665, 64 S.Ct. 268, 271, 88 L.Ed. 376; United States v. Masonite Corp., 316 U.S. 265, 278, 62 S.Ct. 1070, 1077, 86 L.Ed. 1461, which the parties have subordinated to their private ends-the public interest in granting patent monopolies only when the progress of the useful arts and of science will be furthered because as the consideration for its grant the public is given a novel and useful invention. U.S.Const., Art. I, § 8; 35 U.S.C. § 101; Statute of Monopolies, 21 Jac. I, c. 3. When there is no novelty and the public parts with the monopoly grant for no return, the public has been imposed upon and the patent clause subverted. United States v. American Bell Telephone Co., 128 U.S. 315, 357, 370, 9 S.Ct. 90, 93, 98, 32 L.Ed. 450; see Katzinger Co. v. Chicago Metallic Mfg. Co., 329 U.S. 394, 400-401, 67 S.Ct. 416, 419-421, 91 L.Ed. 374; Cuno Engineering Corp. v. Automatic Devices Corp., 314 U.S. 84, 92, 62 S.Ct. 37, 41, 86 L.Ed. 58; Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 154-155, 71 S.Ct. 127, 131-132, 95 L.Ed. 162 (concurring opinion). Whatever may be the duty of a single party to draw the prior art to the Office's attention, see 35 U.S.C. § 115; 37 CFR § 1.65(a); Bell Telephone, supra, 128 U.S. at 356, 9 S.Ct. at 92, clearly collusion among applicants to prevent prior art from coming to or being drawn to the Office's attention is an inequitable imposition on the Office and on the public. Precision Instrument Mfg. Co. v. Automotive Maintenance Machinery Co., 324 U.S. 806, 65 S.Ct. 993, 89 L.Ed. 1381; see H.R.Rep.No.1983, 87th Cong., 2d Sess. 1, 4 (Rep. on Act of October 15, 1962 Pub.L. 87-831, 76 Stat. 958; U.S.Code Cong. & Adm.News, 1961, p. 3286). In my view, such collusion to secure a monopoly grant runs afoul of the Sherman Act's prohibitions against conspiracies in restraint of trade-if not bad per se, then such agreements are at least presumptively bad. Compare Mitchel v. Reynolds, 1 P.Wms. 181, 191-192, 24 Eng.Rep. 347, 350 351. The patent laws do not authorize, and the Sherman Act does not permit, such agreements between business rivals to encroach upon the public domain and usurp it to themselves.

Mr. Justice HARLAN, dissenting.