EIM COMPANY v. Philadelphia Gear Works

• Decision Date: 16 August 1955
• Docket Number: No. 15261.,15261.
• Citation: 223 F.2d 36
• Parties: E-I-M COMPANY, Inc., Appellant, v. PHILADELPHIA GEAR WORKS, Inc., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

223 F.2d 36 (1955)

E-I-M COMPANY, Inc., Appellant, v. PHILADELPHIA GEAR WORKS, Inc., Appellee.

No. 15261.

United States Court of Appeals Fifth Circuit.

May 25, 1955.

Rehearing Denied August 16, 1955.

Browning, Simms & Hyer, T. E. Richards, Jr., Berry, Richards & Baker, Houston, Tex., Blenko, Hoopes, Leonard & Buell, Pittsburgh, Pa., Walter J. Blenko, Pittsburgh, Pa., James B. Simms, Houston, Tex., for appellant.

Henry N. Paul, Jr., Francis W. Sullivan, Philadelphia, Pa., Douglas W. McGregor, Houston, Tex., for appellee.

Before HOLMES and RIVES, Circuit Judges, and WRIGHT, District Judge.

RIVES, Circuit Judge.

E-I-M Company, Inc. appeals from an order holding it in civil contempt of an injunction previously issued by the district court restraining its further infringement of the Ball patent No. 2,114,013, issued April 12, 1938, for a "Valve Operator," which patent is owned by appellee. The prior judgment upon which the injunction was based, held claim 2 of the Ball patent valid and infringed, and that decision was subsequently affirmed by this Court. See E.I.M. Co., Inc., v. Philadelphia Gear Works, Inc., D.C., 102 F.Supp. 14, affirmed 5 Cir., 205 F.2d 28. The present district court decision holding appellant in contempt of its prior injunction is not officially reported, but since we consider the findings of fact and conclusions of law therein set forth as practically essential to an intelligent understanding of this review, they are fully quoted in the margin.¹ Appellant's modified CS device, like the previously adjudicated PP structure and the mechanism of the Ball patent, are all devices for opening and closing large pipe line valves in oil and gas fields, each being actuated optionally either by an electric motor or manually by means of a hand wheel. Though identical in purpose and result accomplished, these three devices exhibit specific divergencies in physical structure and methods of operation, the material details of which have already been explained in the above cited and quoted decisions of the district court and this Court. In amplification, however, of the district court's decision presently under review Footnote (1), supra, it should be stated that the only material structural difference between appellant's modified CS type valve operator and its old infringing PP structure is a clutch actuated by a centrifugal flyball mechanism, the latter distinctive element having been to some extent copied from the expired Jones prior art patent, U. S. No. 1,864,653, and substituted in lieu of the hydraulic clutch mechanism of its predecessor PP device heretofore held to infringe, as the substantial mechanical equivalent of the "clutch detent mechanism" revealed by appellee's Ball patent. Since it appears that the remaining elements of the adjudicated PP valve operator and the Ball patent, or their full mechanical equivalents, are clearly present in appellant's modified CS structure, the only really substantial controversy on the issue of equivalency thus narrows to whether the revised CS clutch assembly, generally referred to by the district court as "the clutch detaining, releasing and shifting mechanism," even though not literally present in the old infringing PP device or the Ball patent, may nevertheless fairly be viewed as "the full equivalent of that previously used in the adjudicated structure," since "it functions in the same manner to produce the same result." See Findings Nos. 5, 6, and 9, and Conclusions 1 and 3, Footnote (1), supra. Incidentally presented are the remaining issues of whether the district court erred in this contempt proceeding in refusing again to review the prior art, and particularly the expired Jones patent, for the avowed purpose of showing that appellant's presently accused CS structure was actually copied therefrom, rather than from the Ball patent or appellant's adjudicated PP device; and, finally, whether the district court was justified in assessing double damages, under its heretofore quoted Finding No. 9 and Conclusion No. 4, as to the willful and deliberate character of appellant's present infringement in violation of the prior injunction.

