Briggs v. M & J Diesel Locomotive Filter Corp.

• Decision Date: 27 March 1964
• Docket Number: Civ. A. No. 62 C 1434,62 C 1436,62 C 1921.
• Citation: 228 F. Supp. 26
• Court: U.S. District Court — Northern District of Illinois
• Parties: Southwick W. BRIGGS and Stone Filter Company, Incorporated, Plaintiffs, v. M & J DIESEL LOCOMOTIVE FILTER CORP. et al., Defendants.

228 F. Supp. 26

Southwick W. BRIGGS and Stone Filter Company, Incorporated, Plaintiffs, v. M & J DIESEL LOCOMOTIVE FILTER CORP. et al., Defendants.

Civ. A. Nos. 62 C 1434, 62 C 1436, 62 C 1921.

United States District Court N. D. Illinois, E. D.

March 27, 1964.

COPYRIGHT MATERIAL OMITTED

Mason, Kolehmainen, Rathburn & Wyss, Walther E. Wyss, Robert L. Rohrback, Chicago, Ill., for plaintiffs.

Wolfe, Hubbard, Voit & Osann, Edward W. Osann, Jr., Phillip H. Mayer, Chicago, Ill., for defendants.

JULIUS J. HOFFMAN, District Judge.

This is a patent infringement action originally brought as three separate actions which were consolidated for trial. Plaintiffs allege infringement of two patents, Nos. 2,395,449 and 2,919,807, granted respectively on February 26, 1946, and January 5, 1960, in the name of Southwick W. Briggs, one of the plaintiffs. Patent No. 2,395,449 expired on February 26, 1963; patent No. 2,919,807 is still in force. Plaintiffs specifically allege infringement of claims 9, 10, 11, and 12 of patent No. 2,395,449 (hereinafter abbreviated to '449) and claims 4, 6, 8, 9, 10 and 11 of patent No. 2,919,807 (hereinafter abbreviated to '807). Both of these patents are directed to the oil filtration field, and specifically to filters using a pleated filter element. Defendants deny infringement of both patents and contend that both patents are invalid.

Civil Action No. 62 C 1434, filed July 23, 1962, Civil Action No. 62 C 1436, filed July 23, 1962, and Civil Action No. 62 C 1921, filed October 15, 1962, were consolidated for trial on January 23, 1963, inasmuch as the same plaintiffs and the same patents are involved in the three actions, and the accused structures manufactured and/or sold by the various defendants for the purposes of this litigation are substantially identical.

Plaintiff Southwick W. Briggs is a resident of Chevy Chase, Maryland, and is the named inventor in both patents in suit and is the owner of both patents.

Plaintiff Stone Filter Company, Incorporated, is a corporation of Maryland, formed on March 31, 1959, and has a regular and established place of business in the Branchville section of College Park, Maryland. Stone is, and has been since its inception, engaged in the business of manufacturing and selling pleated paper lubricating oil filters for diesel locomotives under license from Briggs. Stone holds an exclusive license, subject to a nonexclusive license to a third party, under the '449 patent; Stone is the exclusive licensee under the '807 patent.

Defendant M & J Diesel Locomotive Filter Corporation is an Illinois corporation organized in 1946 and has a regular and established place of business in Chicago, Illinois, within the Northern District of Illinois. The corporation is, and has been since its inception, engaged in the manufacture and sale of railroad equipment and supplies, including cotton waste lubricating oil filters for diesel locomotives. Since March, 1961, M & J has been engaged in the sale of pleated paper lubricating oil filters for diesel locomotives, the accused structures in this litigation. It does not itself manufacture the accused structures, but acquires them from defendant Allied Filter Engineering, Inc.

Defendant Robert W. McNeily is a resident of Western Springs, Illinois, and is president of M & J as well as president of Allied Filter Engineering, Inc.

Defendant Superior Diesel Filter Company is a partnership organized in 1953 and has a regular and established place of business and a manufacturing plant in Chicago, Illinois, within the Northern District of Illinois. At the time this action was brought, the partners in Superior were defendants Barbara A. Giacobbe (nee Bair), Clara A. Bair, Irwin R. Bair, and Dorothy Bair Nichols. The partnership is, and has been since its inception, engaged in the manufacture and sale of railroad equipment and supplies, including cotton waste type lubricating oil filters for diesel locomotives. Since March, 1961, it has been engaged in the sale of pleated paper lubricating oil filters for diesel locomotives ÔÇö the accused structures in this litigation. Superior does not itself manufacture the accused structures but acquires them from defendant Allied.

Defendant J. R. McGrath was formerly a partner in Superior.

Defendant Stanley G. Bair was formerly a partner in Superior and founded Superior in 1953. The evidence shows that he has authority over personnel in Allied, Superior, and M & J.

