Gonser v. Leland Detroit Mfg. Co.

• Decision Date: 19 April 1940
• Docket Number: No. 15.,15.
• Citation: Gonser v. Leland Detroit Mfg. Co., 293 Mich. 196, 291 N.W. 631 (Mich. 1940)
• Parties: GONSER v. LELAND DETROIT MFG. CO.
• Court: Michigan Supreme Court

293 Mich. 196

291 N.W. 631

GONSER

v.LELAND DETROIT MFG. CO.

No. 15.

Supreme Court of Michigan.

April 19, 1940.

Suit by John C. Gonser against the Leland Detroit Manufacturing Company for specific performance of a contract to assign improvements and modifications of a patent to plaintiff. From a decree granting specific performance, the defendant appeals.

Decree set aside and case remanded for an accounting and adjudication of other rights plaintiff might establish under contract relating to the invention.

Appeal from Circuit Court, Wayne County, in Chancery; Allan Campbell, judge.

Argued before the Entire Bench.

Frank C. Sibley, of Detroit, for appellant.

Johnston, Fast, Gazley & Huhn, of Detroit, for appellee.

BUTZEL, Justice.

Plaintiff invented a ‘Meat Tenderizer and Cutter’ and was granted patent No. 2,025,505 on December 24, 1935. The invention differed in some limited but important details from the devices known in the prior art. Defendant is a manufacturer of automotive parts and other specialties. Plaintiff and defendant entered into a contract whereby defendant agreed to manufacture and sell the machine invented by plaintiff, and to make a proper accounting and pay the agreed royalties. It was provided that the rights of the parties should terminate in 30 days after notice to that effect. Such notice had been given. The clause occasioning the present litigation provides: ‘It is mutually agreed that should second party make any improvements or modifications of said invention, that said first party shall have the right to the use thereof during the life of this contract, and that should said first party, at any time, hereafter, make any improvements or modifications of said invention, that such improvements and modifications shall become the property of the said second party and first party does hereby assign and transfer to second party all such modifications and improvements, and said first party shall manufacture all tnederizers in accordance with such specifications and designs as shall be approved by second party.’

Plaintiff contends that defendant has made an improvement or modification of the invention which in equity belongs to him; defendant contends that its new device is entirely different from the patented features of plaintiff's machine, that its new tenderizer is based on different principles or the prior art which is now public domain. Defendant also refers us to unexpired patents belonging to third parties. We are reviewing the decree of the trial court granting specific performance of the contract.

We are confronted at the outset with a challenge to our jurisdiction of the subject matter. Defendant says that because a United States patent is the subject of the contract here sought to be enforced, the exclusive jurisdiction of the controversy is in the courts of the Nation. The answer is that the suit arises out of a contract and depends on common law and equity principles. Our power to adjudicate does not vanish because in deciding we have to grant or deny a prayer for the transfer of patents or patentable rights. Becher v. Contoure Laboratories, 279 U.S. 388, 49 S.Ct. 356, 73 L.Ed. 752;Nichols, Shepard & Co. v. Marsh, 61 Mich. 509, 28 N.W. 699, affirmed sub nom. Marsh v. Nichols, Shepard & Co., 140 U.S. 344, 11 S.Ct. 798, 35 L.Ed. 413;Paul v. Collins, 191 Mich. 113, 157 N.W. 400;Goodman v. Wobig, 216 Mich. 51, 184 N.W. 532;Nahikian v. Mattingly, 265 Mich. 128, 251 N.W. 421.

To laymen, the device would immediately suggest a narrow old-fashioned wash wringer with rolls about six inches long placed far enough apart to permit a piece of meat to be run between them. The steel rolls resemble large, symmetrical ears of corn with rows of kernels of uniform size, in the middle of which are inserted small projecting steel knives that are perpendicular to the roller shaft. The kernels or teeth are arranged in the same plane with those of the opposing roll and mesh when the rolls are turned, each kernel or tooth projecting into the interdental space on the opposite roll. The entire mechanism is enclosed in a steel box, for which no claim is made here. The box has a wide slot opening at the top through which a piece of meat may be inserted. The meat is tenderized at it passes between the rolls by the cutting action of the knives and the crushing process of the teeth.

