[1] | UNITED STATES COURT OF APPEALS FOR THE FEDERAL CIRCUIT |
[2] | Appeal No. 84-560 |
[3] | 1984.CFC.40491 <http://www.versuslaw.com>; 733
F.2d 858 |
[4] | Decided: April 23, 1984. |
[5] | ROCHE PRODUCTS, INC. APPELLANT, v. BOLAR PHARMACEUTICAL CO., INC., APPELLEE |
[6] | Appealed from: United States District Court for the Eastern District
of New York. |
[7] | John C. Vassil, of New York, New York, argued, for Appellant. With him
on the brief were Stephen R. Smith, J. Robert Dailey, Janet Dore, Ralph N.
Del Deo and Ann G. McCormick. |
[8] | Robert V. Marrow, of New York, New York, argued, for Appellee. With
him on the brief were Leo Salon, Joel Salon, David L. Shandalow and
Jacques Catafago. |
[9] | Peter Barton Hutt and Bruce J. Brennan, of Washington, District of
Columbia, were on the brief for Pharmaceutical Manufacturers Association,
Amicus Curiae. |
[10] | Alfred B. Engelberg, Morton Amstar and Anthony F. LoCicero, of New
York, New York, were on the brief for Pharmaceutical Industry Association
as Amicus Curiae. |
[11] | Markey, Chief Judge, Nichols, Senior Circuit Judge, and Kashiwa,
Circuit Judge. |
[12] | Nichols |
[13] | NICHOLS, Senior Circuit Judge. |
[14] | This is an appeal from a judgment entered on October 14, 1983, in
which the United States District Court 572 F. Supp. 255 for the Eastern
District of New York held United States Patent No. 3,299,053 not infringed
and denied relief. We reverse and remand. |
[15] | I |
[16] | At stake in this case is the length of time a pharmaceutical company
which has a patent on the active ingredient in a drug can have exclusive
access to the American market for that drug. Plaintiff-appellant Roche
Products, Inc. (Roche), a large research-oriented pharmaceutical company,
wanted the United States district court to enjoin Bolar Pharmaceutical
Co., Inc. (Bolar), a manufacturer of generic drugs, from taking, during
the life of a patent, the statutory and regulatory steps necessary to
market, after the patent expired, a drug equivalent to a patented brand
name drug. Roche argued that the use of a patented drug for federally
mandated premarketing tests is a use in violation of the patent
laws. |
[17] | Roche was the assignee of the rights in U.S. Patent No. 3,299,053 (the
'053 patent), which expired on January 17, 1984. The '053 patent, which
issued on January 17, 1967, is entitled "Novel 1 and/or 4-substituted
alkyl 5-aromatic-3H-1,4-benzodiazepines and benzodiazepine-2-ones." One of
the chemical compounds claimed in the '053 patent is flurazepam
hydrochloride (flurazepam hcl), the active ingredient in Roche's
successful brand name prescription sleeping pill "Dalmane." |
[18] | In early 1983, Bolar became interested in marketing, after the '053
patent expired, a generic drug equivalent to Dalmane. Because a generic
drug's commercial success is related to how quickly it is brought on the
market after a patent expires, and because approval for an equivalent of
an established drug can take more than 2 years, Bolar, not waiting for the
'053 patent to expire, immediately began its effort to obtain federal
approval to market its generic version of Dalmane. In mid-1983, Bolar
obtained from a foreign manufacturer 5 kilograms of flurazepam hcl to form
into "dosage form capsules, to obtain stability data, dissolution rates,
bioequivalency studies, and blood serum studies" necessary for a New Drug
Application to the United States Food and Drug Administration
(FDA). |
[19] | On July 28, 1983, Roche filed a complaint in the United States
District Court for the District of New Jersey against three parties:
Bolar, Bolar's principal officer, and the importer of the infringing
flurazepam hcl. Only Bolar remains a party defendant. Roche sought to
enjoin Bolar from using flurazepam hcl for any purpose whatsoever during
the life of the '053 patent. When Bolar stated during discovery, on August
30, 1983, that it intended immediately to begin testing its generic drug
for FDA approval, Roche moved for and was granted a Temporary Restraining
Order, on September 2, 1983. |
[20] | On September 26, 1983, Bolar was granted a change of venue and the
case was transferred to the United States District Court for the Eastern
District of New York. That court consolidated Roche's motion for a
preliminary injunction with the trial on the merits pursuant to Fed. R.
