Mergenthaler Linotype Co. v. International Typesetting Mach. Co.

• Decision Date: 28 December 1914
• Docket Number: 10-266,10-311.
• Citation: 229 F. 168
• Parties: MERGENTHALER LINOTYPE CO. v. INTERNATIONAL TYPESETTING MACH. CO. (two cases).
• Court: U.S. District Court — Southern District of New York

229 F. 168

MERGENTHALER LINOTYPE CO. v. INTERNATIONAL TYPESETTING MACH. CO. (two cases).

Nos. 10-266, 10-311.

United States District Court, S.D. New York.

December 28, 1914

[Copyrighted Material Omitted]

There are enumerated in the pleadings as the subject of suit 28 patents, but only those hereinafter specifically considered were finally put in issue.Either by reference in the bills of complaint or by notice of particulars, complainant specified before trial the several claims of the patents relied upon and said to be infringed.At or immediately before hearing, many of these claims were withdrawn from the consideration of the court, and no evidence was given in support of any claims, except those hereinafter specifically mentioned.

Frederick P. Fish and Robert F. Rogers, both of New York City, and Odin Roberts, of Boston, Mass., for complainant.

Edmund Wetmore and Robert D. Eggleston, both of New York City, for defendant.

HOUGHDistrict Judge.

There having been no formal discontinuance of these actions, either in respect of the patents as to which suit was practically abandoned, or as to the claims originally relied upon and then withdrawn, the defendant is entitled to a decree dismissing the bill as to said patents and said claims.Such dismissal will not be without prejudice, but will be general.

Complainant has for many years developed, improved, manufactured, and sold what are generically known as 'Linotype Machines,' originally constructed under the well-known Mergenthaler patents.It was so often said in argument and briefs that it may be here asserted that the basic and organization patents on composing machines have expired, and that, during the life of the patents which insured control of the business, every effort has been made by complainant to obtain by invention or purchase what are commonly known as improvement patents.

Mr Dodge, who for many years has been the president of complainant, is himself a frequent patentee, and Messrs Rogers and Kennedy have contributed a good many inventions; Mr. Rogers especially having been for years in the employment of complainant, primarily as an inventor.Mr. Homans was likewise a frequent patentee, whose inventions (in so far as they related to linotypes) were apparently invariably assigned to complainant; but it does not appear whether he was regularly employed on a salary.

By these usual and proper methods complainant has acquired, and now owns, all the patents here in suit and some dozens of those put in evidence.As the result of what may be called syndicated invention of this kind, complainant possesses (as shown by the exhibits herein) a long line of subsidiary inventions or patents, each one covering some specific part of the standard Mergenthaler linotype, a machine used all over the world and exemplified by the exhibit referred to during the lengthy trial of these cases as the 'No. 5.'Upon the expiration, in 1912, of the latest patent regarded as basic and affecting such machines, the defendant company was organized, for the expressly avowed purpose of making (inter alia) a machine which at two-thirds of the price would be the equivalent of and do just as good work as the No. 5.I think it proven that, with some possible exceptions in small detail, defendant has succeeded in this effort, the result of which has been referred to during this litigation as 'Exhibit 23,' or the 'Intertype.'

As shown by its advertisements and publications of divers kinds, defendant used in producing Exhibit 23 the services of Mr. Homans, who has been held out to the world as the deviser or designer or organizer of linotype No. 5.Defendant has sought to induce the purchase of machines like Exhibit 23 by statements (in divers forms) that its machine had been designed by Mr. Homans, and such words have been used as the following:

'The Intertype (Exhibit 23) is the better machine because it was designed by the man who invented the Model 5 linotype; he put into the Intertype the result of seven years' experience with the Model 5.'

It does not appear that Homans has become a shareholder or officer of defendant, nor does the evidence reveal the exact nature of his business relations; but it is in evidence and has been admitted that defendant induced Homans to terminate business relations with complainant, in order that he might make for it something that could be sold in competition with complainant's No. 5 without infringing the long line of secondary, subsidiary, or improvement patents owned by complainant, and to which Mr. Homans had made substantial contributions.

Before taking up the various patents in suit, it seems best to state generally my position on several questions of law which have been fully argued, even though the view taken as to invention and infringement may render some of these points inapplicable.

