Gates Rubber Co. v. BF Goodrich Rubber Co.

• Court: U.S. District Court — District of Colorado
• Citation: Gates Rubber Co. v. BF Goodrich Rubber Co., 45 F.2d 652 (D. Colo. 1930)
• Decision Date: 19 November 1930
• Docket Number: No. 8739.,8739.
• Parties: GATES RUBBER CO. v. B. F. GOODRICH RUBBER CO.
• Writing for the Court: SYMES

45 F.2d 652 (1930)

GATES RUBBER CO. v. B. F. GOODRICH RUBBER CO.

No. 8739.

District Court, D. Colorado.

November 19, 1930.

A. J. O'Brien and W. F. Denious, both of Denver, Colo., for Gates Rubber Co.

Dines, Dines & Holme, Tyson Dines, Jr., and Robert E. More, all of Denver, Colo., and Merrell E. Clark, of New York City, for B. F. Goodrich Rubber Co.

SYMES, District Judge.

This is a patent infringement suit involving the two Gates patents; No. 1,354,738, a process for manufacturing endless V-shaped belts, dated October 5, 1920, application filed March 21, 1919; and No. 1,400,539, for endless belts, dated December 20, 1921, application filed March 19, 1919. The complainant, the Gates Rubber Company, is the owner of both patents by assignment from its president, the inventor, Charles C. Gates.

For convenience, the first patent will be referred to as the process patent; the second as the product patent for an endless belt, manufactured according to the process set forth in the other patent. The defendant, the B. F. Goodrich Rubber Company, is the sales subsidiary of the B. F. Goodrich Company of Akron, Ohio, a large manufacturer of rubber products.

First. We will direct our attention to the so-called process patent, No. 1,354,738. The definition of, and considerable law applicable to, process patents, is found in Expanded Metal Co. v. Bradford, 214 U. S. 366, 29 S. Ct. 652, 53 L. Ed. 1034, and need not be quoted here.

The defendant is charged with contributory infringement of this patent, because it purchases and sells in this district, and elsewhere, endless belts made by the said B. F. Goodrich Company of Akron, Ohio, under a process alleged to infringe this patent. Its defenses are: (1) That the so-called Goodrich process does not infringe; (2) that the Gates patent is invalid for anticipation; (3) that, even if the Goodrich process does infringe, no cause of action arises against this particular defendant, because, while it purchases and sells belts made by the Goodrich Company, it does not manufacture, and has neither used the process, nor contributed to its use, so is not guilty of contributory infringement.

Defendant's answer to plaintiff's interrogatories admits it is a subsidiary corporation of the B. F. Goodrich Company, manufacturer of the alleged infringing belts, and sells as resale agent practically the entire output of belts made by said parent company, and none other, within this district and elsewhere. Attached to the interrogatories as part of its answer are three contracts between the two Goodrich Companies of successive dates. These disclose a very intimate and continuous business relationship existing since 1917.

Defendant relies upon the well-established rule that a patent for process only, as distinguished from a product patent, is not infringed by mere sale of the infringing article. Contributory infringement, such as is charged here, according to the authorities, is the intentional aiding by one party of another in the carrying out of an infringing act. The answers to the interrogatories, and the contracts above referred to, disclose a far closer relationship between the two Goodrich companies than that resulting from the mere sale of its product. Defendant's authorities on this point, therefore, are not applicable to the instant case. It is established that defendant agreed to, and has for many years devoted its sole efforts to, the promotion and sale of the products of the alleged infringer. It is required to sell a minimum of $35,000,000 worth of its goods a year; to devote its best energies to the promotion of these sales throughout the whole of the United States as its exclusive territory; to take all its requirements of such merchandise from the parent company in a sum not less than $35,000,000 a year. At one time the parent company even went so far as to guarantee that the defendant would earn a net profit of not less than 5 per cent. upon its outstanding capital stock, etc. In another it recites that the goods required to be taken by defendant amounted to practically its entire output of these belts. These and other proven facts dispose of the claim that defendant merely buys belts of the parent company over the counter, from stock in hand, as other dealers might do. On this feature of the case General Electric Co. v. De Forest Radio Co. (C. C. A.) 28 F.(2d) 641, supports plaintiff's contentions. The chancellor will always disregard the corporate entity in determining the real relation between two corporations.