Civ. P. 65(a)(2) (both parties had stipulated to all the pertinent facts
so no testimony was necessary) and on October 11, 1983, issued a
Memorandum and Order denying Roche's application for a permanent
injunction. The court held that Bolar's use of the patented compound for
federally mandated testing was not infringement of the patent in suit
because Bolar's use was de minimis and experimental. The court entered
judgment for Bolar on October 14, 1983, and Roche filed its notice of
appeal that same day. |
[21] | II |
[22] | The district court correctly recognized that the issue in this case is
narrow: does the limited use of a patented drug for testing and
investigation strictly related to FDA drug approval requirements during
the last 6 months of the term of the patent constitute a use which, unless
licensed, the patent statute makes actionable? The district court held
that it does not. This was an error of law. |
[23] | III |
[24] | A |
[25] | When Congress enacted the current revision of the Patent Laws of the
United States, the Patent Act of 1952, ch. 950, 66 Stat. 792 (codified at
35 U.S.C.), a statutory definition of patent infringement existed for the
first time since section 5 of the Patent Act of 1793 was repealed in 1836.
Title 35 U.S.C. § 271(a) incorporates the disjunctive language of the
statutory patent grant which gives a patentee the "right to exclude others
from making, using, or selling" a patented invention, 35 U.S.C. § 154.
Congress states in section 271(a): |
[26] | Whoever without authority makes, uses or sells any patented invention,
within the United States during the term of the patent therefore,
infringes the patent. |
[27] | It is beyond argument that performance of only one of the three
enumerated activities is patent infringement. It is well-established, in
particular, that the use of a patented invention, without either
manufacture or sale, is actionable. See Aro Manufacturing Co. v.
Convertible Top Replacement Co., 377 U.S. 476 , 484, 12 L. Ed. 2d 457 , 84
S. Ct. 1526 , 141 U.S.P.Q. (BNA) 681, 685 (1964); Coakwell v. United
States, 178 Ct. Cl. 654, 372 F.2d 508, 510, 153 U.S.P.Q. (BNA) 307, 308
(1967). Thus, the patentee does not need to have any evidence of damage or
lost sales to bring an infringement action. |
[28] | Section 271(a) prohibits, on its face, any and all uses of a patented
invention. Of course, as Judge Learned Hand observed in Cabell v. Markham,
148 F.2d 737 , 739 (2d Cir.), aff'd, 326 U.S. 404 , 66 S. Ct. 193 , 90 L.
Ed. 165 (1945): |
[29] | It is true that the words used, even in their literal sense, are the
primary, and ordinarily the most reliable, source of interpreting the
meaning of any writing: be it a statute, a contract, or anything else. But
it is one of the surest indexes of a mature and developed jurisprudence
not to make a fortress out of the dictionary; but to remember that
statutes always have some purpose or object to accomplish, whose
sympathetic and imaginative discovery is the surest guide to their
meaning. |
[30] | Because Congress has never defined use, its meaning has become a
matter of judicial interpretation. Although few cases discuss the question
of whether a particular use constitutes an infringing use of a patented
invention, they nevertheless convincingly lead to the conclusion that the
word "use" in section 271(a) has never been taken to its utmost possible
scope. See, e.g., Pitcairn v. United States, 212 Ct. Cl. 168, 547 F.2d
1106, 192 U.S.P.Q. (BNA) 612 (1976), cert. denied, 434 U.S. 1051 , 54 L.
Ed. 2d 804 , 98 S. Ct. 903 (1978) (experimental use may be a defense to
infringement); United States v. Univis Lens Co., 316 U.S. 241 , 86 L. Ed.
1408 , 62 S. Ct. 1088 (1942) ("An incident to the purchase of any article,
whether patented or unpatented, is the right to use and sell it, * * *."
