Ball & Socket Fastener Co. v. Ball Glove Fastening Co.

• Decision Date: 27 October 1893
• Docket Number: 57.
• Citation: 58 F. 818
• Parties: BALL & SOCKET FASTENER CO. v. BALL GLOVE FASTENING CO. [1]
• Court: U.S. Court of Appeals — First Circuit

58 F. 818

BALL & SOCKET FASTENER CO. v. BALL GLOVE FASTENING CO. ^[1]

No. 57.

United States Court of Appeals, First Circuit.

October 27, 1893

The contract in question was as follows:

This agreement, made this twenty-first day of March, A. D. 1885 by and between the Ball and Socket Fastener Company of Nashua, N. H., a corporation duly organized under the laws of the state of New Hampshire, party of the first part, the Ball Glove Fastening Company, of Boston, Mass., a corporation duly organized under the laws of the state of Massachusetts, party of the second part, and Henry M. Rowe, of Winthrop, William F. Griffin, of Boston, Edwin J. Kraetzer, of Cambridge George R. Gay, of Cambridge. Sylvester S. Crosby, of Cambridge, and Alfred T. Turner, of Cambridge, all in the state of Massachusetts, party of the third part, witnesseth That whereas, the party of the first part owns and controls certain letters patent granted to William S. Richardson, and is engaged in the business of making what are known as 'ball and socket fasteners;' and whereas, the said party of the second part is proprietor of certain letters patent dated September 30, 1884, numbered 306,021, and other letters patent dated July 17, 1883, numbered 281,376, and other letters patent dated December 11, 1883, numbered 290,067, all granted to Edwin J. Kraetzer for improvement in glove fastener, and also owns and controls two English patents, one dated January 22, 1884. No. 1,861, and the other dated August 15, 1884, No. 11,319, or however otherwise the two English patents may be numbered, the same being taken as a communication, and for said invention of said Kraetzer, as patented in the United States; and whereas, the party of the second part began the manufacture of glove fasteners under said Kraetzer patent, and the party of the first part brought suit in the circuit court of the United States for the first circuit and district of Massachusetts against the parties herein named as parties of the third part, being stockholders of the said Ball Glove Fastening Company, which suit is still pending and undetermined; and whereas, the parties hereto are desirous of adjusting their controversies, and of making a business arrangement for the manufacture of said Krzetzer fastenings for common advantage: It is hereby understood and agreed by and between the parties of the first and second parts that the party of the first part is hereby made the exclusive licensee, under the said Kraetzer patent for the United States, and under the said English letters patent, to manufacture and sell glove fastenings, or other fastenings embodying the contrivances and improvements shown in the said Kraetzer letters patent, and to that end agree to transfer to the said party of the first part the dies and tools already made for the manufacture of said articles. And the party of the first part hereby agrees to issue to trade samples of the said goods, and offer the same in the same manner that it now issues or offers, or shall hereafter issue or offer, other goods of its own manufacture. It being understood that the present method of exhibiting ball and socket fasteners to the trade is to put samples of the several sorts upon cards for the selection of customers, each sort of fastening having a particular number. The price to be put upon said Kraetzer fasteners by the party of the first part shall not exceed the prices put upon the ball and socket fastenings as now known and shall not exceed similar goods for similar uses made by the Ball and Socket Fastener Company. The object of this article being that the Kraetzer and Richardson fasteners shall be offered by the Ball and Socket Fastener Company to the trade on equal footing and terms, and that the public may select between them on their merits. And similar rates of discount for similar quantities shall be allowed on said Kraetzer fastenings as on the Richardson. And for each and every gross of the Kraetzer fastenings sold by said Ball and Socket Fastener Company the party of the first part shall account for Kraetzer fasteners to the party of the second part once in six months, to include the last days of June and December, for all sales made in the preceding six months, rendering the account within the first fifteen days of July and January, respectively, and will pay for each and every gross sold within the period of the account at the rate of twenty cents a gross as royalty on said Kraetzer fastenings. This agreement or license is to continue during the life of the said patents, both in the United States and in England. The party of the second part is to pay the English patents fees as they accrue from time to time. The party of the first part is to prosecute infringements of their patents at their discretion, and the party of the second part is to prosecute infringements of its patents at its discretion: provided, however, that if the party of the first part thinks it of paramount importance that an infringement should be prosecuted, which the party of the second part does not consider should be, the party of the first part may prosecute infringements of the Kraetzer patents in the name of, and for the advantage of, the party of the second part, on assuming the cost of prosecution, and indemnifying the party of the second part against loss for damage therefor. And it is further understood and agreed by and between the parties of the first and third parts that a stipulation shall be made for the discontinuance of the suit now pending, without costs or prejudice, and that the reason shall be stated in said stipulation that the complainants have compromised the contention, and undertaken the manufacture of the goods alleged to be infringed for mutual benefit of the parties interested. Executed and delivered by the treasurers of the respective corporations on the day and year first above written.

