Keystone Type Foundry v. Fastpress Co., 106.

• Decision Date: 02 February 1921
• Docket Number: 106.
• Citation: 272 F. 242
• Parties: KEYSTONE TYPE FOUNDRY v. FASTPRESS CO.
• Court: U.S. Court of Appeals — Second Circuit

272 F. 242

KEYSTONE TYPE FOUNDRY v. FASTPRESS CO.

No. 106.

United States Court of Appeals, Second Circuit.

February 2, 1921

E. W Bradford, of Washington, D.C. (William A. Redding and Ambrose L. O'Shea, both of New York City, of counsel), for appellant.

George Scull, of New York City, for appellee.

For opinion below, see 263 F. 99.

In 1913 one Stonemetz was working over a printing press of his own devising, whereof the meritorious novelty, if any, resided in the normal placing of the cylinder in relation to the bed and the means for producing operative conjunction between them. He had built several machines, kept them at Palmyra, N.Y and intended to apply for a patent in time.

This resulted on May 12, 1915, in a written contract between defendant and Stonemetz, whereby the latter duly agreed to assign to defendant the patent he was to apply for on the machine lately shown to defendant in plaintiff's factory. Of this performance of Stonemetz plaintiff was certainly contemporaneously ignorant. Whether defendant had notice of the relations between plaintiff and Stonemetz we are not sure, but must hold that under the form of this action it is plaintiff's duty affirmatively to show the existence of such notice and plaintiff has not borne the burden of proof on this point. Probably before May 12, 1915, and certainly before September of that year, plaintiff directed one Smith an employee of its own, to attempt the betterment of the mechanism of the Palmyra press.

On September 9, 1915, plaintiff wrote Stonemetz a letter (approved in writing by the latter) whereby he was immediately employed to work on the mechanical improvements of his press with and under plaintiff's old employee, Mr. Smith. The nature of Stonemetz's work appears from testimony other than the letter of employment. We find that Smith is the man who devised (and subsequently patented) those devices or adjuncts which made out of Stonemetz's press as much of a commercial success as it ever became. The letter of September 9th also sets forth a royalty scheme wholly different from that of the 1913 contract, to which no reference is made in the 1915 writing.

On October 7, 1915, Stonemetz by formal assignment, subsequently duly recorded, transferred to defendant the invention embodied in his printing press. On October 11th he filed his application for patent, accompanied by drawings made from a machine belonging to plaintiff, which by that time was actually pushing the construction of some thirty presses with Smith's improvements as they matured. Stonemetz was in plaintiff's pay when he did this. The patent ultimately issued to defendant (No. 1,188,507, June 27, 1916). In 1917 plaintiff decided to cease business and go into liquidation. It then had on hand upwards of 20 presses, the result of the joint labors of Smith and Stonemetz. These were about to be sold in bulk to one customer, when defendant served notice of infringement of the Stonemetz patent. Thereafter plaintiff brought this suit, asking to have declared its right as licensee under the 1913 contract to make and sell the said printing presses. The court below denied such right, and after other proceedings, not (in the view we take of the case) necessary to mention further, dismissed the bill and sustained a counterclaim of defendants, demanding injunction against plaintiff and more particularly (in effect) forbidding any profitable disposition of said 20 machines. From decree accordingly plaintiff appealed.

Plaintiff was a Pennsylvania corporation and a jobber in printers' supplies, including presses. In December, 1913, it executed a written agreement with Stonemetz. By this very inartificial document plaintiff agreed to take one of the Palmyra presses to its establishment in Philadelphia and pay for it-- if after 30 days it proved 'satisfactory'-- and to order the rest of the machines at Palmyra at the same price. The one machine was taken and paid for; the rest were never ordered, nor did Stonemetz ever complain thereof.

The contract also provided for payment of royalties on machines manufactured for plaintiff. Stonemetz further agreed to be diligent in procuring patents, 'and to license (plaintiff) to exclusive use of same and to defend (plaintiff) against any claims for infringement of other patents. ' Plaintiff also for two years from date of agreement had the option of buying 'all patent rights' in Stonemetz's press, and Stonemetz agreed to enter plaintiff's employ at a named salary if requested-- to stay as long as wanted and apparently devote his time to 'advertising and building any other machinery (plaintiff) may desire to have built.'

Before ROGERS, HOUGH, and MANTON, Circuit Judges.

HOUGH Circuit Judge (after stating the facts as above).

The declaration of law made below rests on a finding of fact as to which we are constrained to differ. The lower court held (263 F. 101) that the 1913 contract between Stonemetz and plaintiff had terminated by abandonment before defendant's contract with Stonemetz of May 12, 1915. There is no direct evidence of this, except the statement of Stonemetz. He has been rightly declared by the trial court a man unworthy of belief, and what he said about that contract is no more credible than any of his other statements. Abandonment implies mutual consent; of such...