National Welding E. Co. v. Hammon Precision E. Co.

• Decision Date: 30 September 1958
• Docket Number: No. 36121.,36121.
• Citation: 165 F. Supp. 788
• Court: U.S. District Court — Northern District of California
• Parties: NATIONAL WELDING EQUIPMENT CO., a corporation, Plaintiff, v. HAMMON PRECISION EQUIPMENT COMPANY, a corporation, George L. Hammon, an individual and Clifford P. Stuebgen, an individual, Defendants.

165 F. Supp. 788

NATIONAL WELDING EQUIPMENT CO., a corporation, Plaintiff, v. HAMMON PRECISION EQUIPMENT COMPANY, a corporation, George L. Hammon, an individual and Clifford P. Stuebgen, an individual, Defendants.

No. 36121.

United States District Court N. D. California, S. D.

September 17, 1958.

As Amended September 30, 1958.

COPYRIGHT MATERIAL OMITTED

Marshall E. Leahy, John F. O'Dea, Naylor & Neal, James M. Naylor, Frank A. Neal, San Francisco, Cal., for plaintiff.

Flehr & Swain, Paul D. Flehr, John F. Swain and Harold C. Hohbach, San Franciso, Cal., for defendants.

ROCHE, District Judge.

This suit is based on two causes of action: (1) patent infringement and (2) unfair competition. The subject matter of this suit is gas pressure regulators, which are devices for reducing the pressure of compressed gas in cylinders to operating levels suitable for such activities as oxy-acetylene welding, the administering of anesthetics, and oxygen therapy.

Defendant George L. Hammon invented the three mechanical structures and the two designs which are the basis of the five patents in suit. He assigned the inventions and the respective patent applications to his employer, National Welding Equipment Co. (hereafter called National). On February 12, 1955, due to a change in National's management, Hammon was dismissed from his position as vice president and general manager of National, although he continued as a director. Three and one-half months later, on June 1, 1955, Hammon organized his own company, Hammon Precision Equipment Company (hereafter called Hammon Precision), to manufacture and sell gas pressure regulators and other apparatus. At about this time, defendant Clifford P. Stuebgen, a close friend of Hammon who was superintendent and treasurer of National and also a director, resigned from his job at National to become an employee of Hammon Precision. Both Hammon and Stuebgen continued as directors of National until March 9, 1956, when two other men were elected to represent their shares. Hammon and Stuebgen still own a substantial number of National's shares.

Patent Infringement

Plaintiff alleges infringement of United States Letters Patent Nos. 2,597,478 (split-skirt seat carrier), 2,597,479 (leather-like insert), and 2,685,300 (dust-cap adjusting handle) and United States Design Letters Patent Nos. D-153,063 (single-stage regulator) and D-153,064 (two-stage regulator). Plaintiff contends that Hammon, as the patentee-assignor of the five patents in suit, is estopped to contest the validity of these patents when sued for infringement by the assignee, National. Westinghouse Electric & Mfg. Co. v. Formica Insulation Co., 1924, 266 U.S. 342, 45 S.Ct. 117, 69 L.Ed. 316; Douglass v. U. S. Appliance Corp., 9 Cir., 1949, 177 F.2d 98. Plaintiff also contends that the estoppel in the case at bar extends to defendants Stuebgen and Hammon Precision as privies of Hammon, the patentee-assignor. Douglass v. U. S. Appliance Corp., supra; Buckingham Products Co. v. McAleer Mfg. Co., 6 Cir., 1939, 108 F.2d 192; accord, American Machinery Co. v. Everedy Machine Co., D.C.E.D.Pa.1929, 35 F.2d 526. Therefore, plaintiff contends, none of the defendants may assert that the patents in suit are invalid; the sole issue to be determined is the question of infringement.

Defendants deny infringing the five patents in suit and also assert that these patents are invalid because of prior public use.¹ To support their contention that an assignor may attack the validity of his assigned patent, defendants rely on Scott Paper Co. v. Marcalus Mfg. Co., 1945, 326 U.S. 249, 66 S.Ct. 101, 90 L.Ed. 47. In that case, the Supreme Court held that an assignor is not estopped because of his assignment from showing that his accused device follows a prior art expired patent. The assignor was permitted to show that the expired patent was identical with the assigned patent, thereby reducing the latter's claims to naught.

Defendants contend that the policy of not according patent protection to public domain inventions which permits a challenge to validity based on following the prior art also permits a challenge to validity based on prior public use. They contend that a device used publicly more than one year before applying for letters patent is as much in the public domain as a device covered by an expired patent. See Welch v. Grindle, 9 Cir., 1957, 251 F.2d 671. If a device is in the public domain, the superior public interest in its unrestricted use precludes the assignee from asserting a limited monopoly of the device by means of an estoppel growing out of the patentee's assignment. Scott Paper Co. v. Marcalus Mfg. Co., 1945, 326 U.S. 249, 255-256, 66 S.Ct. 101.

