Carter Products v. Colgate-Palmolive Company

• Decision Date: 07 July 1958
• Docket Number: Civ. A. No. 6924.
• Citation: 164 F. Supp. 503
• Parties: CARTER PRODUCTS, Inc., Joseph G. Spitzer, and Marvin Small, Plaintiffs, v. COLGATE-PALMOLIVE COMPANY, Stalfort Pressure-Pak Corporation, John C. Stalfort & Sons, Inc., and Read Drug & Chemical Company, Inc., Defendants.
• Court: U.S. District Court — District of Maryland

164 F. Supp. 503

CARTER PRODUCTS, Inc., Joseph G. Spitzer, and Marvin Small, Plaintiffs, v. COLGATE-PALMOLIVE COMPANY, Stalfort Pressure-Pak Corporation, John C. Stalfort & Sons, Inc., and Read Drug & Chemical Company, Inc., Defendants.

Civ. A. No. 6924.

United States District Court D. Maryland.

July 7, 1958.

COPYRIGHT MATERIAL OMITTED

Piper & Marbury, John W. Avirett, 2d, Baltimore, Md., Morgan, Finnegan, Durham & Pine, George B. Finnegan, Jr., New York City, William D. Denson, Washington, D. C., Jerome G. Lee, John R. Murtha, and Morris Kirschstein, New York City, for plaintiffs.

Venable, Baetjer & Howard, H. Vernon Eney, Baltimore, Md., Cahill, Gordon, Reindel & Ohl, Mathias F. Correa, Thomas C. Mason, David R. Hyde and William T. Lifland, New York City, and Carlson, Pitzner, Hubbard & Wolfe, Richard R. Wolfe and C. Frederick Leydig, Jr., Chicago, Ill., for defendants.

THOMSEN, Chief Judge.

Plaintiffs have now moved for an order holding defendant Colgate-Palmolive Company in contempt of the injunction issued against Colgate pursuant to Judge Coleman's decision herein, D.C., 130 F. Supp. 557, as affirmed by the Court of Appeals, 4 Cir., 230 F.2d 855, certiorari denied 352 U.S. 843, 77 S.Ct. 43, 1 L.Ed. 2d 59. See also 4 Cir., 243 F.2d 163 and D.C., 151 F.Supp. 427. Plaintiffs Spitzer and Small are the owners of U. S. Patent No. 2,655,480, issued to Spitzer, et al., for a lather producing composition. Plaintiff Carter Products, Inc. is the holder of an exclusive license under that patent and manufactures and sells a pressurized shaving cream known as "Rise". The injunction with which we are dealing enjoined Colgate (a) from making, using, or selling, or from actively causing or inducing others to make, use or sell pressurized lather compositions covered by the claims of the Spitzer patent for the remainder of its term; and (b) from making or offering for sale a pressurized lather shaving cream utilizing one of plaintiffs' trade secrets held to have been wrongfully appropriated by Colgate.

Plaintiffs claim that Colgate has violated the injunction (I) by continuing to induce the sale by retailers of the adjudicated products after it was served with the writ of injunction, and (II) more importantly, by manufacturing a new, altered product and advertising and selling it under the same names as the old, adjudicated products, Palmolive Rapid Shave and Colgate's Instant Barber Shave.

Colgate uses as a propellant in the altered product a combination of two hydrocarbons, propane and isobutane, instead of the Freons listed in the claims of the Spitzer patent and used by Colgate in the adjudicated products. The altered product is sometimes referred to in the record as the "H" product. Plaintiffs do not contend that the altered product infringes the literal language of the claims of the Spitzer patent; plaintiffs contend (II-A) that the hydrocarbons Colgate now uses are equivalent to the Freons claimed in the Spitzer patent, particularly in claims 16 and 19. Plaintiffs also contend (II-B) that Colgate is still using one of the trade secrets which it wrongfully appropriated.

Colgate (I) denies that it violated the injunction in connection with the adjudicated products. (II-A-1) It denies the equivalence of the propellants, and contends (II-A-2) that plaintiffs are estopped to claim such equivalence by reason (a) of file wrapper estoppel, and (b) of judicial estoppel, by positions taken by plaintiffs at the previous trial in this court and on appeal. (II-B) Colgate denies that it is using the prohibited trade secret in manufacturing the altered product, and (III) claims misuse of the Spitzer patent by plaintiffs.

