United States v. American Bell Telephone Co. - 128 U.S. 315 (1888)


U.S. Supreme Court

United States v. American Bell Telephone Co., 128 U.S. 315 (1888)

United States v. American Bell Telephone Company

No. 846

Argued October 9-10, 1888

Decided November l2, 1885

128 U.S. 315

Syllabus

A bill in equity which assails two patents, issued nearly a year apart, but to the same party and relating to the same subject, both held by the same corporation defendant and used by it in the same operations, is not multifarious.

Where a patent for a grant of any kind, issued by the United States, has been obtained by fraud, by mistake, or by accident, or where there is any error in the patent itself capable of correction, a suit by the United States against the patentee is the appropriate remedy for relief. This proposition is supported by precedents in the High Court of Chancery of England, and in other courts of that country.

The more usual remedy, under the English law, to repeal or revoke a patent obtained by fraud from the King was a writ of scire facias returnable either into the Court of King's Bench or of Chancery, though it has been said that the jurisdiction of the Court of Chancery arises not from its general jurisdiction to give relief for fraud, but because the patents issuing from the King were kept as records in the petty-bag office of that court. The case, however, of The Attorney General v. Vernon, 1 Vernon 277, and other cases seem to indicate that by virtue of its general equity powers, the Court of Chancery had jurisdiction to give relief against fraud in obtaining patents.

In England, grants and charters for special privileges were supposed to issue from the King, as prerogatives of the Crown, and the power to annul them was long exercised by the King by his own order or decree. This mode of vacating charters and patents gradually fell into disuse, and the same object was obtained by scire facias returnable into the Court of King's Bench or of Chancery.

In this country, where there is no Kingly prerogative, but where patents for lands and inventions are issued by the authority of the government and by officers appointed for that purpose, who may have been imposed upon by fraud or deceit or may have erred as to their power, or made mistakes in the instrument itself, the remedy for such evils is by proceedings before the judicial department of the government.

Both the Constitution and the acts of Congress organizing the courts of the United States have in express terms provided that the United States may bring suits in those courts, and they are all very largely engaged in

Page 128 U. S. 316

the business of affording a remedy where the United States has a legal right to relief.

The present suit -- a bill in Chancery in the Circuit Court of the United States for the District of Massachusetts wherein the United States are plaintiffs, brought against the defendant to set aside patents for inventions on the ground that they were obtained by fraud -- is a proper subject of the jurisdiction of that court as defined in § 1, c. 37, Act of March 3, 1875, 18 Stat. 470, and is well brought under the direction of the Solicitor General on account of the disability of the Attorney General to take part in the case, and its allegations of fraud and deception on the part of the patentee in procuring the patents are sufficient, if sustained, to authorize a decree setting aside and vacating the patents as null and void.

Section 4920 of the Revised Statutes, which enumerates five grounds of defense to a patent for an invention that may be set up by anyone charged with an infringement of the rights of the patentee, was not intended to supersede, nor does it operate as a repeal or withdrawal of, the right of the government to institute an action to vacate a patent for fraud.

In equity. The object of the bill, which was signed by the District Attorney of the United States for the District of Massachusetts and the Solicitor General, acting in this case as Attorney General, was to obtain the cancellation, avoidance, recall and repeal of the two patents granted to Alexander Graham Bell which formed the subject of the litigation in The Telephone Cases, and which will be found in 126 U.S. at pages 126 U. S. 4 and 5, one being numbered 174,46 and dated March 7, 1876; the other No. 186,787, dated January 30, 1877. It was charged that the patents were and each of them was "procured to be issued by means of fraud, false suggestion, concealment and wrong on the part of the said Alexander Graham Bell," and that he and the Telephone Company, which was his assignee, had at all times known and had full knowledge of the alleged frauds and concealment.

It was alleged

"that up to the time of the issuing of the said [first] patent, the said Bell had never in fact been able to transmit articulate speech by the method or with the apparatus described in his said application, but that he purposely framed his said application and claim in ambiguous and general terms in order to cover both antecedent and future inventions and to deceive and mislead the examiners of the

Page 128 U. S. 317

Patent Office and the public, and did not set forth or declare that his alleged invention had any relation to the art of transmitting articulate speech by means of electricity, but entitled it an application for 'an improvement in telegraphy,' and made special reference to a then recent application made by himself for a patent for a method of 'multiple telegraphy,' and treated his alleged new invention as another method thereof, and set forth advantages which it had over the other, but did not include or mention its capacity, or claim for it any capacity, to transmit speech."

