Chicago Metallic Mfg. Co. v. Edward Katzinger Co., 8320.

• Decision Date: 10 December 1943
• Docket Number: No. 8320.,8320.
• Citation: 139 F.2d 291
• Parties: CHICAGO METALLIC MFG. CO. v. EDWARD KATZINGER CO.
• Court: U.S. Court of Appeals — Seventh Circuit

139 F.2d 291 (1943)

CHICAGO METALLIC MFG. CO. v. EDWARD KATZINGER CO.

No. 8320.

Circuit Court of Appeals, Seventh Circuit.

December 10, 1943.

Samuel W. Banning, Ephraim Banning, and Max W. Zabel, all of Chicago, Ill., for appellant.

Charles J. Merriam, Russell Wiles, and Stanley Hoods, all of Chicago, Ill., for appellee.

Before MAJOR, KERNER, and MINTON, Circuit Judges.

MINTON, Circuit Judge.

The only question presented on this record is whether or not the plaintiff-appellant is estopped to deny the validity of Mechanical Patent No. 2,077,757 and Design Patent No. D-108573 for a baking pan, issued to one Jackson April 20, 1937 and February 22, 1938, respectively. These patents were assigned to the defendant-appellee, who is now the owner thereof. The District Court did not pass upon the validity of these patents as to all the world. It found: "* * * petitioner (appellant) is estopped to deny the validity of the two patents relied upon by the respondent herein."

Upon such findings, the District Court in its conclusions of law stated that each of said patents "is valid as between the parties to this suit."

The District Court, having found that the appellant was estopped to deny the validity of the patent, entered its decree that each of the said patents "is valid as to each of its claims, as between the parties to this suit" and, having found infringement of both patents, ordered an accounting as to both. From this decree, the appellant brings this appeal.

If the estoppel upon which the court relied is not warranted, then the validity of the patents has not been tried and determined. Of course, we shall not reach the question of infringement until the validity of the estoppel is determined. Was the estoppel valid?

The appellant and the appellee, prior to the time the patents in question issued, were engaged in manufacturing baking pans. At first the pans were all made of smooth, unfigured material. Just prior to the issuing of the patents in suit, the appellant was manufacturing its Bakerex line and the appellee its Ovenrex line, in accordance with the claims afterwards allowed in the patents. These pans were manufactured from patterned metal strips. When the Mechanical Patent issued and while application was pending for the Design Patent, the appellee, as assignee and owner, wrote the appellant advising it of the appellee's patent rights and asserting that the appellant was infringing. On October 1, 1937, the appellant and the appellee entered into a non-exclusive licensing agreement authorizing the appellee to manufacture baking pans in accordance with the patent issued and the Design Patent for which application was pending. This license agreement contained certain price-fixing provisions, which are set forth in the margin.¹

The duration of the license agreement and rights on termination were controlled by Paragraph 14, which is set forth in the margin.²

On February 20, 1941, the appellant elected to terminate this license agreement. The appellee contends the effect of the appellant's action was to terminate the contract as to the price-fixing provisions, and, since the appellant was manufacturing the line of bakng pans known as Bake-King which the appellee claimed infringed its patents, to bring into effect the estoppel provision of Paragraph 14.

After the trial was concluded but before the court entered its decree, the Supreme Court decided Sola Electric Co. v. Jefferson Electric Co., 317 U.S. 173, 63 S.Ct. 172, 87 L.Ed. 165. The District Court in its memorandum opinion said it did not think the Sola Electric case applied, stating: "The decision of the Supreme Court in the case of Sola Electric Company v. Jefferson Electric Company so strongly urged by the petitioner as being applicable to this case, I feel is not in point. In this case no price fixing by the respondent has been proved by the petitioner. The evidence shows that the clause to which petitioner refers in its argument was inserted in the contract at the request of the petitioner. At no time did the respondent attempt to carry it out and the respondent was at all times willing to have same removed from the contract. For these and other reasons apparent upon a reading of the Supreme Court's opinion, I feel that the decision in the Sola Electric Company case is not controlling here."

The license agreement, Paragraph 11, supra, note 1, did provide for a clear price-fixing arrangement. The appellee will not be heard to say that it really was not in favor of the provisions as to price-fixing contained in a written agreement it had signed, or that it did not practice...