Unistrut Corporation v. Power
| Decision Date | 18 December 1958 |
| Docket Number | Civ. A. No. 54-961. |
| Citation | 175 F. Supp. 294,121 USPQ 381 |
| Parties | UNISTRUT CORPORATION, Unistrut Products Company, and Charles W. Attwood, Plaintiffs, v. James F. POWER, Unistrut Service Company of New England, Power Products Company, Inc. and Power-Strut, Inc., Defendants. |
| Court | U.S. District Court — District of Massachusetts |
COPYRIGHT MATERIAL OMITTED
Cedric W. Porter, Heard, Smith, Porter & Chittick and Nicholas A. Pandiscio, Boston, Mass., for plaintiffs.
Arthur D. Thomson, Boston, Mass., and James F. Power, in pro. per., for defendants.
In their bill of complaint the plaintiffs include five distinct causes of action and they will be treated as such. The actions center around the activities of both parties with respect to the production, promotion and sales of articles covered by patents numbered 2,345,650 issued on April 4, 1944, on an application filed on October 12, 1940 and 2,696,139 issued on December 7, 1954, on an application dated May 28, 1952. The complaint alleges (a) unfair competition on the part of the defendants, (b) infringement of the plaintiffs' patents and (c) infringement of plaintiffs' copyrights, (d) infringement of plaintiffs' trademark and (e) breach of contract by the defendants. Injunctions and an accounting of profits and damages are sought. The defendants filed a motion for a declaratory judgment attacking the validity of Patent No. 2,696,139 and this decision will also dispose of that motion.
The plaintiffs are Unistrut Corporation, the manufacturer of the Unistrut metal framing system, hereinafter referred to as the Corporation, Unistrut Products Company, hereinafter referred to as the Company, the national distributor, and Charles W. Attwood, the owner of the two patents in suit and president of the Corporation. Unistrut Corporation is the exclusive licensee of the patents in suit. The defendant James F. Power had been the exclusive New England distributor of Unistrut and, as such, did business under the name Unistrut Service Company of New England.
When, in 1952, the Company changed its franchise policy to grant only non-exclusive distributorships, Power entered into a non-exclusive agreement with the Company. But he became increasingly dissatisfied and in 1954 cancelled this agreement and established his own manufacturing and distributing organizations, Power-Strut, Inc., and Power Products Company, Inc.
The basic Unistrut patent relates "to building and structural elements for the construction of skeletonized reinforcing and supporting structures, ladders, scaffolding, rails, frames, struts and the like," and its object is "to provide improved means whereby structures of the indicated and other types, of great strength may be erected more quickly and easily than is now possible, with the expenditure of less effort and labor in the field, and without the necessity of drilling or forming the material."
Both the Unistrut and Power-Strut systems employ slotted channel members with inturned edges which are connected to each other by a clamping nut with grooves and teeth to receive the inturned edge of the channel. The nut is backed by a coil spring to hold it in place and clamped by a threaded bolt which draws the nut tightly against the inturned edges of the channel member.
Several months before he actually cancelled his agreement with the Company, Power began to take steps which eventually led to the establishment of the Power-Strut organization. He solicited other Unistrut distributors and with offers of more advantageous discounts persuaded four of them to join him. These four represented a total Unistrut market of about one million dollars annually. He prepared a catalog which listed, in addition to Power-Strut parts, Unistrut equivalent parts numbers and which included pictures of Unistrut installations which were not identified as such. He sub-contracted with Van Huffel Tube Company, a former Unistrut supplier, for the manufacture of channels and nuts.
Power-Strut channels are very similar in design, color and size to Unistrut channels. They differ in shape from Unistrut only in that the inturned edges of the latter are bevelled, as compared with the flat or rounded edge of Power-Strut. The original supply of Power-Strut channels consisted of those sizes which were the most popular of the Unistrut line. The original Power clamping nut was admittedly an exact duplication of the Unistrut nut. Even Power-Strut's parts numbers were, in part, assimilated from Unistrut; e. g. Unistrut's P-1000 was equivalent in size and shape to Power-Strut's PS-100.
