New Britain Machine Co. v. Yeo, 16211
| Decision Date | 08 March 1966 |
| Docket Number | No. 16211,16287.,16211 |
| Parties | NEW BRITAIN MACHINE CO., Plaintiff-Appellant, v. W. Lloyd YEO, Administrator, Estate of Joseph H. Hoern, et al., Defendants-Appellees. W. Lloyd YEO, Administrator, Estate of Joseph H. Hoern, et al., Plaintiffs-Appellees, v. NEW BRITAIN MACHINE CO., Defendant-Appellant. |
| Court | U.S. Court of Appeals — Sixth Circuit |
COPYRIGHT MATERIAL OMITTED
Roy C. Hopgood, New York City, and Palmer S. McGee, Jr., Hartford, Conn., for New Britain Machine Co., Milton E. Higgs, Higgs & Higgs, Bay City, Mich., on the brief, John M. Calimafde, Arthur M. Lieberman, Hopgood & Calimafde, New York City, Palmer S. McGee, Jr., Day, Berry & Howard, Hartford, Conn., of counsel.
Ferdinand D. Heilman, Saginaw, Mich., for W. Lloyd Yeo and others, Heilman, Purcell, Tunison & Cline, Saginaw, Mich., on the brief.
Before PHILLIPS and CELEBREZZE, Circuit Judges, and CECIL, Senior Circuit Judge.
Case No. 16,287 is an appeal by New Britain Machine Company (referred to herein as "New Britain") from a final judgment rendered against it in the amount of $202,253.51, plus costs and disbursements yet to be taxed. This judgment is based upon royalties on a certain "BV" machine manufactured and sold by New Britain, which uses mechanisms covered by U. S. Patent No. 2,872,853 (application No. 400,531). Plaintiffs-appellees (referred to herein as "Yeo et al.") are a group of twenty-four former stockholders of Hoern & Dilts, Inc., a Michigan corporation which was dissolved in 1955, and are the owners of the aforesaid patent as assignees of this corporation.
Case No. 16,211 is an appeal by New Britain from an order of the district court dismissing its action against Yeo et al. for the recovery of royalties alleged to have been paid by mistake and without consideration in the amount of $207,193.36.
Jurisdiction in both cases is based upon diversity of citizenship. This opinion will be devoted to case No. 16,287 except where otherwise indicated.
This action is for breach of contract. Three contracts are involved, referred to herein as the 1946 contract, the 1950 contract and the 1955 contract. The patent in question, No. 2,872,853, was issued to J. H. Hoern, inventor, February 10, 1959. The application for this patent was filed by Mr. Hoern December 28, 1953.
New Britain is a manufacturer and seller of industrial machines. The machine here in question is of a type known as a rotary-cam actuated boring machine. This type of machine falls generally into one of three classes, namely: (1) "indexing" machines, or (2) "continuous" machines, or (3) "non-indexing, non-continuous" machines. The BV machine here involved is of the third class, i. e., "non-indexing, non-continuous."
In 1946 and prior thereto J. H. Hoern and Carl E. Dilts were engaged in business as a partnership designing and building machine tools. Mr. Hoern is now dead and Yeo is the administrator of his estate.
On March 28, 1946, these two individuals entered into a licensing agreement with New Britain. This contract stated that the licensors, Hoern and Dilts, "have been and now are developing cam and pneumatic actuated type boring machines;" that certain improvements in cam and pneumatic actuated type boring machines were disclosed in patent application No. 642,352 (later granted as Patent No. 2,641,146) and in application for U. S. Patents then in course of preparation (this reference is to application No. 671,477 which was filed May 22, 1946, and for which the patent was issued November 24, 1953, as No. 2,659,961); and that the exclusive right and license to manufacture and sell the said boring machines was granted to New Britain, except in certain particulars therein provided.
The pertinent licensing language of the 1946 contract is quoted in the margin.1
Additionally the agreement provided that Hoern and Dilts would disclose to New Britain any invention or improvements relating to the said machines, without further royalty payments.2
In September 1946, the Hoern and Dilts Corporation, hereinafter referred to as "H & D, Inc.", was formed, with Messrs. Hoern and Dilts holding a majority of the stock. H & D, Inc. engaged in the manufacture and sale of "indexing" and "continuous" rotary cam actuated boring machines.
In 1950 New Britain discovered that H & D Inc. was also engaged in the manufacture and sale of a type of "non-indexing, non-continuous" boring machines. New Britain protested to the individuals and the corporation that this action was an infringement of the exclusive rights granted by the 1946 contract. Two new agreements were executed, one between New Britain and H & D Inc., and the other between New Britain and Messrs. Hoern and Dilts as individuals. The agreement between the two corporations provided that:
The new licensing contract which was executed in 1950 between New Britain and the individuals Hoern and Dilts provided that the 1946 agreement "be amended by substituting therefor" the new agreement. The 1950 contract granted New Britain the exclusive license to manufacture and sell "said Rotary-Cam Actuated Boring Machines, including machines of the general type shown in Blue Print T-3003 annexed hereto," and including improvements thereto described and claimed in patent applications No. 642,352 and No. 671,477 ().