While conceding that it was not entitled below to rehash the entire prior art for the purpose of invalidating appellee's Ball patent, the validity of which has already been upheld on the prior appeal, 205 F.2d 28, appellant nevertheless insists that a number of federal decisions² establish its right to invoke prior art in justification of a structure such as its accused CS valve operator, which it presently manufactures for sale; that the Supreme Court's decision in Graver Tank & Mfg. Co. v. Linde Air Products Co., 339 U.S. 605, 609, 70 S.Ct. 854, 94 L.Ed. 1097, establishes that the question of equivalency here should have been determined against the background of the prior art, not for the purpose of impairing the judgment upon which the injunction was based, but simply to show that its presently accused structure stems from the prior art Jones patent, now in the public demesne, rather than from the Ball patent or its PP device heretofore held to infringe; that, since the prior Jones patent was not specifically considered by the court in arriving at its Finding No. 6, Footnote (1), supra, that finding should here be reversed as clearly erroneous, particularly since the exhibits and testimony allegedly reveal that the accused CS device constitutes a substantial departure in structure and operation from the Ball patent and the heretofore adjudicated PP structure, and under this Court's recent decisions in Jeoffroy Mfg., Inc., v. Graham, 219 F.2d 511, decided February 11, 1955, m/s, and Stewart-Warner Corp. v. Lone Star Gas Co., 5 Cir., 195 F.2d 645, appellee is estopped because of its prior inconsistent representations both to the Patent Office and this Court to contend otherwise; finally, in view of testimony showing that appellant has in good faith sought to comply with this Court's prior injunction restraining its further manufacture and sale of valve operators akin to its old PP device, and upon advice of counsel has merely exercised its claimed lawful right to follow the expired Jones patent, it has been guilty of no conscious wrongful conduct or wanton disregard of this Court's injunction which justified the district court's finding of "willful and deliberate" infringement and its imposition of double damages, costs and attorney's fees.

Relying upon Judge Hutcheson's opinion for this Court in Patton v. Stone, 5 Cir., 178 F.2d 515, 517, and numerous other federal authorities,³ appellee insists that neither the validity of the Ball patent nor the scope of claim 2 thereof can again be challenged in this contempt proceeding, and that the district court properly limited the present inquiry to the question of whether appellant's modified CS device "`is the equivalent of the device held to be infringing, and the prior art is not at issue'", Patton v. Stone, supra; that the testimony and exhibits reveal that most of the elements of the CS device have been taken without modification from the old infringing PP structure, and the full mechanical equivalent of the critical clutch shifting and "detent mechanism" is also exhibited therein; that the accused structure corresponds in all material respects to Ball's invention in effecting the release of the clutch by a power driven mechanism, as previously set forth in Judge Russell's opinion for this Court (see district court's Finding No. 7, Footnote 1, supra); and, finally, because of the aggravated circumstances of this infringement, the district court was amply justified in imposing punitive damages.

We think the district court was justified in its factual finding of equivalence between appellant's modified CS structure and the heretofore adjudicated PP device. In support of Finding No. 6, the record contains convincing testimony by appellee's witnesses, Kron and Panish, based upon actual tests, that the clutch of appellant's presently manufactured CS device actually functions more effectively as a "detent mechanism", i. e. to hold, release and shift the clutch, than the hydraulic detent mechanism of the adjudicated PP structure already held to infringe the Ball patent. In fact, as the district court observed, the presently accused CS clutch mechanism is structurally even more closely akin to the Ball patent than its infringing PP predecessor device, since, it exhibits a lever and spring combination, and for all practical purposes is actuated more positively by mechanical rather than by hydraulic means. In any event, accepting the no longer debatable premise that the hydraulic detent mechanism of appellant's PP valve operator was "the full equivalent of the clutch detent mechanism of the Ball patent", 102 F.Supp. 14, 22, we think consistency and logic impel the instant conclusion that the comparable elements of appellant's modified CS structure also constitute substantial equivalency within the prohibition of the prior injunction. E.I.M. Co., Inc., v. Philadelphia Gear Works, Inc., 102 F.Supp. 14, affirmed 5 Cir., 205 F.2d 28; Patton v. Stone, supra.

We think appellant's vigorous insistence, that it was prejudiced by the district court's claimed refusal to consider the Jones prior art patent, as bearing upon its contention that its CS device now follows Jones instead of Ball, is neither fairly supported by this record or by the authorities upon which it relies. True, the district court several times indicated its impression that, validity of the Ball patent having already been upheld, appellant was not entitled to a practically de novo review of the entire prior art, on the controlling issue of equivalency between the modified and adjudicated structures in this contempt proceeding. However, the court did several times permit appellant's counsel to elicit testimony in support of its contention that the clutch mechanism of its modified CS device follows the teachings of...