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Keywords

plaintiffdefendantlitigationequityappealtrialaffidavitpatentgood faith
plaintiffdefendantequityappealpatent

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Keystone Driller Co. v. General Excavator Co., 290 U.S. 240, 54 S.Ct. 146, 78 L.Ed. 293, 19 U.S.P.Q. 228

Facts

The Keystone Driller Company owned five patents related to ditching machines, including the Clutter patent and four Downie patents. Prior to these suits, the company had successfully sued the Byers Machine Company for infringement of three of these patents. However, during the litigation, evidence emerged that the plaintiff had engaged in misconduct by suppressing evidence related to the validity of the patents, specifically involving an affidavit from Bernard R. Clutter, which was intended to conceal prior use of the invention. This misconduct was revealed during the trial against the General Excavator Company and Osgood Company, leading to the appeal.

Defendants introduced evidence that plaintiff did not come into court with clean hands.

Issue

Whether the Circuit Court of Appeals rightly applied the maxim, 'He who comes into equity must come with clean hands.'

The question presented is whether the Circuit Court of Appeals rightly applied the maxim, He who comes into equity must come with clean hands.

Rule

A party seeking relief in equity must demonstrate that they have acted in good faith and have not engaged in misconduct that is directly related to the matter in litigation.

‘It is one of the fundamental principles upon which equity jurisprudence is founded, that before a complainant can have a standing in court he must first show that not only has he a good and meritorious cause of action, but he must come into court with clean hands.’

Analysis

The court determined that the plaintiff's actions in the Byers case, particularly the suppression of evidence regarding the validity of the patents, were directly related to the current suits. The plaintiff's use of the Byers decree to support its claims against the defendants was deemed improper, as it was based on a tainted process. The court emphasized that the misconduct affected the equitable relations between the parties and warranted the application of the clean hands doctrine.

The relation between the device covered by the first Downie patent and those covered by the other patents, taken in connection with the use to which plaintiff put the Byers decree, is amply sufficient to bring these cases within the maxim.

Conclusion

The Circuit Court of Appeals affirmed the District Court's decision to dismiss the complaints without prejudice, concluding that the plaintiff did not come to court with clean hands.

Decrees affirmed.

Who won?

General Excavator Company and Osgood Company prevailed because the court found that the Keystone Driller Company's misconduct in a related case undermined its claims.

The Circuit Court of Appeals held the contrary, reversed the decrees of the District Court, and remanded the cases, with instructions to dismiss the complaints without prejudice.

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