Colgate-Palmolive Company v. Carter Products

Citation230 F.2d 855
Decision Date08 March 1956
Docket NumberNo. 7075.,7075.
PartiesCOLGATE-PALMOLIVE COMPANY, Stalfort Pressure-Pak Corporation, John C. Stalfort & Sons, Inc., and Read Drug & Chemical Company, Inc., Appellants, v. CARTER PRODUCTS, Inc., Joseph G. Spitzer and Marvin Small, Appellees.
CourtUnited States Courts of Appeals. United States Court of Appeals (4th Circuit)

John T. Cahill, New York City (Benjamin B. Schneider, New York City, H. Vernon Eney, Baltimore, Md., H. Walter Reynolds, New York City, Trenton Meredith, Jersey City, N. J., Thomas C. Mason, New York City, H. Paul Rome, H. Ross Black, Jr., and Venable, Baetjer & Howard, Baltimore, Md., on the brief), for appellants.

George B. Finnegan, Jr., New York City (William L. Hanaway, New York City, William D. Denson, Washington, D. C., Jerome G. Lee and Morris Kirschstein, New York City, on the brief), for appellees.

Before PARKER, Chief Judge, and SOPER and DOBIE, Circuit Judges.

PARKER, Chief Judge.

This is an appeal in a case involving patent infringement and appropriation of trade secrets. The patent in suit is United States Patent No. 2,655,480 issued October 13, 1953 to one Spitzer and others relating to a pressurized shaving cream. The plaintiffs in the court below, appellees here, were Spitzer and his partner Small, holders by assignment from the other patentees, and Carter Products Inc., manufacturer of drugs and cosmetics and the holder of an exclusive license under the patent. The defendants below, appellants here, were the Colgate-Palmolive Company, the manufacturer of a pressurized shaving cream alleged to infringe, the Stalfort Pressure-Pak Corporation and John C. Stalfort & Sons, Inc., who packaged pressurized shaving cream alleged to infringe the patent for the Mennen Company, and the Read Drug & Chemical Company, Inc., which sold the pressurized shaving cream for Colgate and Mennen. Plaintiffs claimed infringement of only eight claims of the patent. Defendants admitted infringement if these claims were valid but denied their validity and asked judgment declaring them as well as all other claims of the patent invalid.

The trial court held the patent valid, and enjoined infringement thereof as well as the use of a trade secret held to have been wrongfully appropriated by Colgate. It also ordered Colgate to assign to plaintiffs rights under patent applications found to have been based upon the trade secret. The case was referred to a special master to determine and report as to damages resulting from infringement and also as to damages and profits for which Colgate should be required to account because of misappropriation of trade secrets and to make recommendations as to whether the damages on account of patent infringement should be increased as allowed by statute, reserving, however, for future determination the question as to whether increased damages should be awarded. Judgment was entered that plaintiffs recover their costs and taxable disbursements to date, including against Colgate reasonable attorneys' fees, and the special master was directed to include in his report a recommendation as to the amount of attorneys' fees to be allowed. Three principal questions are presented by the appeal: (1) Is the patent valid? (2) Should the findings of the trial court as to misappropriation of trade secrets be sustained? And (3) Is the decree proper?

1. The Validity of the Patent.

Spitzer, one of the patentees, in the year 1948 conceived the idea of developing a shaving lather which, like the lather produced by machines in barber shops, could be used as it came from the container without being worked up on the face. He employed Foster D. Snell, Inc., consulting chemists, to work out his idea for him in terms of a mixture that could be enclosed in a small container and, upon the opening of a valve, would emerge in the form of a durable lather, which, without whipping up or other agitation, could be used for shaving purposes. Snell put to work on the project two chemists, Reich and Fine, who after several months of work and experimentation developed an emulsion consisting of an aqueous soap solution mixed with certain gases liquefied by pressure, which they enclosed in a container. When the valve of the container was opened the pressure of the gases extruded the emulsion and, as it came from the can, the particles of gas expanded into minute bubbles covered with soap which was the shaving lather desired. Patent, applied for November 2, 1949, was issued to Spitzer, Reich and Fine October 13, 1953. In the meantime an exclusive license had been granted to Carter and the product was being marketed under the trade name of "Rise". It achieved at once outstanding commercial success. Sales of "Rise" in 1950 amounted to $400,000, in 1951 to $800,000, in 1952 to $1,800,000 and in 1953 to $2,600,000. The sales of Colgate's infringing product in 1954 amounted to $5,000,000.

