Etten v. Lovell Mfg. Co.

• Decision Date: 30 April 1954
• Docket Number: Civ. A. No. 55.
• Parties: ETTEN et al. v. LOVELL MFG. CO. et al.
• Court: U.S. District Court — Eastern District of Pennsylvania

121 F. Supp. 291

ETTEN et al. v. LOVELL MFG. CO. et al.

Civ. A. No. 55.

United States District Court W. D. Pennsylvania.

April 30, 1954.

COPYRIGHT MATERIAL OMITTED

Charles F. Meroni, of Hill, Sherman, Meroni, Gross & Simpson, Chicago, Ill., Isaac J. Silin, Erie, Pa., for plaintiffs.

Frank Zugelter, of Zugelter & Zugelter, Cincinnati, Ohio, Ralph Hammar, Erie, Pa., for defendants.

FOLLMER, District Judge.

This matter is again before the Court on mandate from the Court of Appeals which vacated the judgment of this Court of March 8, 1950 in its entirety to the end that this Court would be unhampered in its consideration and disposition of the case in conformity with suggestions made in the opinion of the Court of Appeals. 184 F.2d 737.

Following receipt of mandate, considerable additional testimony, oral and documentary, directed solely to the question of title and legal interest as it affected the jurisdiction of the Court, was received.

I reaffirm findings of fact made in this cause on February 28, 1949, 83 F. Supp. 178, and on the basis of all the evidence now before me, I make the following additional

Findings of Fact

1. Plaintiff, Nicholas L. Etten, on May 16, 1929 entered into a License and Royalty Agreement (Plaintiffs' Exhibit B-B) with Floyd L. Chamberlain by which the latter was licensed under certain inventions and patents of Etten relating to devices manufactured by the Chamberlain Corporation, and in Paragraph IX thereof included future inventions. The said agreement has since its execution remained continuously in force and effect. It was entered of record June 17, 1932 in the Patent Office in Liber D153, Page 541.

2. The Etten applications and patent involved in the instant suit are within the provisions of Paragraph IX of said agreement relating to future inventions.

3. On October 16, 1929 Floyd L. Chamberlain executed an assignment (Plaintiffs' Exhibit C-C) by which he transferred all his right, title and interest in the License and Royalty Agreement of May 16, 1929 to the plaintiff, Chamberlain Corporation, an Iowa corporation, excepting a partial reversionary interest which was later assigned to Etten (Plaintiffs' Exhibit I-I).

4. Nicholas L. Etten has remained in the employment of Chamberlain Corporation continuously from the date of the Floyd L. Chamberlain assignment to the said corporation to the present time.

5. Pursuant to the provisions of Paragraph IX of said License and Royalty Agreement of May 16, 1929, Nicholas L. Etten, on October 16, 1935, executed an assignment (Plaintiffs' Exhibit A-A) to Chamberlain Corporation assigning his entire right, title and interest in and to his inventions relating to "Safety Release Mechanism" (Serial No. 648,620) and "Wringer Release Mechanism" (Serial No. 38,932) which are the inventions on which Letters Patent were prayed for by plaintiff in Paragraphs 4 and 5 of the original complaint herein and the former of which is the original application on the invention upon which Etten reissue application, S.N. 167,775, involved in the R.S. § 4915, 35 U.S.C.A. §§ 145, 146, action is predicated and is the invention covered by Etten Letters Patent No. 2,054,970 involved in the suit under R.S. § 4918, 35 U.S.C.A. § 291, added by amendment to the bill of complaint. The assignment was made "subject", however, "to the terms and conditions" of said agreement of May 16, 1929 which reserved, therein and thereby, certain royalty and reversionary interests and rights of suit to Nicholas L. Etten.

6. Nicholas L. Etten, since the inception of the License and Royalty Agreement of May 16, 1929, has been receiving royalties under and as provided for in the aforesaid agreement, including the yearly minimum royalty of $5,000 pursuant to Paragraph I (4) of said agreement.

7. Etten reserved unto himself the right to appear in litigation and to protect the patents covered by the License and Royalty Agreement of May 16, 1929 (Plaintiffs' Exhibit B-B) under the terms of Paragraph III, which reads in part as follows:

"* * * PROVIDED, that first party is given notice of any suit pending in which the validity of said patent is challenged or involved and that such notice is given in time to enable first party to appear in said litigation and protect said patent."

8. Chamberlain Corporation, in the late summer and early fall of 1943, advised Nicholas L. Etten that it would not become a party to a suit under R.S. § 4915 to procure the granting and issuance of Letters Patent covering the inventions of Nicholas L. Etten and involved in the complaint in the instant case, and on or about September 22, 1943 assigned the entire legal title to said inventions and the pending patent applications thereon, Serial Nos. 167,775 (reissue) and 38,932, to Nicholas L. Etten (Plaintiffs' Exhibits G-G and H-H) and on October 22, 1943 Etten instituted the instant suit pursuant to R.S. § 4915.

