National Machine Works v. Harris

• Decision Date: 26 September 1947
• Docket Number: Civ. No. 3140.
• Citation: 73 F. Supp. 568
• Parties: NATIONAL MACHINE WORKS, Inc., et al. v. HARRIS et al.
• Court: U.S. District Court — Western District of Oklahoma

73 F. Supp. 568

NATIONAL MACHINE WORKS, Inc., et al. v. HARRIS et al.

Civ. No. 3140.

District Court, W. D. Oklahoma.

September 26, 1947.

Robert F. Davis (of Stevens, Davis & Miller) of Washington, D. C., and D. I. Johnston (of Keaton, Wells, Johnston & Lytle) of Oklahoma City, Okl., for plaintiffs.

Charles M. McKnight, of Tulsa, Okl., and John H. Bruninga, of St. Louis, Mo. (Edgar Fenton (of Looney, Watts, Fenton & Billups), of Oklahoma City, Okl., of counsel), for defendants.

VAUGHT, District Judge.

On July 27, 1946, Theodore C. Gerner filed this action to enjoin the defendants from infringing his Letters Patent No. 2,403,520 issued on a "Drive Shaft Bushing Assembly" on July 9, 1946. On August 31, 1946 Theodore C. Gerner assigned all his right, title and interest in the patent to the plaintiff National Machine Works, Inc., and on November 2, 1946 an amended complaint was filed by the National Machine Works, Inc., seeking the same relief. Later Theodore C. Gerner was again made a party plaintiff. In addition to seeking an injunction against infringment of the patent, the plaintiffs also allege unfair business practices upon the part of the defendants and seek an accounting.

The defendants filed an answer and amended answer and set up the following defenses and claims: 1. They deny that they infringe the plaintiffs' patent. 2. They allege that the plaintiffs' patent is invalid as it is the application of an old device to a new use. 3. That the patent is invalid as an aggregation. 4. The patent is invalid over the prior art. 5. That the plaintiffs have misused the patent in suit. 6. That the plaintiffs are guilty of unfair competition in trade. 7. That the patent is invalid for failure to file supplemental oath. 8. They deny that they are guilty of unfair competition in trade.

There are two facts to be determined which control all the other questions raised, except the seventh contention of defendants which will be taken up in the course of the opinion.

First. Is the device of the plaintiffs a patentable article?

Second. If the device of the plaintiffs is a patentable article, does the device of the defendants infringe the patent?

The facts are largely undisputed and cover quite a long course of conduct. In 1943, Theodore C. Gerner was an automobile mechanic. He possessed a limited education, but had an inquiring mind. He maintained a small shop at his home where he experimented with ideas of a mechanical nature. His work on Chevrolet cars called for the repair of worn propeller shafts and assemblies thereof. He gave a clear and understandable description of how that was done, in his testimony as follows:

"Q. Will you just briefly explain to the Court how you did that? A. Well, at that time, in order to repair a Chevrolet propeller shaft, it was necessary to remove the complete rear end with its wheels from underneath the car; completely disassemble the differential, rear gear, the differential, and pinion; take it completely apart, and then remove the bushing, the old bushing, taking the entire shaft, by driving it out and the seals, then replacing with a new seal and new bushing and a new propeller shaft, and then completely assembling the differential, running gear, and the pinion, and axle shaft, and putting the assembly back under the car.

"Q. How long would it usually take to do that? A. Approximately five to six hours." (R. 41.)

Sometime in 1943 Gerner started to work and experiment on a device to eliminate the tearing down and complete removal of the differential from underneath the car and drive shaft. His idea was, to make a device that could be installed in the front end of the propeller shaft housing to support the propeller shaft without a removal of that complete assembly.

