Lear, Inc. v. Adkins

PETITIONER: Lear, Inc.
RESPONDENT: Adkins
LOCATION: Ohio General Assembly

DOCKET NO.: 56
DECIDED BY: Warren Court (1969)
LOWER COURT:

CITATION: 395 US 653 (1969)
ARGUED: Nov 20, 1968 / Nov 21, 1968
DECIDED: Jun 16, 1969

Facts of the case

Question

Media for Lear, Inc. v. Adkins

Audio Transcription for Oral Argument - November 20, 1968 in Lear, Inc. v. Adkins

Audio Transcription for Oral Argument - November 21, 1968 in Lear, Inc. v. Adkins

Earl Warren:

Number 56, Lear Incorporated, petitioner versus John S. Adkins.

Mr. Cohen, you begin your argument.

Peter R. Cohen:

Mr. Chief Justice and may it please the Court.

First, it is important to show in this case that Lear never properly raised or preserved the question of whether licensee estoppel violates either the patent laws or the antitrust laws.

Although Mr. Wallace for the Government referred the Court to pages 25 to 28 of one of Lear's reply briefs where Lear had quoted the constitutional standard for invention and the sections of the patent laws dealing with validity.

He did not read far enough from that portion of the brief.

In that section after quoting those provisions what Lear was arguing was only that the federal laws including the constitutional standard had to be applied in determining the question of validity.

That portion did not in any way assert that the doctrine of licensee estoppel was invalid and that it violated either the patent laws or the antitrust laws.

In fact, at page 75 of that same brief, Lear had a separate section dealing with the doctrine of licensee estoppel in which Lear conceded that the doctrine was applicable in this case unless it fell within one of two exceptions.

One being termination and the other being repudiation.

I have Xerox copies of the brief that Mr. Wallace referred to pages 18 to 26 and I have handed them to the Clerk this morning for this Court to consider if it's so desires.

Now, I offer now a copy to the Government.

William O. Douglas:

What page is that?

Peter R. Cohen:

It's 18 through 28.

In fact, the Government concedes in its amicus brief that the issue of whether or not the doctrine of licensee estoppel violates either the patent laws or the antitrust laws was not timely raised or preserved in this case.

At page 8, the Government says as follows, “This Court need not be deterred from reaching this issue, licensee estoppel by the fact that petitioner's contentions in the state courts were directed primarily to attempting to carve out an exception to the doctrine rather than to its overturn.”

Because of this Court's decision upholding the doctrine at Automatic Radio Co. versus Hazeltine it would have been futile for the petitioner to argue broadly to the state courts that federal law bars the states from applying the doctrine of patent licensee estoppel.

Moreover, Lear has conceded in the state court system that the rule of licensee estoppel was applicable unless Lear fell within one of two state exceptions.

The best statement of this concession appears at page 109 of Lear's answering brief in the California District Court which is quoted at page 120 of the appendix before this Court and which states as follows, “it is a recognized principle of law that when a license agreement provides a grant of a right to either manufacture, use or sell a product incorporating a patented invention, the licensee is estopped to contest the validity of the license patent only so long as the licensee is operating under the license.”

This is not only the modern rule as plaintiff likes to call it but as also the old rule as well.

This rule was set out in the 1939 case of the Armstrong Co. versus the Shell Company of California which was a California Court opinion.

Lear then goes on to say this estoppel as only so long as the licensee operates under the license agreement.

This estoppel arises not because of the expressed terms in the agreement but because the licensee is using and enjoying the benefit and protection of the right covered by the agreement and should not be permitted to reap the benefits of the agreement and at the same time contest the validity of the patents to show failure of consideration for the agreement.

Hugo L. Black:

What appendix are you reading from?

Peter R. Cohen:

Appendix number 1 to the briefs on the merits and this appears at page 120.

Hugo L. Black:

Page 20?

Peter R. Cohen:

120.

Hugo L. Black:

120.

Peter R. Cohen:

120.

Hugo L. Black:

Appendix number 1?