Bijur Motor Lighting Co. v. Eclipse Mach. Co.

• Decision Date: 14 July 1916
• Docket Number: 136B.
• Citation: 237 F. 89
• Parties: BIJUR MOTOR LIGHTING CO. v. ECLIPSE MACH. CO. et al.
• Court: U.S. District Court — Western District of New York

237 F. 89

BIJUR MOTOR LIGHTING CO. v. ECLIPSE MACH. CO. et al.

No. 136B.

United States District Court, W.D. New York.

July 14, 1916

Engelhard & Pollak and Emery, Booth, Janney & Varney, all of New York City (Walter H. Pollak, Frederick L. Emery, and Samuel L Jackson, all of New York City, of counsel), for plaintiff.

Rector Hibben, Davis & Macauley, of Chicago, Ill., and Stanchfield Lovell, Falck & Sayles, of Elmira, N.Y. (John B. Stanchfield of New York City, Samuel E. Hibben, of Chicago, Ill., and Alexander D. Falck, of Elmira, N.Y., of counsel), for defendants.

HAZEL District Judge.

This is a bill in equity to enjoin the defendants from infringing patent No. 1,095,696, granted May 5, 1914, to Joseph Bijur, inventor, for improvements in engine starting apparatus, consisting of specific means for transmitting power from the starting motor to the flywheel of the engine. Defendants attack the validity of the patent, but mainly rely upon a written agreement or contract, dated July 9, 1914, to grant a license under the invention to Vincent Bendix, and pray for specific performance thereof. The defendants' asserted legal right to a license under the agreement or writing is sharply controverted by the complainant company, and the maintenance of this action for infringement is dependent upon the intendment of the parties at the time of the execution and delivery of the document. The replication substantially avers that an agreement was never executed or delivered, and that complainant was induced to sign the writing by fraudulent representations made by the defendant Bendix; but at the trial the latter averment was disclaimed or abandoned, and testimony directed towards proving that no completed or binding agreement to license had been made.

Concededly no fraud or deception was practiced by Bendix or the witness Dunn, who represented the Eclipse Machine Company, sublicensee, at the time the writing was executed, to induce Bijur, president of the complainant company, or Allen, an employe, to sign the agreement. The latter were not ignorant persons, or persons unacquainted with business methods or contractual obligations. By education and experience they were familiar with the effects of the consummation of contracts, and accordingly must abide by the consequences of their acts. They initiated the meeting with Bendix and Dunn at the office of Blair, their solicitor, where the plan of co-operation and association with Bendix in the exploitation of the patent in suit and the probable effects thereof were discussed in detail and at length.

The agreement, although terse and inelaborate, nevertheless admittedly is without ambiguity or indefinitiveness, and is believed to fairly express the intention of the parties. Each subdivision of the document was protractedly discussed before and after reducing it to writing, and no doubt was fully comprehended by the participants in the transaction. If anything was left unincorporated which should have been included, there is nothing in the document to indicate the fact. Its very silence on the subject is to my mind indicative of the fact that matters not expressly referred to were regarded as matters of detail, and not of the essence of the agreement. If in truth the effectiveness of the agreement was intended to be dependent upon future conditions, a reading of the agreement does not disclose such intention, although it appears that Bendix was to furnish at some future time the wording of the broadest claim of the German application, warrant its allowance, give information regarding the filing date, and, further, to secure a certain United States application for patent which was alleged to interfere with the Bijur patent in suit. The instrument in question reads as follows: 'Memorandum of Agreement Reached July 9, 1914, Between Bijur Motor

Lighting Company an Vincent Bendix.

'First. Mr. Bendix is to receive a license under the Bijur patent, No. 1,095,696, for the life of the patent, and for the manufacture, use, and sale of starters involving a screw shaft.

'Second. This license is to be exclusive as against all parties save Bijur Motor Lighting Company.

'Third. This agreement is to be binding upon the heirs and successors of both parties, and upon the assignees of the whole business of each party, and is to convey to Mr. Bendix the right to sublicense the Eclipse Machine Company, its heirs, successors, and assigns of its business.

'Fourth. Mr. Bendix is to pay a royalty of five hundred dollars ($500) a year.

'Fifth. Mr. Bendix is to grant the Bijur Motor Lighting Company an exclusive license under each of his foreign patents or applications on starting apparatus for the life of the prospective foreign patents or applications.

