Miller v. Zaharias, Civ. A. No. 3029.

• Decision Date: 13 February 1947
• Docket Number: Civ. A. No. 3029.
• Parties: MILLER v. ZAHARIAS et al.
• Court: U.S. District Court — Eastern District of Wisconsin

72 F. Supp. 29

MILLER v. ZAHARIAS et al.

Civ. A. No. 3029.

District Court, E. D. Wisconsin.

February 13, 1947.

Ira M. Jones, of Milwaukee, Wis., for plaintiff.

Leo J. Kohn and David Charness, both of Milwaukee, Wis., for defendants Zaharias, Polanis and Wallace.

Joseph P. Brazy, of Milwaukee, Wis., for Janet Salomon.

Herman A. Mosher, of Milwaukee, Wis., for Jack Castronovo and Albert Salomon.

Maxon W. Polland, pro se.

DUFFY, District Judge.

Plaintiff claims infringement of U. S. Letters Patent Nos. 1,888,234 and 1,960,276 issued to and owned by him. Patent No. 1,888,234 for "method of and apparatus for applying wall finishes" was issued November 22, 1932, upon application filed November 9, 1929, and Claims 3, 4, 6, and 7 thereof are here in issue. Patent No. 1,960,276 for "apparatus for applying wall finishes" was issued May 29, 1934, on application filed August 22, 1932, and Claims 1, 2, and 5 thereof are here in issue. Claims 3, 4, 6, and 7 of Patent No. 1,888,234 are set forth in the margin.¹

Heretofore three actions were commenced in this court by Edward J. Miller, the plaintiff herein, alleging infringement of the two patents in suit. In Civil Action No. 458² where the defendants were Clayton H. Fralick doing business as Lanonite Company of America, Fralick Construction Company, Fralick Realty Company and/or American Stucco Company, a decree by default was entered on October 2, 1942. In Civil Action No. 8362 where the defendants were Advance Construction Company, Inc., and Albert Salomon, a decree by default was entered on October 4, 1943. In Civil Action No. 16932 where the defendant was Ralph J. Emling doing business as Ralph J. Emling Roofing and Siding Company, a consent decree was entered on December 14, 1944. The complaint herein asks that the defendants Jack Castronovo, Albert Salomon, and Janet Salomon be adjudged in contempt for violation of the judgments in the three cases heretofore described.

The defenses of noninfringement and invalidity are here interposed. At the conclusion of the testimony the defendants moved for an order granting leave to amend their answers to conform to the evidence in the following respects: that the license agreement between plaintiff and J. D. Kaiser, his exclusive licensee for the State of Wisconsin, contained a provision, to wit: "8. For the duration of this contract or any extension thereof, Licensee agrees to devote all of his normal working time to the promotion of Perma Stone in connection with building construction or remodeling and improvements, and to sell and use only materials and methods furnished or approved by Licensor in writing * * *"; that under the terms of said license agreement and the enforced practice thereof the patentee has exacted as one of the conditions of said license that unpatented material, to wit, coloring matter used in connection with the invention, shall be furnished by plaintiff and that by attaching such condition the plaintiff patentee has enlarged his monopoly and that plaintiff is thus using his patents as the effective means of restraining competition with and in the sale of coloring matter.

At the trial the court indicated that this motion of the defendants to amend their answer should be granted, but no formal order to amend was entered. Transcript, p. 243. However, as plaintiff strenuously objects to the allowance of such amendment and has filed a 24-page brief in support of his objections, I have again given consideration to the defendants' motion.

Plaintiff contends that under Rule 12(h), Federal Rules Civil Procedure, 28 U.S.C.A. following section 723c, defendants have waived the defense to be interposed in the amendment to their answer. However, that rule provides: "A party waives all defenses and objections which he does not present either by motion as hereinbefore provided or, if he has made no motion, in his answer or reply, except * * *." As soon as the contract in question was brought to light during the course of the trial, the defendants did seek to raise the defense by motion to amend their answers under Rule 15(b), Federal Rules Civil Procedure. This rule provides: "When issues not raised by the pleadings are tried by express or implied consent of the parties, they shall be treated in all respects as if they had been raised in the pleadings. Such amendment of the pleadings as may be necessary to cause them to conform to the evidence and to raise these issues may be made upon motion of any party at any time, even after judgment; * * *. If evidence is objected to at the trial on the ground that it is not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice him in maintaining his action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence."

