Acme Acetylene Appliance Co. v. Commercial Acetylene Co.

• Decision Date: 05 December 1911
• Docket Number: 2,214.
• Parties: ACME ACETYLENE APPLIANCE CO. et al. v. COMMERCIAL ACETYLENE CO. et al.
• Court: U.S. Court of Appeals — Sixth Circuit

192 F. 321

ACME ACETYLENE APPLIANCE CO. et al. v. COMMERCIAL ACETYLENE CO. et al.

No. 2,214.

United States Court of Appeals, Sixth Circuit.

December 5, 1911

This is an appeal from an order (188 F. 89) granting a preliminary injunction. Appellants are restrained from selling certain devices called acetylene gas generators and compressors for use in recharging with acetylene gas certain other devices called Prest-O-Lite gas tanks or Autogas tanks, from infringing United States letters patent No. 664,383, and from inducing others so to infringe such letters patent or to contribute thereto. These letters patent were granted December 25, 1900, to Claude & Hess, and through mesne assignments appellee, the Commercial Acetylene Company acquired title to the patent; and the other appellee, the Prest-O-Lite Company, through agreement with its coappellee became the exclusive licensee in the United States and territories to manufacture and sell apparatus (employing and containing the invention covered by the letters patent mentioned) for use on automobiles, carriages, and other vehicles. One complaint made against appellants is that in March, 1911, the two Widrigs and Wilmot organized the corporation, the Acme Acetylene Appliance Company, and commenced the manufacture of a machine described as an 'Acetylene Gas Generator and Compressor," and caused it to be used for the purpose of generating acetylene and compressing the same in Prest-O-Lite and Autogas tanks, and for forming therein a supersaturated solution of acetylene as set forth in claims 1, 2, and 5 of the letters patent in suit. A suit was begun by appellees in November, 1909, in the court below against one of the appellants, viz., Arthur S Widrig, and one Robinson, in which upon motion and hearing an order was issued (June 9, 1910), enjoining Widrig and Robinson pendente lite from filling or refilling or causing to be refilled with acetylene any Prest-O-Lite gas tanks; and it is now charged that the sole purpose of organizing the appellant corporation was to avoid the operation of the injunction issued in that case, and that the individual appellants have been actively engaged in managing the company's affairs and business. An appeal was taken in that case from the order granting the preliminary injunction but it was dismissed by the appellants in the case when called for argument in this court.

April 20, 1911, appellants in the present case filed an answer admitting the organization of the appellant company, the manufacture and sale by the Prest-O-Lite Company of the gas tanks bearing its name; also that the Prest-O-Lite tanks and Autogas tanks through use become exhausted and depleted of acetylene, that appellees brought the suit against Widrig and Robinson alleging the filling, selling, and exchange of Prest-O-Lite tanks and infringement of the patent in suit, that an injunction pendente lite was issued by Judge Denison restraining Widrig and Robinson, and that Robert Widrig is managing the affairs of the appellant company.

The answer denies the other averments of the bill, including validity of the patent in suit or its infringement, and avers anticipation through a number of domestic and foreign patents and publications named. It also alleges that on June 30, 1896, 'there was granted to Claude & Hess letters patent No. 29,750, by the Kingdom of Great Britain, which said letters patent covered the same alleged invention as is shown in letters patent of United States No. 664,383 and that by the laws of the Kingdom of Great Britain the life of said patent was 14 years from date of issue, and that by reason of section 4887 of the Revised Statutes of United States before amendment by Act March 3, 1897, c. 391, 29 Stat. 692 (U.S. Comp. St. 1901, p. 3382), the term of said letters patent No. 664,383 expired June 30, 1910.'

It is further averred that, by reason of the failure of Claude & Hess to comply with the laws of Great Britain, their letters patent expired June 30, 1900, and that letters patent No. 664,383 having been issued December 25, 1900, upon an application filed March 1, 1897, are null and void.

The order granting the preliminary injunction required a bond in the penal sum of $10,000 to be filed, and imposed as a condition that if it be finally determined either that the patent sued upon is invalid, or that defendants were not acting in infringement of it, the complainants should pay to defendants $5,000 as liquidated damages caused by the issuing of the injunction, and also such further damages in excess of $5,000 as may be assessed by the court in favor of defendants, 'both liquidated and assessed excess, to be subject to be ordered to be paid in the final decree in this cause, or by proceedings herein at the foot of the decree.'