"And your orator further shows and charges that by the means aforesaid, the said Bell not only failed to meet the requirements of the statute as to the form of his application, but did in fact mislead and deceive the examining officers of the Patent Office, and did cause them to regard the said alleged invention as a mere improvement in telegraphy, and not as an invention of the telephone, and did lead them to suppose that it had no relation to the art of transmitting articulate speech by electricity, and did thus cause them not to make an inquiry as to the state of that art, or the patents or the printed publications concerning it; that accordingly, no such inquiry was made by any of them, and that thereby the said Bell did mislead and deceive your orator, and did cause your orator to issue the said patent No. 174,465 in the form and according to the tenor aforesaid, and that but for the said delusive and ambiguous application the said patent, would not have been granted or issued by your orator as aforesaid; wherefore your orator avers that the said patent No. 174,465, issued upon said delusive and ambiguous application, was and is void and of no effect."

"Your orator further avers and charges upon information and belief that at the time of filing the said application, the said Bell was not the original and first inventor of all the improvements in telegraphy described and claimed in the said specification; that certain of the aforesaid so-called improvements had been previously known to and used by others, as is hereinafter more fully and at large set forth, that the said Bell, on the said 20th day of January, 1776, and at the time

Page 128 U. S. 318

of filing the said application, did not verily believe himself to be the original and first inventor of all the so-called improvements in telegraphy described and claimed in the said specification, and that on the said 20th day of January, 1876, and at the time of filing the said application, the said Bell did know and did believe that certain of the so-called improvements in telegraphy described and claimed in the specification aforesaid had been previously known to and used by others, as is hereinafter more fully set forth."

"And your orator avers and charges that the said untrue statements made by said Bell as aforesaid constituted deception and fraud upon your orator by the said Bell, and did deceive and defraud your orator, and did cause your orator to issue and deliver said patent No. 174,465 to said Bell upon your orator's faith that the said statements were true, and that but for the said false and fraudulent statements of the said Bell made by him as aforesaid, the said patent would not have been issued or granted by your orator so as to create any exclusive monopoly of the method or process described in the said fifth claim thereof."

It was then charged that Philipp Reis' device of "an apparatus for the transmission of speech by means of the galvanic current" (see 126 U.S. 126 U. S. 33-74) was well known to Bell and the world before 1874, and that

"many persons devised and were seeking to devise apparatus and means by which such method and process could be successfully operated, and made to transmit articulate speech,"

and it was said that

"not only did the said Philipp Reis make and operate an apparatus upon such alleged method or process, but divers other persons in this county did, prior to the alleged date of said Bell's invention, to-wit, prior to the year 1875, well understanding the conditions under which alone speech and other composite sounds could be transmitted by electricity, experiment upon said problem and devise, use, and operate more or less perfect means therefor."

Then, after charging that the caveat of Elisha Gray, also set forth in The Telephone Cases, 126 U.S. 126 U. S. 77-86, was filed in the Patent Office on the same day with Bell's application for his first patent, and prior thereto, the bill charged:

Page 128 U. S. 319

"That notwithstanding the requirements of the said statute to preserve said caveat in secrecy, the examining officer of the Patent Office communicated to the said Bell very soon after the filing of the said caveat the fact and date of the filing thereof, the name of the caveator, as well as the general nature of the claim contained therein and some information as to the particular method employed; that the said Bell, by his attorneys, followed up this knowledge, unlawfully obtained, and induced some of the officers of the Patent Office to violate still further the requirement of secrecy concerning said caveat by setting on foot an inquiry for the benefit of the said Bell as to the precise time of the day when the same was filed, and thereupon, without any proof and contrary to law and the custom of the office, it was determined by the Patent Office authorities, contrary to the fact, that said caveat was filed after said application, although on the same day, and that the said caveator was not entitled to the notice which had already been given, or to any of the benefits of the said section, with respect to the application of the said Bell."

"That thereupon the examiner of the Patent Office who had the matter in special charge, without communicating to the said Gray the question that had been so raised as to the time of the filing of the respective papers nor the determination thereof or giving him any opportunity to establish by proof the actual time of filing his own, announced to him by letter dated February 25, 1876, that the said notice had been given under a misapprehension of the rights of the parties, and was withdrawn, and on the same day informed the said Bell by letter that the suspension of his application, had been withdrawn."

