Eversharp, Inc. v. Fisher Pen Co.

• Decision Date: 07 November 1961
• Docket Number: Civ. A. No. 56 C 77.
• Citation: 204 F. Supp. 649
• Parties: EVERSHARP, INC., a corporation, and The Parker Pen Company, a corporation, Plaintiffs, v. FISHER PEN CO., Inc., a corporation, and Paul C. Fisher, Defendants.
• Court: U.S. District Court — Northern District of Illinois

204 F. Supp. 649

EVERSHARP, INC., a corporation, and The Parker Pen Company, a corporation, Plaintiffs, v. FISHER PEN CO., Inc., a corporation, and Paul C. Fisher, Defendants.

Civ. A. No. 56 C 77.

United States District Court N. D. Illinois, E. D.

November 7, 1961.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Raymond L. Greist and Raymond E. Fidler, Chicago, Ill., for plaintiffs.

William A. Marshall, Merriam, Smith & Marshall, Chicago, Ill., for defendants.

PERRY, District Judge.

1. This Action was filed by Eversharp, Inc., a Delaware corporation (hereinafter referred to as Eversharp), against Paul C. Fisher and Fisher Pen Co., Inc. (hereinafter referred to as Fisher Pen Co.) on January 12, 1956, for infringement of United States Letters Patent Nos. 2,390,636, 2,397,229, 2,400,679, and 2,416,896, all of which were duly and legally issued on inventions made by one Laszlo Jozsef Biro, and were thereafter acquired by Eversharp.

2. On November 21, 1958, The Parker Pen Company, a Wisconsin corporation (hereinafter referred to as Parker) was joined as a party Plaintiff, Parker having acquired the patents in suit from Eversharp as of December 31, 1957, including all rights of recovery for past infringement.

3. On October 14, 1959, Eversharp and Parker filed an Amended and Supplemental Complaint, charging infringement of additional Parker-owned patents, Nos. 2,428,854 and 2,580,753 covering project-retract mechanisms.

4. On February 23, 1961, said patents, Nos. 2,428,854 and 2,580,753, together with said Biro patent 2,400,679, all covering project-retract mechanisms were, by stipulation of the parties, withdrawn without prejudice from this suit, leaving only Biro patents '636, '229 and '896 involved herein.

5. Defendants, in answering the original Complaint, filed a counterclaim charging Eversharp with misuse of the patents in suit, and in answering the Amended and Supplemental Complaint charged both Eversharp and Parker with misuse of the patents in suit. Eversharp has been retained as a party to this suit only for the purpose of adjudication of defendants' Counterclaim.

6. Paul C. Fisher is the owner, president and manager of Fisher Pen Co. (Fisher 917), an Illinois corporation which manufactures, distributes and sells ball point pens and ball point pen refill cartridges. Paul C. Fisher is also the owner of Pen-Pal, Inc., a California corporation which manufactures points for ball point pens, and he is the owner of William Pen Co., operating out of Forest Park, Illinois, which merchandises ball pens manufactured by Fisher Pen Co. (Fisher 91-93). From 1950 until 1954 Paul C. Fisher operated a sole proprietorship which manufactured and sold ball point pens and refill cartridges (Fisher 930).

7. The defendant, Paul C. Fisher, formed Fisher Pen Co. in 1954 for the purpose of continuing the activities of his sole proprietorship, i. e., the manufacture and sale of ball point pens and refill cartridges (Fisher 930). Mr. Fisher owns all of the outstanding stock of Fisher Pen Co., he is president and manager, he has personal control of the administration and management of that company, he is the guiding spirit of that company, he is the dominant or sole moving force, and he is the active controlling head of that company. As such, Mr. Fisher directed the activities of Fisher Pen Co. from the time of its inception, and he acted both before and after forming Fisher Pen Co. with full knowledge of the existence of the patents here in suit when he participated in and directed the manufacture and sale of infringing ball point pens and refill cartridges. It is clear that he used the other defendant, Fisher Pen Co., to carry on the infringement.

8. The patents in suit have to do with ball point pens, the '636 patent covering a ball mounting and ink feeding arrangement, the '229 patent broadly covering a continuous ink vein capillary type reservoir, and the '896 patent covering an improved form of continuous ink vein capillary reservoir.

9. The defendants Fisher Pen Co. and Paul C. Fisher have both manufactured and sold ball point pens and refill cartridges identified by plaintiffs as Type A (Fisher 75, 987) in the United States during the period beginning six years prior to the filing of the original Complaint in the present suit.

