Globe-Union, Inc. v. Chicago Telephone Supply Co.

• Decision Date: 19 May 1939
• Docket Number: No. 6682.,6682.
• Parties: GLOBE-UNION, Inc., et al. v. CHICAGO TELEPHONE SUPPLY CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

103 F.2d 722 (1939)

GLOBE-UNION, Inc., et al. v. CHICAGO TELEPHONE SUPPLY CO. et al.

No. 6682.

Circuit Court of Appeals, Seventh Circuit.

April 4, 1939.

Rehearing Denied May 19, 1939.

Frank H. Hubbard, of Milwaukee, Wis., for appellants Cutler-Hammer, Inc., George J. Meuer and William C. Stevens.

George I. Haight and M. K. Hobbs, both of Chicago, Ill., and John W. Michael and Gerrit D. Foster, both of Milwaukee, Wis., for other appellants.

George L. Wilkinson and Howard W. Hodgkins, both of Chicago, Ill., for appellees Chicago Telephone Co. and Newton Schellenger.

Before EVANS, MAJOR, and KERNER, Circuit Judges.

KERNER, Circuit Judge.

This appeal involves a contest among rival inventors¹, who claim priority of invention in a certain rheostat-snap switch mechanism defined in a single count² as follows:

"In combination a volume control comprising a circular resistance, a contact arm for varying said resistance, a rotatable actuator shaft on which said contact arm is mounted, a projecting pin eccentrically mounted on said shaft, a casing enclosing said volume control, an aperture in said casing, an auxiliary recessed casing closing said aperture, a snap-switch contained in said auxiliary casing, and an actuating arm for said snap-switch operable by said projection at one extreme of its cycle."

The three inventors involved filed applications³ in the United States Patent Office at about the same time: Schellenger's, serial No. 602006, on March 30, 1932; Stoekle's, serial No. 602855, on April 2, 1932, which was referred back to his prior application, serial No. 532138, on April 23, 1931; and Meuer's and Stevens', serial No. 537774, on May 16, 1931. An interference was declared and the case was heard by the Examiner of Interferences of the United States Patent Office, who awarded priority of invention to Schellenger. An appeal was taken to the Board of Appeals of the United States Patent Office, which affirmed the decision of the Examiner of Interferences, whereupon Stoekle and Globe-Union Inc., assignee of the Stoekle claim, brought an equity suit under R.S. § 4915, 35 U.S.C.A. § 63, to adjudicate the question of priority. This appeal was taken from the district court's decree⁴, which favored the Schellenger claim to priority of invention.

Disposition of this appeal depends on the answer to the following question: Which inventor was entitled to a patent on the combined volume control and switch-unit described in the co-pending applications before the Patent Office? To give response to this question, it is imperative that we in turn answer two factual issues: Was Schellenger, the first conceiver, the first to reduce his conception to practice? And, if Schellenger is not the first reducer, was he reasonably diligent in reducing his idea to practice? Since the district court found for Schellenger, it is necessary that Stoekle convince this court thoroughly that Schellenger was not entitled to a favorable answer to both questions. Morgan v. Daniels, 153 U.S. 120, 14 S.Ct. 772, 38 L.Ed. 657; Gold v. Gold, 7 Cir., 237 F. 84.

A suit in equity between interfering claims is an original action, in general independent of earlier Patent Office interferences, and the issues therein are tried de novo upon all competent evidence, old or new. Courson v. O'Connor, 7 Cir., 227 F. 890; Uihlein et al. v. General Electric Co., 7 Cir., 47 F.2d 997, 999. The old evidence, i. e., the testimony contained in the Patent Office record, follows:

Stoekle filed his application on April 23, 1931, and Schellenger filed his application on March 30, 1932. Stoekle fixed the date of conception as about September 16, 1929 and the date of reduction to practice on January 10, 1930, whereas Schellenger fixed conception on April 18, 1928 and reduction to practice as about May 13, 1928. The dates submitted by Stoekle are not disputed. On the other hand, dispute exists over the dates fixed by Schellenger. The entire record in the interference proceedings was by depositions and exhibits.

1928 work: Schellenger, electrical engineer for the Chicago Telephone Supply Company which manufactured radio supplies, testified that he conceived the built-in radio control device on April 18, 1928. For corroboration he pointed to his 1928 diary, the appropriate calendar entry of which revealed drawings of the improved art here in question. In addition, three supervisory employees of the company and Mrs. Schellenger testified that they saw the drawings of the 1928 diary in the spring of 1928, while sales executive Hill and President Best stated that Schellenger had disclosed his conception to them.

