Toledo Scale Co v. Computing Scale Co Fidelity Deposit Co of Maryland v. Computing Scale Co
| Decision Date | 09 April 1923 |
| Docket Number | Nos. 339,388,s. 339 |
| Citation | 43 S.Ct. 458,261 U.S. 399,67 L.Ed. 719 |
| Parties | TOLEDO SCALE CO. v. COMPUTING SCALE CO. FIDELITY & DEPOSIT CO. OF MARYLAND et al. v. COMPUTING SCALE CO. et al |
| Court | U.S. Supreme Court |
This case comes here by writs of certiorari granted to the Circuit Court of Appeals of the Seventh Circuit to review the proceedings of that court in enforcement of a final decree in a suit to enjoin infringement of a patent and for an accounting of profits. The patent had expired pending the litigation, but the accounting resulted in a decree of the District Court for Northern Illinois for profits of more than $400,000 in favor of the Computing Scale Company against the Toledo Scale Company. The Circuit Court of Appeals, which had sustained the patent (208 Fed. 410, 125 C. C. A. 622), affirmed the decree for profits (279 Fed. 648), but stayed the mandate to permit an application to this court for a writ of certiorori, which was denied January 9, 1922 (257 U. S. 657, 42 Sup. Ct. 184, 66 L. Ed. 420). On the same day, the Toledo Company, a corporation of New Jersey, filed a bill in the District Court for the Northern District of Ohio against the Computing Company, a corporation of Ohio, to enjoin it from enforcing the decree of the Circuit Court of Appeals of the Seventh Circuit on the ground that it was obtained by fraud. The Computing Scale Company filed an answer, raising first a special plea to the jurisdiction and then responding on the merits, denying fraud, and pleading res judicata. The bill also made parties defendant the sureties on the supersedeas bond in the Circuit Court of Appeals, the Fidelity Deposit Company and the United States Fidelity & Guaranty Company, both corporations of Maryland, as well as three Toledo banks, citizens of Ohio, which held money deposited to the credit of the surety companies by the Toledo Company as indemnity, and asked that they all be enjoined from in any way satisfying or aiding to satisfy the decree. The Computing Company then filed in the Circuit Court of Appeals a petition for a rule against the Toledo Company, to show cause why it should not be enjoined from maintaining the bill in Ohio, and why a summary decree should not issue against the sureties. Pending a hearing as to this rule, the Ohio court granted a temporary injunction restraining the Computing Scale Company, and the sureties and the banks as prayed by the Toledo Company. The Circuit Court of Appeals thereafter heard the petition for the rule to which the Toledo Com- pany had made answer, in which by way of exhibit to its averments it set up as a defense the complete record in the injunction suit in Ohio. The Circuit Court of Appeals then made the order which is here for review. It reads as follows:
'We now receive from the Computing Company the certified copy of the Supreme Court's order denying Toledo Company's petition for writ of certiorari, and we direct the clerk to file it in this cause.
'Unless the mandate which we now formulate be stayed on Toledo Company's motion filed within five days, the clerk is directed to issue and transmit to the court below the following mandate:
'(1) Enter of record our affirmance of the final decree on accounting.
'(2) Enjoin Toledo Company from further maintaining its Ohio bill and from filing elsewhere any similar bill.
'(3) Enter summary decree against the sureties on the supersedeas bonds for the amount due upon the accounting decree, including all costs in both courts, but not exceeding the penalties of the bonds.
'(4) Ascertain Computing Company's expenses in this matter, including reasonable attorney's fees, paid or incurred since the Supreme Court's denial of the petition for writ of certiorari on January 9, 1922, and enter summary decree therefor against Toledo Company, but not against the sureties on the supersedeas bonds.'