The process patent is for a method of forming endless belts — preferably of the so-called V-shape type; that is, having sloping side walls designed to contact with the adjacent sides of a grooved pulley, the inner face of the belt not touching the bottom of the groove, so that the belt tends to wedge into the groove, thus insuring a tight contact with the pulleys. Plaintiff's belt is used almost exclusively for connecting the fan of automobiles with the main shaft. The two pulleys that these belts work over are small and of different diameters. This service requires a belt that will not slip and capable of withstanding an unusual amount of flexing.

The Gates process is described in the patent as follows:

"My invention relates to a process of forming endless belts, preferably the V-type, or having sloping walls which contact with the adjacent sides of a grooved pulley, the inner face of the belt not touching the bottom of the groove, whereby the belt wedges in the groove and thus insures tight contact with the pulleys. The belt to be formed by this process * * * is composed of rubberized cords, or other suitable material, constituting the structural element, or the element which gives strength or backbone to the belt, while the wearing feature of the belt consists of rubberized woven fabric whose warp and woof form oblique angles to the direction of the belt."

The principal piece of apparatus used is a drum mounted on a revolving shaft (Fig. 1 of the patent), with a circular peripheral groove or cavity, having a cross-section suitable to give the belt the desired shape. A plurality of these drums may be mounted in series on the same shaft. Into this groove is first laid one or more strips of rubberized fabric, cut on the diagonal, so that its warp and woof extend at oblique angles to its length. This material lines the cavities and forms the outer covering of the completed belt. Next there may be wound into the groove on the cover strip one or more similar layers or strips of similar material. This second strip, however, is not essential. Then several convolutions of rubberized cord, or fabric, are conveniently wound into the groove on top of these strips. These cords running lengthwise form the neutral axis or backbone of the belt, and do not stretch when in use. In place of cords, rubberized woven fabric may be used, in which one set of threads extends in the direction of the belt, making this element non-elastic. Then the margins of the cover strip (the first strip inserted) are folded over each other, so that two or more layers of fabric are outside of the cord section. Next, layers of rubber may be placed in the outer portion of the cavity. The open periphery of this groove is closed with a convenient casing, so as to completely inclose the belt, which is then vulcanized. After vulcanization the casing is removed, and the drum, which is built in convenient sections, is so divided by the removal of one of the sections that the completed belt is easily slipped off sideways. In practice, the shaft is rotated and the sheets of rubberized fabric and the cords are conveniently and quickly wound into the grooves through the open periphery of the mold in the manner described.

When so operated, and as soon as the proper number of convolutions of cord are placed in the first cavity, the cord is automatically crossed over to the next cavity, as indicated (Fig. 22 of the drawings), and this operation continued until all the cavities are supplied with one or more convolutions of cord. As soon as this is done, the fabric, or cord, can be cut with knives arranged for that purpose, and the exposed ends properly placed in the cavities.

The object of applying the outer layer or layers of the rubberized fabric to the grooves of the drum, so that the warp and woof of the fabric form oblique angles to the direction of the belt, is to give the latter a limited degree of elasticity beyond and outside of the cords. This permits the flexing of the belt freely when bending over a small pulley it is designed to be used on, without in any way injuring the material thereof.

The so-called Goodrich process complained of follows the Delzell patent, No. 1,657,300, January 24, 1928 (Plaintiff's Exhibit 11), No. 2 of the appendix of drawings. The process there disclosed, having the product patents in mind, may be briefly described as follows: A smooth-surfaced building drum, freely rotatable, is set up on a stationary shaft, having its periphery slightly tapered toward one end, for the purpose of reducing the force necessary to roll the belt components upon each other, when such rolling takes place from the larger towards the smaller diameter of the drum, as hereafter described. Around the left end or largest diameter of this drum is laid flat and circumferentially a core-forming band of friction-coated or otherwise rubberized straight-laid thread fabric (12, Fig. 1). This piece extends around the drum, and is brought together in a loop splice, as indicated in Fig. 1.

Next to this is laid an inner or intermediate filler band (14), of...