Robert H. Parkinson (Robert M. Calfee and Joe G. Fogg, on the brief), for appellants.

Keyes Winter and John P. Bartlett (Clarence Winter, on the brief), for appellees.

Before WARRINGTON and KNAPPEN, Circuit Judges, and SANFORD, District judge.

WARRINGTON Circuit Judge (after stating the facts as above).

In testing the validity of an order granting a preliminary injunction, we are bound to recognize that there resided in the court making the order a reasonable discretion either to grant or to withhold it. And the general rule is that unless it explicitly appears that the court has proceeded upon an erroneous hypothesis of pertinent fact or law, or has improvidently exercised its legal discretion, the order will not be disturbed. This court has so frequently expressed the rule in this behalf that we need not do more than to cite one or two of the recent decisions, in which reference will be found to the earlier cases. Interurban Ry. & T. Co. v. Westinghouse E. & Mfg. Co., 186 F. 166, 170, 108 C.C.A. 298; City of Shelbyville, Ky., v. Glover, 184 F. 234, 238, 106 C.C.A. 376. We may say with respect to the present case that this rule requires us to pass upon any question of law, the determination of which was necessarily involved in the granting of the order. Bissell Carpet Sweeper Co. v. Goshen Sweeper Co., 72 F. 545, 19 C.C.A. 25 (C.C.A. 6th Cir.)

Before the order was granted, the validity of the patent in suit had been adjudicated upon final hearing in Commercial Acetylene Co. v. Avery Portable L. Co. (C.C.) 166 F. 907. The same court, upon a motion for a preliminary injunction, had occasion again to pass upon the patent in suit in Commercial Acetylene Co. v. Autolux Co. (C.C.) 181 F. 3 87 . Moreover, the suit of the present appellees against Widrig and Robinson, mentioned in the statement, was based upon the patent now in suit, and the preliminary injunction there allowed was granted by the judge who made the order in this case.

It is urged in respect of the decision of Judge Quarles in Commercial Acetylene Co. v. Avery Portable L. Co., that he treated the patent in suit as a method patent and not as an apparatus patent; and consequently that it was not an adjudication upon which the order now in dispute could rightly be based.

The strength of this contention is to be tried by a consideration of the opinion as a whole, and not by particular words or sentences or by a paragraph apart from their context. It appears in the opening paragraph of the opinion ((C.C.) 166 F. 908) that Judge Quarles was fully cognizant of the fact that Claude & Hess 'had pending at the same time two distinct applications, one for the method or process * * * and the other for the apparatus or package. * * * ' For reasons there stated, he did not feel at liberty 'to consider the proceedings in the Patent Office touching the method application, or the claimed abandonment predicated thereon,' and treated the evidence as failing to show 'what became of the process application, except that no patent was granted thereon. ' (C.C.) 166 F. 909. It would seem strange, then, that the learned judge understood that he was passing upon a method patent. We may derive further assistance from portions of the language used, which we think are fairly indicative alike of context and trend of the opinion as an entirety. For instance, the court stated ((C.C.) 166 F. 909) that the primary difficulty in the Patent Office 'seems to have been to what extent the solvent supersaturated with gas might be considered an element of the combination in the apparatus patent. ' Again ((C.C.) 166 F. 909, 910):

'It was finally held on appeal that, as an apparatus for storing and distributing acetylene gas, the solvent, with supersaturated solution of acetylene, might constitute an element of the combination, and a claim was suggested by the board, which is claim 1 of the patent in suit.'

Of the things accomplished by the inventors, it is said ((C.C.) 166 F. 912):

'First: By equipping the gas package with acetone as a solvent, they have enormously increased the storing capacity of the tank,' etc.

When these quoted portions are construed in connection with what is said later of the pith of the invention ((C.C.) 166 F 916), it is plain that there is no such inconsistency as to warrant the conclusion that the court determined the validity of the patent in suit upon the theory that it was a method patent; on the contrary, as we interpret the opinion, the court considered the patent as a combination of elements and so treated the invention patented as an apparatus patent. This was the conclusion reached by the court below. And Judge Quarles himself in unmistakable terms made his conception of the patent clear, in the later case of Commercial Acetylene Co. v. Autolux Co., supra (C.C.) 181 F. at page 390 where he said: 'The 'package,' which is the patented product, consists not only of the steel tank, but of the internal equipment of a supersaturated solution of acetylene...