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Supreme Court decides that we should not be compelled to take the brakes off, then we will be damaged to that amount."
Senator CHILTON. That would not occur until the Supreme Court would decide on it, would it—that is, until the final decision? They would not be required to take the brakes off until the final decision?
Mr. WALKER. They certainly might. If injunctions could not be enforced by the courts of first instance without first going to a higher court on an appeal, the delays incident to patent litigation would be so great that the right to an injunction would not be of much value. Indeed, the United States district courts all over the country are constantly enforcing injunctions in patent cases, without giving the defendants any opportunity to appeal before the injunctions are enforced.
The CHAIRMAN. The court would not issue a restraining order mandatory in form, would it?
Mr. WALKER. In a patent case ? The CHAIRMAN. In any case. Mr. WALKER. Certainly. The CHAIRMAN. A restraining order? Mr. WALKER. A writ of injunction. The CHAIRMAN. I am speaking only of a restraining order granted without notice. A final injunction may in some cases de mandatory in form. I do not understand that the courts ever make a restraining order which is mandatory in form?
Mr. WALKER. I will clear up your misapprehension of my meaning, Senator. I will call attention to the section which I am now considering. It speaks of restraining orders and also of interlocutory orders; and it provides in both those classes of cases that bonds shall be required. I have no objection to a bond being required in the case of a restraining order, and I am not discussing that subject. But the decrees that are entered by the district courts, in pursuance of a full presentation of all the merits of the cases, are strictly interlocutory orders, and are so called. The final decree that is sometimes entered by a district court, never comes until after a master has reported the amount of money which the complainant is entitled to receive; and in most cases such final decrees are not made at all. The real crux of patent litigations consists in the obtaining or not obtaining of interlocutory decrees; and those interlocutory decrees are of the utmost importance to litigants. If they can not be had without giving bonds to secure damages for whatever injury may be theoretically inflicted upon defendants by erroneous injunctions, then they can not be had at all by poor inventors against wealthy infringers.
Senator CHILTON. As I understand, we speak of the final order; that is the order from which you can appeal. That is what we mean by a final order. You can only appeal from the final order. Is not the final order the one which adjudicates the principles of the case, which decides which side recovers? For instance, if the court decides that A's patent is good and that B has infringed it, could you not appeal from that decree, even before the amount shall have been ascertained ?
Mr. WALKER. You can thus appeal. But such an order is not a final decree. It is only an interlocutory decree. If you will allow me to explain it, I will try and do so. Prior to 1891 appeals could be had only from final decrees which settled the amounts of money recoveries. But the judiciary act of 1891 introduced a new departure into our jurisprudence, and provided that interlocutory decrees that are entered after all the questions are settled, except the amount of the money recovery, may be appealed. The circumstance that Congress 21 years ago did make those interlocutory decrees appealable did not make them final decrees. The law still continues to exist since 1891, as it did before, that a second appeal may be taken from the final decree, if the defendant has occasion or is advised to take a second appeal. But as litigation is conducted now, since the judiciary act of 1891, the critical point in any patent case is the interlocutory decree. It is called an interlocutory decree in the statute of 1891. It was always an interlocutory decree and nothing but an interlocutory decree, but the statute of 1891 made it appealable for the first time.
This section, 266a, in speaking of that kind of a decree, an interlocutory decree, does not modify the act of 1891. It leaves such a decree appealable by the defeated defendant, but provides that it shall not be granted at all, unless the complainant shall give a bond to secure to the defendant all of the loss that he would theoretically incur in case the interlocutory decree comes to be reversed on an appeal, which may be taken from it. As it stands at present, if the judge has any doubt of the correctness of his decision, he exercises his discretion to refrain from granting any interlocutory decree, except upon terms that the complainant will give a bond; and I never knew of a case where a judge was asked to exercise that discretion, and where it ought to have been exercised, in which he did not exercise it. But this section tells the judge he must positively require the complainant to give a bond, perhaps in an enormous sum and perhaps far beyond his means. Although you yourself, if you are a judge, are perfectly clear as to a patentee's rights, and know that an injunction is essential to maintaining those rights, you shall not give him that remedy for the wrongs, which you are perfectly sure have been inflicted upon him.
