the litigations under discussion and were followed by the reopening of the patent suits in the same circuit court of appeals, resulting ultimately in the reversal by that Court (107 Fed. 2d 940, 944) of both of the adverse decisions which had been corruptly rendered by Judge Manton.

The patent suits were filed under patent No. 1,673,727. In the course of the litigation this patent was reissued as No. 19023, referred to in the pending bill, but the reissue did not alter or affect the patent in respect to any of the matters adjudicated.

(a) FIRST DECISION

Art Metal Works, Inc., v. Abraham & Straus, Inc. (Circuit Court of Appeals, Second Circuit, 61 Fed. 2d, p. 122, rendered August 23, 1932).

The suit was an ordinary patent infringement suit brought against a Department Store which had been selling two forms of cigar lighter marketed by Evans Case Company, the leading competitor of the patent owner. The Court adjudged the patent to be valid and infringed by both forms of lighter, and since the suit was defended by Evans the judgment became binding against Evans, and affected all of the Evans lighters having any general similarity to the patent in suit which had theretofore been marketed by Evans.

The evidence in the criminal proceedings showed it was shortly after this decision in 1932 that the conspiracy began.

(b) SECOND DECISION

Art Metal Works, Inc., v. Abraham & Straus, Inc. (62 Fed. 2d 79, Circuit Court of Appeals, Second Circuit, rendered December 1, 1932).

Shortly after the last-mentioned decision the defense moved to reopen the case for the presentation of further defenses and this motion was granted by the circuit court of appeals with Judge Manton presiding. The effect of the decision was to suspend the decision which the circuit court of appeals had previously rendered favorably to the patent owner, and allow the case to be further contested by Evans, on the theory that trade announcements by the patent owner of the decision previously rendered in its favor were so exaggerated and overdrawn in character as to constitute "inequitable conduct" or "unclean hands", which would justify the denial of relief to the patent owner.

(c) THIRD DECISION

Art Metal Works, Inc. vs. Abraham & Straus, Inc. (two decisions) (Circuit Court of Appeals, Second Circuit, 70 Fed, Rep. 2d 639, and 70 Fed. Rep. 2d 641, both opinions rendered by Judge Manton on April 30, 1934).

The reopening proceedings allowed by Judge Manton at the instigation of Evans in 1932 were dragged out until 1934, and in the meantime Evans was encouraged by its relations with Judge Manton to put on the market a still further competing cigar lighter closely similar to the patent, against which the owner of the patent filed a

separate infringement suit in the same court and involving the same parties.

In 1934 both suits came before the circuit court of appeals, Judge Manton presiding, for final decisions on both questions, namely, whether the latest form of Evans lighter infringed upon the patent, and whether the patent owner had been guilty of such inequitable conduct or unclean hands that all relief under the patent should be denied.

In opinions rendered by Judge Manton, both questions were decided in favor of Evans. It was ruled that the third form of Evans lighter was not an infringement, and that all relief to the patent owner for infringement arising out of the first and second forms of Evans lighter (which the same court had previously decided to be an infringement) should be denied.

The legal effect of these two final decisions, under the principles of Kessler vs. Eldred (206 U. S. 285, 51 U. S. Law Ed. 1065) was to give a complete release to Evans and all Evans' customers and users throughout the United States, from all liability from infringement arising out of the manufacture, use, or sale of all three of the successive forms of lighter on which Evans had been in Nation-wide competition with the patent owner all over the United States. These reopening proceedings instituted in the fall of 1932 effectually blocked enforcement of the patent up to the date of Judge Manton's decisions in 1934, now to be referred to.

(d) FOURTH DECISION

United States vs. Manton (Circuit Court of Appeals, Second Circuit, 107 Fed. Rep. 2d 834, decision rendered October 14, 1939, by Mr. Justice Sutherland of the United States Supreme Court, sitting with Mr. Justice Stone and Circuit Judge Clark as a specially convened circuit court of appeals).

Evans' Nation-wide infringement went on undisturbed and beyond any power of the patent owner to prevent until the year 1939, when the criminal proceedings in the District Court for the Southern District of New York exposed former Judge Manton's criminal acts in the Abraham & Straus litigations above referred to. In its opinion (107 Fed. 2d 840) the specially convened circuit court of appeals, by Mr. Justice Sutherland, said, at 107 Fed. 2d 840,

2. The first of the suits involved in the conspiracy, the Art Metal Works case, was begun in 1932, the defense being assumed by the Evans Case Co. Reilly, president of the company, was one of the conspirators. He advised with Fallon about the case on a number of occasions. He gave Fallon, at the latter's request, many sums of money aggregating thousands of dollars and for several years carried him on the pay roll of the Evans Case Co. at $100 per week and paid him other sums, the whole amounting to nearly $20,000. The district court, having decided the case against the Evans Case Co., the company appealed. In another case decided in its favor an appeal was taken by the losing party. After some negotiations between Reilly and Fallon, the former expressed a willingness to pay $25,000 upon Fallon's assurance of favorable action by Manton on the appeal, $15,000 to go to Manton as a loan. At a later time, Reilly was informed by Fallon by telephone that he had learned that the decision would be favorable and "that the Judge (Manton) was in bad circumstances for the money and wanted to know if I could not get $10,000 as quickly as possible." About the same time, decisions favorable to the Evans Case Co. were handed down, the opinions being rendered by Manton. Reilly then paid Fallon $10,000 in cash and also gave him three $500 checks. The $10,000 was entered in the books of the Evans Case Co. as "Prepaid Royalties, Air-Flow." Subsequently, on motion of Reilly, the board

of directors of the company directed that the item be transferred to the "legal and professional account for litigation expense."