9. On or about September 22, 1943, in the Chicago office of Charles K. Woodin (a patent attorney who died in 1950) George R. Keltie, as President of Chamberlain Corporation, executed assignments transferring the entire legal title to said applications, Serial Nos. 167,775 (reissue) and 38,932, to Nicholas L. Etten, and which assignments were lost or misplaced and after diligent search cannot now be found.

10. The facts and circumstances in connection with the nonexistence, by reason of loss or misplacement, of the assignments from Chamberlain Corporation to Etten and the subsequent execution of the nunc pro tunc assignments (Plaintiffs' Exhibits G-G and H-H) were correctly set forth in letter of Chamberlain Corporation by its President, George R. Keltie, to Nicholas L. Etten under date of July 31, 1946 (Defendants' Exhibit W-22), excepting that the exact date of the execution of the lost assignment as established by evidence subsequently taken was September 22, 1943.

11. The content of the 1943 assignments is correctly set forth in the nunc pro tunc assignments of August 30, 1946 (Plaintiffs' Exhibits G-G and H-H) and which said nunc pro tunc assignments were recorded in the Patent Office on September 6, 1946, respectively in Liber Y207, Page 246, and Liber Y207, Page 248.

12. Charles F. Meroni, Esq., who just prior to the filing of the suit herein was retained as attorney for plaintiff, wrote a report under the letterhead of The Firm of Charles W. Hills, dated October 7, 1943 (Defendants' Exhibit W-12), relative to the filing of suits to procure the granting of Etten's patents on the inventions herein involved, which report confirmed, in writing, a previous conference with Mr. Woodin on September 27, 1943, and which, among other things, said:

"* * * as we understand the matter, the Etten application is not assigned to the company, * * *."

Such understanding was predicated upon the fact that Mr. Woodin had prepared and had in his possession the lost assignments and had in such conference with Mr. Meroni informed him that the title to the said patent and applications were in Etten.

13. The defendants have no interest in the Chamberlain Corporation either as stockholders, directors or creditors.

14. On March 1, 1944, written assignments were prepared and executed by Nicholas L. Etten (Plaintiffs' Exhibits E-E and F-F), assigning the legal title of the Etten inventions, applications and patent here in suit (Application S.N. 38,932, Reissue Application S.N. 167,775 and Etten Patent No. 2,054,970) to the Chamberlain Corporation, subject, however, to the terms and conditions of the so-called Floyd L. Chamberlain License and Royalty Agreement of May 16, 1929 (Plaintiffs' Exhibit B-B). The said assignments were recorded in the Patent Office on April 1, 1944, respectively in Liber V198, Page 645, and Liber V198, Page 646.

15. Under date of March 29, 1944, Lena E. Chamberlain, surviving spouse and sole heir at law of Floyd L. Chamberlain, deceased, assigned to Nicholas L. Etten all of her right, title and interest in the License and Royalty Agreement of May 16, 1929, and Letters Patent and inventions forming the subject matter of said agreement, "including my right to receive the one-half interest which said agreement provides shall revert to Floyd L. Chamberlain under the terms of the provisions of said agreement hereinabove set out." (Plaintiffs' Exhibit I-I)

16. At the time of the institution of the R.S. § 4915 action, on October 22, 1943, legal title to the patent and applications hereinabove referred to and involved in this suit were in Nicholas L. Etten.

17. At the time of the amending of the complaint to include a cause of action under R.S. § 4918, the plaintiff, Etten, was receiving royalties under the License and Royalty Agreement of May 16, 1929, and was also the owner of the full reversionary interest under said agreement and the assignment of Lena E. Chamberlain entitling him to all of the rights under the patent in the event that royalties were not paid to him as provided for in the agreement, and had also reserved unto himself in the said License and Royalty Agreement of May 16, 1929 the right to appear in litigation and to protect the applications and patents on his inventions.

18. Chamberlain Corporation became the owner of the legal title of the aforesaid Etten applications and patent here in suit by virtue of the reassignment of said patent and applications to the Chamberlain Corporation on March 1, 1944 (Plaintiffs' Exhibits E-E and F-F) and has continued in said ownership to the present time.

19. There was no intention to conceal on the part of Etten or Chamberlain Corporation in connection with the lost or misplaced assignments herein referred to, and on the discovery of the lapse in the chain of title to the patent and applications the parties took prompt action to place on record the documents to correctly portray the complete chain of title and to confirm what had previously been done in connection therewith.

20. As to the defense of res adjudicata raised by defendants...