Louis Gilbert Dubuit v. Harwell Enterprises, Inc., and Roy M. Harwell, JR., 540 F.2d 690, 4th Cir. (1976)

540 F.
2d 690
191 U.S.P.Q. 17, 1976-1 Trade Cases 60,890
Louis Gilbert DuBUIT et al., Appellants,

v.
HARWELL ENTERPRISES, INC., and Roy M. Harwell, Jr.,
Appellees.
No. 75-1470.
United States Court of Appeals,

Fourth Circuit.
Argued Nov. 14, 1975.
Decided May 17, 1976.
Robert E. Wagner, Chicago, Ill. (Robert E. Browne, Stone, Wagner &

Aubel, Chicago, Ill., Floyd A. Gibson, Parrott, Bell, Seltzer, Park &
Gibson, Charlotte, N. C., on brief), for appellants.
Jack E. Dominik, Chicago, Ill. (Basil L. Whitener, Gastonia, N. C., on
brief), for appellees.
Before BOREMAN, Senior Circuit Judge, RUSSELL, Circuit Judge, and
FIELD, Senior Circuit Judge.
FIELD, Senior Circuit Judge:
On December 15, 1972, Louis G. DuBuit filed an appeal from a final judgment
order which had been entered in this case. The appeal was argued in this court
on June 4, 1973, and an opinion and judgment of affirmance was filed on
October 15, 1973. 1 Approximately one year later, on November 5, 1974, the
district court entered an order in which it found this case to be "exceptional"
under 35 U.S.C. 285, and directed DuBuit and his co-plaintiffs to pay to the
defendants counsel fees and expenses totaling approximately $35,000.00. The
plaintiffs have appealed and we reverse.
The background and procedural history of this controversy is as follows. Louis

G. DuBuit, a citizen and resident of France, is the owner of United States
Patent No. 2,090,300 entitled "Silk Screen Printing Machine" which was issued
to him on May 21, 1963. Machines DuBuit is a company organized under the
laws of France, having its principal place of business in that country, and
manufactures the machines covered by the DuBuit patent. American Screen
Process Equipment Company (American) is the exclusive distributor of the
subject machines in the United States. Harwell Enterprises, Inc., is a North
Carolina corporation with its principal office in that state, and Roy M. Harwell,
Jr., the principal stockholder and executive officer of Harwell Enterprises, Inc.,
is a citizen and resident of North Carolina.
3
In August of 1969, Louis G. DuBuit, Machines DuBuit and American instituted

this action against Harwell Enterprises, Inc., and Roy M. Harwell, Jr., the
complaint being drafted in four counts. The first count charged the defendants
with infringement of the DuBuit patent. In the second count, which was based
on diversity jurisdiction, Louis G. DuBuit charged the defendants with libel,
and in the third count he charged them with slander. In the fourth count, which
was also based upon diversity jurisdiction, American and Machines DuBuit
charged the defendants with unfair competition and disparagement of products.
The parties engaged in extensive discovery, and thereafter the district court
summarily adjudged that an agreement between Machines DuBuit and
American contained a tying arrangement which constituted patent misuse, and
reserved for submission to the jury at trial the issue of whether the plaintiffs
had purged such misuse. At trial the court directed a verdict for the defendants
on the unfair competition and slander counts of the complaint and in favor of
DuBuit Machines and American on a counterclaim which had been filed against
them by the defendants charging unfair competition and violations of the
antitrust laws. The issues of validity, infringement, purge of misuse and libel
were submitted to the jury which, in answer to specific interrogatories, found
the patent to be valid but not infringed, and the misuse not purged. It further
found that DuBuit had not been libeled by the defendants.
A final judgment order was entered by the district court on October 26, 1972,
which order, after reciting the findings of the jury, specifically disposed of all
of the issues raised by the complaint as well as the defendants' counterclaim.
On November 2, 1972, the defendants filed a motion for attorney fees, stating
that it was based upon 35 U.S.C. 285 or, in the alternative 15 U.S.C. 14 for
a per se violation of the Clayton Act. On the same date, the defendants filed a
motion for amendment of the judgment order pursuant to Rule 59(e), Federal
Rules of Civil Procedure. A motion pursuant to Rule 59(e) was also filed by the
plaintiffs on November 3, 1972, seeking amendment of the judgment order in
several respects.
The district court did not act upon the motion for attorneys fees but entered an
order on November 30, 1972, in which it denied the defendants' motion to
amend the judgment order and granted the plaintiffs' amendatory motion in
certain limited respects. On December 15, 1972, Louis G. DuBuit filed a notice
of appeal with respect to all of the issues which had been resolved against him.
American and Machines DuBuit did not appeal, nor did the defendants appeal
from those portions of the judgment which were adverse to them, i. e., the
finding that the DuBuit patent was valid and the denial of their counterclaim.
The mandate of this court was filed in the district court on December 27, 1973,
and on March 22, 1974, counsel for the defendants filed a paper entitled
"Supplemental Affidavit in Support of Renewed Motion for Attorneys Fees and
Expenses." The plaintiffs filed a motion to strike, challenging the jurisdiction of
the district court to entertain the motion. In entering its order of November 5,
1974, however, the district court concluded that it had the requisite jurisdiction,
and awarded the fees and costs requested by the defendants.
Unquestionably, the record demonstrates that the district court had no

