Kenyon v. Automatic Instrument Co.
| Decision Date | 09 February 1951 |
| Docket Number | No. 11197.,11197. |
| Citation | 186 F.2d 752 |
| Parties | KENYON v. AUTOMATIC INSTRUMENT CO. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Milton A. Johnson and Eugene C. Knoblock, South Bend, Ind. (Bidwell, Schmidt & Martin, Grand Rapids, Mich., of counsel), for appellant.
Clarence J. Loftus, Chicago, Ill., and Marshall M. Uhl, Grand Rapids, Mich. (William E. Lucas, Chicago, Ill., James H. McLaughlin, Grand Rapids, Mich., on the brief), for appellee.
Before HICKS, Chief Judge, and SIMONS and ALLEN, Circuit Judges.
This appeal was instituted to a judgment of the District Court holding appellant, plaintiff below, not entitled to recover royalties claimed in the manufacture of phonographs under a contract executed December 7, 1925, between appellant's decedent, Bertram C. Kenyon, and the Automatic Musical Instrument Company, a Delaware corporation, predecessor of appellee.1 Pursuant to this contract a patent was applied for July 15, 1927, and issued September 27, 1932, Kenyon patent 1,879,693, under which Kenyon received from the Delaware corporation the royalty of $5.00 per phonograph, making a total of approximately $48,000 for machines manufactured, models P, Z, J, and K. The Delaware corporation went into receivership in 1931 and all of its assets, including the Kenyon patent, were sold in 1933 to the Automatic Musical Instrument Company, a newly organized Michigan corporation, predecessor of appellee. The record changer which was a main feature of the Kenyon patent and the only feature at issue here had proved unsatisfactory. After the organization of the Michigan corporation new models were designed and manufactured in 1935, the ARC constructed under Green patent, 2,104,032 and manufactured until May 31, 1946, and the 500 model, manufactured thereafter and covered by the Vanderzee patent application.
Shortly before his death October 16, 1941, Kenyon claimed royalties on machines manufactured under models ARC and 500, and this suit was instituted against the Michigan corporation January 22, 1945, seeking recovery for such royalties. In the court below appellee asserted that the contract of December 7, 1925, created a mere license, a right personal and nonassignable, and that the assignment of the patents by the receiver of the Delaware corporation imposed upon the Michigan corporation no obligation to pay royalties. This contention was sustained by the District Court, 63 F.Supp. 591, but reversed by this court, 160 F.2d 878 and the case proceeded to trial upon the merits.
It was conceded that appellee was liable for royalties in the period from 1935 to 1947 if its models ARC and 500 fell within the scope of the Kenyon patent. While the Kenyon patent covers several improvements in phonographic construction, the issue herein was narrowed by stipulation to the record-changer alone.
Evidence upon certain vital points is undisputed. It appears without contradiction that the Kenyon record-changer jammed in operation and broke many records, as a result of which models P, Z, J, and K were discarded and the tools, dies, and jigs for manufacturing them were scrapped. The new mechanisms claimed here to be covered by Kenyon were sharply differentiated from the old in structure and operation. As summarized by the District Court: "In the Kenyon mechanism the record rack is stationary — in defendant's it is movable; in Kenyon the selector arm is swingable in a different path for each record — in defendant's the record-transfer arm moves in a single fixed path; in Kenyon the selector arm moves to the rack and selects the record — in defendant's the rack moves to a positive registration point on the fixed path of the arm, and the arm picks up whatever record is presented to it; in Kenyon the jaws pressure-grip opposite sides of the record at only one point — in defendant's, two brackets on the transfer arm engage the record at two points on opposite peripheral edges."
It is stipulated that the new model ARC was manufactured in accordance with Green, 2,104,032, and that model 500 was manufactured under Vanderzee, but appellant claims that nevertheless the manufacture is in accordance with Kenyon and that appellee is therefore required to pay royalties to the time of the rejection of the contract in 1948.
Upon this, the principal point in the case, the District Court made the following findings of fact:
The findings of the District Court are amply supported by the record, and we do not review the evidence upon these points, but proceed to...
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