Indiana Mfg. Co. v. J. I. Case Threshing Mach. Co.

• Decision Date: 16 April 1907
• Docket Number: 1,334.
• Citation: 154 F. 365
• Parties: INDIANA MFG. CO. v. J.I. CASE THRESHING MACH. CO.
• Court: U.S. Court of Appeals — Seventh Circuit

154 F. 365

INDIANA MFG. CO. v. J.I. CASE THRESHING MACH. CO.

No. 1,334.

United States Court of Appeals, Seventh Circuit.

April 16, 1907

Charles C. Linthicum and W. H. H. Miller, for appellant.

Robert S. Taylor and I. K. Boyesen, for appellee.

Before GROSSCUP, BAKER, and KOHLSAAT, Circuit Judges BAKER, Circuit Judge.

The appeal is from a final decree dismissing appellant's bill for want of equity. 148 F. 21.

A sufficient outline of the bill is this: Appellant owns certain patents on pneumatic straw stackers; in 1895 appellant licensed appellee for the lives of the patents to make, use, and sell stackers embodying any of the inventions then owned or thereafter acquired by appellant, and used by appellee, on the terms that appellee maintain the price at $250, put on the patent marks, and pay appellant $30 royalty and that appellant give appellee the benefit of any more favorable terms extended to subsequent licensees; appellee accounted until 1902; in that year appellee sold stackers under the license, but refused to pay $40,000 royalties that accrued; beginning in 1902 appellee made a so-called 'Norton stacker,' omitted appellant's patent marks, refused to pay royalty on the ground that the Norton stacker did not embody any of the inventions covered by appellant's patents, and threatened to put that stacker on the market at a price less than $250; the Norton stacker did embody inventions covered by appellant's patents beyond the damage that resulted from infringement appellee's manufacture and sale of Norton stackers was injuring appellant in this wise: Before and after 1895 appellant had granted similar licenses to other makers; the validity of the patents had been universally recognized; on the patents appellant had built up a valuable property right in its system of licenses; appellee's conduct with respect to the infringing Norton stacker was demoralizing to the system, and, if persisted in, would destroy its integrity. In addition to an accounting, an injunction was prayed to restrain appellee from further making, using, or selling stackers in violation of appellant's rights as stated, or except in strict compliance with the terms of the license.

This is not a bill for the specific performance of a contract. The court is not asked to compel appellee to make and sell stackers under the license, and to see to it that appellee maintains the price, puts on the patent marks, and accurately reports its sales. So far as this bill is concerned, appellee may quit the stacker business any minute it sees fit. What is sought is an injunction against appellee's unlawful invasion of appellant's lawful patent monopoly. If appellee has not invaded, or if the monopoly is unlawful appellant fails. If appellant had chosen to accept appellee's repudiation of the license, a bill to exclude appellee utterly from the domain of the patents would have lain. By declining to recognize the fact or the right of repudiation, appellant did not estop itself from asking to exclude appellee from that part of the domain which had not been granted, namely, the control of prices and methods. Stripped of all averments in relation to appellant's business built up on licenses, the bill states a good cause of action for infringement of the patents. These averments, as appellant rightly claims, show an aggravation of the injury resulting from the infringement, and constitute, therefore, an additional appeal for injunctive relief. That the bill properly invokes the aid of a court of equity, we have no doubt. Eureka Co. v. Bailey, 11 Wall. 488, 20 L.Ed. 209; Kinsman v. Parkhurst, 18 How. 289, 15 L.Ed. 385; Hardin v. Boyd, 113 U.S. 763, 5 Sup.Ct. 771, 28 L.Ed. 1141; Western Union Tel. Co. v. Union Pac. Rld. Co. (C.C.) 3 Fed. 423, 721; McKay v. Smith (C.C.) 29 F. 295; Hat Sweat Mfg. Co. v. Porter (C.C.) 34 F. 745; Ball Glove Fastener Co. v. Ball & Socket Co. (C.C.) 36 F. 309; Am. Box. Mch. Co. v. Crosman (C.C.) 57 F. 1021; Id., 61 F. 888, 10 C.C.A. 146; Heaton-Peninsular Co. v. Eureka Specialty Co., 77 F. 294, 25 C.C.A. 267, 35 L.R.A. 728; Victor Talking Machine Co. v. The Fair, 123 F. 424, 61 C.C.A. 58; Rupp & Wittgenfeld Co. v. Elliott, 131 F. 730, 65 C.C.A. 544.

