GRIDIRON STEEL COMPANY v. GEUDER, PAESCHKE & FREY COMPANY
| Decision Date | 21 January 1970 |
| Docket Number | Civ. A. No. 66-C-39. |
| Citation | 308 F. Supp. 1198 |
| Parties | GRIDIRON STEEL COMPANY, Plaintiff, v. GEUDER, PAESCHKE & FREY COMPANY, Defendant. |
| Court | U.S. District Court — Eastern District of Wisconsin |
Elwin A. Andrus, Milwaukee, Wis., and Harold K. Bell, Robert J. Fay and David B. Deioma, Cleveland, Ohio, for plaintiff.
Maxwell H. Herriott and Donald G. Casser, Milwaukee, Wis., for defendant.
Plaintiff, Gridiron Steel Company ("Gridiron"), is a patent holding corporation organized and existing under the laws of the State of Ohio and having its principal office and place of business at Cleveland, Ohio. Defendant, Geuder, Paeschke & Frey Company ("Geuder"), is a corporation organized and existing under the laws of the State of Wisconsin having its principal place of business at Milwaukee, Wisconsin.
This court has jurisdiction based upon diversity of citizenship and the amount in controversy which, exclusive of interests and costs, exceeds $10,000.
Gridiron seeks to recover damages for the breach of a patent license agreement between it and Geuder which relates to metal ironing tables. The license agreement was executed in 1940 and was amended in 1947 and in 1950.
The royalties claimed under this agreement are predicated on four patents* relating to metal ironing boards, which patents were in effect when the controversy arose. The validity of these patents is not an issue, and the parties have stipulated that for the purposes of this litigation, it may be assumed that the tables involved are covered by these patents.
Geuder had never manufactured ironing tables of any construction prior to 1940.
This matter was tried to the court without a jury. Based upon the evidence presented at trial, the extensive stipulation of facts filed by the parties, and the exhaustive briefs submitted by counsel, herewith is my decision and findings of fact and conclusions of law pursuant to Rule 52 of the Federal Rules of Civil Procedure.
This dispute involves three types of ironing table tops. Geuder manufactured and sold these tables under numerous model numbers. For convenience, these tables will be described and referred to by the exhibit numbers used throughout this lawsuit.
The top of Exhibit 5 is known as a full grid top and has a single top metal sheet. The bottom structure of Exhibit 5 has a sheet with longitudinal channels pressed out of their normal plane to form rigid braces. The lower sheet is attached to and supports the upper sheet.
Exhibit 5 was sold under two trade-marks: (1) MET-L-TOP as Model Nos. C-605, C-607, and C-680, and (2) GLIDE EASY as Model Nos. P-510, P-610, and P-620.
The top of Exhibit 10 has a top sheet identical to that of Exhibit 5. The bottom structure of Exhibit 10 was basically the same as Exhibit 5 except that some center portions of metal were removed from between the longitudinal channels. Exhibit 10 was sold under the trademark GLIDE EASY as Models C-608 and C-609.
The top of Exhibit 11 has an identical top as that of Exhibit 5 and Exhibit 10 except that the channels of the under structure are transverse instead of longitudinal. Exhibit 11 was sold under the trademark GLIDE EASY as Model Nos. C-150, P-101, and P-100.
The issue is which, if any, of the clauses in the 1950 amendment to the licensing agreement are applicable to the table tops in dispute.
Gridiron claims that all of the table tops involved here were covered by this agreement. Geuder claims that the disputed table tops are not covered by the contract, or, if they were, then they are "other tables" as to which the parties specifically left the royalty fee to future negotiation. The 1950 amendment to the 1940 license agreement reads as follows:
"December 31, 1950 Geuder, Paeschke & Frey Company 324 North Fifteenth Street Milwaukee 3, Wisconsin
Gentlemen:
In the contract between Gridiron Steel Company and Geuder, Paeschke & Frey Company cancel the first full paragraph of section 4, as revised in February 1947, and substitute therefor the following:
`4. Geuder agrees to pay Gridiron a royalty fee on ironing tables embodying ironing table tops sold under this contract in the year 1950 from the date of this revision and each calendar year thereafter as follows:
In Nos. 2 and 3 the base price on which the royalty has been figured at 2½% is to go up or down with changes in the retail sales price of the tables. As an example, if the base price of tables Nos. P-600 and A-606 change from $7.95 and $8.95 to $8.95 and $9.95 then the base price shall change from $4.00 to $4.50 and the base price of Nos. 3 and 5 will change in the same manner with the change in the retail price of the article.