Gentlemen of the committee, I assure you from a thorough acquaintance with this whole subject during a lifetime, you might almost as well repeal the patent laws as to enact this section 266a, because you would thus be taking away from poor inventors the right to secure from courts the relief which the law allows them, except upon terms to which those poor inventors could not conform.
As the minority report of the Judiciary Committee of the House states, there never was anything said to that committee in favor of any such legislation, and nobody told any story that indicated any harm that had been done, resulting from reposing discretion in the courts relevant to requiring bonds of complainants in equity cases. I can not protest too emphatically against a plan to deprive the Federal judges of the power to administer equity, as they have been administering it for a hundred years, in cases where it would be the wealthy and powerful who would win as the result of nonadministration of equity, and the poor who would suffer on account of that nonadministration.
Section 2666 provides: That every order of injunction or restraining order shall set forth the reasons for the issuance of the same, shall be specific in terms, and shall describe in reasonable detail, and not by reference to the bill of complaint or other document, the act or acts sought to be restrained.
I object to that provision, because in patent cases—I will speak of patent cases particularly, but what I say about them will also be applicable to some other cases--it is generally impracticable and quite useless to describe in a writ of injunction the act or acts sought to be restrained. For instance, take complicated automatic or electrical machines that are often the subjects of patent litigation. No human being can, without using thousands of words, describe in detail and without reference to any other document any such machine. The proper course, which has been pursued in patent cases without any trouble at all for many years, has been that the bill of complaint specified the patent upon which it is based, by its number, by its date and its name, and made profert of the letters patent itself, and that profert incorporated that document into the bill of complaint.
Thereupon, if the defendant filed an answer, he filed an answer in such terms as he pleased. Patent litigation depends mainly upon similarities and differences in complicated mechanism and processes. The parties become perfectly acquainted with the issues. When the judge decides a case in favor of the complainant, the defendant knows what machines he has been making, selling, or using, and he knows precisely upon what ground the judge has held that those machines infringe the complainant's patent. But this section 266b provides that the writ of injunction shall describe to the defendant his own machines in detail, which is an act that is quite unnecessary, and could not be accomplished except by high experts, who might use many thousands of words in doing so. The law upon the subject of definitions in writs of injunction is well settled now.
Senator CHILTON. Don't you think that that is a little unfair ? It says, “shall describe in reasonable detail.”
Mr. WALKER. I did not fail to notice the word "reasonable." But detail is none the less detail because it is reasonable.
Senator Chilton. You do not think a man in describing a farm would have to describe the fence, each panel, the gate, the posts, the house, the chimney, and all that?
Mr. WALKER. That is not analogous to describing machinery, because a farm can be described by metes and bounds.
Senator CHILTON. My first suggestion would be unreasonable detail?
Mr. WALKER. To describe a farm by metes and bounds or by quarter sections would be reasonable. But that does not apply to machines, for machines can not be described in any such way. There is no occasion for any such legislation as this, because the injunctions that are issued now are issued in such terms that the defendants need not have the slightest doubt as to what they are prohibited doing A defendant is prohibited from using the machines that he has been using. He knows his machines perfectly well and knows he must stop using those machines. There is no necessity for Congress to enact a statute whereby any writ of injunction served by a United States marshal shall contain a detailed description of any machine.
Section 266c contains much matter which I could criticize, but other gentlemen here will attend to most of its points. I will confine
what I have to say to a small portion of the matter which is covered by that section. In order that my criticism may be understood, I will read only such portions of the section as relate to my criticism. Section 266c provides" that no restraining order or injunction shall be granted by any court of the United States or a judge or the judges thereof in any case between an employer and employees, or between employers and employees, or between employees" except under certain circumstances.
That is the class of cases which is attended to by that section, and I wish to criticize it. The last paragraph relating to that class of cases reads as follows, in part: And no restrining order or injunction shall prohibit any person or persons
from ceasing to patronize or to employ any party to such dispute, or from recommending, advising, or persuading others by peaceful means so to do.