The Prior Proceedings

The original complaint in this action charged patent infringement by all of the defendants and wrongful appropriation by Colgate of plaintiffs' trade secrets. Plaintiffs claimed infringement of eight of the twenty claims of the patent. Defendants admitted infringement if those claims were valid, but denied their validity and prayed for a judgment declaring all claims of the patent invalid. After a long trial Judge Coleman held the patent valid and decreed that an injunction should issue enjoining infringement thereof. He also found that Colgate had unlawfully misappropriated three of plaintiffs' trade secrets.¹ Only one secret, dealing with superfatting, is involved in the present contempt proceeding. Judge Coleman decreed that the use of that secret should be enjoined, ordered Colgate to assign to plaintiffs its rights under certain patent applications, and referred the case to a special master to determine and report on the damages resulting from infringement and the damages and profits for which Colgate should be required to account because of its misappropriation of plaintiffs' trade secrets. The question whether increased damages should be awarded was reserved for future determination. An index to Judge Coleman's opinion, 130 F.Supp. 557, is set out below in note². The Court of Appeals affirmed the decree, 230 F.2d 855; an index to that opinion is set out below in note³. The Supreme Court denied certiorari, 352 U.S. 843, 77 S.Ct. 43, 1 L.Ed.2d 59.

This court then issued the injunction called for by Judge Coleman's decree, as so affirmed, enjoining Colgate (a) from making, using, or selling, or from actively causing or inducing others to make, use or sell pressurized lather compositions covered by the claims of the Spitzer patent for the remainder of its term, and (b) from making or offering for sale a pressurized lather shaving cream utilizing the trade secret which was described as follows: "By combining in a pressurized lather-generating composition a soap solution superfatted with petrolatum, carbowax and excess stearic acid * * *." 230 F.2d 863.

Thereafter Colgate filed a motion in the Court of Appeals seeking to be relieved of its stipulation admitting infringement. Colgate contended that the decision of the Court of Appeals had limited the effect of the claims as to which infringement had been admitted and had limited the invention to which the claims relate. Colgate's motion was denied, the court stating that there was no basis for the contention that it had intended to limit or did limit the scope of the invention or the claims of the patent in any way. 243 F.2d at page 164.

Colgate then sought, unsuccessfully, to have this court "clarify and amplify the decree" by changing the accounting period for damages and profits. See 151 F.Supp. 427, 428.

Meanwhile, on April 3, 1957, plaintiff had filed the motion now under consideration, for an order holding Colgate in contempt of the injunction. The issues raised are set out in the second and third paragraphs of this opinion. The facts with respect to each issue will be found and stated separately.

Definitions

Certain terms were used by some of the witnesses in different senses. I am therefore stating the definitions of those terms as they will be used in this opinion.

In true solutions, the molecules of the dissolved substance, called the solute, are dispersed among those of the solvent. The single independent molecules are the unit.

In colloidal solutions, ultramicroscopic particles of one substance are in permanent suspension in another.

In emulsions microscopically visible droplets of one liquid are suspended in another.

Soap micelles are aggregates of soap molecules in colloidal suspension in water.

McBain⁴ defines solubilization as a mode of bringing into solution substances that are otherwise insoluble in a given medium. So defined, it involves the complete disappearance of the original solid particle or liquid droplet, as it is taken up, molecule by molecule into the organized colloidal particles of the stable colloid itself. Some of the witnesses used the term solubilize in a different sense, to mean the taking up or envelopment of droplets, or groups of molecules, of a compound in liquid phase by the organized particles of a stable colloid, in this case the soap micelles. In such solubilization the liquid droplets of the compound propane-isobutane do not completely disappear, but remain in droplets or groups of 50 or 100 or more molecules of isobutane in association with the soap micelles. To avoid confusion, I will use the words absorb and absorption to describe the latter phenomenon.

The organic compounds referred to in the evidence include: I. Ethers; II. Aliphatic Hydrocarbons, (A) Saturated, and (B) Unsaturated; III. Halogenated Hydrocarbons, which are not true hydrocarbons, since the hydrogen atoms have been completely or partially replaced by halogens; thus we have (A) chlorinated hydrocarbons, (B) fluorinated hydrocarbons, and (C) chlorfluorinated hydrocarbons. Freon is DuPont's commercial name for the class of chlorfluorinated hydrocarbons. In some of the Freons the fluorine equals or exceeds the chlorine and in some of the Freons the chlorine exceeds the fluorine.

In this case, we are principally interested in a few of the Freons and in four saturated aliphatic hydrocarbons, namely, propane, butane, isobutane and cyclobutane. Note⁵ sets out a group of saturated aliphatic hydrocarbons with their respective vapor pressures, and the important Freons with their vapor pressures. Various propellants may be combined to secure a desired vapor pressure, which in a pressurized lather shaving cream must be sufficiently high to eject the mixture from the can and form a lather rapidly, but which, under ICC regulations, may not exceed 40 p. s. i. g.

I. Inducing Sales of Adjudicated Products

Judge Coleman's decision was suspended by supersedeas pending appeal and application for certiorari. In May, 1956, while the supersedeas was in effect, Colgate discontinued the manufacture of the adjudicated products, and began the manufacture of the altered product. Colgate used the same packages, labels and advertising in connection with the altered product that it had used in connection with the adjudicated...