Id. at 249); General Electric Co. v. United States, 215 Ct. Cl. 636, 572
F.2d 745, 198 U.S.P.Q. (BNA) 65 (1978) ("It can be properly assumed that
as part of the bargain the seller of a device incorporating a patented
combination * * * authorizes the buyer to continue to use the device so
long as the latter can and does use the elements he purchased from the
patentee or licensor." Id. at 784-85, 198 U.S.P.Q. (BNA) at
98). |
[31] | Bolar argues that its intended use of flurazepam hcl is excepted from
the use prohibition. It claims two grounds for exception: the first ground
is based on a liberal interpretation of the traditional experimental use
exception; the second ground is that public policy favors generic drugs
and thus mandates the creation of a new exception in order to allow FDA
required drug testing. We discuss these arguments seriatim. |
[32] | B |
[33] | The so-called experimental use defense to liability for infringement
generally is recognized as originating in an opinion written by Supreme
Court Justice Story while on circuit in Massachusetts. In Whittemore v.
Cutter, 1 Gall. 429, 29 F. Cas. 1120, 1121 (C.C.D. Mass. 1813) (No.
17,600), Justice Story sought to justify a trial judge's instruction to a
jury that an infringer must have an intent to use a patented invention for
profit, stating: |
[34] | It could never have been the intention of the legislature to punish a
man who constructed such a machine merely for philosophical experiments,
or for the purpose of ascertaining the sufficiency of the machine to
produce its described effects. |
[35] | Despite skepticism, see, e.g., Byam v. Bullard, 1 Curt. 100, 4 F. Cas.
934 (C.C.D. Mass. 1852) (No. 2,262) (opinion by Justice Curtis), Justice
Story's seminal statement evolved until, by 1861, the law was
"well-settled that an experiment with a patented article for the sole
purpose of gratifying a philosophical taste, or curiosity, or for mere
amusement is not an infringement of the rights of the patentee."
Poppenhusen v. Falke, 19 F. Cas. 1048, 1049 (C.C.S.D.N.Y. 1861) (No.
11,279). (For a detailed history and analysis of the experimental use
exception, see Bee, Experimental Use as an Act of Patent Infringement, 39
J. Pat. Off. Soc'y 357 (1957).) Professor Robinson firmly entrenched the
experimental use exception into the patent law when he wrote his famous
treatise, W. Robinson, The Law of Patents for Useful Inventions § 898
(1890): |
[36] | § 898. No Act an Infringement unless it Affects the Pecuniary
Interests of the Owner of the Patented Invention. |
[37] | The interest to be promoted by the wrongful employment of the
invention must be hostile to the interest of the patentee. The interest of
the patentee is represented by the emoluments which he does or might
receive from the practice of the invention by himself or others. These,
though not always taking the shape of money, are of a pecuniary character,
and their value is capable of estimation like other property. Hence acts
of infringement must attack the right of the patentee to these emoluments,
and either turn them aside into other channels or prevent them from
accruing in favor of any one. An unauthorized sale of the invention is
always such an act. But the manufacture or the use of the invention may be
intended only for other purposes, and produce no pecuniary result. Thus
where it is made or used as an experiment, whether for the gratification
of scientific tastes, or for curiosity, or for amusement, the interests of
the patentee are not antagonized, the sole effect being of an intellectual
character in the promotion of the employer's knowledge or the relaxation
afforded to his mind. But if the products of the experiment are sold, or
used for the convenience of the experimentor, or if the experiments are
conducted with a view to the adaptation of the invention to the
experimentor's business, the acts of making or of use are violations of
the rights of the inventor and infringements of his patent. In reference
to such employments of a patented invention the law is diligent to protect
the patentee, and even experimental uses will be sometimes enjoined though
no injury may have resulted admitting of positive redress. [Emphasis
supplied, footnotes omitted.] |
[38] | The Court of Claims, whose precedents bind us, on several occasions
has considered the defense of experimental use. See Ordnance Engineering
Corp. v. United States, 84 Ct. Cl. 1, 32 U.S.P.Q. (BNA) 614 (1936), cert.
