Howard Industries, Inc. v. Rae Motor Corporation

• Decision Date: 27 May 1959
• Docket Number: No. 12568.,12568.
• Parties: HOWARD INDUSTRIES, INC., a Corporation, Plaintiff-Appellee, v. RAE MOTOR CORPORATION, a Corporation, Defendant-Appellant.
• Court: U.S. Court of Appeals — Seventh Circuit

267 F.2d 430 (1959)

HOWARD INDUSTRIES, INC., a Corporation, Plaintiff-Appellee, v. RAE MOTOR CORPORATION, a Corporation, Defendant-Appellant.

No. 12568.

United States Court of Appeals Seventh Circuit.

May 27, 1959.

Jerome J. Foley, Rex Capwell, Jr., Racine, Wis., George J. Kuehnl, Racine, Wis., for appellant.

Carroll R. Heft, Glenn R. Coates, Racine, Wis., for appellee.

Before DUFFY, Chief Judge, and SCHNACKENBERG and PARKINSON, Circuit Judges.

PARKINSON, Circuit Judge.

Plaintiff-appellee Howard Industries, Inc. (Howard) filed this action in the District Court to enjoin the defendant-appellant Rae Motor Corporation (Rae) from manufacturing, using or marketing its electric motors in a motor casing confusingly similar in appearance to that of Howard, and for damages.

The District Court, by pre-trial conference order, separated the issues on liability and damages and, following a bench trial on the question of liability, filed findings of fact and conclusions of law and entered an injunctive order and judgment in accordance therewith in favor of Howard. This appeal followed.

The relevant undisputed facts are that in 1945 Howard purchased the assets of Electric Motor Corporation, a manufacturer of fractional horsepower motors, which included Patent No. 2,032,084. Shortly thereafter certain personnel formerly of Electric Motor Corporation left Howard and organized Rae. By early spring of 1946 Rae was manufacturing and selling fractional horsepower motors, which infringed Howard's patent, housed in a motor casing identical to that of Howard, except the brushes within the Rae casing were welded thereto while in the Howard casing they were attached by crimping.

Thereupon Howard filed a patent infringement action against Rae and one Dunham. Prior to trial the parties entered into a settlement agreement and the infringement suit was dismissed. The settlement agreement is as follows:

"This agreement made and entered into this 15th day of August, by and between Howard Industries, a corporation organized and existing under and by virtue of the laws of the State of Illinois, having its principal place of business in Chicago, Illinois, party of the first part and hereinafter referred to as Howard; Rae Motor Corporation, a corporation organized and existing under and by virtue of the laws of the State of Wisconsin, having its principal place of business in Racine, Wisconsin hereinafter referred to as Rae, and Irvie H. Dunham, an individual of the City of Racine, Racine County, Wisconsin hereinafter referred to as Dunham.

"Witnesseth:

"Whereas, there is pending in the United States District Court for the Eastern District of Wisconsin, an action in which Howard, as plaintiff, charges infringement of its patent No. 2032084 by Rae and Dunham, Defendants, said action being identified as Civil Action No. 4554, wherein issue has been joined; and

"Whereas, apart from any cause of action pleaded in said litigation, Howard complains that the shells or casings of motors made by Rae too closely resemble in appearance those previously made by Howard.

"Now, Therefore, in consideration of the agreement of the parties hereinafter set forth, it is agreed as follows:

"First: Rae and Dunham covenant and agree:

"1. That the brush holder and the contact slip of the electric motor first manufactured and sold by Rae are acknowledged to have infringed the patent in suit No. 2,032,084.

"Second: Rae Covenants and agrees:

"That as soon as its present stock of motor shells or casings is used up it will adopt a different shell or casing for its motor either like Exhibit A attached hereto or some other casing design which is not confusingly similar in appearance to the casing design now embodied in the E. M. C. motor. The present stock of Rae\'s motor casings being not in excess of 3500.

"Third: Howard covenants and agrees:

"1. That Howard waives any claim or right it might have or make now or in the future based upon infringement by the motor currently manufactured by Rae upon Patent No. 2,032,084.

"2. That it does hereby acknowledge the receipt of Thirty-five Hundred ($3500.00) dollars to it paid by Rae.

"3. That in consideration of the said Thirty-five Hundred ($3500.00) dollars to it paid by Rae and of the agreement of Rae and Dunham herein set forth it does for itself, its successors and assigns hereby remise, release and forever discharge Dunham and Rae of and from all claims, controversies and demands accruing to the date hereof, jointly or severally against Dunham or Rae or either of them and based upon matters set forth in the complaint of this action or upon alleged simulation of casing design.

"4. That a shell or motor casing design, of the type indicated by the attached print marked `Exhibit A\' is adequately differentiated in appearance from the motor shell or casing design of Howard.

"Fourth: It is mutually covenanted and agreed by and between the parties hereto that the aforesaid Civil Action No. 4554 shall be dismissed without costs to either party or parties, upon the written stipulation of the parties or their counsel being filed in the United States District Court of the Eastern District of Wisconsin.

"In Witness Whereof, the Plaintiff, Howard Industries, Inc., has caused this agreement to be executed by its President and Secretary and its corporate seal to be affixed hereto, this 15th day of August, 1949; the Defendant, Rae Motor Corporation has caused this agreement to be executed by its President and Secretary and its corporate seal to be affixed hereto this 15th day of August, 1949; and the

...