Cardinal Chemical Company v. Morton International, Inc.

PETITIONER: Cardinal Chemical Company
RESPONDENT: Morton International, Inc.
LOCATION: Austin's Auto Body Shop and mobile home

DOCKET NO.: 92-114
DECIDED BY: Rehnquist Court (1991-1993)
LOWER COURT: United States Court of Appeals for the Fourth Circuit

CITATION: 508 US 83 (1993)
ARGUED: Mar 03, 1993
DECIDED: May 17, 1993

ADVOCATES:
Charles F. Schill - Argued the cause for the petitioners
Gordon R. Coons - Argued the cause for the respondent

Facts of the case

Acting upon a belief that Cardinal Chemical ("Cardinal") violated two of its patents on chemical compounds used in polyvinyl chloride, Morton International ("Morton") challenged Cardinal's actions in a South Carolina District Court. Cardinal counterclaimed that Morton's patents were invalid. The District Court ruled that although none of Morton's patents were violated, they were both invalid. Morton appealed to the Federal Circuit Court which sustained the lower courts infringement finding but issued a per se reversal of its determination as to the validity of Morton's patents based on a practice dating back to 1987. Cardinal appealed the per se rejection of its validity counterclaim and the Supreme Court granted certiorari.

Question

Can a federal court, with exclusive jurisdiction over all federal appeals concerning patent litigation, use its finding that a patent has not been infringed as a per se justification for upholding the validity of the disputed patents themselves?

Media for Cardinal Chemical Company v. Morton International, Inc.

Audio Transcription for Oral Argument - March 03, 1993 in Cardinal Chemical Company v. Morton International, Inc.

William H. Rehnquist:

We'll hear argument now in 92-114, Cardinal Chemical Company v. Morton International.

Mr. Schill.

Charles F. Schill:

Mr. Chief Justice, and may it please the Court:

The practice of the Federal Circuit at issue here has resulted in resurrecting patents which have been twice found invalid by district courts.

This practice is out of step with the precedent of this Court and commercial reality.

I want to make three points to you in my argument today.

First, the Federal Circuit has jurisdiction to decide--

Sandra Day O'Connor:

Mr. Schill, in addressing us, I hope you will tell us how, if at all, your position differs from that expressed by Mr. Coons.

Charles F. Schill:

--I certainly plan to, Your Honor.

Sandra Day O'Connor:

And tell us whether you think we have any controversy here at all.

Charles F. Schill:

I certainly shall.

May I proceed with my three points, Your Honor?

Sandra Day O'Connor:

Sure.

Charles F. Schill:

Okay.

The Federal Circuit had jurisdiction to decide the patent and validity issue, and this issue is not moot.

The Federal Circuit's practice ignores the strong public interest in resolving the invalidity issue, and finally, that the Federal Circuit should always reach the issue of validity when presented on appeal in a declaratory judgment counterclaim unless that issue becomes moot through happenstance during the appeal, or if a decision on another issue in the case completely resolves the controversy between the parties, and with respect to your question, Justice O'Connor, we believe that there is a case of controversy that has proceeded since the beginning in this case, there is a difference between the case brought by Morton on the infringement issue.

That is, Morton is accusing us of infringement.

That is decided by a very special set of facts, and Cardinal had separate, independent basis on which to assert its claim that the patent was invalid.

If the patent is, indeed, invalid, then not only does Morton's claim fail against us, it fails against all parties, and not only against the particular products that were at issue in this case, but all the products that Cardinal may wish to make in the future.

Since this issue, or these parties--

Sandra Day O'Connor:

I thought, though, that we granted certiorari on the question whether the Court of Appeals for the Federal Circuit errs when it vacates a declaratory judgment holding an asserted patent invalid merely because it determines that the patent is not infringed.

Now, that's the question as framed, right?

Charles F. Schill:

--Yes, Your Honor.

Sandra Day O'Connor:

As to that question, is there any difference between you and Mr. Coons' position?

Charles F. Schill:

I believe that the way I would put the issue, or resolve that issue, is that the court has erred because it has not resolved the controversy between the parties in this case.

There may be some factual situations in which it need not reach the issue of validity.

For example, one case might be where the issue of unenforceability was also there, and the court decided that the patent was unenforceable, for example, either against the particular party or parties or the world.

Sandra Day O'Connor:

Well, you take the position that the policy adopted and now followed by CAFC is in error, that it shouldn't follow that policy--

Charles F. Schill:

That's correct.

Sandra Day O'Connor:

--And that seems to be the same position taken by your opponent.