Panther Pumps & Equipment Co., Inc. v. Hydrocraft, Inc.

• Decision Date: 10 December 1976
• Docket Number: No. 67 C 201.,67 C 201.
• Citation: 424 F. Supp. 815
• Court: U.S. District Court — Northern District of Illinois
• Parties: PANTHER PUMPS & EQUIPMENT COMPANY, INC., now Morrison Pump Company, Inc., Plaintiff, v. HYDROCRAFT, INC., et al., Defendants.

424 F. Supp. 815

PANTHER PUMPS & EQUIPMENT COMPANY, INC., now Morrison Pump Company, Inc., Plaintiff, v. HYDROCRAFT, INC., et al., Defendants.

No. 67 C 201.

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

December 10, 1976.

COPYRIGHT MATERIAL OMITTED

Roy E. Petherbridge, Chicago, Ill., for plaintiff.

Timothy M. Bittel, Cleveland, Ohio, for defendants.

MEMORANDUM OPINION

AUSTIN, District Judge.

This cause is once again before me following a two-week contempt hearing which took place in April of this year. The Defendant, Mr. Louis Beck, appeared pursuant to this court's Order to Show Cause, dated February 9, 1976. That order directed Beck to show cause why he should not be held in contempt of court for violating an injunction issued in 1970 following a jury trial. The Plaintiff corporation brought this action for civil contempt because it believed that Beck's conduct in manufacturing a pump designed for spraying paint constituted a violation of this 1970 injunction entered by this court.

BACKGROUND

Nine years ago, Plaintiff Panther Pumps filed suit against Hydrocraft, Inc., Paul W. Schlosser and Edwin Drath alleging that the Defendants were infringing upon patents held by Panther Pumps. The patents in question involved a paint spray apparatus; specifically, the alleged infringement occurred in the hydraulic pump used to operate the paint sprayer. Following a six-day jury trial in 1970, judgment was entered against the corporate Defendant as well as both individuals charged with infringement. Also, a permanent injunction which forbid Hydrocraft or any of its agents from infringing upon U.S. Patent Nos. 3,254,845 and 3,367,270 was entered. This decision was appealed by the Defendants and the Seventh Circuit affirmed the judgment against the corporation, but reversed as to the two individuals. Panther Pumps & Equipment Co., Inc. v. Hydrocraft, Inc., 468 F.2d 225 (7th Cir. 1972). During the pendency of this appeal, no stay of execution of judgment was sought by the Plaintiff.

The claims disputed in the original trial, and intimately involved the recent contempt proceeding, concern mainly the pump used to power the paint spraying gun. As the Court of Appeals noted, paint spraying is an intermittent operation; when the operator stops spraying paint from the gun, the pump usually continues to operate on "standby". The patented device manufactured by the Plaintiff avoids overheating of the driving fluid during standby through the utilization of a process known as "cavitation cooling". Cavitation cooling is accomplished by creating a partial vacuum in the driving liquid chamber. When this occurs, some of the liquid in that chamber vaporizes, thereby reducing the temperature of the driving fluid below that which it would be if cavitation cooling did not occur.¹

Following the issuance of the injunction in 1970, Louis Beck, who is presently being accused of contempt, purchased the outstanding stock of Hydrocraft, Inc. from his former partners, Paul W. Schlosser and Edwin Drath. Hydrocraft had by this time ceased functioning as a viable corporation. Its only real asset, a parts inventory, was transferred to Cleveland by Beck, allegedly to keep it from being seized by the Plaintiff.

In 1971, Beck formed an Ohio corporation known as Universal Spray Systems, Inc. and this company began to manufacture a paint spray pump called the "Spraymate B".² Superficially, the original Spraymate and the Spraymate B appear to be identical. However, the pump manufactured by Beck and Universal Spray Systems, Inc. does differ in at least one respect. The Spraymate B possesses a spring-loaded piston shaft which the Defendant Beck argues prevents the Spraymate B from exhibiting phase reversal cavitation or cavitation cooling. Naturally, the Plaintiff disagrees with the argument that phase reversal cavitation does not occur in the Spraymate B.

DISCUSSION

Three major issues are before the court at this time. First, it must be determined whether or not Louis Beck and Universal Spray Systems, Inc. are violating the terms of the permanent injunction issued in 1970 by the manufacture of the Spraymate B Pump. Secondly, I must decide whether or not the transfer of Hydrocraft's assets was a contemptuous act on the part of the Defendant Beck. Finally, the Plaintiff urges this court to hold that Louis Beck is now personally bound by the original money judgment entered against Hydrocraft, Inc. in 1970.