'Sixth. The foreign rights given under the Bendix foreign patents are in no way to interfere with the rights of export and use in foreign countries of all apparatus built in accordance with the license to Mr. Bendix under the Bijur patent in this country.

'Seventh. The rights of Mr. Bendix under this agreement and those of his licensee shall extend to the manufacture in Canada, as well as its use and sale.

'Eighth. Mr. Bendix agrees, without further consideration, either to secure a certain United States application now pending in the Patent Office, and alleged to interfere with the Bijur patent, and guarantee that it be conducted and handled throughout in a manner satisfactory to the Bijur Motor Lighting Company, or, failing in this, that he will, at his own expense, vigorously prosecute the parties owning or controlling such application, or the resultant patent, to his full ability, under any rights which he may possess.

'Ninth. Mr. Bendix and the Eclipse Machine Company agree to mark the goods licensed under this agreement, 'Licensed under Patent No. 1,095,696,' or equivalent words.

'Tenth. As against infringers of the Bijur patent, building screw shaft starting apparatus, Mr. Bendix is to bear the expense of legal proceedings, and as against other infringers of said patent Bijur Motor Lighting Company is to bear the expense of legal proceedings.

'Eleventh. Mr. Bendix is to furnish the wording of the broadest claim which has been allowed to his German application, and warrant that it has been allowed, and also the effective filing date of the German case.

'Twelfth. Mr. Bendix agrees that the licensee (the Eclipse Machine Company) will, in consideration of the granting of this license by the Bijur Motor Lighting Company, give an additional discount of five per cent. (5%) off from the best price named to any other motor and lighting company, and that he will also obtain the best deliveries and prompt service.

'In witness whereof, we have hereunto set our hand and affixed our seals this 9th day of July, 1914, the Bijur Motor Lighting Company by its proper officer thereunto duly authorized.

Bijur Motor Lighting Company. 'By Walter C. Allen. (L.S.) 'Vincent Bendix. (L.S.)'

As complainant asserts that this agreement was informal, preliminary, and incomplete, and not a binding and enforceable obligation, it is necessary to summarize the facts and circumstances in chronological order: In the year 1912, before the agreement in question was suggested, Bendix invented a transmission drive for gas engines, and filed an application for a patent. Associated with one Brandenburg, he immediately exploited the same, and entered into a license and manufacturing agreement with the Eclipse Machine Company, of Elmira, N.Y., for the manufacture of starters upon payment of royalty. Prior thereto, on March 12, 1912, the complainant's application for a patent for starters for engines was filed, and on May 5, 1914, was inadvertently granted, as shown by the file wrapper and contents in evidence, in view of the fact that Bendix was entitled to an interference therewith under rule 96 of the Patent Office to determine any question of priority of invention. Thereupon Bendix, as he testified, because of the expense entailed by interference proceedings, recurred to the offer previously made by complainant to give him a license under the Bijur patent.

On May 30, 1914, Bendix met the witness Allen, complainant's employe, and requested a conference on the license project which was later had with Mr. Bijur, Mr. Allen, and Mr. Blair, patent solicitor for complainant, on June 13, 1914, at the office of the latter. The grant of a license, under the Bijur patent, the Bendix application for a patent, and right of interference within the time specified by the Patent Office, and which had not then expired, and the foreign applications for patents filed by Bendix, were discussed, but without the parties reaching any agreement. It is shown that Bendix afterwards mailed copies of the drawings upon which his foreign applications were based to complainant's solicitor, and on July 8, 1914, there was another conference between Bijur, Allen, and Blair, on one side, and Bendix and the witness Dunn, on the other. The giving of a license under the Bijur patent was again discussed in all its details, with regard to the length of the license, the right of Bendix to sublicense to the Eclipse Machine Company, the royalties, the license from Bendix to Bijur of foreign patents, the applications, the manner of marking the manufactured articles by the sublicensee of Bendix, the Eclipse Machine Company, the control of other applications alleged to interfere with the Bijur patent, etc., and on the following day another conference, lasting several hours, was held at Blair's office, resulting in the dictation of the agreement in question and its typewritten transcription. The evidence discloses that Blair, Bijur, and Dunn dictated portions of the agreement, and that each paragraph was read aloud by...