"That after the withdrawal and revocation of the suspension of the said application of Bell, the said Bell called upon the said examining officer at the room occupied by him in the Patent Office, and that the said examining officer did then, on or about the 26th or 27th day of February, 1876, exhibit to the said Bell the drawings of the said caveat of Gray and did then and there fully describe to the said Bell the construction and mode of operation of the telephone illustrated in the said

Page 128 U. S. 320

drawing and the method disclosed by the said Gray in said caveat of transmitting and receiving vocal sounds."

"That the said Bell did unlawfully obtain important information as to essential features of the invention of Gray as disclosed by his caveat, and did proceed without delay to make substantial amendments of his said specification and claims, which amendments were made on the 29th day of February, only four days after said withdrawal of notice was communicated to said Gray; that such amendments related to those parts of said Bell's alleged invention which he and his assigns have since claimed as the cardinal element or feature of his patent, to-wit, the transmission of sounds by gradual or undulatory changes in the electrical current, as distinguished from alternate or pulsatory changes; that in the said notice of the 19th of February, 1876, the said examiner had distinctly advised the said Gray that the application of Bell seemed to conflict with his caveat in respect to the method of producing the undulations by varying the resistance of the circuit and the method of transmitting vocal sounds telegraphically by causing these undulatory currents; that this same examiner, without the knowledge of the said Gray, communicated to Bell the fact that Gray's invention varied the resistance and produced undulations by means of a liquid transmitter; that upon and in consequence of this surreptitious information and of the unlawful communications respecting the said caveat made to the said Bell, as herein above alleged, the said Bell made the said amendments, more clearly defining the distinction between pulsatory and undulatory currents and substituting the word 'gradually' for 'alternately' wherever it occurred in one of his claims, and your orator charges that these amendments were substantial, as well in themselves as in their bearing upon the rights then secured by Gray under the statute, and were not verified by oath, and that the said patent was issued thereon, and during the pendency of said caveat, and with undue and unusual haste, and without proper consideration and in violation of the rights secured by said Gray, or of the rights and interests of the citizens of the United States with respect to the art of telephony now sought

Page 128 U. S. 321

to be monopolized by the defendant the American Bell Telephone Company."

"That the examiner was of the opinion that the said application and caveat were in interference on principles employed on harmonic or multiple telegraphy, but not in the art of transmitting speech, and did not understand the application to lay claim to the art of transmitting speech; nor did the language of the specification, or the drawing attached thereto, give due, fair and intelligible notice that, notwithstanding the entitling of the invention as an improvement in the art of telegraphy, one portion thereof might be construed to have reference to telephony, which had been, since that art had been invented by Reis, the term adopted by lexicographers, and had come into general use as a recognized term of art denoting a peculiar operation for transmitting speech by means of electricity."

"Your orator is informed and believes that the said Bell was not able to get the said devices shown in his patent, or any of them, to transmit and deliver articulate speech up to the time of issuing the said patent on the 14th of February, 1876, and he did not intend to so operate them or any of them, nor was he aware that they or any of them would do so."

"Your orator further shows that on March 10, 1876, three days after the said patent issued to said Bell, he obtained for the first time articulate speech by an electric speaking telephone. This success was not obtained by any device or apparatus described in the said Bell's specification and patent, but on March 10, 1876, was obtained with the liquid transmitter, or water telephone, described in Gray's caveat, and a knowledge of which said Bell derived from the wrongful communication to him, as before shown, of the contents of the Gray caveat."

"These facts showing fraud, collusion and overreaching in the obtaining of the said Bell patent long remained artfully concealed from your orator, and have only recently been brought to your orator's knowledge and attention."

Then, after allegations which are not necessary to be set

Page 128 U. S. 322

forth at length in order to understand the opinion of the Court, including some allegations relating to the discoveries of Antonio Meucci, Thomas A. Edison, Asahel K. Eaton and to the Varley inventions, described in 126 U.S. 126 U. S. 107-109; the bill charged respecting the Dolbear invention (see 126 U.S. 126 U. S. 131-142) that

"in addition to the above stated grounds for the invalidity of said patent No. 186,787, the said Bell procured his last-named patent by fraud upon one Amos E. Dolbear, professor of physics at Tufts College in Massachusetts, in the manner, and under the circumstances following, to-wit:"

"The said Dolbear did discover and invent the magnetotelephone, now used as a receiver by the American Bell Telephone Company, being the same as that embraced in the said patent issued to said Bell on said January 30, 1877, and made and exhibited a complete, perfect, articulate speaking telephone on September 20, 1876, combining all the appliances now used in the modern magneto-telephone used by the defendant, the American Bell Telephone Company, professedly under the said last-named patent, and began to take steps to secure to himself, his heirs and assigns, a patent for the said invention from the government of the United States, and to that end communicated his invention to a, friend, one Percival V. Richards, who was assisting him to procure a patent for his said invention."

