Derman v. Stor-Aid, 292-294.

• Citation: 141 F.2d 580
• Decision Date: 23 March 1944
• Docket Number: No. 292-294.,292-294.
• Parties: DERMAN v. STOR-AID, Inc., et al. STOR-AID OF NEW JERSEY v. DECORATIVE CABINET CORPORATION et al. STOR-AID OF ILLINOIS, Inc., v. SAME.
• Court: United States Courts of Appeals. United States Court of Appeals (2nd Circuit)

141 F.2d 580 (1944)

DERMAN v. STOR-AID, Inc., et al. STOR-AID OF NEW JERSEY v. DECORATIVE CABINET CORPORATION et al. STOR-AID OF ILLINOIS, Inc., v. SAME.

Nos. 292-294.

Circuit Court of Appeals, Second Circuit.

March 23, 1944.

W. Lee Helms, of New York City, for appellants.

Aaron L. Danzig, of New York City, for appellees.

Before L. HAND, SWAN, and AUGUSTUS N. HAND, Circuit Judges.

L. HAND, Circuit Judge.

The defendant appeals from one, and the plaintiffs appeal from two judgments of the District Court. The first was in an action for patent infringement and held valid and infringed, claims eleven, thirteen and fourteen of Patent No. 1,933,099, issued to the plaintiff, Harry Derman, on October 31, 1933; and dismissed a counterclaim for unfair competition because of his abuse of the patent in suit and ten other patents issued to him. The other two judgments were in actions brought by subsidiaries of defendant in the first action — Stor-Aid, Inc. — against companies controlled by Derman, and dismissed complaints for unfair competition, similar to the counterclaim in the first action. The principal issue in the litigation is the validity of the claims in suit of Derman's patent. Its specifications disclose a collapsible box or case which can be used as a chest — or, when stood on end, as a wardrobe — made of cardboard or the like, cheap, easily set up and made as follows. A rectangular strip of the specified material, longer than its width, is scored across its shorter axis at three different places and then folded upon the scored lines so as to form the bottom, front and back walls and cover of the chest, making, when the cover is closed, a parallelogram with open ends. The ends are closed by two square pieces of the same material, to the inside surface of which along all four edges is glued or otherwise fastened a wooden frame. This frame has slots on three of its lengths, into which fit the edges of the bottom and front and back walls of the chest, and which hold them in place by glue, upholstery tacks, or the like. This makes a solid box with a cover, hinged upon the third fold, having a flap, frictionally held by the upper edge of the front wall. Derman shipped this chest or wardrobe in a collapsed state so as to be easily transported, and sold it at wholesale for about a dollar. Sales began early in 1933, and immediately began to grow with enormous rapidity: during the following eight years twenty-five or thirty million units have been sold. Blechman, one of the defendants, at first took out a license under the patent for a company of which he was president, and which continued to manufacture under the license for nearly ten years, paying Derman over $175,000 in royalties. But in August, 1941, Blechman apparently concluded that the patent was invalid, resigned from the company which had taken the license, and formed another, the defendant, Stor-Aid, Inc., which thereupon began frankly to infringe the claims in suit. Thus, the only question as to the complaint in the first action is of validity.

Many years before Derman's filing date — January 13, 1933 — the art had been familiar with boxes made of three pieces of cardboard, pasteboard, or the like: one piece, folded along two or three scored lines, so as to form a box, open at the ends, and two square pieces to close the openings. The earliest of these are Manneck, No. 111,463, which issued January 31, 1871. The bottom, front and back walls were made of a single piece of pasteboard folded in only two places, for it had no cover; the square ends were of the same material with flanges turned in on three sides, which slipped inside the bottom and front and back walls — instead of embracing them like Derman's — and which were held in place by metallic clamps. Green, in 1896, No. 573,782, disclosed a similar construction except that the end pieces were framed with wood, and that the box had a cover with a flap like Derman's. We need not discuss any other references except Hofman, No. 1,270,294, issued June 25, 1918; and Friedel, No. 1,523,639, issued January 20, 1925. The first of these was for a cardboard "shipping box" whose bottom, front and back walls, and cover (a double flap), were of a single piece of cardboard scored in four lines, along which it was bent to form a parallelogram. The end pieces did not, it is true, have any frames into whose grooves the edges of the bottom and front and back walls fitted; but the edges of the end walls were bent into flanges at right angles, and then doubled back on themselves through 180 degrees, thus making channels or grooves, and into these the bottom and front and back walls slipped. Thus, the end pieces embraced the edges of the bottom and front and back walls by means similar in function to the slots in Derman's "frames." The result of this construction was that the surfaces of the end pieces were set a little inside the main body of the box, instead of being flush as in Derman. Friedel's disclosure was of a wardrobe proper, which stood on its end. The three upright sides, and two "stiles" for a door, were made of a single piece of scored and folded cardboard, or the like. The end pieces — top and bottom — were of the same material, and flanged; the flanges at the bottom being turned down, and those at the top, turned up. These flanges fitted into grooves in wooden frames which ran around the edges of the end pieces, and were secured in them. In setting up this wardrobe, the edges of the upright sides were fitted into the same grooves alongside of the flanges of the end pieces; and from this it resulted that, as in Hofman, the end pieces were set a little inside the edges of the bottom and front and back walls. Friedel's door was a very complicated affair, with "stiles," a lintel, a sill; it was altogether unlike Derman's. Friedel also provided a number of reinforcing pieces of wood inside and around his wardrobe, making an expensive, cumbersome and inconvenient construction as a whole, although it went upon the market and had a limited success. It will have been observed, however, that the frames embraced the edges of the bottom and front and back walls, like Derman's "frames," though they were not fastened to the inner surfaces of the end walls along their edges.

Of the claims in suit claim eleven is for a box, case, chest or wardrobe made of cardboard or the like in which the bottom and front and back walls are in one piece, so hinged that they can be collapsed; and in which the two end walls are "provided with peripheral means" which "engage" the edges of the bottom and front and back walls. "Peripheral," although nowhere defined in the specifications, can only mean that the end walls embrace the edges of...