denied, 302 U.S. 708 , 37 U.S.P.Q. (BNA) 842, 82 L. Ed. 547 , 58 S. Ct. 28
(1937); Chesterfield v. United States, 141 Ct. Cl. 838, 159 F. Supp. 371,
116 U.S.P.Q. (BNA) 445 (1958); Douglas v. United States, 181 U.S.P.Q.
(BNA) 170 (Ct. Cl. Tr. Div. 1974), aff'd, 206 Ct. Cl. 96, 510 F.2d 364,
184 U.S.P.Q. (BNA) 613, cert. denied, 423 U.S. 825 , 46 L. Ed. 2d 41 , 96
S. Ct. 40 (1975); Pitcairn v. United States, 212 Ct. Cl. 168, 547 F.2d
1106, 192 U.S.P.Q. (BNA) 612 (1976), cert. denied, 434 U.S. 1051 , 54 L.
Ed. 2d 804 , 98 S. Ct. 903 (1978). Bolar concedes, as it must, that its
intended use of flurazepam hcl does not fall within the "traditional
limits" of the experimental use exception as established in these cases or
those of other circuits. Its concession here is fatal. Despite Bolar's
argument that its tests are "true scientific inquiries" to which a literal
interpretation of the experimental use exception logically should extend,
we hold the experimental use exception to be truly narrow, and we will not
expand it under the present circumstances. Bolar's argument that the
experimental use rule deserves a broad construction is not
justified. |
[39] | Pitcairn, the most persuasive of the Court of Claims cases concerning
the experimental use defense, sets forth the law which must control the
disposition of this case: "tests, demonstrations, and experiments * * *
[which] are in keeping with the legitimate business of the * * * [alleged
infringer]" are infringements for which "experimental use is not a
defense." 547 F.2d at 1125-1126 , 192 U.S.P.Q. (BNA) at 625. We have
carefully reviewed each of the other Court of Claims cases, and although
they contain some loose language on which Bolar relies, they are
unpersuasive. The Ordnance Engineering case provides no guidance
concerning the boundaries of an appropriately applied experimental use
rule other than flatly stating that a device must have been "built for
experimental purposes." In Chesterfield, the court's flat declaration that
"experimental use does not infringe" is pure obiter dictum. See Pitcairn,
547 F.2d at 1125 , 192 U.S.P.Q. (BNA) at 625. Douglas has no precedential
value here since the Court of Claims never affirmed the part of the trial
judge's opinion dealing with experimental use; moreover, Trial Judge
Cooper's well-reasoned analysis of the experimental use rule concluded
that no case had permitted a pattern of systematic exploitation of a
patented invention for the purpose of furthering the legitimate business
interests of the infringer. The authority of Trial Judge Cooper's views
rests on his reputation as a fine patent lawyer, and on their own
intrinsic persuasiveness. |
[40] | Bolar's intended "experimental" use is solely for business reasons and
not for amusement, to satisfy idle curiosity, or for strictly
philosophical inquiry. Bolar's intended use of flurazepam hcl to derive
FDA required test data is thus an infringement of the '053 patent. Bolar
may intend to perform "experiments," but unlicensed experiments conducted
with a view to the adaption of the patented invention to the
experimentor's business is a violation of the rights of the patentee to
exclude others from using his patented invention. It is obvious here that
it is a misnomer to call the intended use de minimis. It is no trifle in
its economic effect on the parties even if the quantity used is small. It
is no dilettante affair such as Justice Story envisioned. We cannot
construe the experimental use rule so broadly as to allow a violation of
the patent laws in the guise of "scientific inquiry," when that inquiry
has definite, cognizable, and not insubstantial commercial
purposes. |
[41] | C |
[42] | Bolar argues that even if no established doctrine exists with which it
can escape liability for patent infringement, public policy requires that
we create a new exception to the use prohibition. Parties and amici seem
to think, in particular, that we must resolve a conflict between the
Federal Food, Drug, and Cosmetic Act (FDCA), 21 U.S.C. §§ 301-392 (1982),
and the Patent Act of 1952, or at least the Acts' respective policies and
purposes. We decline the opportunity here, however, to engage in
legislative activity proper only for the Congress. |
[43] | The new drug approval procedure which existed between 1938 and 1962
was relatively innocuous and had little impact on the development of
pioneer prescription new drugs. Section 505 of the FDCA, ch. 675, 52 Stat.
