Adler Sign Letter Co. v. Wagner Sign Service, 7043

• Decision Date: 15 June 1940
• Docket Number: No. 7043,7044.,7043
• Citation: 112 F.2d 264
• Parties: ADLER SIGN LETTER CO. et al. v. WAGNER SIGN SERVICE Inc. WAGNER SIGN SERVICE, Inc., v. BEN ADLER SIGNS, Inc., et al.
• Court: U.S. Court of Appeals — Seventh Circuit

112 F.2d 264 (1940)

ADLER SIGN LETTER CO. et al. v. WAGNER SIGN SERVICE Inc. WAGNER SIGN SERVICE, Inc., v. BEN ADLER SIGNS, Inc., et al.

Nos. 7043, 7044.

Circuit Court of Appeals, Seventh Circuit.

April 25, 1940.

Rehearing Denied June 15, 1940.

Max W. Zabel, E. C. Gritzbaugh, Greek Wells, and Edward U. Dithmar, all of Chicago, Ill., for Adler Sign Letter Co.

Albert G. McCaleb and Warren C. Horton, both of Chicago, Ill., for Wagner Sign Service, Inc.

Before SPARKS, MAJOR, and TREANOR, Circuit Judges.

MAJOR, Circuit Judge.

These appeals involve three patents relating to changeable letter silhouette signs such as are used to display the titles of pictures upon the marquees of motion picture theatres. The appeal in No. 7043 involves two suits brought by Wagner Sign Service, Inc. (hereinafter referred to as "Wagner"). The first charges infringement of Wagner's Patent No. 2,048,040, by Adler Sign Letter Company and Ben Adler Signs, Inc. (hereinafter referred to as "Adler"). The second charges infringement of Wagner's Garner and Auer Patent No. 2,119,430, by Patio Theatre Company, a customer of Adler, (hereinafter referred to as "Patio.")

In Cause No. 7044, Adler charged Wagner with infringement of Adler's Patent No. 2,038,978, and also sought a declaratory judgment with respect to the Garner and Auer Patent No. 2,119,430. All of the suits were consolidated for trial. The court below found all of the patents valid and infringed. Thus, Wagner prevailed as to its suits predicated upon Patent No. 2,048,040 and Patent No. 2,119,430, while Adler prevailed in its suit upon Patent No. 2,038,978. Wagner's first patent issued in July, 1936, upon an application filed in February, 1934. Adler's patent issued in April, 1936, upon an application filed in June, 1935. Wagner's second patent (Garner and Auer) issued in May, 1938, upon an application filed in March, 1937.

The contested issues in each of the appeals are the validity of the respective patents and their infringement as determined by the District Court.

Wagner started in the sign business prior to 1920 and was incorporated in 1927 for the purpose of servicing, selling and installing signs. While not entirely limited to theatre signs, its principal business was in that field. Subsequent to 1920, the moving picture business experienced a rapid growth and many large and imposing theatres were built. One of their noticeable characteristics was the elaborate marquees extending out and over the sidewalk. Such marquees presented very desirable space for advertising displays and that was, in fact, their principal purpose. As is well known, the attractions at such theatres have short runs, and the advertising display announcing the program was an important, if not an essential, part of the business. With the frequent changing of programs, it was also important that a method be employed by which the advertising announcements could be changed expeditiously. During the fourteen-year period from 1920 to 1934, much effort was expended in this field, with no more than a meager amount of success. During that period, literally hundreds of types were offered, tried out, but generally discarded. Among the types most frequently used were the "bulb" letter signs in which electric bulbs were so arranged as to spell out an announcement; stenciled letter signs in which light from bulbs in the marquee box was allowed to escape only through stenciled openings; and the so-called "luminous" letter signs in which the light through glass-covered openings in metal sheets spelled out the announcements.

Late in 1933, so it is claimed, Wagner conceived and produced a simple and satisfactory structure for a changeable letter theatre sign, which is embodied in his first patent in suit. It is claimed that this invention standardized the sign equipment for theatres, and the record supports this contention.

The Adler companies were incorporated in 1933, and for two years were engaged in selling the now obsolete "luminous" letter-type of sign for theatre marquees. Subsequent to 1935, its sales were largely of a silhouette letter-sign equipment charged to infringe. Prior to that time, Adler called upon Wagner at the office of the latter and was shown the new type of sign equipment. He was furnished with samples of Wagner's sign and the terms upon which they might be purchased. A few months later, Adler commenced the manufacture and sale of his own silhouette sign. That the silhouette type of letter was rather widely acclaimed by the trade seems evident from the rapid increase in the total sales of both Wagner and Adler and, that it has come into general use is undisputed.