There was, of course, nothing novel in the use of soap to make lather, nor in the use of a can as a container, nor in the use of a gas liquefied by pressure and mixed with another liquid to spray the mixture from the can. What was novel was to get a mixture of the right gases, with the right soaps in the right proportions, confined in a container under the right pressure, so that a lather satisfactory for shaving purposes would be produced when the mixture was allowed to emerge. In producing such a mixture many problems were encountered and the record shows that their solution took many months. The first experiment consisted in mixing a liquid soap then on the market with nitrous oxide gas, the gas used with pressurized whipped cream This was a failure because the gas was soluble in the aqueous soap solution and the product extruded from the container was not a lather useful for shaving but a mere soapy liquid. An emulsion consisting of the gas propellant Freon-12 (dichlordifluormethane) and the soap solution used in barber shop machines would not do because the pressure was too high. Reduction of the vapor pressure by mixing Freon-11 (monofluortrichlormethane) with Freon-12 produced a smarting, skin-irritating product not suitable for shaving. Reduction of vapor pressure with mineral oil solved the pressure problem but produced problems in connection with the soaps. Finally, after much experimentation, sodium soaps were eliminated and the soap solution adopted was a combination of 80 parts of TEA (triethanolamine) stearate and 20 parts of TEA cocoate, to prevent jelling. The proper propellant was found after much inquiry and experiment by mixing Freon-114 (1, 2 dichlor 1, 1, 2, 2 tetrafluorethane) with Freon-12. The trial judge summarized the matter as follows:

"Precisely what is this new combination? The individual ingredients of the shaving soap solutions embraced in the Spitzer patent were old in the art. So were the Freons. Also, Freons had previously been used successfully as propellants in aerosols and insecticides. In other words, the combination of some Freons with the Spitzer soap solutions was not new in the art. But the combination of an aqueous soap solution, emulsified in the liquid base with a Freon which had not only low water solubility but which combined the properties of (1) not smarting or burning the face, and (2) good, stable lather, was unknown. There were a number of Freons used in the propellant art which did not smart or burn the face, but they did not afford a good stable lather. Conversely, there were those Freons that were known to give a satisfactory lather but they were disagreeable on the skin. It is this combination of a relatively small group of Freons, that manifest those desirable properties of low water solubility and the optimum characteristics of non-smarting and of lather quality, with aqueous soap solutions that constitutes the invention of Spitzer and his associates. They discovered that all three of these characteristics were inter-related. They found that Freons having a solubility in water not exceeding about 32 cc. of gas to 100 grams of water to be the type of Freons productive of the optimum of the other two qualities desired in the lather composition. This is what the specifications of the Spitzer patent teach, and all 8 of the claims in suit are responsive to this teaching. Claims 6 and 9 are limited to the use of Freon-114. Claims 8 and 10 are limited to the use of Freon-12. Claims 18 and 20, which are based upon claim 16 as a parent claim, prescribe the use of any one of a group of five Freons, including 12 and 114. Claims 8 (based on claim 2) and 15 embrace the use of a broader group of Freons, but in this group also are only Freons that are essentially non-smarting to the face, and stable in lather forming. In fact, the entire 21 claims of the patent are so limited."

The invention is thus described in the specification:

"In general, the above and other objects of the invention are carried out by employing a composition comprising a water solution of a suitable soap or like detergent and a highly volatile organic liquid, hereinafter generally termed a propellant. At least a substantial proportion of the propellant used in the mixture is insoluble in the soap solution and the two primary ingredients are mixed and maintained under sufficient pressure so that the insoluble portion of the propellant is in liquid phase, existing as droplets or in the form of a liquid-liquid emulsion in the soap solution. The mixed primary ingredients are confined at the vapor pressure of the propellant in a pressure-tight container having an opening controlled by a suitable manually operable valve. When the valve is opened, the pressure on the composition is released as it emerges from the container, with the result that a fine textured creamy lather is produced. The action is apparently such that the volatile propellant liquid, entrapped as an emulsion within the liquid soap solution vaporizes upon the release of pressure therefrom, forming fine gas cells throughout
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