National Lockwasher Co. v. George K. Garrett Co.

• Decision Date: 13 July 1943
• Docket Number: No. 8115.,8115.
• Citation: 137 F.2d 255
• Parties: NATIONAL LOCKWASHER CO. v. GEORGE K. GARRETT CO., Inc.
• Court: U.S. Court of Appeals — Third Circuit

137 F.2d 255 (1943)

NATIONAL LOCKWASHER CO. v. GEORGE K. GARRETT CO., Inc.

No. 8115.

Circuit Court of Appeals, Third Circuit.

Argued April 19, 1943.

Decided July 13, 1943.

Rehearing denied September 2, 1943.

Leonard L. Kalish, of Philadelphia, Pa. (Paul & Paul and Henry N. Paul Sr., all of Philadelphia, Pa., on the brief), for defendant-appellant.

Newton A. Burgess, of New York City (William H. Foulk, of Wilmington, Del., and H. H. Hamilton, of New York City, on the brief), for plaintiff-appellee.

Before MARIS and GOODRICH, Circuit Judges and GANEY, District Judge.

GOODRICH, Circuit Judge.

On an earlier appeal to this Court Loutrel patent 1,655,018 for a compression spring washer was upheld and the case remanded with instructions to reinstate the bill, decree the patent valid and infringed, and direct an accounting. 98 F.2d 643 (1938). The litigant is again here, this time upon the accounting phase of the litigation, the defendant having appealed from the judgment rendered upon the report of a special master which awarded the sum of $17,994.25 to the plaintiff.

In the court below and again in this Court, the defendant raised one point, which, if sustained, would deny the plaintiff any recovery whatever. It is based upon the theory that the plaintiff, as patentee, has so abused his rights acquired under the patent that he is entitled to no relief in this litigation. The argument stems from a series of Supreme Court decisions. Motion Picture Patents Co. v. Universal Film Mfg. Co., 1917, 243 U.S. 502, 37 S.Ct. 416, 61 L.Ed. 871, L.R.A.1917E, 1187, Ann.Cas.1918A, 959; Carbice Corporation of America v. American Patents Development Corporation, 1931, 283 U.S. 27, 51 S.Ct. 334, 75 L.Ed. 819; International Business Machines Corp. v. United States, 1936, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085; Leitch Mfg. Co. v. Barber Co., 1938, 302 U.S. 458, 58 S.Ct. 288, 82 L.Ed. 371; Interstate Circuit, Inc., v. United States, 1939, 306 U.S. 208, 59 S.Ct. 467, 83 L.Ed. 610; Ethyl Gasoline Corporation v. United States, 1940, 309 U.S. 436, 60 S.Ct. 618, 84 L.Ed. 852; Morton Salt Co. v. G. S. Suppiger Co., 1942, 314 U.S. 488, 62 S.Ct. 402, 86 L.Ed. 363; B. B. Chemical Co. v. Ellis, 1942, 314 U.S. 495, 62 S.Ct. 406, 86 L.Ed. 367; United States v. Univis Lens Co., Inc., 1942, 316 U.S. 241, 62 S.Ct. 1088, 86 L.Ed. 1408; United States v. Masonite Corporation, 1942, 316 U.S. 265, 62 S.Ct. 1070, 86 L.Ed. 1461.

The patentee, it is said, issued licenses to various manufacturers of metal washers under a standard form of license agreement. Each license issued, it is claimed, contained a provision to the effect that the licensee agrees, while the agreement is in force, that it will not manufacture any other form of non-tangling spring washers except those covered by the patent in suit. It is not disputed that there are other forms of unpatented non-tangling spring washers than those involved in the Loutrel patent. So what we have here, assuming the facts as above stated, is a patentee who gives a license to a manufacturer for a stipulated consideration, part of the consideration being that the licensee will abstain from manufacturing any other kind of non-tangling spring washer except those covered by the license.

The Supreme Court has made it abundantly clear in the series of decisions above cited that the patentee cannot use his patent monopoly to force upon customers his brand of a non-patented article to be used by the customer in connection with the patented article sold or leased. The Carbice and International Business Machines cases are typical of this point. And not only is a patentee under such circumstances open to attack by the public authorities, but he is precluded from the enforcement of his rights as patentee against an infringer so long as he is making such a use of a patent. The Morton Salt Company and the B. B. Chemical Co. decisions bring this out clearly. "The patentee, like these other holders of an exclusive privilege granted in the furtherance of a public policy, may not claim protection of his grant by the courts where it is being used to subvert that policy," says Mr. Chief Justice Stone in the Morton Salt case at page 494 of 314 U.S., 62 S.Ct. at page 406, 86 L.Ed. 363.

These cases are different on the facts than the one here involved. The patentee in this case is not selling any unpatented goods under a tying-in clause to the licensee. But it is, as the facts are alleged by the defendant, using its patent monopoly to suppress the manufacture of possible competing goods not covered by its patent. Prior to the cases above...