Siemens-Halske Electric Co. v. Duncan Electric Mfg. Co.

• Decision Date: 03 October 1905
• Docket Number: 1,147.
• Citation: 142 F. 157
• Parties: SIEMENS-HALSKE ELECTRIC CO. v. DUNCAN ELECTRIC MFG. CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

142 F. 157

SIEMENS-HALSKE ELECTRIC CO. v. DUNCAN ELECTRIC MFG. CO. et al.

No. 1,147.

United States Court of Appeals, Seventh Circuit.

October 3, 1905

Edward Rector and Drury W. Cooper, for appellant.

Robert H. Parkinson, for appellees.

Before GROSSCUP, BAKER, and SEAMAN, Circuit Judges.

BAKER Circuit Judge.

The appellant, complainant below, brought this suit against Duncan, the Duncan Company, Cragg, and Brown, to restrain their alleged infringement of claim 3 of patent No. 550,823 issued December 3, 1895; claims 3, 6, and 7 of patent No 604,465, issued May 24, 1898; and claims 2, 3, 4, 5, 7, and 11 of patent No. 698,653, issued April 29, 1902.

These inventions were all made by Duncan, and related to electric meters. In March, 1899, Duncan began service for the complainant as an electrical engineer, and continued until March, 1901. His contract required him to assign to the complainant all inventions made by him during the term of his employment. In January, 1900, for $10,000, he assigned to the complainant, among numerous patents and applications therefor, the two first patents in suit and the pending application for the third and the inventions therein described. During Duncan's term of service with the complainant, and both before and after that time, and until March, 1902, Brown and Cragg were the complainant's patent attorneys, and had charge of patent matters between the complainant and Duncan. Shortly after Duncan left the complainant, which was in March, 1901, Duncan, Brown, and Cragg organized the Duncan Company to exploit the inventions of Duncan made subsequent to March, 1901, in the line of electric meters. The Duncan Company immediately made a contract with Duncan to issue to him one-half of the $100,000 capital stock and to pay him $3,600 a year for 10 years, in consideration of which he engaged to act as general superintendent of the company's works for 10 years, to assign certain inventions and to allow the use of the name Duncan as a trademark. Brown and Cragg took $25,000 of the capital stock, and the remaining $25,000 was subscribed for by seven other persons. It does not appear but that each of these others had at the time full knowledge of the prior relations between Duncan and the complainant, Brown and Cragg and the complainant, and Duncan and Brown and Cragg, and of the assignments from Duncan to the complainant.

In the view we take of the case it is needless to cumber these pages with the claims in suit and the specifications relating thereto, or with a description of the meters there is either identity with, or mechanical equivalency of, the complainant's inventor's claims 'as he made them the prior art being left entirely out of view' (Standard Sewing Machine Co. v. Leslie, 118 F. 557, 561, 55 C.C.A. 323); and that, on the other hand, if the prior art is in the case, there is no infringement of many, if not all, of the claims. In the trial court, the complainant was denied relief against Duncan and the Duncan Company (Brown and Cragg were not served with process and did not appear), because there was found to be no infringement in view of the prior art.

1. As to Duncan. The claims in suit were presented to the government for allowance, and were allowed, as Duncan made them. He thereby asserted that the inventions described in these claims were exclusively his property. The government, by allowing the claims and issuing the patents, granted him the franchise to exclude all others from practicing the inventions without his consent, and certified to his ownership of what he claimed as his property. True, the grants imported only prima facie validity as against strangers thereto. They could defend on the ground that what purported to be described in the grant as property, had no existence (want of invention), or that the title to the property was in themselves (the public) by prescription (want of novelty by reason of prior publication or use), or that, although they were occupying a part of the property within the stated metes and bounds of the grant, the title to that part was in themselves (limitation by the prior art). The defendants admit that parties who come into relation with an invention described in a patent, whether by deed or lease or other form of contract, stand on a different footing from that of strangers. They admit that there is some sort of an estoppel, but insist that it does not apply in this case. The contentions may be stated and answered quite summarily.

Granting, they say, that Duncan is estopped from asserting that the claims are void for lack of invention or lack of novelty, he may nevertheless bring in the prior art to limit the claims and thus defeat the suit. Why one defense and not the other? They are of as like blood as brothers. One is somewhat larger than the other, is all. Lack of novelty defeats the complainant's title to the whole of the property within the metes and bounds of the claims. Limitation destroys his title to a part. If a stranger were occupying a part, but not all of the property described in the deed, he could answer, 'I am not concerned with your title to the residue, but what I am occupying is not yours. ' The contention that Duncan can do likewise brings the estoppel to nothingness.

When these patents were issued, the public were strangers to the grants. The grant to Duncan was the right to exclude the public from using the inventions described in the claims subject to the right of the public to strike down, if they could, the claims in whole or in part. The defendants assert that all that the complainant acquired by the assignment was the franchise to exclude, which had been granted to Duncan. This may be taken as true so far as...