Commercial Acetylene Co. v. Autolux Co.

• Decision Date: 02 May 1910
• Docket Number: 126.
• Citation: 181 F. 387
• Parties: COMMERCIAL ACETYLENE CO. et al. v. AUTOLUX CO. et al.
• Court: U.S. District Court — Eastern District of Wisconsin

181 F. 387

COMMERCIAL ACETYLENE CO. et al. v. AUTOLUX CO. et al.

No. 126.

United States Circuit Court, E.D. Wisconsin.

May 2, 1910

This is an application for a preliminary injunction pendente lite restraining the defendants from selling, arranging with, and inducing certain persons to buy certain high-pressure generators with the intent and knowledge and under such circumstances that they will be used for the purpose of filling with acetylene gas certain devices known as gas tanks, which have been manufactured by the Prest-O-Lite Company under certain letters patent and licensed, and sold under these patents with restrictions precluding any sale or use of such tanks when filled with acetylene gas by any one other than said complainant Prest-O-Lite Company, and certain gas tanks which had been formerly manufactured and sold by the Avery Portable Lighting Company, and are now in use in infringement of said letters patent.

The complainant the Commercial Acetylene Company is the owner by assignment of certain letters patent of the United States numbered, respectively, 664,383 and 727,609, known as the Claude & Hess patents. The complainant Prest-O-Lite Company is the exclusive licensee of said patentee to manufacture and sell the device embodied in these letters patent for the purpose of use on automobiles, carriages, and other movable vehicles. The patented article covered by said letters patent consists of a steel cylinder into which acetone is introduced and gas is forced under pressure, said tank being furnished with an inlet and an outlet valve. Said Prest-O-Lite Company has manufactured and sold under this license contract upward of 150,000 of these devices, which are known to the trade as the 'Prest-O-Lite gas tanks.' Conspicuous notice is given to the public of these patents. Owing to the nature of the ingredients, great care and skill are required to secure the exact proportion and volume of acetone and acetylene gas which constitute the contents of these packages. A record of the formula for each tank is kept by the Prest-O-Lite Company. The complainant, the Prest-O-Lite Company, has established a uniform practice of giving in exchange for each empty gas tank of their make a recharged standard Prest-O-Lite gas tank, and has established five agencies throughout the country. For the purpose of insisting upon this practice of exchange or recharging, and to protect its customers from badly filled and inefficient tanks, the Prest-O-Lite Company has since its organization sold these devices solely with the intent that they be returned when empty to the Prest-O-Lite Company for exchange, and that they should not be sold or used when filled with acetylene gas by any one other than the patentee or its licensee, the complainants herein. This purpose has always been understood and recognized in the trade, and generally acquiesced in. In order to bring fully to the attention of the users the terms and conditions under which these tanks were sold and exchanged, the Prest-O-Lite Company since the 1st day of June, 1907, has placed upon every one of these devices sold and exchanged a metallic plate on which is engraved the following words:

'The Prest-O-Lite Gas Tank No. (Serial No.)

'The Prest-O-Lite Co.

'New York, Boston, Indianapolis, San Francisco, Toronto.

'Patented Dec. 25, 1900, May 12th, 1903.

'Notice this device is sold and purchased for sale and use only when charged with gas by the undersigned. No license is granted to use or sell this device when charged by any one else and no license is granted to any one else to recharge this device. Any sale or use of this device when sold or used in violation of this condition and limited license will be considered as an infringement of Letters Patent of the United States under which this device is made and sold and all parties so selling and using this device contrary to the terms of this limited license will be treated as infringers of said Letters Patent and render themselves liable to suit for damages and injunction without further notice. This license is good so long as this plate remains upon the device. Any erasure or removal of this plate will be considered a violation of this license. A purchase is an acceptance of these conditions.

'Agents and dealers are not authorized to vary this license.

'The Commercial Acetylene Co.

'The Prest-O-Lite Co.'

In addition to this notice of the nature of the rights in these tanks passed by their sale to the purchaser, the Prest-O-Lite Company has attached to each and every of these tanks a paper label containing in large letters substantially the same matter as that placed on the metallic plate.

These conditions were well known to the defendants Avery & Burnham and their associates and the defendant corporation. The defendant Avery was one of the original officers and stockholders in the Prest-O-Lite Company, but severed his relations therewith for the purpose of establishing in the city of Milwaukee under the name and style of the 'Avery Portable Lighting Company' an infringing plant for the manufacture and sale of a certain infringing device, and by recharging said licensed device of the Prest-O-Lite Company and until February 5, 1909, said parties so connected with the Avery Portable Lighting Company were actively engaged in committing these infringing acts, and so continued until enjoined by an order of this court on final hearing from continuing to manufacture and sell the device known as the Autogas tank, or from committing any other infringing act. About this time Avery and his associates organized a new corporation under the name of the Autolux Manufacturing Company at Milwaukee, for the purpose, as claimed by complainants, of continuing the invasion of the rights of the complainant under the patents aforesaid, and commenced the manufacture of an apparatus known as a 'high-pressure generator,' which has been extensively used in recharging the Prest-O-Lite gas packages and other gas tanks used on automobiles.

The defendants introduced a large number of affidavits of users of these gas tanks, showing that the demand has been so great that complainants could not supply the trade with charged tanks, and that great inconvenience had resulted to users who were obliged to send their exhausted tanks to Indianapolis in order to secure recharged tanks; that the high-pressure generators had proved a blessing to the users of Prest-O-Lite tanks because it enabled them to secure a prompt exchange of depleted tanks at home, etc.

Eleven such high-pressure generators have been sold by defendants and installed in populous cities, where they have been used to fill the gas tanks of the Prest-O-Lite Company and others.

Ferdinand A. Geiger, Keyes Winter, and John P. Bartlett, for complainants.

George Wilkinson and Marshutz & Burnham, for defendants.

QUARLES District Judge (after stating the facts as above).

The showing made by complainants on this application on its face presents two distinct legal aspects. The first rests on the patent alone for all necessary recharging of the Prest-O-Lite gas tank during the life of the patent; that any unlicensed person who charges such a tank with a supersaturated solution of acetylene gas for use or sale is an infringer, and that whoever advises, aids, or abets such tort is a contributory infringer; that no restriction by the patentee is necessary to re-enforce the sanction of the patent. Second. The conditions imposed by the patentee forbidding any one aside from the patentee from recharging the gas tanks are set up and insisted upon. The principle of law relied upon is that the patentee may withhold his device from the public entirely if he so elects, and therefore may impose such restrictions upon use or sale of the patented package as he may choose; that the purchaser or user who knows of such restriction is bound to comply therewith. To knowingly violate them is a tort, and whoever advises, abets, or aids in such violation is a joint tort-feasor. The contention of complainant is that defendants are guilty under either phase of the law. It may be well to consider these two propositions separately.

To clarify the first proposition, we must have in mind what the device is that is protected by the Claude & Hess patent. All along through the showing of defendants the idea crops out that one who has bought a patented gas tank owns the same absolutely, and may have the same recharged when and where he will; that is to say, that the legal effect of such purchase is to release the device from the monopoly. Now, if the empty steel shell with its two valves be the physical embodiment of the patent, this contention would be entitled to consideration. A reference to the language of the Claude &amp Hess patents and to their history in the Patent Office, and the construction placed upon them by this court in 166 F. 907, should suffice to silence this contention. The 'package,' which is the patented product, consists not only of the steel...