BB Chemical Co. v. Ellis

• Decision Date: 21 February 1941
• Docket Number: No. 3626.,3626.
• Citation: 117 F.2d 829
• Parties: B. B. CHEMICAL CO. v. ELLIS et al.
• Court: U.S. Court of Appeals — First Circuit

117 F.2d 829 (1941)

B. B. CHEMICAL CO. v. ELLIS et al.

No. 3626.

Circuit Court of Appeals, First Circuit.

February 21, 1941.

Harrison F. Lyman, of Boston, Mass. (C. E. Hammett, Jr., A. D. Salinger, and Fish, Richardson & Neave, all of Boston, Mass., on the brief), for appellant.

William Gates, Jr., of Boston, Mass. (James R. Hodder and Roberts, Cushman & Woodberry, all of Boston, Mass., on the brief), for appellees.

Before MAGRUDER and MAHONEY, Circuit Judges, and HARTIGAN, District Judge.

MAHONEY, Circuit Judge.

The appeal in this case is from the final decree of the District Court dismissing the bill of complaint in a suit brought to restrain the defendant from infringing patent No. 1,830,428. The patent was applied for by the defendant, Elmer A. Ellis, November 8, 1929, and the application was assigned to the plaintiff for $8,000. On November 3, 1931, the patent was issued pursuant to the application and is now owned by the plaintiff.

The defendants are Elmer A. Ellis, the inventor of the patented process and the plaintiff's assignor, and the Magic Tape Company. The latter is a corporation with outstanding capital stock of twenty-five shares, of which the defendant Ellis and his wife own twenty-four. The defendants are charged with infringing the plaintiff's patent by selling materials to shoe manufacturers for use in an allegedly infringing process.

The patent relates to the manufacture of insoles for shoes. The specification describes the usual practices which formerly had been followed by shoe manufacturers in reinforcing the insoles. By the so-called "hot process", insoles were reinforced by cementing to them a textile fabric such as "gem" duck which had been coated with a thermoplastic material containing gutta percha or gutta siak and cut into strips of approximately the width of the insoles. To insure the proper adhesion of the fabric to the insole, this coat of thermoplastic material had to be heated to a very high temperature just prior to its application to the insole. The disadvantages of this process were that it had to be used while the coating was still hot and pliable and was difficult and dangerous for the operator to use.

The process known as the "cold process" consisted of the application to a strip of duck of a coating of ordinary fluid rubber cement containing a large proportion of solvent. In order for the coating to become tacky, i. e. sticky, and thus suitable for use, the strips were hung up in the factory to allow the solvent to evaporate. This took up a great deal of factory space and consumed an impracticable amount of time. Attempts to use a permanently tacky coating such as a surgeon's adhesive plaster were also unsuccessful as the strip, when coated, could not be rolled without sticking.

It was to overcome the disadvantages of these earlier processes that the defendant Ellis developed the process of the patent in suit. Claim 4 of the patent, the only claim in issue, is set forth in the margin.¹ In this process, a suitable fabric, such as "gem duck" is coated in the web with a cold rubber cement composition containing rubber, a resin and a solvent, and capable of being rendered permanently non-tacky upon evaporation of the solvent and consequent drying of the coating. The web is then heated to evaporate the solvent, thus rendering the coating non-tacky, and the web is cut into strips and wound into rolls which, because the cement is non-tacky, can be easily unwound. Just before the strip is applied to the insole in the reinforcing operation, a second, or top coat of rubber cement is applied to this pre-coated material. The absorption of this top coat by the pre-coated material and the evaporation of the solvent form a single reinforcing material which immediately adheres to the insole, at room temperature, and forms a satisfactory bond. The main improvement was the elimination of heat as a necessity in the reinforcing of insoles and the use of evaporation of cold, highly volatile rubber solvents of a tack-producing ingredient which permitted immediate use in reinforcing insoles when applied to a pre-coated fabric.

Claim 4 does not include specific reference to ingredients in its base or top coat. It provides only for a cement "having a substantial rubber content" and a top coat "containing a relatively high amount of rubber" with the proper adhesive qualities at room temperature. However, the specification suggested that a "suitable cement" for the base coat would contain rubber, zinc oxide as a filler, and a resinous material such as Burgundy pitch, the rubber and resin being dissolved in naphtha. The suggested top coat consists essentially of the same materials but in different proportions.