Defendant Allied Filter Engineering, Inc., is an Illinois corporation organized in August, 1960, and has a regular and established place of business in Chicago, Illinois and a manufacturing plant at Franklin Park, Illinois, within the Northern District of Illinois. The corporation is, and has been since its inception, engaged in the business of manufacturing and selling to defendants M & J and Superior pleated paper lubricating oil filters for diesel locomotives.

M & J and Superior have common ownership and a common source of manufacture of the accused structures. M & J, Superior, and Allied are closely interrelated companies having common control at the top and share common office space.

The court has jurisdiction of the parties and of the subject matter.

PLAINTIFFS' RIGHT TO SUE

Defendants contend that neither Southwick W. Briggs nor Stone Filter Company has the right to sue for infringement of the '807 patent. The parties agree that plaintiffs have the burden of establishing their right to bring this action.

It is undisputed that Briggs is, and since the respective dates of issuance has been, owner of both the '449 and the '807 patents. By an agreement of January 4, 1957, Briggs granted to Stone Paper Tube Company an exclusive license under the '449 patent, subject only to a nonexclusive license previously granted by Briggs to the Briggs Filtration Company. Briggs further granted to Stone, in this agreement, an exclusive license on all his inventions made within a period of ten years from the date of the agreement. Subsequently, Stone Paper Tube was merged with the parent corporation, Stone Straw Corporation of Washington, D. C. Stone Straw manufactured pleated paper filters under the license of January 4, 1957, until March 31, 1959, when Stone Filter Company, plaintiff, was formed as a subsidiary of Stone Straw to manufacture and sell pleated paper filters for diesel locomotives under the January 4, 1957, agreement with Briggs.

It is clear that if only the 1957 agreement is considered, the '449 and '807 patents fall within its terms and consequently both Briggs and Stone have the right to sue for their infringement.

Defendants assert, however, that the '807 patent falls within the terms of an earlier agreement, of August 3, 1956, between Briggs and the Briggs Filtration Company (hereinafter called BFC). Defendants contend that under this agreement BFC has the exclusive right to sue for infringement of the '807 patent. Plaintiffs admit that if BFC has such right, then Stone could not receive any rights with respect to that patent under the 1957 contract, nor would Briggs have a right to sue for its infringement. Plaintiffs deny, however, that the 1956 agreement applies to '807.

Paragraph 8 of the 1956 contract provides, in pertinent part, as follows:

"If, during the existence of this agreement, there is any infringement by others of any patent or patentable improvements herein licensed to Company, Company shall have the sole right, in case such patent or patentable improvement is licensed to it under paragraph 2 hereof, to institute or bring and to prosecute any suit or proceedings of any kind, either in the name of Company, in the name of Briggs, or in their joint names, for the purpose of enjoining such infringement and recovering damages."

(Emphasis added.) Paragraph 2 of this agreement provides in pertinent part, as follows:

"Briggs hereby grants to Company an exclusive license to make, use and sell and sublicense others to make, use, and sell * * * products or devices embodying all inventions covered by a claim in Letters Patent numbers 2,746,608; 2,669,318; 2,468,862; 2,454,033; 2,420,414; 2,407,247; 2,390,494; 2,374,976; 2,249,681 and patent applications Serial No. 43,797; Serial No. 486,850, and any and all patents which may issue thereon, together with all patentable improvements or modifications thereon which may be acquired, owned or controlled by Briggs. The license hereby granted shall extend throughout the life for which Letters Patent for said inventions and improvements may have been or may be granted to Briggs and shall include all reissues, divisions, continuations, patentable improvements or modifications which cover directly or indirectly the subject matter hereof."

Defendants maintain that the '807 patent, issued on January 5, 1960, is a "patentable improvement or modification" of certain of the patents listed in paragraph 2, particularly since the paragraph specifies "patentable improvements or modifications which cover directly or indirectly the subject matter hereof." Since certain of the patents listed in paragraph 2 concern filters containing a pleated filter element, defendants argue, the '807 patent, which likewise concerns a filter with a pleated filter element, is an improvement or modification thereon.

Plaintiffs contend that the '807 patent is not an improvement or modification of any patent listed in paragraph 2. I agree. When paragraph 2 is viewed in the context of the entire agreement, and when the nature of the patents listed in paragraph 2 is compared with the nature of '449, '807, and other patents covered by the contract, the conclusion is compelled that '807 is not comprised within the improvements and modifications clauses of paragraph 2. These clauses, by their nature, must be strictly construed. Gas Tool Patents Corp. v. Mould, 133 F.2d 815 (7th Cir. 1943).

A brief statement of the circumstances leading up to this contract is found therein. The contract recites that...