In the event that other tables are to be made, then in each such case a new royalty rate shall be agreed upon between the parties, such royalty to be based approximately on the present schedule as outlined above.
Executed in duplicate, this 31st day of December, 1950 and effective as of the 26th day of April, 1950.
(Corporate Seal) Attest: GRIDIRON STEEL COMPANY /s/ Thos. H. Fay By /s/ Horace B. Fay Treasurer. President (Corporate Seal) Attest: GEUDER, PAESCHKE & FREY COMPANY /s/ H. J. Stephany By /s/ August K. Paeschke President"
The 1950 amendment does not list every type and model manufactured by defendant.
Geuder asserts that the 1950 royalty schedule is not enforceable as to any models not specifically referred to in that amendment. The basis of this position is that (1) one or two model numbers are included in each of five clauses setting forth the various methods of royalty computation, and (2) the concluding clause of the 1950 amendment states:
"In the event that other tables are to be made, then in each such case a new royalty rate shall be agreed upon between the parties, such royalty to be based approximately on the present schedule as outlined above."
Geuder further takes the position that any ironing table not specifically mentioned in the 1950 amendment is an "other table" as to which no royalty is due until agreed upon by the parties.
The conduct of the parties is relevant to determine what classification they intended to apply to the various types and models.
Commencing in May 1954, and up to September 1, 1957, when Geuder sold its rights under the license agreement to Jones & Laughlin Steel Corporation, Geuder made 405,439 ironing tables composed of all three types and numerous models on which royalties were not paid.
After the 1950 amendment, and up to September 1, 1957, Geuder paid Gridiron royalties on tables with tops of the type in Exhibit 5. Some of these tables had been sold under the trade name of "MET-L-TOP" at a "fair trade" price, and as to these, the royalty paid was 2½% of the base price which Geuder charged its customers. Other of the Exhibit 5 types of tables were marketed under the trade name of "GLIDE EASY," and as to these a royalty of $0.05 per table was paid.
Geuder's records for 1955, 1956, and 1957 show that tables having Model Nos. P-610, P-620, C-608, C-609, C-150, P-101, and P-100 were listed as "promotional" with a $.05/table royalty opposite the model number and the amount of units produced. As seen from the 1950 amendment, the category of "competitive tables" in the 1950 amendment is the only one for which a $.05/table royalty is due. All of these models listed as promotional were marketed under the trademark "GLIDE EASY." Geuder paid royalties on various models of ironing tables which were not listed in the 1950 amendment, e. g., the C-605 and C-607 tables.
For a period of time Geuder paid $.05/table royalty on the C-608 and C-609 ironing tables. A credit was subsequently taken by Geuder for the royalties paid on the C-608 and C-609 tables for the express reason that they were not covered by the patents now in suit.
Geuder itself equated one of the inexpensive GLIDE EASY tables, the P-510, listed as "competitive" in the 1950 amendment with promotional type tables listed in its records. It did so in one of its brochures where it states:
Gridiron previously instituted a suit against Geuder's assignor of the license in suit, Jones & Laughlin Steel Corporation ("J & L"), in the Northern District of Ohio, Eastern Division, Civil Action No. 35,145, seeking inter alia recovery of royalties under the license agreement and obtained a judgment against J & L for $.05/table royalties based upon J & L's production of the C-150 tables (Exhibit 11) which were also produced by defendant. Gridiron Steel Co. v. Jones & Laughlin Steel Corp., 142 U.S.P.Q. 264 (N.D.Ohio 1964), aff'd 361 F.2d 791 (6th Cir.1966). It was there specifically held that the lower structure of Model C-150 (Exhibit 11) was a discontinuous sheet. The Sixth Circuit Court of Appeals found that the C-150 was a competitive table for which a $.05/table royalty was due.
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H. M. Chase Corp. v. Idaho Potato Processors, Inc.
...208, 308 P.2d 732 (1957). Therefore, the applicable state statute of limitations is determinative. Gridiron Steel Co. v. Geuder, Paeschke & Frey Co., 308 F.Supp. 1198 (E.D.Wis.1970). 'Where money is payable in installments, the statute of limitations begins to run against a cause of action ......