Frischer & Co. v. Bakelite Corporation, 3009.

• Citation: 39 F.2d 247
• Decision Date: 10 April 1930
• Docket Number: No. 3009.,3009.
• Parties: FRISCHER & CO., Inc., et al. v. BAKELITE CORPORATION et al.
• Court: United States Court of Customs and Patent Appeals

39 F.2d 247 (1930)

FRISCHER & CO., Inc., et al. v. BAKELITE CORPORATION et al.

No. 3009.

Court of Customs and Patent Appeals.

April 10, 1930.

COPYRIGHT MATERIAL OMITTED

Meyer Kraushaar and W. Lee Helms, both of New York City, for appellants.

Barnes, McKenna & Halstead, of New York City (Albert MacC. Barnes, Jr., Maxwell Barus, and Samuel M. Richardson, all of New York City, of counsel), for appellees.

James W. Bevans, of New York City, amicus curiæ.

Before GRAHAM, Presiding Judge, and BLAND, HATFIELD, and GARRETT, Associate Judges.

GRAHAM, Presiding Judge.

This matter comes to this court on appeal from the United States Tariff Commission under the provisions of section 316 of the Tariff Act of 1922, 42 Stat. 858, 943 (19 USCA §§ 174-180).

On December 16, 1925, Bakelite Corporation, a corporation organized under the laws of the state of Delaware, Abse Bros., a co-partnership, with its principal place of business in New York, and the Embed Art Corporation, a corporation organized under the laws of the state of New Jersey, filed with the United States Tariff Commission a complaint, under oath, asking relief under said section 316 from unfair competition in the importation and sale of beads and others materials or articles made of synthetic phenolic resin, or Bakelite.

On April 10, 1926, certain manufacturers of cigar and cigarette holders, to wit, Kaufmann Bros. & Bonde, of New York, Reiss-Premier Pipe Company, of Union City, N. J., S. M. Frank & Co., Inc., of New York, Wm. Demuth & Co., of New York, L. & H. Stern, Inc., of Brooklyn, and M. Linkman & Co., of Chicago, petitioned for leave to join in said complaint, and that any order made therein might cover and apply to cigar and cigarette holders made of synthetic phenolic resin. On April 16, 1926, the said Commission set the several matters mentioned in said application for hearing on May 24, 1926, and gave public notice of said hearing. On the same day the said Commission reported to the President and recommended that, pending completion of the investigation, the articles complained of be forbidden entry, in accordance with the provisions of said section 316, subsection (f), 19 USCA § 179.

On April 22, 1926, the President issued an order, which was duly circulated to the collectors of customs under date of April 24, 1926, directing that synthetic phenolic resin of Form C, and all articles manufactured wholly or in part thereof, except articles made by molding synthetic phenolic resin when mixed with other articles, be forbidden entry into the United States. Thereafter, on April 26, 1926, the Secretary of the Treasury, in pursuance of the provisions of said statute, instructed the various collectors of customs to the same effect. T. D. 41512, 49 Treas. Dec. 715. On May 12, 1926, Frischer & Co. Inc., a corporation organized under the laws of the state of New York, Richard Ganz, doing business as Randes Import Company, of New York, Transatlantic Watch & Clock Co., Inc., a corporation organized under the laws of the state of New York, and Western Briar Pipe Company, a corporation organized under the laws of the state of Illinois, appeared and filed their joint and several answer to the foregoing complaint, in and by which answer the right of the complainants to the relief or any part thereof prayed by them was denied. In connection with this answer various sworn statements were filed. Said answer also contained a motion that the said order of the President declaring a temporary embargo upon synthetic phenolic resin and products be rescinded and dissolved. That portion of the answer consisting of said motion was set for hearing before said Commission on May 17, 1926, and on that date was duly heard. The motion was thereafter, on May 24, 1926, taken under advisement until the decision of the matter on the merits. This hearing on the merits began on May 24, 1926, and continued thereafter, from time to time, until it was completed.

The complaint was based, in part, upon the alleged violation of certain patent rights involved in United States letters patent Nos. 942,700 and 942,809, both of which were issued to Leo H. Baekeland on December 7, 1909, and which were owned by Bakelite Corporation at the time of the filing of the complaint with said Commission.