The Ball & Socket Fastener Co.

By Wm. S. Richardson, Treas.

Ball Glove Fastening Co.

By W. F. Griffin, Treas.

[Seal.]

Henry M. Rowe.

William F. Griffin.

George R. Gay.

In presence of (corrections being first made as noted by my initials in the margin) Thomas Wm. Clarke.

Whereas, since the following agreement of March 21, 1885, was signed, an interference has been declared between the said Kraetzer patent, No. 290,067, and an application of W. S. Richardson, of which the Ball and Socket Fastener Company is or will be the assignee, it is hereby understood and agreed by the said Richardson and by the Ball and Socket Fastener Company that, in case the said interference is decided in favor of said Richardson, such decision shall in no way prevent the carrying out in good faith of the aforesaid agreement of March 21, 1885. Executed and delivered this eighth day of April, 1885.

Wm. S. Richardson,

The Ball and Socket Fastener Co.

By W. S. Richardson, Treasurer.

In presence of W. F. Griffin.

Cousten Browne and Thomas W. Clarke, for appellant.

John R. Bennett and William B. H. Dowse, for appellee.

Before PUTNAM, Circuit Judge, and NELSON and WEBB, District Judges.

PUTNAM Circuit Judge.

The appellant (respondent below) contends that there is no jurisdiction in equity over the subject-matter of this bill. If it is a bill for infringement, as the complainant below seems to regard it, the parties are properly made, and the jurisdiction is, of course, not to be questioned. If it is to be taken as a bill for a specific enforcement of rights under the contract set up in it, the court is yet of the clear opinion that for that purpose we have here the proper parties, and full jurisdiction in equity over the merits of the controversy.

The prayers of the bill are sufficient in either aspect, as they include discovery and an account, a decree for payment, injunctions to prevent the violation of the provisions of the agreement, and 'such other relief as the equity of the case may require.' So far as the relief desired is a mere account of stipulated royalties, counsel are not able to point out any decision of the supreme court clearly sustaining the bill. On the other hand, it is claimed that Root v. Railway Co., 105 U.S. 189, defeats jurisdiction in the case at bar. But that was a case of a mere tortious infringement of a patent expired before the bill was brought, while this suit, in one view, relates to patents still in life, and, in another, to agreed royalties.

The contract stipulated that the respondent below should render semiannual accounts; and as it was exclusively to conduct the manufacture and sale of the goods in question, and as the knowledge of the facts necessary to make an account was therefore peculiarly, and, indeed, wholly, its own, there is a strong equity in favor of enforcing specifically this portion of the agreement. But the matter before the court is one especially the subject of equity jurisdiction and relief. This will appear from an examination of the terms of the contract between the parties. This stated that they were desirous of making a business arrangement for the manufacture of the Kraetzer fasteners for common advantage. It made the respondent below the exclusive licensee under the Kraetzer patents, so that the complainant below withdrew from all active part whatsoever. It provided that the complainant should transfer to the respondent the dies and tools, and that the latter should issue to the trade samples of the goods, and offer the same in the same manner as other goods of its own manufacture. It stated that its object was that the Kraetzer and Richardson fasteners should be offered by the respondent to the trade on equal footing and terms, so that the public might select between them on their merits also, it provided that, in disposing of the litigation then existing, it should be stated...