Monroe Auto Equipment Co. v. Precision Rebuilders, Inc.

Decision Date27 March 1964
Docket NumberCiv. A. No. W-2600.
Citation229 F. Supp. 347
PartiesMONROE AUTO EQUIPMENT COMPANY, Plaintiff, v. PRECISION REBUILDERS, INC., Defendant.
CourtU.S. District Court — District of Kansas

COPYRIGHT MATERIAL OMITTED

Lilleston, Spradling, Gott, Stallwitz & Hope, Wichita, Kan., Harness, Dickey & Pierce, Detroit, Mich., of counsel, for plaintiff.

Hill & Mason, Wichita, Kan., for defendant.

WESLEY E. BROWN, District Judge.

This is an action for trademark infringement, unfair competition and patent infringement. Defendant, Precision Rebuilders, Inc., admitted the allegations of trademark infringement and unfair competition, and plaintiff, Monroe Auto Equipment Company, has waived damages therefor. The present matter of defendant's liability for patent infringement was tried to the court sitting without a jury. The issue of damages for patent infringement has been reserved pending our determination of the liability issue.

Certain admissions have been made by the parties and are found herein accordingly. We find the facts on the issue of liability for patent infringement as follows:

1. Plaintiff, Monroe Auto Equipment Company, a Michigan corporation, manufactures, among other items, approximately 28 models of shock absorber. These are sold both as original equipment to automobile manufacturers and also in the replacement market. Twenty-five models of Monroe's shock absorbers, or approximately 90 per cent of plaintiff's manufacture are covered by either United States Letters Patent No. 2,546,038 or United States Letters Patent No. Re. 23,421, the combination patents here in suit which plaintiff owns. (The three models not covered by either patent are designated by Monroe as models M471, M547 and M548.) These combination patents relate generally to the directacting hydraulic type of shock absorber. This type shock absorber embodies, inter alia, the following components: an inner pressure cylinder and an outer reserve chamber, both of which normally contain hydraulic fluid; valve means normally disposed in the lower end of the pressure cylinder to control the interflow of fluid between the pressure cylinder to the reserve chamber; and a piston operable in the pressure cylinder, having valve means associated therewith to control the flow of fluid from one side of the piston to the other during the movement of the piston within the cylinder. The combination patents here in suit relate generally to a combination of valving and restricted orifice control. Defendant does not challenge the validity of these combination patents. Since 1951, Monroe has stamped on the outside of its shock absorbers its name and the numbers of the patents covered thereby.

2. A rubber seal, designated by Monroe by part number 12894, surrounds the shock absorber piston at the upper end of the pressure cylinder and seals in the hydraulic fluid. The seal is made according to Monroe's specifications as to constituent material, shape and dimensions. The seal is designed to last the useful life of Monroe's shock absorber, approximately 40,000 miles, and normally does so. Abrasion by a rusted, pitted or otherwise damaged shock absorber piston rod will damage the seal and terminate the useful life of the shock absorber; on certain models of Monroes a dirt shield aids in protecting the piston rod from damage. As a cause of the termination of Monroe shock absorbers' useful life, seal damage, while being one of several causes, is not a usual nor a particularly significant cause. Monroe does not anticipate that during the useful life of a shock absorber, seal 12894 will be replaced, nor are Monroe shock absorbers otherwise intended or designed to be repaired, although the shock absorber design does not prohibit repair; rather, Monroe intends that at the termination of its shock absorbers' useful life, they will be replaced.

3. Defendant, Precision Rebuilders, Inc., a Kansas corporation organized in December 1960, processes used shock absorbers or "cores" and sells them in the replacement market. Precision originally acquired used shock absorbers by purchase through newspaper advertisement and from junk dealers, salvage yards, garages and similar sources, paying approximately twenty-five cents a piece. Subsequently, Precision bought used shock absorbers on an exchange basis, receiving and giving credit for a core, or charging a fifty-cent "core charge". The used shock absorbers so purchased have been discarded and abandoned by the owner of the automobile from which they have been removed, and are considered by all involved as being useless as shock absorbers, to be thrown away or sold as junk or scrap; automobile owners are not paid for nor given an allowance for used shock absorbers by the garages which remove them and sell them to Precision. A very small per cent of the used shock absorbers thus purchased by Precision are Monroes.