1052 (1938), required the manufacturer of a pioneer new drug to submit to
the FDA a New Drug Application (NDA) containing information concerning the
safety of the drug. If the FDA did not disapprove the new drug within 60
days after it received the NDA, marketing could begin. |
[44] | The provisions of the Drug Amendments of 1962, Pub. L. No. 87-781, 76
Stat. 780, caused a substantial increase in the time required for
development and approval of a pioneer new drug. Beginning in 1962, the
amended Section 505 (codified at 21 U.S.C. § 355 (1982)) required an NDA
to contain proof of efficacy (effectiveness) as well as safety, and
required the FDA affirmatively to approve the NDA rather than just to
permit marketing by inaction. A recent study indicated that it now can
take on average from 7 to 10 years for a pharmaceutical company to satisfy
the current regulatory requirements. National Academy of Engineering, The
Competitive Status of the U.S. Pharmaceutical Industry 79-80
(1983). |
[45] | Because most FDA-required testing is done after a patent issues, the
remaining effective life of patent protection assertedly may be as low as
7 years. Id., citing Statement of William M. Wardell to the Subcommittee
on Investigations and Oversight of the Committee on Science and
Technology, U.S. House of Representatives, Feb. 14, 1982, at 14.
Litigation such as this is one example of how research-oriented
pharmaceutical companies have sought to regain some of the earning time
lost to regulatory entanglements. They gain for themselves, it is
asserted, a de facto monopoly of upwards of 2 years by enjoining
FDA-required testing of a generic drug until the patent on the drug's
active ingredient expires. |
[46] | Bolar argues that the patent laws are intended to grant to inventors
only a limited 17-year property right to their inventions so that the
public can enjoy the benefits of competition as soon as possible,
consistent with the need to encourage invention. The FDCA, Bolar contends,
was only intended to assure safe and effective drugs for the public, and
not to extend a pharmaceutical company's monopoly for an indefinite and
substantial period of time while the FDA considers whether to grant a
pre-marketing clearance. Because the FDCA affected prevailing law, namely
the Patent Act, Bolar argues that we should apply the patent laws to drugs
differently. |
[47] | Simply because a later enacted statute affects in some way an earlier
enacted statute is poor reason to ask us to rewrite the earlier statute.
Repeals by implication are not favored. See, e.g., Mercantile National
Bank v. Langdeau, 371 U.S. 555 , 565, 9 L. Ed. 2d 523 , 83 S. Ct. 520
(1963). Thus, "courts are not at liberty to pick and choose among
congressional enactments, and when two statutes are capable of
co-existence, it is the duty of the courts, absent a clearly expressed
congressional intention to the contrary, to regard each as effective."
Morton v. Mancari, 417 U.S. 535 , 551, 41 L. Ed. 2d 290 , 94 S. Ct. 2474
(1974). There is no affirmative obligation on Congress to explain why it
deems a particular enactment wise or necessary, or to demonstrate that it
is aware of the consequences of its action. See Harrison v. PPG
Industries, Inc., 446 U.S. 578 , 592, 64 L. Ed. 2d 525 , 100 S. Ct. 1889
(1979). Rather, because "laws are presumed to be passed with deliberation,
and with full knowledge of all existing ones on the same subject," T.
