Hazel-Atlas Glass Co. v. Hartford-Empire Co.

Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238 (1944), is a much cited 1944 decision of the United States Supreme Court dealing with fraud on the Patent Office.

"[2] Although the fraud occurred in the late 1920s, the facts became public only much later in the Government's antitrust trial in United States v. Hartford-Empire Co.[3] In 1926 Hartford had a pending Peiler patent application on a "gob feeder" glass-making machine.

Hatch "ghost-wrote" a trade journal article for a union official, Clarke, praising the invention as a revolutionary advance, and paying him to sign it.

[6] In contrast to the district court, the Third Circuit considered the patent to be a pioneer (as Clarke maintained), so that the claims were entitled to a broad construction.

Hazel did not at that time attempt to verify the truth of the hearsay story of the article's authorship, but relied upon other defenses, which proved successful in the district court.

After the opinion of the Third Circuit in 1932, quoting the spurious article and reversing the decree of the district court, Hazel hired private investigators for the purpose of verifying the hearsay by admissible evidence.

Hazel then capitulated in the patent infringement litigation and settled with Hartford for $1 million, and the parties entered into a cross-licensing agreement.

It concluded, however, that "sordid as is the story concerning the genesis of the Clarke article and the deceptive design and use of its spurious authorship, still it does not qualify as after-discovered evidence" in Hartford's infringement suit against Hazel.

"[12] The Third Circuit also held that it lacked power to set aside its 1932 of infringement and must dismiss the case: [This court lost] the only jurisdiction it ever had over the decrees in those cases, appropriate mandates duly issued and the terms at which the final orders on the appeals were entered expired long prior to the filing of the instant petitions without action having been taken to extend this court's grasp.

"From the beginning," Black wrote, citing the court's 1878 decision in United States v. Throckmorton, "there has existed alongside the term rule a rule of equity to the effect that, under certain circumstances, one of which is after-discovered fraud, relief will be granted against judgments regardless of the term of their entry" and "where the situation has required, the court has, in some manner, devitalized the judgment even though the term at which it was entered had long since passed away", relying on an 1891 decision, Marshall v. Holmes, which allowed an unconscionability exception from Throckmorton's rule generally barring equitable relief in cases of intrinsic fraud such as how Hartford characterized its actions.

"[14] Next, because of public policy, the Court rejected the Third Circuit's condonation of Hartford's fraud on the grounds of Hazel's failure to exercise sufficient diligence: This matter does not concern only private parties.

[15]Third, the Court challenged the Third Circuit's argument that the fraudulent conduct was not "basic’ to the 1932 decision and the factual allegations in the article were actually true.

Courts of appeals lack original jurisdiction to hold trials, and the proceeding should be by way of taking testy from witnesses, not use of affidavits as here.

The settlement agreement resulted to Hazel's becoming a co-conspirator in the market-allocation scheme condemned in the recent Hartford-Empire case and profiting greatly from the antitrust violation.

The Hartford gob feeder fraudulently patented in this case (U.S. Pat. No. 1,655,391
Justice Hugo Black delivered the opinion of the Court
Owen J. Roberts delivered the dissent