4. Precision's normal processing of used shock absorbers is: clean and degrease the outside of the core; cut one end off; remove and clean all parts; replace any defective parts, including the valves, such as are covered by the combination patents here in suit; replace Monroe's seal 12894 with a neoprene seal of Precision's own manufacture; re-assemble, re-fill, re-weld and re-paint the shock absorber; test the shock absorber for pressure on a machine of Precision's own making against specifications of its own determination; attach a decal showing Precision's name and the word "rebuilt"; box and catalogue the processed shock absorber. When a defective part is replaced, an undamaged part is substituted from a core of the same make and model as the one being processed. In its process, Precision in no way re-engineers nor re-tools the shock absorber nor any part thereof. Approximately two per cent of the used shock absorbers thus processed by Precision are of Monroe Manufacture, and at least one of the Monroe shock absorbers so processed was covered by both of the combination patents here in suit. The only purchased items used in Precision's processing of Monroe cores are the seals and the hydraulic oil, neither of which element in a Monroe shock absorber is covered by the patents in suit specifically; if replacement parts are needed they are substituted as above described, or, if parts are thus available, the core is thrown away.

5. Precision's commissioned salesmen sell the processed shock absorbers to jobbers, warehouses and wholesale parts equipment companies; these purchasers, in turn, sell the processed shock absorbers to dealers, such as service stations and garages.

6. Precision has no license to repair used Monroe shock absorbers.

7. Precision's processing of used Monroe shock absorbers is a reconstruction, rather than a repair, thereof.

CONCLUSIONS OF LAW

Plaintiff contends that defendant's processing of used Monroe shock absorbers amounts to a rebuilding thereof and, accordingly, is an infringement of its combination patents here in suit; defendant contends that its processing is permissible repair. This case presents a question of direct infringement as distinguished from contributory infringement. See 40 Am.Jur., Patents ¶¶ 150, 151.

The law is settled that a combination patent covers only the totality of the elements in the claims and that no element, viewed separately, is protected by the patent monopoly, regardless of however essential it may be to the patented combination and no matter how costly or difficult of replacement it may be. Leeds & Catlin Co. v. Victor Talking Machine Co. (1908), 213 U.S. 301, 29 S. Ct. 495, 53 L.Ed. 805; Mercoid Corp. v. Minneapolis-Honeywell Regulator Co. (1943), 320 U.S. 680, 64 S.Ct. 278, 88 L. Ed. 396; Aro Mfg. Co. v. Convertible Top Replacement Co. (1961), 365 U.S. 336, 81 S.Ct. 599, 5 L.Ed.2d 592, reh. den. 365 U.S. 890, 81 S.Ct. 1024, 6 L.Ed.2d 201. Thus, apart from the question of rebuilding versus repair, no direct infringement of the combination patents arises merely by reason of the replacement of seal 12894, the hydraulic fluid and, occasionally, of valves in the used Monroe shock absorbers.

By virtue of his letters patent, a patentee acquires the exclusive right to make and to use his patented invention and to sell the same to others to be used for the period of time specified in the patent. But when the patentee sells a patented article, it passes outside of this monopoly and is no longer under the peculiar protection granted to patented rights. By a valid sale and purchase, the patented article becomes the private, individual property of the buyer. The patentee ceases to have any interest whatever in the patented article so sold and delivered, and he can exercise no future control over what the purchaser may wish to do with the article after his purchase. Chaffee v. Boston Belting Co. (1859), 22 How. 217, 16 L.Ed. 240; Mitchell v. Hawley (1872), 16 Wall. 544, 21 L.Ed. 322; United States v. General Electric Co. (1926), 272 U.S. 476, 47 S.Ct. 192, 71 L.Ed. 362. Thereafter, the buyer of the patented article may continue to use it so long as it is capable of use, and he may maintain it, repair it or improve upon it and otherwise preserve its fitness for use so far as it may be affected by wear or breakage as he pleases, in the same manner as if dealing with property of any other kind. When, however, the article is worn out, or substantially destroyed, the buyer's right to use the patented article expires. Chaffee v. Boston Belting Co., supra; Adams v. Burke (1873), 17 Wall. 453, 21 L.Ed. 700; Leeds & Catlin Co. v. Victor Talking Machine Co. (1908), 213 U.S. 325, 53 L.Ed. 816, 29 S.Ct. 503; Heyer v. Duplicator Mfg. Co. (1923), 263 U.S. 100, 44 S.Ct. 31, 68 L.Ed. 189; Aro Mfg. Co. v. Convertible Top Replacement Co., supra.

In the case of an article covered by a combination patent, when one of the elements of the combination has become so much worn as to be inoperative, or has been broken, the owner who has bought its use may restore it to its original condition. In...

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