Schellenger then testified that on May 13, 1928 he reduced his concept to practice by making the combined rheostat switch and successfully installing it in his own personal battery-operated radio receiving set at home. This testimony is supported by the diary, the three supervisory employees (Kehres, Steely, McMeekan), and Mrs. Schellenger. Schellenger continued by stating that thereafter the control arrangement was removed to the factory to serve as a guide for his second sample and that on August 5 of 1929 the original device was given a life-test on 110-125 volt A. C. current. This life-test was described in the diary and the device was seen at the life-testing machine by two of the three supervisory employees, by one Smead (a former supervisory employee who had gone to the plant on that particular day to see about a job), and by one Tait (an employee who was told by Kehres that the unit he saw being tested was a combination rheostat and snap-switch).

On the other hand, neither the 1928 original device nor the 1928 second sample was produced in evidence, Schellenger explaining that they had been mislaid and that a diligent search had been made in vain. A duplicate of the 1928 original device, made several days before these depositions were taken, was offered in evidence, and described generally by the corroborating witnesses, Mrs. Schellenger and the three supervisory employees, as being similar to the original. Except the diary, no records were kept of the 1928 radio test and of the 1929 life-test. Moreover, these corroborating witnesses testified in October of 1934 from memory concerning events in 1928 and 1929.

1930 work: Schellenger testified that in 1930 little work was actually done on the control unit in question. He gave increased production tasks and bad health as reasons for this inactivity. This testimony was corroborated by other witnesses. Schellenger then stated that in the spring of 1930 he turned over the development of the rheostat switch unit to engineer Haselwood, who testified that he did not work much on the unit in 1930. Schellenger said that he gave verbal instructions and sketches to Haselwood, that he directed him to make drawings and samples, and that he gave greater thought to the whole matter during the latter part of 1930.

The record also showed that during 1928, 1929, 1930, and 1931 Schellenger and his company stressed the development, improvement and manufacture of the bracket or outrigger types of rheostat switch construction. Giving most of his time and activity to the production of the outrigger combinations (which were in demand by the trade), neglecting the built-in control unit (which admittedly was vastly superior), and saying that the new unit had been so developed by 1930 that a high school boy following instructions could have finished it, is also shown by the record in the interference proceedings. In addition, neither records nor drawings nor sketches were produced in evidence as representing what work was done in 1930.

1931 work: Schellenger testified that the final work on the rheostat switch device was started in January of 1931. Haselwood corroborated this testimony and stated that he had supervised the making and testing of samples in February, March, April, and May. Some of these samples were produced in evidence and the activity was supported by the 1931 diary. Abel and Veatch, employees who made the samples, also corroborated this testimony. Time cards of Abel and Veatch were produced which showed that in June of 1931 they had been working overtime, and late in June Haselwood obtained the approval of the samples by the Underwriters' Laboratories. The company began to manufacture the built-in rheostat switch in late summer of 1931.

The record revealed other evidence. Thus, Haselwood stated that in March Stoekle had advised Schellenger that Cutler-Hammer, manufacturer of bracket and barnacle (built-in) switches, was making exclusively for Stoekle's combination unit a "switch to go in the cover," and Schellenger testified that it was not until after he had completed his unit and sometime late in 1931 that he saw the Stoekle unit.

On the other hand, Phillips, sales executive for Cutler-Hammer, testified that sometime in April of 1931 Schellenger had expressed an interest in the barnacle or built-in switch which was then used in the Stoekle combination rheostat and snap-switch unit.⁵ Phillips introduced in evidence a letter from Schellenger, dated April 25, 1931, which acknowledged this interest in the following way:

"I have one of your new switches on my desk and must say that the same impresses me very favorably."

This letter was addressed to Greenman, Cutler-Hammer salesman, and Phillips did not have personal knowledge that the switch referred to in the Schellenger letter was the switch used by Stoekle.

Lastly, in explaining the delay in filing an application for a patent, Schellenger testified that the company was not "patent conscious" at the time and that therefore it was then their policy to delay until they had perfected the device commercially. Yet, during 1928, 1929, 1930, and 1931 at least 25 patents had been issued to the company with Schellenger appearing as inventor of most of the patented devices.

The Board of Appeals in the United States Patent Office found on the record related above...