We think the main claim of novelty in plaintiff's patent is described in the first claim: ‘In a meat tenderizer, a supporting casing, a shaft supported rotatively therein, pairs of crushing gears carried by the shaft, cutter members arranged between the gears of each pair of gears, spacers arranged between the said pairs of gears to space the pairs apart, a stationary shaft having oppositely threaded ends, bearings for said threaded ends, the said bearings being provided with springs arranged to act against the interior of the casing whereby said bearings are normally pressed away from said revoluble shaft, the said bearings and the casing having engaging inclined portions whereby when said stationary shaft is turned said bearings move the stationary shaft parallel with respect to said revoluble shaft, and a revoluble mandrel on said stationary shaft, the said mandrel being provided with pairs of crushing gears with interposed cutter members and spacers, and the said cutter members carried by either shaft being constructed and arranged to extend between the pairs of gears on the other shaft and to the said spacers.’

It appears that defendant was not successful in selling this device, it having sold only 550 or 600 up to the time it received notice of the termination of the contract. The failure is ascribed to the breaking off of the small knives, of which there were over 350 on the two rolls. Frequently the broken steel would get into the meat, and defendant claims it was threatened with suits for personal injuries by persons who claimed to have been injured by eating processed steak in which bits of the knife blades were embedded. Defendant further claims that it was constantly called upon to replace the broken knives, and many customers complained that the device was difficult to clean and maintain in a sanitary condition.

After plaintiff had given notice of termination of the contract, but before the expiration of the thirty-day period, defendant was manufacturing and preparing to market a new machine, on which it has applied for letters patent. The new machine is housed in the same box, but the rolls do not have any cutter knives or blades. It does not have gears which crush the meat. The rolls have a series of star-shaped discs which have concave edged teeth, as distinguished from the convex teeth of plaintiff's machine. Each disc of the two rolls is not arranged in the same plane with the corresponding disc of the opposite roll so as to mesh, as they do in plaintiff's machine, but each meets its correspondent side-by-side in the plane adjacent; a tooth on one roll projects beside the interdental space of the opposite roll, so that there is a scissor-like action on the meat instead of a crushing and cutting operation.

It is contended by defendant that its new tenderizer had been made after the contract had been terminated and that, therefore, the contract gave plaintiff no rights therein. The trial court found that ‘this improvement was contemplated and largely developed before the termination of the contract.’ This finding is amply supported by the evidence, and we are not inclined to disturb it.

The main question concerns the construction to be given the contractual expression ‘improvements or modifications of said invention.’ Did the contract grant to plaintiff every device that defendant might conceive in the art in general, or is this language to be given a more limited scope? Defendant claims that its new machine is for the most part copied from the prior art, with possibly some new feature on which it is seeking letters patent, and that the contract does not deprive it of the right which it would otherwise have with the rest of the world to partake of the public domain; plaintiff contends, as the trial court found, that ‘defendant undertook to develop a market for a rather special device, and had built up somewhat of a trade through the use of the Gonser patent, and the fruits of such business development was contemplated by the parties to be a valuable right which Gonser had a right to reserve and which the defendant agreed to regard as his own property.’ We think this conclusion is erroneous. The tenderizing of meat by rollers was not a new art. There were other devices on the market. There was no agreement by defendant not to go into the same line of business before the termination of the contract or not to use old processes open to the public or new ones constituting new inventions; it agreed to regard as plaintiff's property only improvements ‘of said invention.’ The trial court's holdings are not in accord with the language of the contract and the decided cases interpreting similar contracts.

American Cone & Wafer Co. v. Consolidated Wafer Co., 2 Cir., 247 F. 335, 336, was a bill for specific performance of a contract to assign a patent ‘together with all rights and privileges thereunder, as well as all improvements that may be made thereto or thereunder.’ Judge Learned Hand wrote: ‘We think it clear that the purpose of the language used was not to subject every future cone baker which Groset might devise to the assignment; the improvements covered by the phrase were those to that machine, not to the art in general. Every more efficient machine would be an improvement ‘upon’ it, in common speech, but not ‘to’ it. We attach significance to the word ‘thereto’, and we should attach an added significance as well to ‘thereunder,’ if we could find any meaning for it. As it is, it seems to us rather a bit of scrivener's verbiage. It is, of course, true that any improved cone baker might supersede that...