Rupp & Wittgenfeld Co. v. Elliott

• Decision Date: 09 May 1904
• Docket Number: 1,254.
• Citation: 131 F. 730
• Parties: RUPP & WITTGENFELD CO. v. ELLIOTT et al.
• Court: U.S. Court of Appeals — Sixth Circuit

131 F. 730

RUPP & WITTGENFELD CO. v. ELLIOTT et al.

No. 1,254.

United States Court of Appeals, Sixth Circuit.

May 9, 1904

Frederick E. Niederhelman (Lewis M. Hosea, of counsel), for appellant.

Taggart Dennison & Wilson, for appellees.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

LURTON Circuit Judge.

This is a bill to restrain contributory infringement of patents Nos 408,700, 526,012 and 552,869, issued to the complainant W. E Elliott for improvement in machines for attaching buttons to shoes. The Elliott button fastening machines are intended for use by retail shoe dealers in setting or resetting buttons upon shoes sold to customers. The bill avers that these machines are 'adapted and intended to take a coil of continuous wire, feed the same to a convenient point in the machine, sever a section of the wire therefrom, construct and form a staple through the eye of a shoe button, and drive the staple, or the prongs thereof, through the leather of the shoe, and clinch the same in position, * * * all by one stroke or operation of the machine. * * * That it was necessary to use wire of a certain size, and a certain temper or color, and coiled or put up in packages so shaped as to be received into the appropriate part of the machine. ' Machines according to these patents are made by the complainant the Elliott Machine Company, but are never sold but placed in the hands of users under a license to use only in connection, with staple wire purchased from the patentee. Every machine carries a metal inscription indicating that the patentees retain the title, and consent only to this restricted use. It is averred that the owners of the patent thus limit their own compensation to the profit upon the wire used in forming staples. It is averred that more than 6,000 machines have been thus placed in the hands of retail shoe dealers within the United States, and all of them conditioned in use as stated above. The bill charges that the defendants, with knowledge of this method of business, and that the mechanism embodying the Elliott inventions could only be lawfully used with the wire procured from the Elliott Company, 'have continuously been engaged for several years past, and are now engaged, in selling, from time to time, to the said users of the Elliott machines, and for the purpose and with the express intent that the same shall be used upon the said Elliott machines, wire put up in spools or coils, and not furnished by the Elliott Company; that the wire so sold by the defendants to the users of the Elliott machines has been and is put up on spools or coils of the exact form, size, and shape suitable for use upon the Elliott machines, and suitable for no other use,' etc. To this bill the defendants filed a demurrer for want of equity. District Judge Thompson, upon the authority of the opinion of this court in Heaton-Peninsular Button Fastener Co. v. Eureka Specialty Co., 77 F. 288, 25 C.C.A. 267, 35 L.R.A. 728, overruled the demurrer, with leave to answer. An answer was filed, but, by leave of the court, withdrawn; the defendants preferring to stand upon their demurrer. Thereupon a decree by default was entered, and the defendants perpetually enjoined from selling wire to the users of such machines, intended and adapted to be used in the manner described in the bill of complaint.

That the complainants were entirely within the boundary of their patent rights in permitting the use of their invention only in connection with wire sold by themselves is not an open question in this court. The conditions imposed upon users of the Elliott machines are substantially those sustained in Heaton-Peninsular Button Fastener Co. v. Eureka Specialty Co., 77 F. 288, 25 C.C.A. 267, 35 L.R.A. 728. The nature and limits of the monopoly acquired by a patentee were there thrashed out, and every aspect of the subject presented by the briefs of counsel for the appellants is dealt with in that opinion. That aspect of the question has since been before the Supreme Court, and the general view of this court, as expressed in that opinion, approved, in Bement v. National Harrow Co., 186 U.S. 70, 91, 22 Sup.Ct. 747, 46 L.Ed. 1058. After referring to certain limitations upon the rights of a patentee growing out of the police power of the state, referred to in the opinion of this court, Justice Peckham, speaking for the Supreme Court, concludes a discussion of the right of the patentee to impose such conditions as he may elect by saying:

'Notwithstanding these exceptions, the general rule is absolute freedom in the use or sale of rights under the patent laws of the United States. The very object of these laws is monopoly, and the rule is, with few exceptions, that any conditions which are not in their nature illegal, with regard to this kind of property, imposed by the patentee, and agreed to by the licensee, for the right to manufacture or use or sell the article, will be upheld by the courts. The fact that the conditions in the contracts keep up the monopoly or fix prices does not render them illegal.'

Heaton-Peninsular Button Fastener Co. v. Eureka Specialty Co. has also been approved by the Circuit Court of Appeals of the Second and Seventh Circuits (Cortelyou v. Lowe, 111 F. 1005, 49 C.C.A. 671; Victor Talking Machine Co. v. The Fair (C.C.A.) 123 F. 424; 426), and by Judge Lowell in Tubular Rivet & Stud Co. v. O'Brien (C.C.) 93 F. 200, and Edison Phonograph Co. v. Pike (C.C.) 116 F. 863, 867.

It is equally clear that the averments of the present bill bring the case fully within the authority of Heaton-Peninsular Button Fastener Co. v. Eureka Specialty Co., in respect to the contributory infringement by the defendants. The insistence that the opinion of this court in respect to the doctrine of contributory infringements, as applied to cases of the type of that before us, is in conflict with Morgan Envelope Co. v. Albany Perforated Paper Co., 152 U.S 430, 14 Sup.Ct. 627, 38 L.Ed. 500, presents no new aspect of that...