jurisdiction over either Machines DuBuit or American which would support the
award of fees and costs against them. As we have stated, the final order of the
court disposed of all of the issues between these two plaintiffs and the
defendants, and since no appeals were taken the judgment became a finality and
terminated the case as to them. Under these circumstances, the case could only
be reopened or the order revised under the provisions of Rule 59 or Rule 60,
Federal Rules of Civil Procedure, neither of which was invoked as the basis of
the court's order. It is equally clear that the district court had no authority to
enter the order for fees and costs against Louis G. DuBuit since his appeal
divested the trial court of further jurisdiction over him. The controlling rule is
stated in Professor Moore's treatise:
8
"The
filing of a timely and sufficient notice of appeal has the effect of immediately
transferring jurisdiction from the district court to the court of appeals with respect to
any matters involved in the appeal. It divests the district court of authority to
proceed further with respect to such matters, except in aid of the appeal, or to correct
clerical mistakes * * * until the district court receives the mandate of the court of
appeals." 9 Moore's Federal Practice P 203.11.
9
Further jurisdiction of the district court, if any, was dependent upon the terms
of the appellate mandate, and when we affirmed the final judgment this put an
end to the litigation and the district court had no authority to reopen the case
for the consideration of attorney fees or any other purpose. Durant v. Essex
Company, 101 U.S. 555, 25 L.Ed. 961 (1879). In doing so "the District Judge
violated the principle that a lower court has no power or authority to deviate
from the mandate issued by an appellate court but is bound thereby and cannot
reopen questions which the mandate lays to rest, Briggs v. Pennsylvania R. Co.,
334 U.S. 304, 68 S.Ct. 1039, 92 L.Ed. 1403." United States v. Cato Brothers,
Inc., 273 F.2d 153, 157 (4 Cir. 1959).
10
In entering the order, the district judge conceded that there had been no express
reservation of jurisdiction but concluded that he had authority to act in the
premises since "the question had been presented by motion before the appeal
had been perfected and was, in fact, deferred pending outcome of the appeal."
Whether jurisdiction of such a motion could be effectively reserved by a district
court pending appeal by the specific language of a judgment order is highly
questionable2 , but in any event there was nothing in any of the orders or
otherwise in the record in the present case to support the district court's exercise
of jurisdiction. While it is true that the defendants' motion was filed shortly
after the judgment order had been entered, nevertheless, as we have pointed out,
the order entered on November 30, 1972, made no mention whatever of the
motion for fees and costs. Under these circumstances, we cannot accept the
defendants' contention that the jurisdiction of the court could be preserved by
correspondence or statements dehors the official record in this case.
Additionally, the issue of attorney fees should have been considered and
disposed of either prior to or at the time of the entry of final judgment in this
case and not left open pending the outcome of the appeal.3 In our opinion, the
correct jurisdictional principles were recognized and applied in this circuit by
the district court in Davis Harvester Company v. Long Manufacturing
Company, 283 F.Supp. 536 (E.D.N.C.1967).
11
In addition to the jurisdictional question, we think it was inappropriate to award

attorney fees in this case under 35 U.S.C. 285. The statute provides:
12 court in exceptional cases may award reasonable attorney fees to the prevailing
"The
party."
13
This section, which was enacted in 1952, substantially adopted the language of
the repealed 35 U.S.C. 70, but the phrase "exceptional cases" was substituted
for the words "in its (the court's) discretion" which appeared in the old statute.
This change was explained by the revisors "as expressing the intention of the
present statute as shown by its legislative history and as interpreted by the
courts."4 The legislative history of Section 285 as well as the predecessor
statute5 indicates that Congress intended that the authority be used sparingly
since it represents a departure from the usual rule in this country that counsel
fees are not awardable to the prevailing party in an action at law. See Alyeska
Pipeline Co. v. Wilderness Society, 421 U.S. 240, 95 S.Ct. 1612, 44 L.Ed.2d
141 (1975). It was never intended to permit recovery of fees routinely in such
cases, but rather such an allowance "should be based upon a finding of
unfairness or bad faith in the conduct of the losing party, or some other
equitable consideration of equal force, which makes it grossly unjust that the
prevailing party be left to bear the burden of his own counsel fees." Purer &
Company v. Aktiebolaget Addo, 410 F.2d 871, 880 (9 Cir. 1969). "
(E)xceptional circumstances have been interpreted as incorporating concepts of
fraud, malice, bad faith and other similar concepts," Hoge Warren Zimmerman
Co. v. Nourse & Co., 293 F.2d 779, 784 (6 Cir. 1961). In our own court we
have stated:
14
"While
the allowance of reasonable counsel fees to the defendant in a patent case is
within the discretion of the District Court * * * we have held that the discretion
should not be exercised except in situations involving vexatious and unjustified
litigation."
15
American Chain & Cable Co. v. Rochester Ropes, 199 F.2d 325, 330 (4 Cir.
1952). See also: Carolina Lee Knitting Company v. Johnson & Johnson, 275
F.2d 91, 94 (4 Cir. 1960).
16
In summarizing what it considered to be the exceptional circumstances in the

