Case(s): Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321 (1971)
Zenith Radio Corp. sued Hazeltine Research, Inc. (“HRI”) for patent infringement. Zenith owned a patent that covered a specific method for tuning and improving the accuracy of radio and television signals. HRI, a competitor of Zenith, had developed a similar method and used it in its own products without obtaining a license from Zenith. Zenith claimed that Hazeltine had violated its patent and sought damages as well as an injunction to stop HRI from using its method.
District Court and Seventh Circuit Appeal
HRI brought a patent infringement suit against petitioner (Zenith) in 1959, and, in 1963, Zenith counterclaimed for damages alleging violations of the Sherman and Clayton Acts by HRI’s participation in patent pools in Canada, Great Britain, and Australia, restricting Zenith’s operations in those countries. A year after evidence was closed, the trial judge entered preliminary findings of fact and conclusions of law favoring Zenith. HRI then moved to amend its reply to the counterclaim and to reopen the record for taking additional evidence. HRI sought to assert defenses of the statute of limitations and release, claiming that part of the damages awarded Zenith for 1959-1963 were caused by pre-1959 conduct, and thus barred by the statute of limitations, or were barred by a 1957 release given by Zenith to certain American companies in settlement of a civil treble damage action. The trial judge permitted the defenses to be filed, but refused to reopen the record or modify his findings and conclusions concerning the Canadian market.
The U.S. Court of Appeals for the Seventh Circuit reversed on the ground that Zenith had failed to prove injury to its business. This Court reversed with respect to Canada, holding that there was ample evidence of damage in the Canadian market and noting that the trial judge had either rejected the limitations and release defenses on the merits or deemed them waived, 395 U. S. 395 U.S. 100. On remand, the Court of Appeals held that the trial judge erroneously rejected the defenses on their merits. That court, while doubting that Zenith’s claim that the statute of limitations was tolled (by reason of a Government antitrust suit pending from 1958 to 1963 against various companies participating along with HRI in the Canadian patent pool), was properly before it, since no formal plea had been entered, rejected the tolling argument, concluding that tolling takes place only with respect to parties to a Government suit, and HRI was not such a party. The court further ordered evidence to determine the extent of reduction of damages by virtue of the defenses it sustained.
Zenith then appealed to the United States Supreme Court.
Supreme Court Decision
The Supreme Court held that Zenith’s patent was valid, and that Hazeltine had infringed it. The Court found that Zenith’s patent met the requirements for validity and that Hazeltine had used the same method covered by the patent without obtaining a license. The Court also rejected Hazeltine’s argument that Zenith’s patent was invalid because it had not disclosed the best mode for practicing the invention. Hazeltine was ordered to pay damages to Zenith and was also permanently enjoined from using Zenith’s patented method. The case set an important precedent for the validity of patents and the protection of intellectual property rights.