Rubber Tire Wheel Co. v. Goodyear Tire & Rubber Co.

• Decision Date: 15 December 1910
• Docket Number: 2,037.
• Citation: 183 F. 978
• Parties: RUBBER TIRE WHEEL CO. et al. v. GOODYEAR TIRE & RUBBER CO.
• Court: U.S. Court of Appeals — Sixth Circuit

183 F. 978

RUBBER TIRE WHEEL CO. et al. v. GOODYEAR TIRE & RUBBER CO.

No. 2,037.

United States Court of Appeals, Sixth Circuit.

December 15, 1910

Staley & Bowman, for appellants.

H. A Toulmin, for appellee.

This cause is here upon appeal from an interlocutory order made in the court below enjoining appellants, pendente lite, from instituting or prosecuting certain suits against customers of appellee. The suit was begun by a bill in equity of the appellee, as complainant, against the appellants as defendants. It is averred in the bill that complainant is engaged in the business of manufacturing and selling solid rubber tires for vehicles; that in 1900 defendants sought by suit commenced in the Circuit Court of the United States for the Northern District of Ohio, to enjoin the present complainant from making and vending its tires on the ground that they embodied the elements of a certain patent issued to one Grant in 1896, No. 554,675, for rubber tired wheels, the letters patent having been acquired by the present defendants; that the suit resulted ultimately in a decision of this court holding the Grant patent to be null and void and directing that the bill be dismissed; and that a petition for a writ of certiorari to this court was subsequently denied by the Supreme Court. It is further averred in the present bill that, notwithstanding such adjudged nullity of the Grant patent, the defendants are seeking to enforce it against customers of complainant, some of whom are specially named in the original bill and an amendment thereto, and against whom suits have been brought; that many of its customers are being intimidated by such suits and by threats made by defendants to commence suits against others, some withholding orders for complainant's rubber tires unless indemnified by it. An injunction is prayed against defendants from so diverting, and interfering with, complainant's business and trade in rubber tires.

In the opinion rendered in the court below, allowing the interlocutory order, this statement of facts appears:

'In July, 1908, the defendants in this case, who were the complainants in the original suit brought in the Northern district of Ohio, filed a bill in one of the federal courts sitting in New York to restrain and enjoin one Doherty from infringing the Grant patent. Doherty is a small dealer, of small means, and has been a customer of the complainant since December, 1907. The affidavit shows him to have stated that some persons unknown to him, desiring to equip a carriage wheel with a rubber tire, directed that the tire must be of the complainant's manufacture, and Doherty thereupon purchased such a tire. Thereafter Roberts, New York manager of the Consolidated Tire Company, before the fitting of a rubber to the wheel, directed him to buy the necessary wiring and steel channel of some one other than the complainant or any of its agents or branch houses. He thereupon purchased the wire of B. F. Goodrich, and the steel channel of the Rutherford Rubber Company. He says he was further directed by Roberts to mark the wheel to which he applied the tire so he could identify it, and to send his bill for services rendered to the company of which Roberts was the New York manager. Doherty did this and credit was given him on his account by such company. The evidence is undisputed that Doherty purchased his materials as above stated and fitted them to the carriage wheel. The statements attributed to him are not denied.'

By the preliminary injunction the appellants are restrained, pendente lite, from prosecuting the suit against Doherty (mentioned in the statement quoted), and also from 'instituting, maintaining or prosecuting any action in any court of the United States, based on alleged infringement of letters patent No. 554,675 * * * against any person, firm or corporation for dealing in, buying, selling or using any of complainant's solid rubber tires or any of the component parts thereof,' and also 'from interfering with the business of complainant by threatening to bring such suits against complainant's customers, whether the business conducted with those customers is the vending to them of the whole of complainant's tire or some one or more of the elements which enter into it.'

Staley & Bowman, for appellants.

H. A. Toulmin, for appellee.

Before SEVERENS, WARRINGTON, and KNAPPEN, Circuit Judges.

WARRINGTON Circuit Judge (after stating the facts as above).

The important question concerns appellants' suit against John Doherty, and the preliminary injunction granted in the present case against the further prosecution of that suit. One objection made is that the court below relied on affidavits containing hearsay statements. Doherty is one of appellee's customers whose names are not stated in the pleadings, but against whom, as a class, threats of suit are alleged to have been made by appellants. Doherty has admittedly been a customer of appellee in the purchases of rubber tires since 1907; and the facts that he purchased a solid rubber tire of appellee and placed it on a wheel and received his pay from one of the appellants as found by the court below are not open to the charge of hearsay and are not disputed. The hearsay statements are those tending to show that one of appellants caused orders for purchases of materials by Doherty and the work done by him to be given and executed in a particular way, with a view of instituting against him the suit before mentioned. Whether hearsay statements can be considered or not on interlocutory motion (Chase's Stephen's Dig. Ev. (2d Ed.) 311, note 4), or whether effective waiver could arise through failure, as here, to present any motion, objection, or denial in the court below concerning such statements (San Pedro, etc., Co. v. United States, 146 U.S. 120, 137, 13 Sup.Ct. 94, 36 L.Ed. 911; White v. Wansey (6th Circuit) 116 F. 345, 347, 53 C.C.A. 634), we need not decide; for, as before indicated, the facts which we regard as material were shown by direct evidence. Then in addition to the averments of a portion of the bill, which are in substance set out in the statement, it is stated among other things in the amended answer:

' * * * Defendants do know and aver the fact to be that in the trade a carriage manufacturer often handles and sells different makes of rubber tires, and that the practice in trade is to purchase rubber, namely, one element of a combination of the Grant patent, from rubber companies and apply this rubber themselves by means of special machinery, or have it applied for them by some blacksmith or machine company, to channel irons furnished by the customer of said carriage company or purchased direct from some steel or rubber company, or furnished direct from some steel or rubber company, and that a large part of the rubber tire business of the carriage manufacturer is often done by applying the rubber by means of two independent retaining wires to their own make of wheels and to wheels furnished them having different makes of channel irons, but all of that peculiar shaped rim which co-operates with the two independent retaining wires and the rubber to form the Grant patented combination. * * * '

The result is that the features of the Doherty case, which consist of his purchase of the solid rubber tire from appellee, the wire from Goodrich, and the steel channel from the Rutherford Rubber Co., and of then assembling these articles in violation of the terms of the Grant patent, present one of the typical cases described in appellants' amended answer, not to speak further of the bill; and learned counsel for appellants insist that:

'The pivotal question in this case is whether the court in construing the Grant patent can treat any one element as more material than some other element.'

We thus reach a consideration of the restraint of the interlocutory order upon appellants' prosecution of the Doherty suit. The basis of that suit is the Grant patent. As pointed out in the statement, in a suit between the parties to the present action the Grant patent was adjudged invalid, the decision being that it was 'void for want of patentable novelty. ' Goodyear Rubber Co. v. Tire & Rubber W. Co. (6th Circuit) 116 F. 363, 365, 366, 377, 53 C.C.A. 583. It was a combination patent, its first claim consisting of three elements, viz., a metallic channel rim, a solid rubber tire, and independent retaining wires passing entirely through the rubber tires horizontally. So far as the effect of the decree in that case is concerned, counsel for appellants in substance admit that if Doherty had purchased all of these elements-- the rim, the tire, and the wires-- from appellee, complete privity between appellee and its customer would have arisen, and so have justified the preliminary injunction as to him. This, of course, includes the further concession on the part of counsel that one effect of the former judgment is that, where a court of equity as...