During the summer of 1934 Reilly was introduced by Fallon to Manton, and thereafter Reilly, Manton, and Fallon played golf together, and Reilly lunched with Manton at the Lawyers Club and went out with Manton and his wife, Fallon at times being present. In February 1939 Manton resigned his office. A day or two before the resignation was to take effect Manton called Reilly on the long-distance telephone and told him he understood that he had Bill (meaning Fallon) on the pay roll. Receiving an affirmative reply, Manton said: "That will be very embarrassing for me if found out, because I heard they intend to investigate.' Manton then said: "Couldn't you pull out those pages?" Reilly answered he knew nothing about bookkeeping and would not know where to begin. Manton repeated that it would be very embarrassing for him, and Reilly responded: "I don't know what to do about it."

After the lapse of a few hours, Reilly had another long-distance telephone talk with Manton, first asking him if it was all right to talk. Manton answered: "I don't think exactly." Manton then asked Reilly for his telephone number and said that he would call him back under another name. Later in the same day, the call was made and the former conversation was repeated in substance. In the course of this conversation, Manton spoke of the statute of limitations and said that it would protect them in the Art Metal investigation; that anything that was 3 years old was outlawed. Manton again spoke of Fallon being carried on the pay roll, saying that it was a great embarrassment to him and to get rid of the records because of the Art Metal investigation. Manton admitted that telephone conversations between himself and Reilly occurred, and that he initiated them, but gave a different version of what was said.

A few days later, Reilly directed the bookkeeper to procure all the records and to destroy them. The bookkeeper destroyed the records of the company up to 1935-cashbooks, ledgers, bills, vouchers and everything with the exception of some papers subsequently discovered and turned over to the Government.

During Judge Manton's trial the evidence which resulted in these findings by Mr. Justice Sutherland came to the attention of the owner of the patent. Petitions were thereupon filed in the Circuit Court of Appeals for the Second Circuit, supported by excerpts of the testimony in the criminal proceedings against Judge Manton, and praying for a reopening of the two adverse decisions which had been rendered by Judge Manton in the Abraham & Straus litigations. These petitions were granted in unreported interlocutory decisions of the court.

(e) FIFTH DECISION

Art Metal Works, Inc. v. Abraham & Straus (Circuit Court of Appeals, Second Circuit (two decisions November 20, 1939), 107 Fed. Rep. 2d 940 and 107 Fed. Rep. 2d 944; Writ of Certiorari Denied Dec. 11, 1939. See 60 Supreme Court 293).

These are the final decisions of the Court, which still remain in effect. At 107 Fed. Rep. 2d 940 the circuit court of appeals in reviewing Judge Manton's decision which had held that the third form of Evans lighter did not infringe upon the patent under discussion, held the Evans lighter to be an infringement, thus reversing the previous decisions by Judge Manton. This form of lighter had been continuously on Nation-wide sale since the time in 1932 when Evans began to conspire with Judge Manton and up to November 20, 1939.

At 107 Fed. 2d 944, the circuit court of appeals reviewed and reversed the decision which had been rendered by Judge Manton to the effect that because of "inequitable conduct" the patent owner was entitled to no relief for infringement arising out of the first and second infringing forms of Evans lighter. Both of the decisions favorable to the

patent owner as rendered in 1939 still remain in full force and effect, reinstating the patent owner, so to speak, to the normal rights supposed to be accorded by the patent for the remainder of its term. Before 1939, however, an infringement liability had been built up so large as to render it impossible to enforce, and any judgment which would amount to fair reinstatement of the patent owner with respect to the 7-year period during which the protection of the patent had been lost due to fraud in the Federal appellate court itself.

The net effect of the foregoing decisions was to deprive the owner of the patent herein of the rights to which he was entitled for the period from December 1932, when the reopening proceedings were authorized by the court, with Judge Manton presiding, to December 1939, when the court, in effect, reinstated the patent.

So far as your committee have been able to find this is the only situation where it has been authoritatively established (by judgment of the court itself) that a patent owner was deprived of his patent rights by fraud right in the court itself. There were of course a number of other cases in the decision of which Judge Manton had participated, and which were later reviewed by the same court upon a showing that his actions in the case had been tainted, but we know of no other situation wherein the court's own later decisions showed that a patent owner had been thereby fraudulently deprived of the rights which his patent was supposed to accord.

Your committee are unanimously of the opinion that the equities in favor of the owner so heavily outweigh any of the arguments advanced by those who appeared in opposition to the bill, that any discussion of those arguments would serve no useful purpose.

The Assistant Commissioner of Patents said (p. 15 of the hearings): * * * At the outset I want to correct a misapprehension that may exist by stating I am not here to oppose this bill. This is a private measure asking for private relief and it does not affect either patent practice or patent law

* * *

Further, your committee are of the view that the enactment of this legislation is without precedent in the history of patent legislation and the committee believe that no future situation comparable will ever arise.

It is the view of your committee that since the Government grants a monopoly to patentees and since the owner of the letters patent here was wrongfully deprived of his rights for a period of 7 years because of the wrongful acts of an agent of the Government, the Congress properly may restore those rights by the enactment of this bill. Full hearings having been had and your committee having duly deliberated upon the legislation proposed, it is unanimously recommended that the bill do pass.

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