Hazeltine Corporation v. Radio Corporation

• Decision Date: 21 September 1937
• Citation: 20 F. Supp. 668
• Parties: HAZELTINE CORPORATION v. RADIO CORPORATION OF AMERICA.
• Court: U.S. District Court — Southern District of New York

20 F. Supp. 668

HAZELTINE CORPORATION v. RADIO CORPORATION OF AMERICA.

District Court, S. D. New York.

September 21, 1937.

Henry T. Kilburn, of New York City, for plaintiff.

Stephen H. Philbin, of New York City (John B. Cunningham, of New York City, on the brief), for defendant.

WOOLSEY, District Judge.

The plaintiff has withdrawn its first three exceptions.

Its other exceptions, Nos. 4-21, are all overruled, and the special master's recommendation that there should not be an accounting herein is hereby approved and adopted.

The defendant's exceptions, owing to the special master's decision in its favor and my adoption thereof, now raise merely moot questions and will not be considered.

I. Revised Statutes § 4900, as amended February 7, 1927, c. 67, 44 Stat. 1058, title 35 United States Code § 49 (35 U.S.C.A. § 49), first imposes a duty on patentees and those in privity with them, saying: "It shall be the duty of all patentees and their assigns and legal representatives, and of all persons making or vending any patented article for or under them, to give sufficient notice to the public that the same is patented."

Then the method of marking which shall give such notice is prescribed as follows: "Either by fixing thereon the word `patent', together with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is inclosed, a label containing the like notice: Provided, however, That with respect to any patent issued prior to April 1, 1927, it shall be sufficient to give such notice in the form following, viz.: `Patented', together with the day and year the patent was granted."

Then comes the sanction for breach of the statutory duty thus prescribed and the statute continues thus: "and in any suit for infringement by the party failing so to mark, no damages shall be recovered by the plaintiff, except on proof that the defendant was duly notified of the infringement and continued, after such notice, to make, use, or vend the article so patented."

Therefore there are two statutory foundations for a claim for damages against an infringer on behalf of a patentee by, for, or under whom patented articles are made and sold: (1) Marking in accordance with the statute, and (2) notice to the infringer.

II. This suit was filed November 28, 1927, and is based on United States patents Nos. 1,533,858 and 1,648,808.

The bill of complaint was double-barreled in regard to the plaintiff's acts to safeguard its right to damages in pursuance of the statute. It alleged on this point in paragraph 12: "* * * that apparatus manufactured under said Letters Patent No. 1,533,858 and embodying the inventions thereof has been marked, ever since the issuance of said Letters Patent, by affixing thereto the word `Patented', together with the day and year the Patent No. 1,533,858 was granted, and that defendant has been notified of the issuance of U. S. Letters Patent No. 1,648,808."

III. At the commencement of the trial of this cause before me the parties stipulated on the minutes "that the issue of whether or not, since the issuance of the patent in it and prior to the alleged infringement by defendant, apparatus manufactured by license under said Letters Patent has been marked with the proper notice as provided by Revised Statutes Section 4900, is reserved to such accounting proceedings, if any, as may be ordered, without prejudice to the respective rights of the parties hereto."

IV. On September 14, 1931, in deciding the case, I held that the theretofore unadjudicated patent No. 1,648,808 was invalid for want of invention, and, following the decision of the Circuit Court of Appeals in Hazeltine Corporation v. Wildermuth, 34 F.(2d) 635, decided July 1, 1929, and Hazeltine Corporation v. National Carbon Co., 47 F.(2d) 573 (decided February 2, 1931), as to the validity of United States patent No. 1,533,858, held, Hazeltine Corporation v. Radio Corporation of America (D.C.) 52 F.(2d) 504, that the defendant had infringed that patent. Accordingly I gave the plaintiff an injunction, and ordered a reference to William Parkin, Esq., as special master, to have determined this reserve issue as to marking of articles manufactured under patent No. 1,533,858, and consequently whether there should be an accounting for any infringing articles made and sold by the defendant.

The plaintiff did not appeal from my decision in respect of the invalidity of United States patent No. 1,648,808; the appeal by the defendant from the interlocutory decree entered on my decision in respect of the validity of United States patent No. 1,533,858 and the infringement thereof resulted in affirmance in a short per curiam opinion filed June 6, 1932, Hazeltine Corporation v. Radio Corporation of America (C.C.A.2) 59 F.(2d) 203, 204.