10. The defendant Fisher Pen Co. has also manufactured and sold ball point pens and refill cartridges identified by plaintiffs as Types A, B, C and D in the United States during the period beginning six years prior to the filing of the Amended and Supplemental Complaint in the present suit (Fisher 88, 89, 991, 992).

11. The defendant Paul C. Fisher has also manufactured and sold ball point pens and refill cartridges, including points of the type embodied in DX 526, in the United States during the period beginning six years prior to the filing of the original Complaint in the present suit (Fisher 947).

12. For years many people, both in the United States and abroad, had endeavored without success to devise a satisfactorily operable writing instrument using a ball as the writing element (Fehling 1529) but the ball point pen, as we know it today, originated with Laszlo Jozsef Biro, the patentee of the three patents in suit, who, at the time he conceived these basic inventions, was a Hungarian living in Argentina. Biro was neither an engineer nor a scientist. He was a journalist who, in 1943, pioneered in a new direction in the writing instrument field to produce and market the first commercially successful ball point pen, the principles of operation of which are illustrated and described in the three patents in suit (Fehling 1506, 1885, 1886).

13. Thousands of these Biro-made pens were sold during the first year (Martin 184) and they performed satisfactorily (Fehling 1507).

14. Once the practicability of a ball point pen incorporating the features he had devised had been demonstrated by Biro, the demand for the same was immediate, and beginning in 1944 many United States companies, including Parker, Eversharp, Eberhard Faber, Reynolds, Hamilton Ross, Eagle and Sheaffer vied for the United States rights to Biro's inventions (Martin 172), with Eberhard Faber and Eversharp finally succeeding in obtaining licenses (Martin 175) under the United States patent rights. Eversharp later acquired outright title to these United States patent rights at a cost of over $1,000,000 (Christensen 290).

15. In April of 1946 Eversharp put its first ball point pen on the market (Christensen 286, 295) calling it the Eversharp CA ball pen (Christensen 296), which pen employed the channeled spherical seat construction of the '636 patent (Exhibits 59, 60 and 61) and a continuous ink vein reservoir having the features disclosed in the '229 patent (Christensen 297).

16. The impact of the ball pen on the writing instrument field was extremely great, and a large number of new companies, as well as the old line pen and pencil manufacturers, quickly entered the business of manufacturing and selling ball pens in accordance with the teachings of these patents (Christensen 297-307). Many of these companies were granted licenses under the Biro patents in suit by Eversharp, and royalties in excess of $600,000 were paid under these licenses up to the time the patents were acquired by Parker (Christensen 308). Over $275,000 in royalties has been paid under these patents since Parker acquired them. Many other companies who did not take licenses were sued by Eversharp and stopped manufacturing. A number of other suits are now pending for infringement of these patents.

17. The Biro inventions were financed by Mr. Henry G. Martin, a British subject living in Argentina, who appeared as a witness at the trial, and who now controls the foreign patents corresponding to the Biro patents here in suit. He testified that he receives the equivalent of over $2,000,000 per year in royalties from the foreign ball point pen patents (Martin 162).

18. At Christmas time in 1945, shortly before the Eversharp CA pen came on the market, Reynolds put out the first ball point pen which was sold commercially in the United States. The Reynolds pen used a different seating arrangement from the '636 patent and a different reservoir than that disclosed in either of the '229 or '896 patents; the first Reynolds ball seat had no radiating channels between any spaced spherical seat sections (Lovejoy 1793) and the reservoir was a large diameter tank type reservoir with a porous plug, the purpose of which plug was to prevent the ink from leaking out of the rear end of the reservoir when the pen was inverted (Fisher 922).

19. The writing quality of the Reynolds pen without channels in the seat was satisfactory only when the pen was new; during use it quickly deteriorated to a very poor writing pen (Lovejoy 1811). The defendant, Paul C. Fisher, manufactured parts for this Reynolds pen and did research work on the Reynolds point which later was modified to incorporate distinct channels intentionally (or artificially) produced in the seat as taught by Biro in the '636 patent, and as used in the Eversharp CA pen which was then on the market. Many other companies, including Scripto, have experimented with and tried to market ball point pens utilizing seat organizations different from that of the '636 Biro patent, but such seats were unsatisfactory and were quickly replaced with the Biro seat (Lovejoy 1772).

20. Once the Biro inventions covered by the patents in suit became known to the public, large numbers of people and companies began experimenting with ball point pens and devising new and different types of seats and reservoirs, as evidenced by the large number of patents which were applied for shortly after Biro's pen came on the market. Prior to Biro's invention there were approximately 100 ball point pen patents in existence, and today there are almost 4,000 which were filed after 1944 (Fehling 1529).

21. In 1947, before going into the...