The language which I have read would operate to impede the courts in restraining boycotting. The Supreme Court, in the Danbury Hatters case, decided that boycotting violates the Sherman law, and held that it is as rightly subject to the restraints of the Sherman law as are combinations between capitalists to restrain interstate trade and commerce. This bill, as it was presented to the Judiciary Committee of the House last January, legalized boycotting in every respect, and provided, in undeniable terms, that boycotting was to be legalized in every shape. Nobody should be restrained from it; nobody should be punished for it; and nobody should be compelled to pay any damages inflicted upon any private party as a result of boycotting. In January, 1912, I stated, with some vigor, before that committee my opposition to that bill. The result was that the committee pared down the bill, so as no longer to eliminate from the law the liability of boycotters to those who are injured by their boycott, and no longer to eliminate from the law the criminality which results from boycotting.
Section 1 of the Sherman law provides that persons guilty of combinations in restraint of interstate trade shall be punished by fine and imprisonment. Section 4 provides that such persons shall be restrained by writs of injunction from continuing their combinations in restraint of trade. Section 7 provides that whenever parties do combine to restrain such trade, they shall be liable to pay damages to any party whom they injure by their combinations.
Senator CHILTON. Do you understand that individuals sue in those kinds of cases or the Government ?
Mr. WALKER. Individuals, under section 7.
Senator CHILTON. To restrain persons from violating the Sherman law?
Mr. WALKER. No; I am speaking of suits for damages. Senator CHILTON. I mean to enjoin a person from violating the Sherman law as it affects an individual. Do you understand an individual can do that?
Mr. WALKER. The Sherman law does not provide that. There are four remedies provided by the Sherman law. One remedy is that the Government may prosecute violators of the Sherman law criminally. Section 4 provides that the Government may restrain violators of the Sherman law by equity proceedings. Section 6 pro
vides that the Government may enforce forfeitures of transported property which is the subject of violation of the Sherman law. Section 7 provides that private parties may recover damages from those who inflict injury upon them by violations of the Sherman law.
Senator CHILTON. Has your attention been called to where this would leave the Government in these suits?
Mr. WALKER. I have called my own attention to it.
Mr. WALKER. Yes. I think there are few things about the Sherman law that I have not thought of. The language of the proposed section 266c is:
That no restraining order or injunction shall be granted by any court of the United States, or a judge or the judges thereof, in any case between an employer and employees, or between employers and employees, or between employees, or between persons employed and persons seeking employment, involving or growing out of a dispute concerning terms or conditions of employment, etc.
Boycotting is illegal, not only under the Sherman law, but illegal under the principles of general law, as was decided before the Sherman law was enacted. While this section does not in terms provide that the Government shall not have power to restrain boycotting by means of equity suits, it does provide that no such injunction shall be issued in any case between an employer and employee, or between employers and employees, or between employees, or between persons employed and persons seeking employment, involving or growing out of a dispute concerning terms or conditions of employment, etc.
In so far as the Government would intervene by actions in equity to enforce the fourth section of the Sherman law against boycotts I should hope that even if this section 266c was enacted it would not be found to constitute an obstacle to that intervention; but I am not sure about that. Moreover, if the Sherman law is to be supplemented by additional legislation, as it seems to me is likely, it is not improbable that in the wisdom of Congress it will be decided that injured parties ought to have relief in equity as well as in law for wrongs inflicted upon them by combinations in restraint of trade.
Mr. DAVENPORT. Would it throw any light upon the question that is now being discussed with regard to the inquiry of Senator Chilton to say that Justice Harlan, Judge Lurton, and Judge Taft in the Addyston Pipe case declared that private parties have a right to protect themselves by injunctions from the injuries sustained under the Sherman law, as well as the Government?
The CHAIRMAN. But not on the ground that it was in restraint of interstate trade.
Mr. DAVENPORT. Surely. Mr. WALKER. That was not actually adjudicated in the Addyston Pipe case.
Mr. DAVENPORT. It was so stated. Of course, there are contrary decisions. Courts of appeal differ; but in the Danbury Hatters' case we got an injunction in the State of California.
The CHAIRMAN. The injury complained of was an injury to your business, was it not?
Mr. DAVENPORT. Surely.