"That said Richards, who was also a friend and associate of said A. G. Bell, while proceeding to secure a patent for said Dolbear for said invention, inadvisedly communicated the fact of said invention of the said Dolbear to the said Bell, and also communicated to him a description of said invention of Dolbear, whereupon and soon after he was informed by one Gardner G. Hubbard, who was a near connection of and associate with the said Bell, that said Bell had invented and secured a patent on said devices and inventions of said Dolbear over two years previously, which untrue statement was communicated at the instance of said Bell to said Dolbear, who believed the same, and thereafter ceased for a long time all further efforts to secure a patent for his said invention."

"That said Bell and Hubbard, as soon as they had gathered

Page 128 U. S. 323

and secured the details of said Dolbear's invention, proceeded forthwith to the City of Washington, and then and there applied for and secured said patent No. 186,787 for the invention of said Dolbear."

"Your orator further says that at the time said Bell made oath to his application for said invention, he well knew that his oath was not true, and that not only he was not the inventor thereof, but that he had appropriated the invention of the said Dolbear."

"Your orator further says that said Amos E. Dolbear, soon after making said invention embraced in said patent No. 186,787, entered into a contract and bargain with the Gold and Stock Telegraph Company, a corporation existing under the laws of the State of New York, controlled by the Western Union Telegraph Company, to manufacture, use and sell his said invention, which said corporation had exclusive control of said invention, and made, used and sold said telephones of Dolbear for the space of nearly three years, when the said American Bell Telephone Company and the said Western Union Telegraph Company, in litigation then pending between them in what is known as the Dowd case, agreed to compromise their differences and appropriate to themselves the entire profits arising from telephony in the United States, and suppressed the fact as to the said invention of said Dolbear of said devices, and that said Bell had appropriated and patented the same."

"Your orator further says that said American Bell Telephone Company and said Western Union Telegraph Company, in order further to suppress the facts and deceive the public, caused a collusive interference case to be begun and prosecuted in the United States Patent Office between said Bell and said Dolbear, wherein said Dolbear was not represented except in name, and wherein his assigns, the said Western Union Telegraph Company, the American Bell Telephone Company, and said Bell were the real parties and were all in one interest, which said interference case was prosecuted so as to suppress the fact that, as against Bell, said Dolbear was the inventor, the attorney for said Dolbear's assignee being in fact one of the

Page 128 U. S. 324

counsel for and in the pay of said American Bell Telephone Company, the testimony also being taken by apparently opposing counsel for opposing interests, but in fact for the same parties and for the same interests, and that accordingly, in the said case, it was decided that the defendant Bell was the discoverer and inventor of said device."

"And your orator charges that for the fraud aforesaid, the said last-named patent, No. 186,787, is invalid and ought to be cancelled and made void by the decree of this honorable court."

The bill further contained the following allegation:

"And your orator further says that prior to the grant of said letters patent No. 186,787, and prior to the 13th day of January, 1877, the day upon which the said Bell made oath to the application upon which the said patent was granted, and prior to the 15th day of January, 1877, the day on which the said application was filed in the Patent Office, the said Bell, as your orator is informed and believes, caused an application to be made for letters patent of Great Britain for the same invention as that described and claimed in the said letters patent No. 186,787; that letters patent of Great Britain, numbered 4765 and dated December 9, 1876, were issued to William Morgan Brown, patent agent, 'for the invention of improvements in electric telephony and telephonic apparatus, a communication from abroad by Alexander Graham Bell,' and that the invention described and claimed in said letters patent of Great Britain No. 4765 was the same as that described and claimed in said United States patent No. 186,787; yet the said Bell, as your orator is informed and believes, concealed from the Commissioner of Patents the facts above mentioned about the said letters patent of Great Britain, and in consequence of this suppression of the truth, a patent was wrongfully issued to him for a term of seventeen years instead of being so limited as to expire at the same time with the said letters patent of Great Britain."

To this bill the Bell Telephone Company filed a demurrer as follows:

"This defendant, the American Bell Telephone Company,

Page 128 U. S. 325

by protestation, not confessing all or any of the matters and things in the plaintiff's bill of complaint contained to be true in such manner and form as the same are therein set forth and alleged, doth demur to said bill, and for causes of demurrer shows that:"

"I. (1) The said bill is multifarious in that it joins allegations and prayers for relief in respect of patent No. 174,465, dated March 7, 1876, and allegations and prayers for relief in respect of patent No. 186,787, dated January 30, 1877."