We shall first consider the validity of Wagner's first patent involving Claims 4, 5, 6 and 8. We shall, at this point, consider Claim 4¹ as typical, and later refer to distinguishing characteristics found in the other claims.

It is argued that by this invention, Wagner solved the important problem with which the industry was confronted, by providing a practical day-and-night sign of the silhouette type characterized by all the indispensible features now employed in standard changeable letter theatre signs. The "happy thought" which Wagner disclosed is stated thus: "A letter unit having a marginally flanged thin visual face boldly and clearly will stand out in high relief, as an island in a sea of light, against an illuminable translucent glass background; and that letter units, so constructed, though appearing to be very massive, actually will be of weight light enough to be carried independently of the glass by unobtrusive (even decorative) rod-like members replaceably and adjustably supporting such letter units."

Adler argues that the claims of Wagner are all anticipated by the prior art and cites in support thereof a number of prior art patents. In fact, fifty of such patents were cited in the court below but only eleven are mentioned here. We assume that the most pertinent prior art patents are the ones discussed in Adler's brief, and while we have examined some of the others, we shall make reference only to those analyzed by Adler. They are, Send Patent, 1,805,478, issued May 12, 1931, Bindhammer Patent 1,163,638, issued December 14, 1915, Standish Patent, 1,884,335, issued October 25, 1932, and Francis Patent, 962,630 issued June 28, 1910. Adler points out that the identical letter of the patent in suit is shown in the Send Patent. There is this distinction, however, in that the Send letter was solid instead of being flanged as taught by Wagner. This is claimed by Wagner to be an important feature. Owing to the size of some of the letters they are, when solid, of such weight as to be difficult to handle. The flanged letter is an improvement in this respect. The Send letter was fastened to an upwardly-hooked lip which formed a part of the background. Such a lip could not be used in case of a glass background as was described by Wagner.

Bindhammer shows letters of thin sheet metal mounted upon and to the rear of a wire. They are devoid of flanges, giving them no marginal depth, which, it is claimed, is an important feature of Wagner.

Standish shows apparently a hollow letter with a metal background which precludes it from producing the silhouette effect. As in Send, the letters are mounted on hooks directly attached to the background.

Francis shows rods upon which thin letters having no substantial margin are mounted. They are stiffened by brackets which are notched for the reception of the horizontal rods. The letters are fastened to the rods by twisted wires. The Bindhammer and Francis Patents were cited in the patent office, but not those of Send and Standish. It is argued by Adler that it follows these two patents were overlooked by the patent office and, if the patent office had considered them, a different result would have been reached. We do not think it necessarily follows, however, merely from the fact that they were not cited, that they were overlooked. It is just as reasonable to conclude that they were considered and cast aside as not pertinent. Detroit Motor Appliance Co. v. Burke, D. C., 4 F.2d 118, 122.

We must admit that at the commencement of our study of this patent in connection with the prior art, we were dubious concerning its validity, occasioned, no doubt, by the apparent simplicity of the construction disclosed. More careful consideration, however, leads us to the opposite conclusion. A study of the testimony is rather convincing that the industry, for many years, had labored under the handicap of unsatisfactory signs, and as the prior art amply discloses, much effort was exerted to remedy the situation. Numerous devices were recommended, tried, and largely abandoned. That the silhouette sign, such as described by Wagner, met with hearty response on the part of theatre owners, is hardly open to question. They generally have supplanted the numerous letter advertising devices which had been theretofore employed. This situation is rather persuasive to the effect that the patent describes an invention of merit. The presumption of validity which attaches to its issuance, as well as the finding of the court below in favor of validity, supports our conclusion that it is valid.

This brings us to a consideration of Adler's letters which are charged to infringe. The two kinds of letters manufactured and sold by Adler are described as the Adler Notched Flanged Type, and the Adler Lug Type. We insert a drawing of each type, the one to the left being the notched flanged type and the one to the right, the lug type. It will be noted that Claim 4 (footnote 1)

provides for supporting rods in front of the panel, "the flanges being notched to engage said rods." The same requirement is contained in Claims 4 and 6. Claim 8 is silent as to notched flanges, but provides "rod-like mounting means" for the letters. All of the claims, both those in suit and those not, refer either to a rod carrier as as a means of...