Sedgwick, The Interpretation and Construction of Statutory and
Constitutional Law 106 (2d ed. 1874), we must presume Congress was aware
that the FDCA would affect the earning potentiality of a drug patent, and
chose to permit it. Although arguably Title 21 and Title 35 are not laws
on the "same subject," we note that during Congress' deliberations on the
1962 amendments to the FDCA, it considered the relationship and
interaction of the patent laws with the drug laws. See S. Rep. No. 1744,
87th Cong., 2d Sess., reprinted in 1962 U.S. Code Cong. & Ad. News
2884, 2911-2915. |
[48] | It is the role of Congress to maximize public welfare through
legislation. Congress is well aware of the economic and societal problems
which the parties debate here, and has before it legislation with respect
to these issues. See H.R. 3605, 98th Cong., 1st Sess. (1983) ("Drug Price
Competition Act of 1983") (amending 21 U.S.C. § 355(b) to allow faster
marketing of new generic drugs equivalent to approved new drugs); S. 1306,
98th Cong., 1st Sess. (1983) ("Patent Term Restoration Act of 1983")
(amending 35 U.S.C. § 155 to add to the patent grant a period of time
equivalent to that lost due to regulatory delay), Cong. Rec. S. 6863
(daily ed. May 17, 1983), 26 Pat. Trademark & Copyright J. (BNA) 87-88
(May 26, 1983). No matter how persuasive the policy arguments are for or
against these proposed bills, this court is not the proper forum in which
to debate them. Where Congress has the clear power to enact legislation,
our role is only to interpret and apply that legislation. "It is not our
job to apply laws that have not yet been written." Sony Corp. of America
v. Universal City Studios, Inc., 464 U.S. 417 , 456, 78 L. Ed. 2d 574 ,
104 S. Ct. 774 , 796, 220 U.S.P.Q. (BNA) 665, 684, 52 U.S.L.W. 4090 , 4100
(1984). We will not rewrite the patent laws here. |
[49] | IV |
[50] | The district court refused to grant a permanent injunction against
Bolar because it believed the law did not require that it find
infringement of the '053 patent. Since we hold that there is infringement,
Roche is entitled to a remedy. We are not in a position, however, to
decide the form of that remedy. |
[51] | Roche requested us, at first, to remand this case to the district
court with instructions to enter a permanent injunction against
infringement by Bolar. After the main briefs were filed, but before oral
argument, the '053 patent expired. This case is not moot, however, because
although the initially requested order no longer is necessary, other
remedies can be fashioned to give Roche relief against Bolar's past
infringement. Roche requests, for example, an order to confiscate and
destroy the data which Bolar has generated during its infringing activity,
citing, Pfizer, Inc. v. International Rectifier Corp., 217 U.S.P.Q. (BNA)
157 (C.D. Cal. 1982) (granting an injunction of that nature to remedy
infringement done in contempt of a court order). |
[52] | Statute provides the basis for Roche's request for injunctive relief,
35 U.S.C. § 283: |
[53] | The several courts having jurisdiction of cases under this title may
grant injunctions in accordance with the principles of equity to prevent
the violation of any right secured by patent, on such terms as the court
deems reasonable. |
[54] | Section 283, by its terms, clearly makes the issuance of an injunction
discretionary: the court " may grant " relief " in accordance with the
principles of equity." The trial court thus has considerable discretion in
determining whether the facts of a situation require it to issue an
injunction. The scope of relief, therefore, is not for us to decide at the
first instance, nor is this the time or place for a discourse on the
"principles of equity." |
[55] | Whether an injunction should issue in this case, and of what form it
should take, certainly depends on the equities of the case. Bolar, Roche,
and amici Pharmaceutical Manufacturers Association and Generic
Pharmaceutical Industry Association, each detail the "catastrophic" effect
our decision for either party will have on the American public health
system. It is true that it "is a principle of general application that
courts, and especially courts of equity, may appropriately withhold their
aid where the plaintiff is using the right asserted contrary to the public
interest," Morton Salt Co. v. Suppiger Co., 314 U.S. 488 , 492, 86 L. Ed.