Sometime in August 1944 the defendant Jack L. Harris called upon Gerner one evening at the Gerner home and told him that a Mr. Brandon had informed him that Gerner was thinking of going into the manufacturing business; that he was then a traveling salesman for automotive parts and was thinking also of going into some kind of business. Gerner advised him it would take $10,000 to start any kind of a business and Harris told him he was not interested in putting $10,000 in a business. Soon after this, in early September, 1944, Harris called on Gerner at his place of business and asked if Gerner had anything saleable in which he might be interested. Up to that time Gerner had never discussed his repair device with any one. During their conversation, Gerner showed the drawings and sketches of his repair device to Harris. Harris immediately became interested and wanted to take the device out on his territory and try to sell it. Early in October, Gerner made a model of the device, and Harris took it out on his territory and found it was saleable, securing several orders for the device. Harris began to press Gerner for an exclusive sales contract which resulted in a written contract between Gerner and Harris under date of November 16, 1944. This contract specifically provided the following:

"That Theodore C. Gerner, of Oklahoma City, Oklahoma, the owner of the inventive idea and a patent pending on a propeller shaft bushing assemblies, hereinafter referred to as the party of the first part, and Jack L. Harris of Oklahoma City, Oklahoma, hereinafter called the party of the second part, stipulate and agree as follows to-wit:

"1. For and in the consideration of $1.00 and other valuable consideration the party of the first part does by these presents assign, set over and convey to the party of the second part all exclusive rights to sell all of the articles described as a propeller shaft bushings assemblies, any improvement made on the patent right, or all other articles which the parties to this agreement may invent, manufacture or cause to be manufactured during the life of the patent or any period of renewal thereof.

"2. It is the intent of this assignment to give to the second party all exclusive rights to sell said articles described as a propeller shaft bushings assemblies and all propeller shaft bearings and seal assemblies and all propeller shaft housing repair units or assemblies and transmission housing part or parts that may be invented and/or manufactured by the party of the first part, in the United States, its territories and all other countries of the world."

* * * * * *

"5. The party of the first part agrees to do all things necessary in the completion and maintaining the patent on said propeller shaft bushings assemblies and all other parts during the life of this contract."

Gerner and Harris began their preparations to operate under the contract. Harris proceeded to prepare labels, catalogue material, et cetera. In the early part of January, 1945, Gerner procured the services of the Calhoun Hydraulic Equipment Company, a partnership composed of the defendant B. T. Calhoun and his brother, Ingram Calhoun, to manufacture some of the devices. Gerner turned over to Ingram Calhoun the complete drawings and specifications of his device, and several hundred units were made and delivered to him by that organization. Harris, under the supervision of Gerner, prepared instruction sheets for installing the device in the cars. In the meantime, Gerner was corresponding with the Charter Institute of American Inventors, in which he held a membership. He had sent that institution his sketches and drawings and by so doing, believed he was pursuing the proper procedure of applying for a patent. The Charter Institute of American Inventors subsequently returned to Gerner the material which he had sent them with the information that they did not render services in procuring patents. Gerner then took the matter up with O'Brien and Jacobson, patent attorneys in Washington, D. C., and through their services procured Letters Patent No. 2,403,520 involved in this action. Gerner's first application for the patent was filed July 23, 1945. The patent was finally issued on July 9, 1946. Gerner and Harris operated under their contract of November 16, 1944 until some time in the latter part of 1945 when suit was instituted in the District Court of Oklahoma County, Oklahoma, in Cause Number 111,515 by the defendant Jack L. Harris against Gerner for an accounting. The evidence discloses that the parties had never been in accord as to the compensation Harris was to receive, and that there was continually a dispute as to that feature of the contract. In that suit the court, on March 14, 1946, rendered judgment that paragraph 3 of the contract had never become effective or operative between the parties and that Harris was entitled to a commission of 7½ per cent. on all net sales made by him through manufacturers' agents, and 15 per cent. on all other net sales. Up to the time of the judgment, Gerner had paid Harris $5,082.78 on account; after the judgment, Gerner paid Harris in compliance therewith, $8,813.32. The judgment cancelled the contract between the parties as of April 1, 1946 and the judgment became final. The evidence discloses that as early as December, 1945, Harris was planning on going into the market with a repair unit in competition with Gerner, and was making it known to the trade. The defendant B. T. Calhoun, in February, 1946, procured C. B. Heim to make two bushings which it is stipulated "except for the oil groove, were the same as the bushings now being manufactured for H-C Products Company." After April 1, 1946 the defendants began to manufacture and sell their device to the trade throughout the United States where the Gerner device was sold and distributed, in competition with the plaintiffs. The plaintiffs immediately notified the trade that the defendants were infringing their patent.

The Gerner device, for which patent No. 2,403,520 was issued, is designated as "Drive Shaft Bushing Assemblies." The patent discloses 14 claims, in each of which it is designated as "a repair unit insertable in said end of said...