GS Suppiger Co. v. Morton Salt Co.

• Decision Date: 11 March 1941
• Docket Number: No. 7356.,7356.
• Citation: 117 F.2d 968
• Parties: G. S. SUPPIGER CO. v. MORTON SALT CO.
• Court: U.S. Court of Appeals — Seventh Circuit

117 F.2d 968 (1941)

G. S. SUPPIGER CO. v. MORTON SALT CO.

No. 7356.

Circuit Court of Appeals, Seventh Circuit.

January 14, 1941.

Rehearing Denied March 11, 1941.

Robert H. Wendt, of Chicago, Ill., for appellant.

Clarence E. Mehlhope and Clarence F. Poole, both of Chicago, Ill., for appellee.

Before EVANS and KERNER, Circuit Judges, and LINDLEY, District Judge.

EVANS, Circuit Judge.

Plaintiff sued defendant for infringement of its patent No. 2,060,645, covering a "tablet depositing machine." Both validity and infringement of said patent were denied. After defendant had taken the deposition of two of plaintiff's officers, it moved for summary judgment, and its motion was granted, upon the ground that the testimony showed plaintiff was using its patent to secure a monopoly of a non-patented article, to-wit, salt tablets.

The District Court, taking its guidance from the holdings in American Lecithin Co. v. Warfield Co., 7 Cir., 105 F.2d 207, 212; Leitch Mfg. Co. v. Barber Co., 302 U.S. 458, 58 S.Ct. 288, 82 L.Ed. 371; Carbice Corp. v. American Patents Development Corp., 283 U.S. 27, 51 S.Ct. 334, 75 L.Ed. 819; Ethyl Gasoline Corp. v. United States, 309 U.S. 436, 60 S.Ct. 618, 84 L.Ed. 852, found:

"2. Plaintiff and its predecessor, Scientific Tablet Company, now dissolved, since 1927 have been in the business of manufacturing and selling salt tablets of predetermined content for use in the canning industry in lieu of loose salt or brine. They also manufactured or had manufactured for them machines under the patent in suit and also other machines under patents owned by them for depositing salt tablets. They did not sell but leased said machines made under the patent in suit and their other patents to commercial canners of vegetables, as tomatoes, and the like, in the many states wherein such canners are located. The leases were in writing and included a license to use the patented machine, upon the condition and agreement by the lessee that plaintiff's and its predecessor's salt tablets be used exclusively in said patented, leased machines.

"3. Plaintiff's salt tablets have a particular configuration which is required for use in plaintiff's depositing machines for continuous, untroubled use. But plaintiff's salt tablets are not patented. And anyone may lawfully make and sell them.

"4. The manufacture and sale of the salt tablets is and was the main business of plaintiff's predecessor and of plaintiff after it acquired that business in June, 1928, and which it has since carried on as a subsidiary company. The end and aim of the business was and is the sale of the salt tablets in which its profits lie. The patented depositing machine of the patent in suit and of other patents is a mere secondary adjunct.

"5. The defendant is in the business of mining, processing and selling salt for commercial canning and for other purposes. It also makes and sells salt tablets such as those made and sold by plaintiff for use in the canning industry. It also makes and leases salt tablet depositing machines to canners, and in particular the salt depositing machines charged to infringe the patent in suit. Defendant's salt tablet depositing machine is not patented."

"7. There is no genuine issue as to any material fact involved in the case."

The Facts. Plaintiff is a canning company which owns and operates a wholly owned subsidiary devoted to making and leasing a patented tablet depositing machine and to making and selling salt tablets of a particular design and configuration.

This last-named business is much smaller than plaintiff's main business, which is canning.

In addition to the principal use as a salt depositor, the machines have also been sold for "separating, picking up and depositing gelatine-enclosed lemon oil capsules."

Plaintiff and its predecessor pioneered in the salt tablet industry (placing salt of predetermined quantity in a definite amount of canned vegetables, through the use of salt tablets deposited by a machine) as applied to the canning industry and developed it to its present success.

Dismissal of its suit was due, not to the invalidity or non-infringement of its patent (which was not litigated) but to plaintiff's alleged efforts to monopolize the salt tablet business by inserting in its lease (paragraph 2) a provision that the licensee or lessee should use no salt tablets in said machine, not made by plaintiff.

Defendant also makes and licenses a tablet depositing machine. It has continuously operated its business since 1927. Its machine is allegedly an infringement of plaintiff's patent. It also leases its machine to the trade and provides in its lease that the lessee shall use only salt tablets made by it.

The summary decree dismissing plaintiff's suit was based on plaintiff's use of its patent to develop a monopoly of an unpatented article, to-wit, salt tablets.

The extent to which a patentee is prevented from enjoining the infringement of his patent, if he be also guilty of using it to develop a monopoly in an unpatented product, which is made by or used in the patented article, has been considered and defined in several cases. The four leading cases are cited above.

This court announced the test which should be applied, in American Lecithin Company v. Warfield, supra, in this language:

"Stated in another way, the underlying question in each case is directed to the inquiry as to whether the patentee's activities are within or beyond his domain. In determining when courts will interfere with the patentee's power to sue infringers (contributory or direct), it is necessary to take into consideration whether, as a practical matter, the exercise of the patent monopoly will result in a limited monopoly in an unpatented commodity, and whether the patentee seeks to derive his profits not from the invention itself but from the unpatented supplies used in the invention."

Further discussion of the rule seems unnecessary.

Our task is to apply the rule to the facts of this case. Is plaintiff, through its patent license agreement, securing a monopoly (limited or complete) in the sale of an unpatented product, to-wit, salt?

A patentee, who is successful in such an effort, accomplishes about the same thing as he does when he fixes the price at which his licensees may resell a patented article. Such a practice has been judicially condemned. Carbice Corp. v. American Patents Corp., 283 U.S. 27, 51 S.Ct. 334, 75 L.Ed. 819; Bauer & Cie v. O'Donnell, 229 U.S. 1, 33 S.Ct. 616, 57 L.Ed. 1041, 50 L.R. A.,N.S., 1185, Ann.Cas.1915A, 150; Straus v. Victor Talking Mach. Co., 243 U.S. 490, 37 S.Ct. 412, 61 L.Ed. 866, L.R.A.1917E, 1196, Ann.Cas.1918A, 955; Boston Store v. American Graphophone Co., 246 U.S. 8, 38 S.Ct. 257, 62 L.Ed. 551, Ann.Cas.1918C, 447. For the same reason, a patentee's efforts to extend its legal monopoly to a monopoly in an unauthorized field, through license agreements, must meet with like judicial condemnation.

A patent, in itself, is a monopoly — a legal monopoly. The limits of that monopoly are prescribed (and fixed) by the statute. They are to make, to sell, and to use the patented product or process for a period of seventeen years. The patent grant does not, however, extend to control of the making, the selling, or the use of an unpatented article which may be the product of the patented process or product, or which may be necessarily used by the licensee of the patented machine or product.

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