"(2) The bill does not point out and specify which of the persons, patents and publications referred to in its several schedules anticipate each of the inventions claimed in the said two patents respectively, nor in the several claims of each, it appearing by said schedule that some of the patents and publications therein referred to are subsequent in date to both the said patents granted to Bell."

"II. To so much of said bill as refers and relates to patent No. 174,465, dated March 7, 1876, this defendant demurs for the following causes of demurrer:"

"(1) The plaintiff in and by its said bill does not show any power or authority, and no power or authority in law exists, in any person or party or any court to bring said suit, nor to entertain the same, nor to give the relief therein prayed, nor any relief thereunder or touching the subject matter thereof."

"(2) The plaintiff in and by said bill has not made or stated a case which calls upon or justifies this court in the exercise of its discretion to permit this bill to be entertained."

"(3) The plaintiff in and by its said bill has not made or stated a case which entitles it in a court of equity to the relief therein prayed for, or any relief whatever."

"(4) The plaintiff in and by its said bill has not made or stated a case which entitles it in a court of equity as against this defendant, the American Bell Telephone Company, to the relief therein prayed for, or any relief whatever."

"(5) The case stated in and by said bill is one which, as against this defendant, the assignee of said Bell patents, should have been prosecuted (if at all) with the utmost diligence, whereas, as against this defendant, it is a stale claim, contrary

Page 128 U. S. 326

to equity and good conscience, and one which, by reason of the gross laches and delay in prosecuting it, a court of equity ought not to entertain."

"III. To so much of said bill as refers and relates to patent No. 186,787, dated January 30, 1877, this defendant demurs for the following causes of demurrer:"

"(1) The plaintiff in and by its said bill does not show any power or authority, and no power or authority in law exists in any person or party or any court, to bring said suit, nor to entertain the same, nor to give the relief therein prayed, nor any relief thereunder or touching the subject matter thereof."

"(2) The plaintiff in and by said bill has not made or stated a case which calls upon or justifies this Court, in the exercise of its discretion, to permit this bill to be entertained."

"(3) The plaintiff in and by its said bill has not made or stated a case which entitles it in a court of equity to the relief therein prayed for, or any relief whatever."

"(4) The plaintiff, in and by its said bill, has not made or stated a case which entitles it in a court of equity, as against this defendant, the American Bell Telephone Company, to the relief therein prayed for, or any relief whatever."

"(5) The case stated in and by said bill is one which, as against this defendant, the assignee of said Bell patents, should have been prosecuted (if at all) with the utmost diligence, whereas, as against this defendant, it is a stale claim, contrary to equity and good conscience, and one which by reason of the gross laches and delay in prosecuting it, a court of equity ought not to entertain."

"IV. This defendant demurs to the whole of said bill for each of the reasons set forth in Division III."

"V. (1) As to each and every charge in said bill set forth as the basis of an attack on the validity of said patents, or either of them, or any claim of either of them, this defendant demurs thereto separately for the reason that it does not show the said patent to be void, and also because the allegations therein contained, if true, would not entitle the plaintiff to the relief prayed for, nor to any relief in a court of equity."

"And it prays that this clause of demurrer may be taken

Page 128 U. S. 327

as a separate demurrer on each of said grounds to each such allegation as if repeated in a separate form to each."

"The allegations here referred to are the following: [setting forth the divisions in the bill demurred to]."

"VI. This defendant specially demurs to said bill for that it does not set forth any fraud in the procuring of said patents, and for that it does not specifically set forth what acts, if any, the complainant relies on as constituting fraud in procuring said patents, and for that it does not show when, how, from whom, or by what means the complainant first had knowledge or notice of each alleged fact, nor why, with due diligence, it would not have learned them earlier."

"VII. Wherefore, and for divers other good causes of demurrer appearing in said bill, the defendant doth demur to said bill and to separate parts thereof where the demurrers are hereinbefore expressed to be to parts, and humbly demands the judgment of this court whether he shall be compelled to make any further or other answer to the said bill or said separate parts where the demurrers are expressed to be to separate parts, and prays to be hence dismissed with his costs and charges in this behalf most wrongfully sustained."

The court below, after hearing argument, sustained the demurrers, and dismissed the bill. 32 F. 591.

Page 128 U. S. 349



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