Plaintiff urges that the allowance of such a defense will prejudice his action, but he made no motion for a continuance. Rule 15(a) Federal Rules Civil Procedure, provides that after one amendment as a matter of course, a party may amend his pleading only by leave of court, or by written consent of the adverse party, but provides "leave shall be freely given when justice so requires." Under the circumstances I have determined that the defendants' motion for leave to amend their answers should be granted and an order to that effect has been filed.

Plaintiff sells to his licensees from 50,000 lbs. to 1,500,000 lbs. of coloring matter a year at a price ranging from 11½¢ to 20¢ per lb. The exclusive licensee in Wisconsin has no right to use any other coloring material without the written consent of the licensor. Plaintiff frankly admitted that the profit motive was an important consideration when he was asked:

"Question: Didn't the profit motive enter into the question at all? Answer: Yes."

In a long line of cases the Supreme Court has held that an owner of a patent may not condition a license so as to tie to the use of the patent the use of other materials, processes or devices which lie outside the monopoly of the patent.

In the case of Carbice Corp. v. American Patents Development Corp., 283 U.S. 27, 51 S.Ct. 334, 75 L.Ed. 819, the license agreement and the invoices provided "that DryIce shall not be used except in DryIce Cabinets or other containers or apparatus provided or approved by the DryIce Corporation of America." The court said at page 31 of 283 U.S., at page 335 of 51 S.Ct., 75 L.Ed. 819: "* * * But it (patentee) may not exact as a condition of a license that unpatented materials used in connection with the invention shall be purchased only from the licensor; and if it does so, relief against one who supplies such unpatented materials will be denied * * *." Among other cases condemning such an extension of the patent monopoly is Ethyl Gasoline Corp. v. United States, 309 U.S. 436, at page 456, 60 S.Ct. 618, 625, 84 L.Ed. 852 where the court said: "He may not, by virtue of his patent, condition his license so as to tie to the use of the patented device or process the use of other devices, processes or materials which lie outside of the monopoly of the patent licensed * * *." See also Motion Picture Patents Co. v. Universal Film Manufacturing Co., 243 U.S. 502, 37 S.Ct. 416, 61 L.Ed. 871, L.R.A.1917E, 1187, Ann.Cas. 1918A, 959; Morton Salt Co. v. G. S. Suppiger, 314 U.S. 488, 62 S.Ct. 402, 86 L.Ed. 363; and Mercoid Corp. v. Mid-Continent Investment Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376.

In view of the provisions of the license agreement hereinbefore described, the court will not assist the plaintiff by restraining those whom plaintiff alleges infringe his patents.

In the event it should be determined by a reviewing court either that the amendment should not have been allowed, or that the plaintiff was not estopped in this action by reason of the provisions of his license agreement, I should make known my views as to the validity of the claims of the patents here in issue.

In considering the four process claims of Patent No. 1,888,234 here in issue, we must keep in mind the file wrapper history. The claims of a patent must be interpreted with reference to cancelled or rejected claims, and an allowed claim cannot be read to cover what has been eliminated from the patent. Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211, 312 U. S. 654, 61 S.Ct. 235, 85 L.Ed. 132; I. T. S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429, 443, 47 S.Ct. 136, 71 L.Ed. 335.

Original Claim 3 provided: "A tool for applying plastic material to a wall comprising, a casing, a plunger movable therein, and means for moving the plunger with respect to the casing to force material from the casing onto the wall." This claim was rejected on Kruck No. 482,369, reference by Patent Office especially in view of Martin No. 843,956, on these grounds: "Kruck shows plastic material forced into position and left there, while Martin shows use of a flexible backing for the plastic material to be old." The applicant acquiesced by cancelling the claim.

Original Claim 5 read: "A tool for applying plastic material to a wall, comprising, a casing, a plunger movable therein, means for moving the plunger with respect to the casing, and means for preventing the adhesion of plastic material placed in the casing to the plunger." This claim was rejected by the Patent Office on Laskey No. 1,466,509, France No. 1,288,554,...