present case, the district court referred to the patent misuse which the jury
found had not been purged; the failure to fully respond to an interrogatory in
regard to certain foreign patents; and what the court characterized as "little, if
any, merit on the fundamental claim of infringement." The charge of patent
misuse, however, does not establish that the plaintiffs' suit was brought in bad
faith. Larchmont Engineering, Inc. v. Toggenburg Ski Center, Inc., 444 F.2d
490 (2 Cir. 1971), especially since the trial court saw fit to submit to the jury
the issue of whether such misuse had been purged.6 On the other two issues
which were submitted to the jury, while DuBuit lost on the charge of
infringement, he prevailed upon the issue of validity. The existence of the
foreign patent applications was fully disclosed to the jury, and its finding of
validity indicates that DuBuit's lack of candor, if any,7 in answering the
interrogatory relative to these foreign patents had no bearing upon the outcome
of this litigation.
17
All in all, our examination of the record persuades us that this is not an
exceptional case in which a party seeking to protect his patent should be
compelled to absorb the expense of attorneys' fees incurred by his adversaries.
18
Finally, we note that the district court made no attempt to distinguish between
that portion of the fees attributable to the patent claims and those attributable to
the non-patent issues in this litigation. The authority to award such fees under
Section 285 is limited to the patent side of the case, and where the action
embraces both patent and non-patent claims, no award of fees can be allowed
under Section 285 which have been incurred in the litigation of the non-patent
issues. See Monolith Portland Midwest Co. v. Kaiser Aluminum & C. Corp.,
407 F.2d 288, 297 (9 Cir. 1969).
19
For the foregoing reasons the order of the district court will be reversed.
20
REVERSED.
DuBuit v. Harwell Enterprises, 486 F.2d 131 (4 Cir. 1973)
See Laufenberg, Inc. v. Goldblatt Bros., 7 Cir., 187 F.2d 823, 825
In Laufenberg, Inc. v. Goldblatt Bros., supra, n. 2, the court quoted with

approval the following observation of the district judge in that case:
" 'I think it would be very bad practice if it is established in patent suits that the
parties may litigate the question of infringement and validity through all the
courts, and then after that is over, start in and litigate again on the question of
whether the one or the other of the parties are entitled to attorney's fees, and if
so, how much. I think that would be a very bad practice. I am not willing to
start it.' " 187 F.2d at 824.
4 U.S. Code Congressional and Administrative News 1952, p. 2423.
A thorough review of the legislative history and collation of the authorities is

contained in Judge Northrop's opinion in Kaehni v. Diffraction Company, 342
F.Supp. 523 (D.Md.1972), aff'd, 473 F.2d 908 (4 Cir. 1973)
Upon the former appeal we noted that the subsidiary issues pertaining to patent
misuse and the measures taken to purge it had been mooted by the judgment of
non-infringement. DuBuit v. Harwell Enterprises, 486 F.2d 131, n. 1 (4 Cir.
1973)
The insufficiency of DuBuit's original answer may have resulted from the fact
that it was necessary to translate the subject interrogatory from English to
French and back to English again. The record discloses that DuBuit voluntarily
supplemented his answer after he noted his mistake and prior to any crossexamination

Louis Gilbert Dubuit v. Harwell Enterprises, Inc., and Roy M. Harwell, JR., 540 F.2d 690, 4th Cir. (1976)

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Louis Gilbert Dubuit v. Harwell Enterprises, Inc., and Roy M. Harwell, JR., 540 F.2d 690, 4th Cir. (1976)

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540 F.

Louis Gilbert DuBUIT et al., Appellants,

United States Court of Appeals,

Robert E. Wagner, Chicago, Ill. (Robert E. Browne, Stone, Wagner &

The background and procedural history of this controversy is as follows. Louis

In August of 1969, Louis G. DuBuit, Machines DuBuit and American instituted

Unquestionably, the record demonstrates that the district court had no

In addition to the jurisdictional question, we think it was inappropriate to award

In summarizing what it considered to be the exceptional circumstances in the

DuBuit v. Harwell Enterprises, 486 F.2d 131 (4 Cir. 1973)

In Laufenberg, Inc. v. Goldblatt Bros., supra, n. 2, the court quoted with

A thorough review of the legislative history and collation of the authorities is

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