In considering the question of unfair competition I must apply the law as the Massachusetts Courts would apply it, Erie Railroad Co. v. Tompkins, 304 U.S. 64, 58 S.Ct. 817, 82 L.Ed. 1188; Fashion Originators' Guild of America v. Federal Trade Commission, 312 U.S. 457, 468, 61 S.Ct. 703, 85 L.Ed. 949, and under Massachusetts law the passing off of one's own goods as those of another with the result that the public is deceived, is clearly included within the definition of unfair competition. Summerfield Co. of Boston v. Prime Furniture Co., 242 Mass. 149, 136 N.E. 396; Healer v. Bloomberg Bros., 321 Mass. 476, 73 N.E.2d 895; Man-Sew Pinking Attachment Corp. v. Chandler Mach. Co., D.C. Mass., 33 F.Supp. 950. Power set out to deceive and succeeded in deceiving the public. The listing of equivalent parts numbers and the very similarity between parts numbers created the impression that Power-Strut was merely a less expensive line of Unistrut. The fact that Power continued to list Unistrut Products Company of New England in the telephone book for several years undoubtedly helped to strengthen that impression. The plaintiff at the trial adduced evidence of at least two instances where former Unistrut customers had received Power-Strut installations, not knowing that they were not getting Unistrut products. Power's testimony that all Unistrut customers were notified of the divorce of Power from Unistrut is not supported by the evidence. While the defendant did mail a letter announcing the new Power line, the letter makes no mention of the completely different origins of Power and Unistrut.
Many activities that are properly labelled "unfair competition" arise through ignorance of legal rights of others, through overzealous efforts to promote a product, or through mistaken belief in the line between fair and unfair competitive activities. But this case cannot be included in any of those categories. Here we have a well calculated plan, both in conception and in execution, to steal from the plaintiff much of its good will, to ride on the skirts of a reputation already established, to fool and mislead the public into believing that the defendants' products originated with the plaintiffs' and to divert into the defendants' own pockets the profits which would probably have accrued to the plaintiffs, except for the defendants' acts. These activities were unfair to the plaintiff as well as to the general public. They were dishonest. I find for the plaintiffs on this cause of action.
The plaintiffs have also argued that there has been a breach of the fiduciary duty owed by Power to Unistrut as a result of the agency relationship. But since no such allegation was included in the pleadings, I will disregard this argument except as it bears indirectly on the charge of unfair competition.
The defendants allege with respect to the first patent, the basic Unistrut patent, No. 2,345,650, that their product does not infringe, but if it does infringe the patent, the latter is invalid, having been anticipated by the prior art.
As to the second patent, No. 2,696,139, they allege and seek a declaratory judgment to the effect that this patent is invalid.
The evidence on the issue of infringement of the first patent included a great deal of testimony about the shape of the inturned edge of Power-Strut channels. The experts disagreed whether the edge was flat or somewhat rounded and whether, in fact, it is possible to achieve a perfectly flat edge when rolling the channels. In the view that I take of this aspect of the case it is immaterial whether the edge is flat or rounded for I find that the departure from the plaintiffs' design in either case is too superficial to avoid infringement.
The law is well settled that where two devices perform substantially the same function in substantially the same way to achieve substantially the same result, there is infringement. See Graver Tank & Mfg. Co. v. Linde Air Products Co., 1950, 339 U.S. 605, 70 S. Ct. 854, 94 L.Ed. 1097; Sanitary Refrigerator Co. v. Winters, 1929, 280 U.S. 30, 50 S.Ct. 9, 74 L.Ed. 147 and Machine Co. v. Murphy, 1877, 97 U.S. 120, 24 L. Ed. 935. The difficult question in all these cases, a question which cannot be answered by resort to formulae, is what degree of difference is necessary to constitute noninfringement of the patent.
As pointed out previously, the only difference between Unistrut and Power-Strut channels is in the shape of the inturned edge of the channel. There is no doubt that both perform the same function and in the same way, and equally efficiently. As a matter of fact, the very similarity of the two devices was the defendants' biggest selling point, and I find and rule that Power-Strut does infringe this patent.
The defendants argue alternatively that if Power-Strut infringes this Unistrut patent, the latter is invalid over the prior patents relied on by the defendants. With this contention I do not agree. While these patents1 show channels of a shape similar to the Unistrut channel, they are all patents for concrete inserts. The advance embodied in the Unistrut patent lies in the combination of channel and nut and in the "skeletonized structure".
The second patent in issue is the so-called nut patent, Attwood Patent No. 2,696,139. The defendants admit that they did copy this...
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