Cortelyou v. Charles E. Johnson & Co.

• Decision Date: 16 March 1906
• Docket Number: 139.
• Citation: 145 F. 933
• Court: U.S. Court of Appeals — Second Circuit
• Parties: CORTELYOU et al. v. CHARLES E. JOHNSON & CO.

145 F. 933

CORTELYOU et al. v. CHARLES E. JOHNSON & CO.

No. 139.

United States Court of Appeals, Second Circuit.

March 16, 1906

Francis T. Chambers, for appellant.

Samuel Owen Edmunds and Edmund Wetmore, for appellees.

This is an appeal from a decree of the Circuit Court of the United States for the Southern District of New York, awarding an injunction restraining the defendant from selling ink to the licensees of a machine known as the 'rotary neostyle.' This machine is made under letters patent No 584,787, granted June 22, 1897, to Henry W. Lowe, and is sold with the following notice attached:

'License Agreement.

'This machine is sold by the Neostyle Company with the license restriction that it can be used only with stencil paper ink, and other supplies made by the Neostyle Company, New York City.'

The defendant is not charged with direct infringement of the Lowe patent, but is charged with contributory infringement, in violation of the license agreement.

The opinion of the Circuit Court is reported in 138 F. 110.

Before COXE and TOWNSEND, Circuit Judges, and HOLT, District Judge.

COXE Circuit Judge.

In the case of Cortelyou v. Lowe, 111 F. 1005, 49 C.C.A. 671, this court fully accepted and approved the decision in the Heaton Peninsular Button-Fastener Case (77 F. 288, 25 C.C.A. 267, 35 L.R.A. 728), and by so doing made it, in effect, the law of the Second Circuit. The opinion of Judge Lurton in the Peninsular Case covers the entire field of controversy and presents the arguments, and all the arguments, in support of the complainants' contention. It is a clear, comprehensive and convincing exposition of the law as applicable to the facts as stated in the bill and admitted by the demurrer, and, upon similar facts, is as controlling upon us as if it were originally promulgated by this court. The fact that the court is now differently constituted is, of course, quite immaterial. If entitled to be considered at all upon a question of general significance, like that under consideration, it should operate as an additional reason for adhering to existing conditions. It is the court, not the individuals composing it, that declares the law; and it would be unseemly, to say the least, to review propositions previously established, even though as an original question we might have been led to a different conclusion. Cimiotti Co. v. Nearseal Co., 123 F. 479, 59 C.C.A. 58.

The Lowe Case arose upon the same general contention which is made in the case at bar, namely, the alleged unlawful sale of ink to the licensees of the Neostyle machine. The injunction order, which was there affirmed, enjoined the making, selling or offering for sale of any duplicating ink adapted for use on restricted rotary noestyles with intent that such ink shall be so used. It is true that an estoppel was alleged in the bill by reason of the fact that the defendant, Harry W. Lowe, is the inventor and had assigned to the complainant the patent not only but the secrets and formulas for the manufacture of the ink and had agreed not to engage in the manufacture and sale of said ink. Harry W. Lowe did not defend the suit and it is very doubtful whether the estoppel alleged could be urged against John C. Lowe. Granting that it could be, it is apparent that it was not relied upon either in the Circuit Court or in this court, where the affirmance rested solely upon the concurrence of the court in the doctrine of the Peninsular Case.

No two cases are identical upon the facts. Differences can always be pointed out, but the question for the court to determine is are the differences of such a character as to induce the court to believe that if the facts in the second case had been present in the first case the same result would have been reached; in other words, are the cases the same in principle? The Peninsular and Lowe Cases have been generally followed in this and other circuits, several of the causes being unreported, but see Cortelyou v. Carter (C.C.) 118 F. 1022; Brodrick Co. v. Mayhew (C.C.) 131 F. 92, affirmed (C.C.A.) 137 F. 596. We therefore feel ourselves controlled by the Peninsular and Lowe Cases upon every point where the facts cannot be fairly distinguished, but, on the other hand, for reasons hereafter stated, we are of the opinion that the doctrine of those cases should not be extended to cover cases where the record shows a substantial distinction.

The majority of the court, consisting of Judge HOLT and the writer, is of the opinion that the decree at bar pushes the doctrine of contributory infringement to its extreme limits if, indeed, it does not transgress those limits. The doctrine originated in a desire to secure to a patentee complete protection in all the rights granted him by the patent, but it was confined to those rights; it went no farther. One who sold an element of a patented combination, which could not be used except in an infringing combination or device, was not permitted to reap the benefits of such sale. He did not himself directly infringe, but he promoted the infringement of others by putting in their hands a device which could only be used in violation of the patent. When confined to articles, whether covered by the patent or not, which are made for the express purpose of inducing infringement and are not intended for any legitimate use, the doctrine of contributory infringement is logical, just and salutary. But we doubt the wisdom of extending ti to the ordinary commodities of life, used in connection with a patented machine, because the patentee sells or licenses the machine upon the condition that he alone is to furnish these commodities. Care should be taken that the courts, in their efforts to protect the rights of patentees, do not invade the just rights of others, engaged in legitimate occupations, by creating new monopolies not covered by patents and by placing unwarrantable restrictions upon trade. We think it is clear that the doctrine may be carried far enough to produce such results. For instance, should the patentee of a fountain pen, by such a notice as we have under consideration, be permitted to hold as an infringer one who sells ink to the owner of the pen even though he knows of the restriction? To compel the dealer to make inquiries and take the precautions necessary to save himself from being sued as an infringer would place intolerable burdens upon business. Should the patentee of a motor cary, by such proceedings, be able to hold the monopoly on all gasoline used in its propulsion, or the patentee of a stove or a refrigerator have an action of infringement against one who furnishes ice or coal, respectively, to its owner? These may seem to be extreme cases and yet they are not so far beside the mark as may at first appear. It was stated at the bar that among the 'supplies' necessary for the operation of the neostyle were oil and varnish. It is not easy to perceive how a machinist who lubricates the machine and the painter who varnishes it can escape the charge of infringement. If the doctrine be driven to its ultimate conclusion the merchant and the consumer may find themselves enmeshed in a network of monopolies embracing all the necessaries of life. No one may safely sell coffee to the consumer but the patentee of his coffee mill, no one can furnish him flour but the patentee of his baking pans and he may...