Sears, Roebuck & Co. v. Stiffel Co

Brief Fact Summary.

The United States Court of Appeals for the Seventh Circuit affirmed an order enjoining the Petitioner, Sears, Roebuck & Co. (Petitioner) from selling lamps similar to those designed by the Respondent manufacturer, Stiffel Co. (Respondent). The retailer was also ordered to pay damages for its violation of the state’s unfair competition law and the Supreme Court of the United States (Supreme Court) granted certiorari.

Synopsis of Rule of Law.

A State may not, consistently with the Supremacy Clause of the United States Constitution (Constitution), extend the life of a patent beyond its expiration date or give a patent on an article that lacked the level of invention required for federal patents.

Facts.

The Respondent secured design patents on a “pole lamp”, a vertical tube with light fixtures attached, that runs from floor to ceiling. The lamp enjoyed strong commercial success, and shortly after its manufacture the Petitioner retailer began marketing a lamp of almost identical design. Given its size and national retail operation, the Petitioner was able to sell the item at a significantly lower price than the Respondent. The latter brought an action against the Petitioner alleging patent infringement and confusion of trade. Although the lamps were not patented under federal law, the district court enjoined the Petitioner from selling the lamps and ordered it to pay damages to the Respondent.

Issue.

May a state’s unfair competition law, consistently with federal patent laws, impose liability for or prohibit the copying of an article that is protected by neither a federal patent nor a copyright?

Held.

No. Reversing the appellate court, the Supreme Court held that because federal law was supreme with regard to copyrights and patents, the states were precluded from providing more protection to unpatented articles.

Discussion.

The court in Sears held that a manufacturer could not use a state unfair competition law to obtain an injunction against copying its product or an award of damages for such copying, as such use of state law conflicts with the exclusive power of the Federal Government to grant patents only to true inventions and then only for a limited time. The Supreme Court noted that an unpatented article, being in the public domain, might be freely copied, though state law may require labeling or other precautions where appropriate to prevent deception as to source.
Justice Hugo Black (J. Black) writing for the Supreme Court, began by asserting federal authority and cited Congress Article I powers which grant the Legislature full authority to “promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” Such Congressional power supersedes most state law: “When state law touches upon the area of these federal statutes, it is ‘familiar doctrine’ that the federal policy may not be set at naught, or its benefits denied by the state law. This is true, of course, even if the state law is enacted in the exercise of otherwise undoubted state power.” J. Black proceeds then to explain the function and policy behind patent law. “Patent rights exist only by virtue of statute. The patent system is one in which uniform federal standards are carefully used to promote invention while at the same time preserving free competition.” This raises the issue of
where state authority fits into the equation. J. Black notes, “Obviously a State could not, consistently with the Supremacy Clause of the Constitution, extend the life of a patent beyond its expiration date or give a patent on an article which lacked the level of invention required for federal patents. To do either would run counter to the policy of Congress of granting patents only to true inventions, and then only for a limited time.” Central to the controversy is the Respondent’s failure to secure a patent: “An unpatentable article, like an article on which the patent has expired, is in the public domain and may be made and sold by whoever chooses to do so. Sharing in the goodwill of an article unprotected by patent or trade-mark is the exercise of a right possessed by all, and in the free exercise of which the consuming public is deeply interested.” State intervention would act as a barrier to rights of the commonwealth: “To allow a State by use of its law of unfair competition t
o prevent the copying of an article which represents too slight an advance to be patented would be to permit the State to block off from the public something which federal law has said belongs to the public.”
With regard to the confusion of trade issue, J. Black states, “Mere inability of the public to tell two identical articles apart is not enough to support an injunction against copying or an award of damages for copying that which the federal patent laws permit to be copied.” There are, however, alternative remedies: “Doubtless a State may, in appropriate circumstances, require that goods, whether patented or unpatented, be labeled or that other precautionary steps be taken to prevent customers from being misled as to the source, just as it may protect businesses in the use of their trademarks, labels, or distinctive dress in the packaging of goods so as to prevent others, by imitating such markings, from misleading purchasers as to the source of the goods.” For the above reasons, the court reversed the injunction and judgment against the retailer Petitioner.