Between 1929 and 1932, the plaintiff used the above formula. Since 1932 it has used a pre-coat and has supplied to shoe manufacturers a top coat which includes a certain percentage of 60 per cent concentrated latex and other ingredients, the rubber content of the respective coats being about 35 per cent of the whole.

The plaintiff's manner of conducting its business was to supply shoe manufacturers with the pre-coated duck in strips of suitable width; if desired, the manufacturers supplied the duck and the plaintiff pre-coated and slit it. The plaintiff also supplied the adhesive top coat to be applied to the pre-coated fabric at the shoe factory, just prior to the application of the reinforcing material to the insole. The plaintiff further supplied its own patented machines suitable for use in applying the adhesive to the pre-coated duck, such machines being and remaining the property of the plaintiff. The plaintiff instructed the machine operators, serviced the machines, and advised and assisted in the reinforcing operations. As compensation for the foregoing, the plaintiff made a single charge to the shoe manufacturer, at a rate per web yard of duck supplied to the manufacturer; and, if the manufacturer did not furnish the duck, the price of that material was added to the charge. The adhesives used by the plaintiff in pre-coating have all had a large rubber content but were made according to different formulae, with special reference to the purpose for which the material was to be used. The plaintiff did not grant written licenses to shoe manufacturers to use its process, nor was any such license ever requested. Neither by notice nor agreement in any form with its customers did the plaintiff require them to use only the plaintiff's material. The plaintiff adopted the foregoing method of utilizing the patented process because it deemed it the most practical.

In 1932, the plaintiff gave to the Pepperell Manufacturing Company and to the H-B Products Company licenses to use the patented process on machines and materials using a latex or non-solvent top coat, at room temperature. The commercial practice of these licensees is substantially identical with that of the plaintiff.

In 1938 the defendant Ellis began to develop and promote a process for reinforcing insoles. The course of business adopted by his corporation followed closely that of the plaintiff.

The price per yard charged by the defendant, however, was somewhat lower than the plaintiff's price. In the machines which the defendants furnished their customers, there was a heating unit ostensibly to heat the latex solution which was used as a top coat. The District Judge found that with the 60 watt unit in use prior to the suit, the temperature of the latex solution when applied to the pre-coated fabric was not above room temperature. Since the suit was brought, a larger unit was installed, and higher temperatures were obtained. But at no time did the temperature approach 200 degrees Fahrenheit, necessary in the old hot process. The machines which the defendant loaned to its customers bore a plate stating that the process required the emulsion used to be kept at a heat of about 120 degrees. The trial judge found as a matter of practice, there was no pretense of maintaining this temperature.

The defendants' process is essentially like that of the plaintiff. The adhesive applied in pre-coating the duck follows closely the suggested formula in the plaintiff's specification. The defendants' top coat contains approximately 60 degrees concentrated latex and certain other ingredients. The defendants contend that their latex adhesives do not respond to the terms of claim 4, if that claim is properly limited, since latex is a colloidal dispersion in water while rubber cement is a colloidal dispersion in rubber solvent. It is agreed that both are adhesives, and the defendants' expert testified that they were certainly equivalents. It was conceded that both the latex and the rubber cement developed adhesion as the liquid vehicle evaporated. There was evidence to show that rubber in solvent as described in the patent co-acts in some way with the base coat but not exactly the same way as with the latex top coat, though the final result would be quite similar. The adhesive powers of the twice coated fabric in either case are due to evaporation and absorption of the liquid.

The defendants claim that their process does not infringe that of the plaintiff since their latex formula for the top coat is dissimilar to the rubber cement suggested in the specification and because heat is required in their process. During the trial the parties conducted tests using the defendants' process. It was found that no substantial benefit was derived from the use of heat and that the defendants' process worked satisfactorily at room temperature.

The District Court found that defendants' process infringed that of the plaintiff because the latex top coat was equivalent to that suggested in the patent and because the terms of claim 4 permit the use of equivalent means. It further held that the defendants were infringers, but that the plaintiff was prevented from recovering because of its method of exploiting its patent. It therefore ordered the...