Pertinent parts of the 1950 agreement, which will be discussed later in more detail, are set forth in the margin.4
In 1955 New Britain purchased the assets of H & D Inc., and that corporation was liquidated. Two new agreements were entered into: (1) covering the purchase and sale of the assets of the liquidated corporation, which expressly reserved in H & D Inc. title to its patents and patent applications, and (2) a patent licensing agreement.
In the "Representations and Acknowledgement" section of the 1955 licensing contract, the parties identified various patents owned by H & D Inc., including the two patents referred to in the 1946 and 1950 agreements; and patent application No. 400,531 (later granted as No. 2,872,853), which is the subject of the present litigation.5
The granting clause of the 1955 contract is quoted in the margin.6
Under the language of the 1955 contract quoted in footnotes five and six, patent application No. 400,531 () is included within the term "letters patent and patent rights" upon which royalties were to be paid by New Britain, unless excluded by the "special acknowledgment" paragraph (footnote 7) which is discussed later in this opinion and unless included in the exclusive license granted to New Britain by the 1950 contract.
It is reemphasized that application No. 400,531 referred to in footnote 5 was later granted as Patent No. 2,872,853 on February 10, 1959. It is conceded by New Britain that the mechanisms of this patent are used in the BV machine involved in this litigation. The claim of Yeo et al. for royalties is based upon the use of patent No. 2,872,853 with respect to the BV machine.
New Britain contends, however, that the exclusive right to this patent was granted to it by Messrs. Hoern and Dilts under the terms of the 1946 and 1950 contracts and that this patent is excluded by the "special acknowledgement" paragraph of the 1955 contract (quoted infra in footnote 7); and it therefore owes no royalties on this BV machine under the 1955 contract.
The case was originally tried at various sittings by the late District Judge Frank A. Picard, who died without announcing a decision. Following the death of Judge Picard the case was assigned to District Judge Stephen J. Roth. Thereupon by stipulation it was agreed that the case would be submitted to Judge Roth upon the transcript of the proceedings, arguments and briefs of counsel, and proposed findings of fact and conclusions of law.
In rendering a judgment against New Britain, it was the reasoning of the district court that, under the provisions of paragraph (1) (e) quoted in footnote 5, it was stated that at the time of the execution of the 1955 contract H & D Inc. was the owner of patent application Serial No. 400,531, filed December 28, 1953, which was then pending. Judge Roth emphasized that, after listing all the patents and patent applications then owned by H & D Inc., paragraph (1) concluded with this language:
"All of the letters patent, patent applications, licenses and other rights referred to in this paragraph (1) shall be referred to hereinafter in the aggregate and for convenience only as `letters patent and patent rights.\'" (See footnote 6).
The district judge then pointed out that "paragraph 3 provides for the licensing of the `letters patent and patent rights'" owned by H & D Inc. and payment of royalties thereon by New Britain.
The court then concluded:
New Britain contends that, under the terms of the 1946 and 1950 contracts, it acquired exclusive rights to al...
To continue reading
Request your trial
-
Ingersoll-Rand Co. v. Ciavatta
...apply a "reasonableness" test consistent with our Solari/Whitmyer test. The Court of Appeals for the Sixth Circuit, in New Britain Machine Co. v. Yeo, 358 F.2d 397 (1966), reiterated the rule for interpreting a contract requiring the assignment of future patents and future "It is well settl......
-
Randolph v. Franklin Inv. Co., Inc.
...F.Supp. 19 (S.D.N.Y. 1955) (two prior counterclaims stricken; case had been pending three years). 19. Compare New Britain Mach. Co. v. Yeo, 358 F.2d 397, 410 (6th Cir. 1966) (four year delay; party had earlier told the court there would be no counterclaim); Kirbens v. Wodis, 295 F.2d 372, 3......
-
Xco Intern. Inc. v. Pacific Scientific Co., 03-1683.
...542 A.2d 879, 887, 895-96 (1988); Dispatch Automation, Inc. v. Richards, 280 F.3d 1116, 1117-19 (7th Cir.2002); New Britain Machinery Co. v. Yeo, 358 F.2d 397, 405 (6th Cir.1966). That would pretty much put XCO out of business, as it would have no incentive to be inventing for the benefit o......
-
Tyler v. DH Capital Mgmt., Inc.
...into a protracted litigation, it may be appropriate to bar consideration of that claim afresh in a new suit. Cf. New Britain Mach. Co. v. Yeo, 358 F.2d 397, 411 (6th Cir.1966) (“[T]he district court was not required to permit New Britain to relitigate the case, either by a belated countercl......