Walker Process Equipment, Inc. v. Food Machinery & Chemical Corporation

PETITIONER: Walker Process Equipment, Inc.
RESPONDENT: Food Machinery & Chemical Corporation
LOCATION: Juvenile Court

DOCKET NO.: 13
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Seventh Circuit

CITATION: 382 US 172 (1965)
ARGUED: Oct 12, 1965 / Oct 13, 1965
DECIDED: Dec 06, 1965

Facts of the case

Question

Media for Walker Process Equipment, Inc. v. Food Machinery & Chemical Corporation

Audio Transcription for Oral Argument - October 13, 1965 in Walker Process Equipment, Inc. v. Food Machinery & Chemical Corporation

Audio Transcription for Oral Argument - October 12, 1965 in Walker Process Equipment, Inc. v. Food Machinery & Chemical Corporation

Earl Warren:

Number 13, Walker Process Equipment Incorporated, Petitioner, versus Food Machinery and Chemical Corporation.

Mr. Merriam.

Charles J. Merriam:

Mr. Chief Justice and members of the Court.

This case comes here on petition for certiorari to the Seventh Circuit for affirming an opinion of the District Court on two different aspects.

The first was the dismissal of the original complaint for patent infringement on the latter patent which I will go into, after it had become apparent that the patent had been obtained by fraud upon the Patent Office and without an opportunity to obtain findings of facts with respect to that fraud, and also, without awarding as requested attorney's fees in connection with the dismissal.

The second point of time, perhaps more important here was the dismissal of Walkers' counterclaim -- or rather second amended counterclaim which setup a cause of action, allegedly, based upon the fact that the plaintiff FMC had obtained its patent by a fraud from the Patent Office and failing to point out to the Patent Office, and in filing a false oath with respect to the absence of prior use more than a year before the patent was filed.

That was dismissed on the ground that a plaintiff in a declaratory judgment action which was -- the counterclaim was taken to be cannot raise the issue of fraud because that would in effect be invalidating the patent which it could only be done by the Patent Office, it distinguished from cases where a fraud was setup in defense.

The latter patent relates to the treatment of sewage and it is in the class of what you call aerations equipment and where long pipes, perforated pipes or tube are put into the bottom of the incoming sewage vessels and a stream of air is passed through that sewage.

These pipes, if left by themselves in the old days, clog and the only remedy was to drain the tanks and go down and clean off the pipes, which was not exactly an appealing job.

And eventually, the Chicago Pump Company which is a division of FMC, developed a so-called swing diffuser in which the pipes were mounted on a swing apparatus which would swing them up so they could be cleaned out of the tank.

That involves some difficulties because of the long arm of the -- it was necessary to swing them out and it involve a considerable torque and -- so the present invention came along, a so-called invention, in which the -- instead of a rigid arm, they need action or hinged arm to put in so that the torque was left, you could left this that's almost straight up.

In spite of the fact that the only improvement was in the lifter arm, the patent covers the entire assembly including the tanks of which the end diffuser pipes, which the villagers and Municipalities themselves ordinarily installed.

This -- the result of the patent however, was to permit the Chicago Pump Company and later FMC, which took it over, to have a complete monopoly on swing diffusers and a substantially complete monopoly on diffuser equipment itself.

The -- Mr. Forest who represented FMC himself admitted at page 50 that they had had practically no competition in the diffuser field.

And at 55, which is a motion filed for dismissal by FMC, they confessed that they had only been able to find one single instance of infringement up to a time or after the patent had expired.

What happened commercially was that the Walker people got into this business much later than FMC.

By 1954, they had developed what they called sparger and this appears at page 74 of the record, which used a -- what they believed to be a non-clogging type of diffuser.

So that it did not have to be cleaned and therefore it did not have to be lifted out.

But they were not able to convince the municipalities of this and after all, there are some reasons for that because you have to convince somebody that five years from now, he's not going to have to clean something that he wants to be convinced about.

And the -- at any rate, Walker was unable to make much of the penetration into the field because of the lifting -- this -- the action lifter.

However, about 1956, the Walker people, who remains not described in the record and I don't know what it was, got a wind of the fact that there might have been a prior public use.

And the patent was applied for on February 2nd, 1942 and they've got wind of an earlier device more than a year before, sold by the plaintiff but no actual information.

But they wrote frankly, a letter to FMC which appears in page 16 of the record, pointing out that they had heard this and asking them to investigate.

FMC replied, the reply is not in the record but at page 62 in the pleadings, it appears that they simply denied any responsibility in looking into the matter and they didn't.

However, Walker got some courage up and sold an infringing device to the City of Houston, in 19 -- in or about 1960.

And in June of 1960, the suit from which this arises was brought against Walker and Chicago alleging infringement.

Now, that was only two and a half months before the patent expired.

The process of discovering followed, and it was not until the winter of 1962, that we obtained from the plaintiff, the documents which are in the record at page 21 to 27 which showed that prior to February 2nd, 1941, there was an operation at the Hunter Airbase in Savannah, Georgia an aeration system involving these lifter arms.

That came hard and I'm not going to go into great details of what happened but there was a great deal of evasive answering of interrogatories until these documents came out.

And even then, it was maintained by FMC that was not a prior use because the claims of most of them call for these presence of some means of pulling out the diffuser tube, because they had supplied the crane, although at page 40 of the record, they admitted that the cranes were there and ready for use and at page 62 in the amended complaint, it was alleged that the -- they were there and that was admitted by the motion to strike.