Scott Paper Co. v. Marcalus Manufacturing Co.

Background

A company bought a patent application from an employee-inventor who later left and formed a rival company. The buyer sued the rival for copying a machine that mounts a cutting strip on box edges. The rival defended by saying its machine matched an older, expired patent from 1912.

Reasoning

The Court addressed whether the inventor who assigned his patent can be stopped from arguing that the accused device is the same as an expired prior patent. The majority said the patent laws give inventors a limited monopoly but dedicate the invention to the public when the patent expires. Allowing an assignment to block use of an expired patent would let private deals continue a monopoly after expiration, which conflicts with the statutory scheme and public policy. The Court therefore held the assignor can show the device is that of an expired patent and has a complete defense to infringement.

Real world impact

The decision means people and companies may freely make and sell devices disclosed in expired patents, even if a former inventor assigned a later patent covering similar features. It prevents assignees from using assignment-based estoppel to extend patent monopolies after expiration. The ruling affirms that expired patents enter the public domain and that a prior-art expired patent can defeat an infringement claim.

Dissents or concurrances

One Justice dissented, arguing that equity and fair dealing should bar an assignor from denying the value of what he sold, and that the longstanding rule protecting assignees from such claims should remain for fairness between buyer and seller.