As a reason why it should not be compelled to pay delinquent royalties on stackers confessedly made in accordance with the patents, appellee pleaded that appellant had itself first violated the license contract by extending to subsequent licensees more favorable terms than it granted to appellee. This partial defense we find to be unsupported by the evidence.

We dismiss without notice other partial defenses which are not established by the evidence, or which, if sustained by any proof, were not pleaded. Rubber Co. v. Goodyear, 9 Wall. 788, 793, 19 L.Ed. 566.

Answering the charge in relation to the Norton stacker, appellee denied that that stacker embodied any invention of any of appellant's patents. The validity of the patents was not questioned in the answer; but appellee, through its expert, brought into the evidence a very large number of prior patents with a view to limiting the claims relied on to less than their prima facie import. If this may not properly be taken as an admission that the Norton stacker infringes unless the claims be thus stripped of some of their apparent meaning, it nevertheless accords with the fact; for, in our judgment, the differences between the Norton stacker and the claims relied on, taking them as they read, are not even colorable enough to require discussion. So the question at this point is whether the prior art depreciates the face value of the claims.

The claims to be considered in the Buchanan patent, No. 467,476, January 19, 1892, are these:

'(1) The combination, in a pneumatic straw elevator and stacker, of the fan, the base portion C, and an upper portion D, hinged thereto, the adjacent ends of said two portions being fitted one within the other, whereby a sliding union is provided as the relative positions are changed, thus permitting one portion to be elevated relatively to the other while still maintaining a substantially air-tight relation between said two parts, substantially as set forth.'

'(5) The combination, in a straw elevator and stacker, of the two portions C and D, united by a hinge or pivot, and a rope E, secured to the lower portion at one end, passing around the sheave on the upper portion, and returning to a windlass, also secured to the lower portion, substantially as shown and described.

'(6) The combination, with a pneumatic straw elevator and stacker, of a mouth portion hinged thereto, having an inclined upper side and an open under side, and means whereby said mouth portion may be adjusted to a desired position, substantially as set forth.

'(7) The combination, with a pneumatic straw elevator and stacker, of a mouth portion D2, hinged thereto and adjustable thereon from a position substantially in line with the main portion of the stacker to a position at an angle therewith, whereby the direction the straw takes at the point of discharge may be controlled, substantially as shown and described.'

'(9) The combination, with a threshing machine, of a pneumatic straw elevator and stacker attached thereto, as described, and a fan located within the machine and communicating with said straw elevator, said fan being arranged centrally of said machine and arranged to take its supply of air from the interior of the machine, thus drawing into itself the dust caused by the operation of said machine and discharging said dust into the straw, substantially as set forth.'

Straw may be dumped into a heap and allowed to rot; or, if treated as a valuable product, it may be built into a compact symmetrical stack, practically impervious to weather conditions, and thus preserved for future use. Prior to the advent of the Buchanan stacker, mechanical conveyors had carried the straw from the separator to the men who built the straw stack. So far as this record shows (and the whole world has apparently been ransacked to produce its bulky volumes), the patent of 1892 first disclosed a conception of means to free mankind from this most disagreeable and arduous manual task. Here was a new result, of the first order of importance. The utmost that any previous machine had done was to save the labor of getting the straw to the men who arranged it with their pitchforks and tramped it to solidity. This machine, with its fan for creating the blast that forces dust and straw out through an air-tight pipe; with its turntable joint at the base of the pipe, for lateral movement; with its substantially air-tight joint between the base and upper sections of the pipe, for vertical movement; with its adjustable mouthpiece at the outer end of the pipe, for controlling the direction and packing the blast-driven straw; with its appliances for giving universality of movement to the pipe and for directing the mouthpiece; all under the hand of a single operator-- built straw stacks. The prior art is rich in fans, turntable joints, flexible pipe joints, air-tight pipes, mouthpieces and nozzles, sheaves, ropes, and windlasses, used in many connections and for many purposes; but Buchanan never claimed that he was the creator of any of these. The record exhibits many mechanical conveyors. They did well their work of saving the labor of the men who pitched the straw from the ground to the men on the stack; but the immense trade in them has been totally lost to the higher-priced machine that relieves both the men on the ground and the men on the stack. The Brinsmead British patent, No. 218 of 1868, shows the combination of a fan and a pipe that is capable of being raised and lowered. That this was merely a pneumatic conveyor is sufficiently indicated by the...