The patent, the subject of controversy in this case, was for an automatic computing scale, issued to one Smith in September, 1895, and reissued April 28, 1896. It related to improvements in weighing scales, wherein the weight and selling price could be seen by the weigher at a glance without mental calculation. It consisted of a pan weighing device attached to an indicator drum inside of a casing with a slot through which the figures on the drum as it revolved in response to the effect of the weight would so co-ordinate with figures on the casing as to show the weight and correct price on the same line. The patentee in his specifications admitted that the general combination was an old one, but said that the object of his improvement was to provide scales, extraordinarily sensitive to weights of small amount, and accurately registering them. He explained that an essential feature of the indicator drum in his improvement was that it should be made of very light material because scales of this kind theretofore would not weigh alike successively, due to the inertia of the revolving drum, the force required to operate it, and the difficulty of stopping, and so he had constructed his drum of a skeleton frame of aluminum with a periphery of a thin sheet of paper.
The claims in controversy were:
'5. An indicator drum for weighing mechanism consisting of a spindle provided with a plurality of skeleton frames of light material and secured to said spindle, and having secured to their periphones a sheet of paper forming a cylinder.
The Computing Scale Company and the Toledo Scale Company were competitors in business. The former had acquired the Smith patent by the purchase of the assets of the Boston Computing Scale Company, and before 1906 was manufacturing scales using the Smith cylindrical drum in competition with scales of the Toledo Company having a fan-shaped registering dial. There had been patent suits between them concerning other parts of the weighing mechanism than the indicator. Each had other patents in this field. In 1906, the Toledo Company did not give up its fan-shaped scales, but began the manufacture of scales with an indicator drum of skeleton aluminum frame and paper periphery, and so increased its sales of them, so that they ultimately constituted the larger part of its business. T is led to two suits by the Computing Scale Company in 1907 against the Toledo Company in the District Court for the Northern District of Ohio. Nothing was done with them until the suit at bar was brought in the District Court for Northern Illinois in 1910. Then, as a condition of getting extension of time to take evidence herein, the Computing Scale Company was required by the court to dismiss the Ohio suits. In its answer to the bill in this case, filed in August, 1910, the Toledo Company alleged that the Smith patent and the claims 5 and 6 had been anticipated by a patent granted to one Phinney in 1870 and further averred anticipation 'by reason of prior public use and sale by various persons at various places and among others at Pawtucket by William H. Phinney, then and now, as defendant is informed and believed residing at said Pawtucket.'
On the trial, the Toledo Company's expert testified that he had built a Phinney scale following the patent to Phinney, but that he could not get it to stop twice within an ounce of the same weight, and that a scale which would not weigh within a very small fraction of an ounce was not an instrument of precision and not a commercial article at all. It should be said that the specifications of the Phinney patent made no reference to the material of which the cylinder of the scales was to be made or its weight, or the importance of those features. The District Court held that the fourth and fifth claims of the Smith patent were valid, and this was affirmed by the Circuit Court of Appeals, April 15, 1913 (208 Fed. 410, 413, 125 C. C. A. 622), holding that Smith had put in the hands of the world's vendors of commodities the first usable computing scale that long before the 'paper' art, including a patent to Phinney in 1870, had proposed to teach practical scale makers how to build automatic computing scales, but all attempts to make them were failures, that in the 25 years between Phinney and Smith the brightest and most skillful men had sought the necessarily tremendous commercial success of a reliable computing scale, but had not found it until Smith had the happy conception that the lightest possible drum would secure the required accuracy of revolution and stopping.
On May 14, 1913, the Toledo Company made a motion in the Circuit Court of Appeals that the court include in its mandate, affirming the decree of the District Court for an accounting leave to rehear the cause and to permit the Toledo Company to introduce proof that computing scales had been made and sold and introduced into use by the patentee Phinney of Pawtucket, R. I., which had a cylinder drum of light wood skeleton covered with thin paper and anticipated the drum of Smith. Three Phinney scales and 13 supporting affidavits were introduced. These included one of the son of Phinney, the patentee, who had been with his father during his manufacture and sale of the scales until his death and who still lived at Pawtucket, of Phinney's widow, and also those of residents of Pawtucket who said they had bought and used the scales. The affidavits also disclosed that in a suit against the Federal Company for infringement of the Smith patent brought by the Computing Scale Company in Philadelphia, which never came to trial, all this evidence had been taken and was on file. The three Phinney scales which were exhibits there had been in the custody of Church & Church who had been counsel for the Computing Scale Company in Philadelphia. It was also shown that the Computing Scale Company...
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