SALE OF SPRAYMATE B

The Plaintiff claims that the manufacture and sale of the Spraymate B Pump constitutes a violation of the permanent injunction for which Beck should be held in contempt of court. At the outset of this discussion, it should be noted that the Plaintiff has a heavy burden to bear when attempting to show conduct amounting to contempt. Where there is a "fair ground of doubt" as to the wrongfulness of the defendant's conduct, the remedy of contempt should not be applied. California Paving Company v. Molitor, 113 U.S. 609, 5 S.Ct. 618, 28 L.Ed. 1106 (1885). A high degree of certainty is required before the aggrieved party is entitled to a remedial order finding the defendant in contempt. Accumulator Co. v. Consolidated Electric Storage Co., 53 F. 793 (C.C.D.N.J.1892). Some courts state that the Plaintiff must prove that the Defendant acted contemptuously by clear and convincing evidence; a bare preponderance of the evidence will not suffice. See e. g. Hart, Schaffner & Marx v. Alexander's Department Store, Inc., 341 F.2d 101 (2d Cir. 1965); Washington v. Central of Georgia Railway Co., 174 F.Supp. 33 (M.D.Ga.1958), aff'd sub nom. Marshall v. Central of Georgia Railway Co., 268 F.2d 445 (5th Cir. 1959), cert. den. 361 U.S. 943, 80 S.Ct. 407, 4 L.Ed.2d 363 (1960). Still other courts have said that the infringement complained of in the contempt proceeding must clearly and indisputably appear to be continuing in violation of the original injunction. General Electric Co. v. McLaren, 140 F. 876 (C.C.D. N.J.1905). Cf. Smith v. Halkyard, 19 F. 602 (C.C.R.I.1884). A degree of certainty which leaves no fair ground of doubt as to the violation of the court's order is required. Where there is ground to doubt the wrongfulness of the conduct of the defendant, he should not be adjudged in contempt. Schauffler v. Local 1291, International Longshoremen's Association, 292 F.2d 182 (3rd Cir. 1961); Electro-Bleaching Gas Co. v. Paradon Engineering Co., Inc., 15 F.2d 854 (E.D.N.Y.1926).

As can be seen from the precedent cited above, the Plaintiff in this case must overcome a heavy burden if he is to successfully prove that the Defendant is guilty of contempt for manufacturing the Spraymate B.

The test utilized by most courts in determining whether the manufacture of a modified device constitutes contempt of court for continuing patent infringement is one of "equivalency" or "colorable imitation". In fact, the text of the 1970 injunction forbid the manufacture or sale of any "colorable imitation or equivalent" of the original Spraymate pump.

The basic question which the court must determine is whether or not the modified device, in this case the Spraymate B pump, is the equivalent of the original device. See e. g., Schlegel Manufacturing Company v. USM Corp., 525 F.2d 775 (6th Cir. 1975). In order for the new pump to be the equivalent of the earlier patented device, it must perform the same tasks, utilizing the same basic methods as were patented originally. Marston v. J. C. Penney Co., 324 F.Supp. 889, 893 (E.D.Va.1971), aff'd 469 F.2d 694 (4th Cir. 1972). To frame this question in different terms, I must decide if the new device is only a colorable variation of the original model. See generally Siebring v. Hansen, 346 F.2d 474 (6th Cir. 1965). A device is only a colorable variation of an earlier device if it does the same work in substantially the same way to accomplish the same result. McCullough Tool Co. v. Well Surveys, Inc., 395 F.2d 230 (10th Cir. 1968), cert. denied, 393 U.S. 925, 89 S.Ct. 257, 21 L.Ed.2d 261 (1968). If the new device or implement is more than colorably different from the earlier patented one, a finding of contempt is improper. American Foundry & Manufacturing Co. v. Josam Manufacturing Co., 79 F.2d 116 (8th Cir. 1935). In the American Foundry case, that court defined the word "colorable" as meaning a lack of a fair ground for doubt. Citing the Supreme Court's opinion in California Paving Company v. Molitor, supra, the Eighth Circuit concluded that a device was more than "colorably different" from the original patented object if there was a fair ground of doubt as to the similarity of the two devices. Where such a fair ground of doubt exists, there can be no punishment for contempt. See generally City of Campbell, Missouri v. Arkansas-Missouri Power Co., 65 F.2d 425 (8th Cir. 1933); Crown Cork & Seal Co. v. American Cork Speciality Co., 211 F. 650 (2d Cir. 1914).

It is with this background in mind that the evidence presented at the two-week contempt hearing must be examined. The existence or non-existence of phase reversal cavitation is the crucial issue to be determined at this point in these proceedings. The record before me indicates that the Plaintiff, in the original trial and appeal, took the position that phase reversal cavitation occurred in the Spraymate pump. In fact, the Court of Appeals implied as much in its opinion when it stated that cavitation cooling was an element of the original patented invention. Panther Pumps & Equipment Co. Inc. v. Hydrocraft, Inc., supra at 230. Thus, phase reversal at the vapor pressure of the driving fluid was necessary in order to infringe upon the patents for the original Spraymate pump. The Plaintiff, having taken this position at trial, cannot now alter it at the contempt proceeding. Union Carbide & Carbon v. Graver Tank & Manufacturing Co., 196 F.2d 103 (7th Cir. 1952).

At the two-week long contempt hearing, each side presented expert testimony relating to the...