Universal Gypsum & Lime Co. v. Haggerty

• Decision Date: 20 April 1927
• Citation: 21 F.2d 544
• Parties: UNIVERSAL GYPSUM & LIME CO. v. HAGGERTY et al.
• Court: U.S. District Court — Western District of New York

21 F.2d 544 (1927)

UNIVERSAL GYPSUM & LIME CO. v. HAGGERTY et al.

District Court, W. D. New York.

April 20, 1927.

J. William Ellis, of Buffalo, N. Y., Charles A. Brown and Leslie W. Fricke, both of Chicago, Ill., and S. Fay Carr, of Buffalo, N. Y., for plaintiff.

Elmer E. Finck, of Buffalo, N. Y., Pennie, Davis, Marvin & Edmonds, of New York City (Morris D. Jackson and Arba B. Marvin, both of New York City, of counsel), for defendants.

HAZEL, District Judge.

This is a motion for an injunction pendente lite against the defendants in an equity suit charging infringement of patent No. 1,500,452, granted July 8, 1924, to Joseph F. Haggerty, and assigned to the Universal Gypsum Company, now known as the Universal Gypsum & Lime Company, the plaintiff, for improvements in plaster wall board, and for discovery of improvements made in the assigned invention, by the patentee, and requiring an assignment of all patent applications and patents covering improvements. The defendant Haggerty has not been served with process. It will suffice to set forth claims 1 and 8:

"1. A wall board consisting mainly of gypsum and having a paper liner, cooked starch being incorporated with the gypsum, to insure secure adhesion of said paper liner."

"8. A wall board consisting mainly of gypsum and having a paper liner, cooked carbohydrate being incorporated with the gypsum to insure secure adhesion of the paper liner, fiber being thoroughly distributed throughout the carbohydrate to strengthen the board."

The injunction is sought on the ground of estoppel to deny the validity of the patent and its utility and novelty because of its assignment by Haggerty to plaintiff, and its subsequent infringement by him and his privies. It is urged, in opposition, that, since there has been no adjudication sustaining the patent, or judicial construction of the claims, or acquiescence by the public, the injunction should not issue. This rule, however, has no application to a state of facts showing that a patentee transferred his patent for a valuable consideration, and afterwards, in co-operation and association with others who had knowledge of the assignment, commits acts of infringement. Continental Wire Fence Co. v. Pendergast (C. C.) 126 F. 381; Mellor v. Carroll (C. C.) 141 F. 992. If, therefore, the defendants Williams and the National Gypsum Company became associated with the patentee, knowing or having reason to know, that the patented invention had been sold to plaintiff, and they jointly or severally co-operated with him to manufacture wall board under the described process, and are so engaged, then they may be restrained from infringements, even though many of the stockholders of the corporation were unaware of the antecedant history of the patent and its sale to plaintiff under an agreement that future improvements or inventions should be assigned. Moreover, if the corporation is dominated by the patentee and persons associated with him, it is deemed to have been in privity with them, and may equally be estopped. In such a situation it amounts to more than a mere co-operation with the estopped assignor. Johnson Furnace & Engineering Co. v. Western Furnace Co. (C. C. A.) 178 F. 819.

What are the circumstances warranting the application of the doctrine of estoppel? It is evidenced that the inventor, Haggerty, was a promoter in the manufacture of wall board, and, at the time he assigned his invention and patent, and prior thereto, was familiar with the ordinary processes by which gypsum board, as a substitute for lath and plaster, was made. He appreciated the difficulties in prior art structures as to the amount of water used in the mixture to secure sufficient adhesion of paper liners placed on both sides of the gypsum core and prevent peeling off. He designed to remedy the difficulty by making the paper liners stick better to the board, and, in the attainment of his object, he used, as the specification and claims in controversy show, a certain quantity of carbohydrate material, or soluble starch, in the core mixture, and made the board lighter by using a relatively large amount of water in the mixture. He did not limit his invention exclusively to the use of starch, and emphasizes that a suitable carbohydrate material may be used in the core, "as, for instance, starch or the like," in practicing the invention. He stated that use of sawdust can be omitted, while the paper liner could be made either of wood fiber or waste paper beaten to a pulp to form sheets. In short, he brought about a wall board that could be nailed without chipping, and which had adhesive qualities between the paper and the...