Estoppel as to Patents by Homans.

Complainant asserts that defendant, though a corporation, is so associated and has so co-operated with Mr. Homans for the purpose of making and selling the thing (Exhibit 23) charged to be an infringement as to affect said defendant with an equitable estoppel, preventing it from alleging invalidity of any patent by Homans affecting the linotype and here in suit.This proposition is worked out from the admitted doctrine that a patentee who has sold his patent is estopped to deny its validity when pursued by his own assignee.

Homans is not a defendant here; no injunction is sought against him.He personally is not said to be an infringer, and defendant relies upon the cases of Boston Lasting Machine Co. v. Woodward,82 F. 97, 27 C.C.A. 69, Babcock & Wilcox Co. v. Toledo Boiler Works Co.,170 F. 81, 95 C.C.A. 363, andTrussed Concrete Steel Co. v. Corrugated Bar Co. (D.C.)214 F. 393.The ground of decision in these cases is well stated by Putnam, J. (82 Fed.at page 98, 27 C.C.A. 70), thus:

'While a person occupying a subordinate position may be in privity with his principal, in the sense in which that word may properly be used in this connection, the reverse is not ordinarily true.'

This means that, because Homans is an employe or subordinate, the defendant cannot be said to be in privity with him; and as Homans himself could not be enjoined in this suit, it is impossible to work out an equitable estoppel as against the corporation employing him, which is not technically in privity with him.As a piece of technique this statement is doubtless correct, but I cannot admit that equitable estoppel is to be limited to such narrow grounds.

The first question in each litigation is to decide the nature of the employment by an alleged infringer of the assignor patentee.If he is a mere subordinate, if he acts only under instructions, if he is not the brains of the infringing combination, it is obviously improper to promote him out of his place and treat the employer as the equal of the employe.But where a man who has assigned his patent is employed by an alleged infringer for the very purpose of avoiding (if possible) his own patent, and when the designing of such evasion is definitely committed to said patentee, it appears to me that such unusual relation between the employer and employe calls for an application of the equitable rule of which as yet no instance is found in the books.

Believing the circumstances shown here to be quite new, I am of opinion that they warrant the holding that this defendant, so far as its Exhibit 23 is concerned, is estopped from denying the validity of any patent granted to Homans assigned to the complainant, sued upon here, and said to be infringed by said exhibit.Such an estoppel, however, no matter against whom it may be upheld, is 'limited in character, and (even) an assignor, when subsequently sued for infringing the assigned patent, may show the state of the art for the purpose of limiting its scope. 'Babcock, etc., v. Toledo Co.,supra, 170 Fed.at page 84, 95 C.C.A. 366;Standard Plunger, etc., Co. v. Stokes,212 F. 941, 129 C.C.A. 461.

Copending Patents as Anticipations.

It is thought to be plainly established in this circuit by controlling authority that as between two patents, the applications for which were in the Patent Office at the same time, neither is prior art as against the other; the reason for the rule being that, assuming each applicant to be a person skilled in the art, neither could know of the other's confidential communication to the Commissioner of Patents contained in his application.

But this does not prevent a contest between two such patentees as to who was the original inventor; such contest, however, being predicated upon the assumption that the two patents are for the same device.Either or both of the patentees may by competent evidence carry the actual date of invention back of the assumed date, viz., the day when application was filed.Sundh Electric Co. v. Interboro Rapid Transit Co.,198 F. 94, 117 C.C.A. 280;Vacuum Engineering Co. v. Dunn,209 F. 219, 126 C.C.A. 313.

The Admissibility and Effect of Mergenthaler Patent 614,230.

This patent is owned by complainant, and was originally sued upon, but abandoned.The complainant has introduced evidence to show the patent inoperative, and to this evidence defendant objected, on the ground that it was inconsistent for complainant to first sue on a patent and then attack it.I am of opinion that a conclusive answer to this contention is that defendant itself introduced the patent mentioned in order to show the state of the prior art.Whatever inconsistency might have resided in plaintiff's attacking its own patent was cured by the introduction of the document in evidence by defendant.

Construction of Claims.

All of the patents here in suit relate to mechanical devices possibly...