Precision Instrument Mfg. Co. v. Automotive Co., 324 U.S. 806 (1945)

Precision Instrument Manufacturing Co. v.

Automotive Maintenance Machinery Co.
No. 377

Argued January 31, February 1, 1945
Decided April 23, 1945
324 U.S. 806

CERTIORARI TO THE CIRCUIT COURT OF APPEALS

FOR THE SEVENTH CIRCUIT

Syllabus

1. In this suit for infringement of patents and breach of contracts related thereto, the District Court’s findings of fact and conclusions of law sustained its judgment of dismissal on the ground of the complainant’s "unclean hands," and the Circuit Court of Appeals’ reversal of the judgment was erroneous. Pp. 807, 820.

2. The maxim "he who comes into equity must come with clean hands" closes the doors of a court of equity to one tainted with inequitableness or bad faith relative to the matter in which he seeks relief, however improper may have been the behavior of the defendant. P. 814.

3. The "clean hands" doctrine is rooted in the historical concept of a court of equity as a vehicle for affirmatively enforcing the requirements of conscience and good faith. P. 814.

4. While equity does not require that its suitors shall have led blameless lives as to other matters, it does require that they shall have acted without fraud or deceit as to the matter in issue. P. 814.

5. One’s misconduct need not have been of such a nature as to be punishable as a crime or as to justify legal proceedings, in order to warrant invocation of the maxim. P. 815.

6. Where a suit in equity concerns the public interest as well as the private interests of the litigants, the "clean hands" doctrine assumes greater significance, for if the equity court in such case properly applies the maxim to withhold its assistance, it not only prevents a wrongdoer from enjoying the fruits of his transgression, but averts an injury to the public. P. 815.

7. A suit to enforce patents and related contracts involves the public interest, as well as interests of the adverse parties. P. 815.

8. The far-reaching social and economic consequences of a patent give the public a paramount interest in seeing that patent monopolies spring from backgrounds free from fraud or other inequitable conduct, and that such monopolies are kept within their legitimate scope. P. 816.

9. Those who have applications pending in the Patent Office or who are parties to Patent Office proceedings have an uncompromising duty to report to it all facts concerning possible fraud or inequitableness underlying the applications in issue. Failure in this duty is not excused by reasonable doubts as to the sufficiency of the proof of the inequitable conduct, nor by resort to independent legal advice. P. 818.

10. A settlement of interference proceedings which is grounded upon knowledge or reasonable belief of perjury, not revealed to the Patent Office or to any other public representative, lacks that equitable nature which entitles it to be enforced and protected in a court of equity. P. 819.

143 F.2d 332 reversed.

Certiorari, 323 U.S. 695, to review the reversal of a judgment dismissing the complaints and counterclaims in two suits for infringement of patents and breach of contracts.