On December 2, 1926, the said Commission reported to the President that the said patents would expire on December 6, 1926, and recommended that the temporary order of exclusion be modified to take effect at that time. On December 7, 1926, by direction of the President, the Secretary of the Treasury instructed customs officers to exclude, after December 6, 1926, "only products composed of different colored sections of synthetic phenolic resin of Form C (except articles made by molding synthetic phenolic resin when mixed with other materials) joined together by applying a fusible phenolic condensation product to the surfaces to be joined, which fusible product has been converted to the infusible state by means of heat or heat and pressure." T. D. 41895, 50 Treas. Dec. 519.

On December 18, 1926, respondents filed a motion that the proceedings be dismissed, or, in the alternative, that they be reopened for the taking of further evidence with respect to United States patent 1,424,738. This patent was issued August 1, 1922, to Lawrence V. Redman, Archie J. Weith, and Frank P. Brock, and at the time of said hearing was the property of Bakelite Corporation. It appears from the record a very extended litigation had occurred between the patentees and the General Bakelite Company, which litigation had resulted in a combination of the Condensite Company, the Redmanol Chemical Products Company, and the General Bakelite Company into Bakelite Corporation, which operated under various patents, among which were said patents 942,700, 942,809, and 1,424,738. A decision on the motion to dismiss was reserved until a hearing on the merits was had and the alternative motion for an additional hearing was allowed, which hearing was duly had on February 11, 1927, continuing until the same was completed. In ordering said hearing, the said Commission included therein the question of unfair methods of competition, or unfair acts by way of infringement of United States trade-marks Nos. 75,266 and 170,772, as well as of said patent No. 1,424,738.

The first of said trade-mark registrations was made on September 14, 1909, by Leo H. Baekeland and consisted of the word "Bakelite," and was applied to condensation products of phenol and formaldehyde. The second was made July 24, 1923, and consisted also of the word "Bakelite" and was applied to pipes and pipe parts, namely, mouthpieces and bits and bowl parts, and cigar and cigarette holders. These trade-marks were also owned by Bakelite Corporation at the time of these proceedings.

On May 25, 1927, the said Commission filed and made public its decision, said decision consisting of three parts: First, a general discussion of the law and facts involved in the controversy; second, findings of law and fact; and, third, three recommendations to the President as to action which might be taken by him in the premises. This report was signed by Commissioner Thomas O. Marvin, Chairman, and by Alfred P. Dennis, Vice Chairman, and E. B. Brossard, Commissioner. Appended thereto was the following notation: "Commissioner Dixon concurs in Recommendation No. 3; and dissents from the findings as to Patents No. 942,809 and No. 1,424,738, and from Recommendations No. 1 and 2 above, as he doubts the jurisdiction of the Tariff Commission to determine the validity of contested patents which are involved in said findings and recommendations." Commissioner Costigan dissented. The court will take judicial notice that at the time said report was made the said Commission consisted of six members, the sixth member being Sherman J. Lowell. Nothing appears in the record as to whether Commissioner Lowell participated in the said decision, findings, and recommendations except as hereinafter stated. His name is not attached to any of the papers.

On July 13, 1927, the respondents filed their petition for review and made 35 assignments of error which will be more fully referred to hereinafter.

On December 14, 1927, Bakelite Corporation and the other original complainants filed herein their motion for a dismissal of said appeal, stating as grounds therefor two propositions, viz.: First, that the United States Court of Customs Appeals was and is an inferior, constitutional court, created by Congress and existing under and by virtue of article 3 of the Constitution; second, that the various matters and things involved in said appeal were administrative only, did not constitute a case or controversy, and that hence this court had no jurisdiction thereof.

This motion came on for hearing before this court, and on May 25, 1928, we entered an order denying said motion. In re Frischer & Co., Inc., et al., 16 Ct. Cust. App. 191, T. D. 42827. The grounds of denial, as stated in the opinion of the court here, were, briefly, that the United States Court of Customs Appeals was and is an inferior constitutional court, as contended, but that the matters involved in the proceedings before the United States Tariff Commission, under said section 316 (19 USCA §§ 174-180), constitute a case or controversy, and that therefore there seemed to be no constitutional objection to the jurisdiction of this court in that respect.

Thereupon the Bakelite Corporation and the other complainants filed their petition for a writ of certiorari in the Supreme Court. This writ was denied October 29, 1928. Bakelite Corporation v. Frisher & Co., 278 U. S. 641, 49 S. Ct. 36, 73 L. Ed. 556. Bakelite Corporation, also, at about the same time, filed in the Supreme Court its petition for a writ of prohibition. After a return thereto this matter came on to be heard and the petition was denied May 20, 1929. Ex parte Bakelite Corporation, 279 U. S. 438, 49 S....