V. Investigation preparatory to commencing the hearings herein before the special master, and possibly their experience in 1931 and early in 1932 in an accounting under the same patent in a litigation with the Atwater Kent Company in the Eastern District of Pennsylvania, apparently satisfied the counsel, then representing the plaintiff, that they could not safely rely on marking as a basis for their accounting. Consequently they made a motion, which came on before me in November, 1932, five years after the complaint was filed and after the affirmance of the interlocutory decree, based on patent 1,533,858, in the plaintiff's favor, to change the basis for the accounting from marking to notice.

I denied this motion on the ground of laches as well as other grounds fully set forth in my opinion thereon, Hazeltine Corporation v. Radio Corporation of America (D.C.) 1 F.Supp. 758.

VI. The proceedings under the accounting herein have been — to put it mildly — rather sedate.

On March 20, 1936, this cause was, for the purposes of the accounting, consolidated by order of this court with equity 50 — 141, Hazeltine Corporation v. General Electric Company and Radio Corporation of America, 19 F.Supp. 898, in which an interlocutory decree had been entered by consent on January 31, 1933.

It is because of this consolidation order that the special master's report is captioned in both causes, and contains a reference to evidence about notice of infringement to the defendants in the second suit, equity 50 — 141, wherein notice was alleged in the complaint.

In the report, here under consideration, which was signed March 10, 1937, the special master found — the issue of notice being precluded by my decision in the motion in the instant suit, equity 43 — 351 — that, owing to failure to mark under Rev. St. § 4900, as amended (35 U.S.C.A. § 49), the plaintiff was not entitled to any accounting under this suit, equity 43 — 351, but that, owing to due notice of infringement which it alleged in the second suit, equity 50 — 141, it was entitled to an accounting, from certain dates, not material here, as against both the defendants therein.

VII. In order to clear this somewhat complicated procedural situation, on March 19, 1937, the parties to the instant cause consented to an order providing that the order for consolidation in respect of accounting dated March 20, 1936, be terminated, and that the special master be directed to make separate reports in the two suits.

In accordance with this order of severance, the special master's report was, on June 16, 1937, filed herein with appropriate findings of fact.

To this report, in so far as applicable to this suit and the master's findings of fact herein, both parties have filed exceptions as to which the following observations may be appropriate herein:

The plaintiff has abandoned its first three exceptions to the master's findings of fact and now accepts these findings in their entirety and consequently its remaining exceptions together now amount to a demurrer to the evidence.

The plaintiff's contentions which need here be noticed are that, the special master erred in the conclusions of law deduced by him from the facts because he refused to find as a matter of law:

A. That, since the plaintiff is a non-manufacturing patent owner, it does not come within the provisions of United States Code, title 35, § 49, 35 U.S.C.A. § 49 (Rev. St. § 4900, as amended), and does not need to show compliance therewith in order to entitle it to an accounting.

B. That the bill of complaint constituted notice of infringement, and, since the defendant continued infringement after service upon it of the bill of complaint, the plaintiff is entitled, without further showing, to an accounting at least from November 28, 1927, the date of the filing of the bill of complaint.

C. That defendant, having continued infringement after notice, by service of the bill of complaint, has by its conduct taken itself out of the protection of U.S. Code, title 35, § 49, 35 U.S.C.A. § 49 (Rev. St. § 4900, as amended), and must account for its entire infringement in this suit.

The defendant's exceptions which naturally do not attack the special master's conclusions are merely safeguarding exceptions and are all directed to certain findings of fact by the special master as to the quantum of marking from July 1, 1927.

Due, however, to the special master's recommendations and findings as to fact and law which I have adopted, it seems to me clear that the defendant's exceptions, if they did not initially merely raise moot questions, certainly now play no other role in the situation before me. It is, therefore, unnecessary to deal further with them.

VIII. A patent suit in equity commonly seeks two forms of relief whereof both depend on the existence of a cause of action at the time when the suit is commenced. Those forms of relief are: (1) An injunction against further trespass on the plaintiff's patent monopoly; and (2) damages, and an accounting for the trespasser's profits.

A cause of action for an injunction in a patent suit is not stated...