The court agrees with defendants. As said in Douglass v. U. S. Appliance Corp., 9 Cir., 1949, 177 F.2d 98, 101:

"* * * Scott Paper Co. v. Marcalus Mfg. Co. brings into the foreground the public interest in the free exploitation and distribution of appliances not truly the subject of a patent monopoly, relegating judicial concern as respects private good faith to an undefined and shadowy, but certainly a secondary, place."

Plaintiff has cited Buckingham Products Co v. McAleer Mfg. Co., 6 Cir., 1939, 108 F.2d 192, Universal Rim Co. v. Scott, D.C.N.D.Ohio 1922, 21 F.2d 346, and Hurwood Mfg. Co. v. Wood, C.C.Conn. 1905, 138 F. 835,² but the court is of the opinion that both Westinghouse Electric & Mfg. Co. v. Formica Insulation Co., 1924, 266 U.S. 342, 45 S.Ct. 117, 69 L.Ed. 316, and Scott Paper Co. v. Marcalus Mfg. Co., 1945, 326 U.S. 249, 66 S.Ct. 101, 90 L.Ed. 47, indicate a trend in the law favoring defendant's contention.

Turning to the evidence of prior public use, the record shows that devices embodying the structure known as the split-skirt seat carrier were sold by National to the United States Navy in 1945. These devices were pre-set regulators, part of a portable emergency cutting unit known as the Pak Kut outfit, which was to be used by men trapped in compartments of ships under water. Since an application for a patent for the split-skirt seat carrier was not filed until March 11, 1947, Patent No. 2,597,478 which issued from that application clearly is void because of public use of the invention disclosed therein more than one year prior to the date of application. 35 U.S.C. § 102(b) (1952).

Further evidence of prior public use, with respect to all three of the mechanical structures as well as the two designs, is as follows. At the end of World War II, Hammon, in an effort to use up surplus regulator parts and to add to National's line of welding equipment, designed a two-stage adjustable gas pressure regulator for National to produce commercially. This model incorporated the split-skirt seat carrier, the leather-like insert, the dust-cap adjusting handle, and the design later patented for both single-stage and two-stage models. Hammon assembled a small quantity of these regulators and toured the industry, offering them for sale. On a trip to Stuart Oxygen Company, he left two two-stage regulators to be tested and demonstrated to the company's salesmen by the head of Stuart's service department. These regulators were left with Stuart Oxygen Company before February 18, 1946 and never returned to Hammon or to National.

If an inventor gives or sells to another a device embodying the inventor's invention, without limitation or injunction of secrecy as to its use, and the device is so used, such use is public even though the use is confined to one person. Egbert v. Lippmann, 1881, 104 U.S. 333, 26 L.Ed. 755; accord, Welch v. Grindle, 9 Cir., 1957, 251 F.2d 671. The record shows a complete relinquishment of the regulators to Stuart Oxygen Company prior to February 18, 1946. Such use was not of an experimental nature which would still permit a valid patent to be issued. See Paraffine Companies, Inc., v. McEverlast, Inc., 9 Cir., 1936, 84 F.2d 335. Since patent applications for two of the mechanical structures and the two designs were not filed until March 11, 1947, and for the third mechanical structure until December 9, 1948, all of the mechanical structures and the patentable design features were in public use more than one year before the filing of patent applications. Therefore, the court concludes that all of the five patents in suit are void. 35 U.S.C. § 102(b) (1952).

The record also shows that none of the patents in suit has been infringed by defendants' structures or designs. Plaintiff has the burden of proof of infringement. Tropic-Aire, Inc., v. Auto Radiator Mfg. Co., 7 Cir., 1938, 96 F.2d 345; National Machine Corp. v. Benthall Machine Co., 4 Cir., 1916, 241 F. 72. The record shows that plaintiff has failed to sustain this burden.

No. 2,597,478 (split-skirt seat carrier)

Patent No. 2,597,478 discloses the use of a split-skirt seat carrier in the valve mechanism of a gas pressure regulator. The end of the valve piston opposite the seat end is slitted, and the portions between the slits act as individual springs to engage the side walls of a cylindrical sleeve. The friction created by this engagement eliminates undesirable buzzing, singing, or chattering when the regulator is in operation. Claim 1 of the patent contains the following limitation:

"* * * the wall forming the recess on the other end of the piston having a plurality of narrow, open-end slits extending in from said other end to give radial resiliency to said wall portions. * * *"

Claim 2 of the patent contains the following limitation:

"* * * said piston having a plurality of axial relatively narrow slits through its wall. * * *"

The evidence shows that the seat carrier in defendants' regulators has no slits but utilizes an old construction in which outwardly bowed lengths of piano wire are mounted on the outer surface of the seat carrier to engage resiliently the side walls of the sleeve.

According to Claims 1 and 2 of the patent, narrow slits in the seat carrier are a material part of the patented...