363 , 62 S. Ct. 402 (1941), reh'g denied, 315 U.S. 826 , 86 L. Ed. 1222 ,
62 S. Ct. 620 (1942). Since "the standards of the public interest, not the
requirements of private litigation, measure the propriety and need for
injunctive relief in these cases," Hecht Co. v. Bowles, 321 U.S. 321 ,
331, 88 L. Ed. 754 , 64 S. Ct. 587 (1944), rev'g Brown v. Hecht Co., 78
U.S. App. D.C. 98, 137 F.2d 689 (D.C. Cir. 1943), we remand this case to
the district court for further proceedings to consider what this interest
is and what measures it calls for. |
[56] | There are other aspects here that might make a tribunal reluctant to
select, within the scope of its discretion, relief along the harsher side
of the possible scale. The case clearly was regarded by both sides as a
test. The good faith with which Bolar acted is undisputed, at least before
us. Bolar says it did nothing clandestine, but notified Roche what it was
going to do at all times before doing it, so Roche could act promptly to
defend what it believed to be its rights. The case may be unlike Pfizer,
Inc., supra, in that Bolar scrupulously obeyed all court orders while they
were in effect, or so it says, whereas in Pfizer, Inc., the infringer
acted in defiance of court decrees. The destruction of material in Pfizer,
Inc., was ordered after everything milder had proved useless. If other
measures can be made sufficient, one might well be reluctant to order
destruction of the records of research and tests that may embody
information that would contribute to the health and happiness of the human
race. All this is, of course, for the district judge to consider so far as
he finds the factual predicates established. |
[57] | The actual infringing acts are said to have all occurred in the
relatively brief period between vacation of the lower court's restraining
order and the expiration of the patent. Counsel for Roche was candid in
explaining that he pushed so hard for the harsh relief he did because he
thought any money damages would have to be nominal. The correctness of
this belief has not been briefed or argued, and we hesitate to state a
firm position, but tentatively, at least, we are skeptical. It is clear
that the economic injury to Roche is, or is threatened to be, substantial,
even though the amount of material used in the tests was small. If the
patent law precludes substantial damages, there exists a strange gap in
the panoply (in its proper meaning, a suit of armor) of protection the
patent statutes place around an aggrieved and injured patentee. The
district judge, before getting into the issue of equitable relief, must
determine if he can deal with the case by adequate money damages. If he
can, the predicate for equitable relief of a harsh, or even a mild,
character is gone. |
[58] | Counsel are equally mistaken in their apparent belief that once
infringement is established and adjudicated, an injunction must follow. In
Hecht Co. v. Bowles, supra, the statute, unlike the one we have here, was
seemingly mandatory by its language that once a violation was shown, an
injunction must follow, and the D.C. Circuit had so held. But the
circumstances made an injunction somewhat repugnant. Hecht Co., an
unquestionably legitimate and long-established District of Columbia
retailer, had got tangled up in the price control regulations of World War
II, and its employees had in good faith unwittingly committed some
violations. The situation was ironic in that the Hecht Co. had been a
leader in extending the patriotic cooperation of the retail trade in
application of the unpopular but necessary retail price controls, and had
itself offered its own operation for study as illustrating the problems
and how they could be solved. |
[59] | After discovering some loopholes in the statute, in light of the
legislative history, Justice Douglas continued at 329: |
[60] | We are dealing here with the requirements of equity practice with a
background of several hundred years of history. Only the other day we
stated that "An appeal to the equity jurisdiction conferred on federal
district courts is an appeal to the sound discretion which guides the
determinations of courts of equity." Meredith v. Winter Haven, 320 U.S.
228 , 235 [88 L. Ed. 9 , 64 S. Ct. 7]. The historic injunctive process was
designed to deter, not to punish. The essence of equity jurisdiction has
been the power of the Chancellor to do equity and to mould each decree to
the necessities of the particular case. Flexibility rather than rigidity
has distinguished it. The qualities of mercy and practicality have made
equity the instrument for nice adjustment and reconciliation between the
public interest and private needs as well as between competing private
claims. We do not believe that such a major departure from that long
tradition as is here proposed should be lightly implied. |
[61] | While two justices declined to join in the opinion, none expressed
themselves in favor of affirming the D.C. Circuit. In short, if Congress
wants the federal courts to issue injunctions without regard to historic
equity principles, it is going to have to say so in explicit and even
shameless language rarely if ever to be expected from a body itself made
up very largely of American lawyers, having, probably, as much respect for
traditional equity principles as do the courts. If an injunction was not
mandatory in Hecht Co. v. Bowles, the more permissive statutory language
here makes it a fortiori that an injunction is not mandatory
now. |
[62] | The application of historic equity principles to the case at bar is in
the first instance for the district court. |
[63] | V |
[64] | Conclusion |
[65] | The decision of the district court holding the '053 patent not
infringed is reversed. The case is remanded with instructions to fashion
an appropriate remedy. Each party to bear its own costs. |
[66] | REVERSED AND REMANDED. |
[67] | Disposition |
[68] | Reversed and Remanded. |
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Edward P. Richards, III, JD, MPH