Osgood Panel & Veneer Co. v. Osgood

• Decision Date: 13 January 1932
• Docket Number: 23297.
• Citation: 166 Wash. 315,12 U.S.P.Q. 298,6 P.2d 661
• Court: Washington Supreme Court
• Parties: OSGOOD PANEL & VENEER CO. v. OSGOOD.

6 P.2d 661

166 Wash. 315, 12 U.S.P.Q. 298, 12 U.S.P.Q. 298

OSGOOD PANEL & VENEER CO. v. OSGOOD.

No. 23297.

Supreme Court of Washington

January 13, 1932

Department 1.

Appeal from Superior Court, Pierce County; F. G. Remann, Judge.

Suit by the Osgood Panel & Veneer Company against George H. Osgood. Judgment for defendant, and plaintiff appeals.

Affirmed.

F. D Oakley, Leo Teats, and Ralph Teats, all of Tacoma, for appellant.

Hayden Langhorne & Metzger, of Tacoma, for respondent.

HERMAN J.

George H. Osgood, the defendant, procured from the United States government a patent on a driven pressure bar for veneer machines. For a valuable consideration, he made a contract with the Osgood Panel & Veneer Company, the plaintiff herein, and out of this contract the present litigation arises. The execution of the contract is admitted and by this contract plaintiff was given the exclusive right in the United States, to the use of the driven pressure bar, covered by defendant's patent. The contract was later modified, reducing the territory in which plaintiff was entitled to exclusive rights to the invention to the states of Oregon, Washington, that part of California including Westwood and points north of Westwood, and British Columbia, excepting that the Wheeler-Osgood Company, of Tacoma, was given the right to use the invention. Defendant contracted with plaintiff that he would not himself sell, nor permit any purchaser to whom he might give the right to manufacture the machine covered by the patent to sell, and such machine in the territory awarded to plaintiff by the contract.

Plaintiff's complaint alleges that defendant took an active part in the organization of plaintiff company, and that defendant represented to the subscribers of the stock of the company that he would grant plaintiff the exclusive right to the use of the patent in question. The complaint also alleges that, immediately after its organization, plaintiff company entered into the contract with defendant, upon which this action is predicated, and proceeded to operate thereunder, investing large sums of money in the course of such operation. The allegations of the complaint referred to in this paragraph are admitted by defendant's answer.

Later defendant sold, to about 75 per cent. of the veneer companies in the northwest, veneer machinery involving a pressure bar. By using the machine which defendant patented, it is not necessary to steam logs Before the veneer is manufactured. Thus the cost of steaming the logs is eliminated, as well as the extra cost of drying the moisture in the product caused by steaming. More of the log can be used, as the pitch pockets and small cracks in the log which extend out from its center are smaller, due to the fact that the steaming process, which expands both the heart checks and the pitch pockets, has been eliminated. The filber in the wood which is cooked in the steaming process renders a poorer grade of veneer than where the veneer is peeled from the unsteamed leg. These savings are also accomplished by the machines sold by defendant in the territory in which plaintiff was by defendant given the exclusive right to the use of the driven pressure bar, for which the United States government granted defendant a patent.

At the trial it was shown that the machine sold by defendant to the veneer companies of the northwest differed, in the method of driving the pressure bar, from the machine on which defendant was issued a patent by the United States government. It was demonstrated at the trial that the pressure bar on the machines sold by defendant was driven by independent means, but plaintiff maintained that, nevertheless, such sales violated the contract between plaintiff and defendant. The trial court found for the defendant, and plaintiff appeals.

Appellant makes two assignments of error: First, the refusal of the trial court to grant a permanent injunction enjoining respondent from selling or otherwise disposing of power driven pressure bars for veneer machines, as covered by the contract between appellant and respondent; and, second, that the court erred in dismissing appellant's cause of action.

The question involved in this action is whether the machines, admittedly manufactured and sold by or under the direction of respondent, were manufactured and sold in violation of the terms of respondent's contract with appellant. This resolves itself into an inquiry as to whether the machines so manufactured and sold are covered by letters patent No. 1,641,452, which were issued to respondent, the rights under which were transferred by respondent to appellant.

A model of the machine made and sold by respondent was introduced in evidence, as was also a model of the machine covered by letters patent No. 1,641,452. Both models are Before this court, and an examination thereof discloses that they differ materially, in that the pressure bar in the machines sold by respondent is driven positively by independent means, while in the machine covered by the letters patent aforementioned the pressure bar is driven only when its rotation falls below a certain predetermined speed, which result is obtained by means of an overrunning clutch or ratchet device interposed between the driving power and the pressure roller, so that, so long as the rate of rotation of the pressure roller resulting from its frictional contact with the log exceeds a certain predetermined rate of speed, it will not be rotated independently, but when, on account of slivers, pitch, or other obstructions, the speed of rotation communicated to it from the log falls below that certain predetermined rate, it will be driven by independent means. An examination of the models discloses that there is lacking from the machines sold by respondent a dominant element of the patented machine; that is, the means for rotating the bar only when its speed of rotation falls below a certain predetermined rate.

Appellant contends, first, that the machine manufactured and sold by respondent infringes on the patent originally granted to respondent and by him sold to appellant. The patent in question was granted for a machine which was the result of a combination of a number of elements, one of which, as described by the inventor in his claim of patent No. 5, is: 'A veneer lathe pressure bar as set forth in claim 2, wherein said roller bar rotating means comprises a wheel driven at a predetermined minimum rate of rotation, together with ratchet means interposed between said wheel and said roller bar whereby, when the roller bar turns faster than said wheel, said rotating means is ineffective, and whereby, when said roller bar tends to turn at a slower rate than said wheel, said ratchet means becomes engaged and turns the roller bar at the same rate as said wheel.'

The Supreme Court of the United States, in the case of Burr v. Duryee, 1 Wall. (68 U. S.) 531, 17 L.Ed. 650, held: 'That two machines produce the same effect, will not justify the assertion that they are substantially the same, or that the devices used by one are, therefore, mere equivalents for those of the other.'

In Fuller v. Yentzer, 94 U.S. 288, 24 L.Ed. 103, the court said: 'Patents for a machine will not be sustained if the claim is for a result, the established rule being that the invention, if any, within the meaning of the Patent Act, consists in the means or apparatus by which the result is obtained, and not merely in the mode of operation, independent of the mechanical devices employed; nor will a patent be held valid for a principle or for an idea, or any other mere abstraction.'

The Osgood patent, issued to responden...