United States Expansion Bolt Co. v. H.G. Kroncke Hardware Co.

• Decision Date: 18 April 1916
• Docket Number: 2320,2331.
• Citation: 234 F. 868
• Parties: UNITED STATES EXPANSION BOLT CO. v. H. G. KRONCKE HARDWARE CO. et al.
• Court: U.S. Court of Appeals — Seventh Circuit

234 F. 868

UNITED STATES EXPANSION BOLT CO. v. H. G. KRONCKE HARDWARE CO. et al.

Nos. 2320, 2331.

United States Court of Appeals, Seventh Circuit.

April 18, 1916

In case No. 2320:

Banning & Banning, of Chicago, Ill., and Vincent P. Donihee, of New York City, for appellant.

Alan M Johnson, of New York City, and Thomas F. Sheridan, of Chicago, Ill., for appellee.

In case No. 2331:

Alan M Johnson, of New York City, and Thomas F. Sheridan, of Chicago, Ill., for appellant.

Banning & Banning, of Chicago, Ill., and Vincent P. Donihee, of New York City, for appellee.

Before KOHLSAAT, MACK, and ALSCHULER, Circuit Judges.

KOHLSAAT Circuit Judge.

On May 8, 1914, appellant, a corporation of the state of New York brought this suit against one of the appellees, H. G. Kroncke Hardware Company, a Wisconsin corporation, to restrain infringement of claims 1, 2, and 3 of letters patent No 623,809, granted April 25, 1899, to K. and V. McCreery for an expansion bolt. On May 9, 1914, appellant's counsel advised Alan M. Johnson, whom it knew to be counsel for the Diamond Expansion Bolt Company, a New York corporation and one of the appellees, manufacturer of the diamond screw anchors handled by the Kroncke Hardware Company and charged to be an infringement of said claims, that such suit had been commenced, inclosing a copy of the bill and saying:

'We presume that your clients will undertake the defense of this suit and accordingly inclose herewith a copy of the bill of complaint for your files.'

On May 28, 1914, the hardware company filed its answer, traversing the bill and setting up title in the Diamond Expansion Bolt Company of certain hereinafter named patents alleged to cover the diamond screw anchors. On August 6, 1914, the Diamond Expansion Bolt Company filed its petition to be made a formal party. This, appellant contested. On hearing had, August 10, 1914, the District Court granted such leave, in accordance with its opinion (216 F. 186). This leave the Diamond Company has availed itself of by joining in the answer of the Kroncke Company filed May 28, 1914, wherein they set up infringement of two patents owned or controlled by them, to wit, Cook patent, No. 685,820, granted November 5, 1901, for an expansion shield, and Pleister patent, No. 973,559 granted October 25, 1910, for an expansion bolt, and also acts of unfair competition on the part of appellant. Thereafter Newhall, licensor of the Pleister patent, a citizen of the state of New Hampshire, also joined in said answer and cross-petition. This answer propounded several questions to appellant. The answer thereupon proceeds, upon the authority of equity rule 30, 198 F. xxvi, 115 C.C.A. xxvi, to ask injunction and accounting as to the last-named three items, to wit, the Cook and Pleister patents and the unfair competition. Appellant's motion to dismiss the patent counterclaims was denied on August 10, 1914-- (see (D.C.) 216 F. 186). With regard to the jurisdiction of the court to consider these matters, appellant strenuously contended that the Diamond Company, having come into the case for the purpose of defending the suit as brought, might not inject into it matters which would not, as original claims, be enforceable against it in the federal court for the Western district of Wisconsin, and which were therefore not fairly to be deemed available counterclaims within the meaning of equity rule 30. These matters were also covered by the court in its order of August 10, 1914 (see opinion (D.C.) 216 F. 186).

There is also embraced within the suit a counterclaim brought by the United States Expansion Bolt Company against the Diamond Company for damages growing out of alleged injury to the former's trade. As no evidence was offered to this claim, it will not be further considered.

The appellant, after the decision of the court last named, proceeded to make reply to the appellee's counterclaims and interrogatories. From the latter it appears that appellant made no sales of any of the articles alleged to infringe appellee's patents, except one sale of about 100 lead anchors made in the Western district of Wisconsin. It does not appear that appellant had any established place of business in that district. The reply traverses the substance of the counterclaims of appellee. A vast amount of testimony was taken. On argument heard, such further proceedings were had that the court sustained all three of the patents and a certain prior use, but found that none of the patents was infringed. Appellee's charge of unfair competition was also sustained, and damages and an accounting awarded, without costs to either party, and the bill was dismissed as to Kroncke. These several orders of the court are assigned as errors, including the order permitting the Diamond Expansion Bolt Company and Newhall to file counterclaims.

The question which first demands attention is that of jurisdiction. Assuming the decision of the District Court as to infringement of the McCreery patent to be correct, had the District Court power to adjudicate upon appellees' two patents and the counterclaim for unfair competition on the facts as presented? There can be no doubt that, as was said in Peninsular Iron Company v. Stone, 121 U.S. 631, 7 Sup.Ct. 1010, 30 L.Ed. 1020:

'It is therefore a suit to which citizens of Ohio are parties on one side and a citizen of Ohio a party on the other, with interests so conflicting that the relief prayed cannot be had without keeping them on opposite sides of the matter in dispute.'

To all intents and purposes, so far as the counterclaims are concerned, appellant was a defendant and entitled to have the question of infringement in the Pleister and Cook patents tried in the district in which it was an inhabitant or in any district in which it had infringed, and where it had an established place of business, provided it did not waive its right thereto. First National Bank v. Morgan, 132 U.S. 141, 10 Sup.Ct. 37, 33 L.Ed. 282.

While suit could not, in the first instance, have been maintained in Wisconsin by the Diamond Expansion Bolt Company against appellant over its objection upon either the Pleister or the Cook patent, we have no doubt but that appellant waived that objection by its action in bringing the suit in the Wisconsin district as well as by statements of counsel shown on pages 1085 and 1087 of the record in the premises with regard to the patents of the counterclaims. The proceeding was one for infringement of a patent in each case. Of such a case some federal court had jurisdiction. So that no question of federal jurisdiction is involved. Appellant had the right to waive the question of privilege, and did so. We think the District Court proceeded properly to treat those matters as coming within the provisions of new equity rule 30 as pertaining to the matter of jurisdiction in equity and not to federal jurisdiction.

We proceed now to a consideration of the merits of the counterclaim for infringement. The opinion of the District Court on final hearing is found in (D.C.) 225 F. 383, wherein the court fully discusses the merits of the three patents in suit, holding as above stated, that while each is valid, none of them is infringed. A careful review of the evidence leads us to concur in the decision of the District Court as to these patents and also as to the question of prior public use. The field is very narrow. The prior art discloses the general principles which pervade each of the devices, and the latter must depend upon minor improvements for the disclosure of invention.

The McCreery patent contains the interior tapering opening longitudinally through the shield, whereby the inside or initially inserted end of the shield is expanded to a greater degree than other portions thereof by the advancing screw. True, it discloses a large iron expansion device, but the principles are there except the exterior longitudinal guides which serve to direct and steady the inward progress of the expansion bolt or shield and keep it from turning. These guides were found to have been added to the device of the McCreery patent in the prior public use expansion bolts made by appellant, taken from the Colonial Arcade and Colonial Building in Cleveland, Ohio. Fig. 2 of the device of the McCreery patent is herewith reproduced:

(Image Omitted)

The later devices are, of course, improvements on McCreery and the public use bolts. They disclose more elaborate expansion bolts with somewhat different exterior ribs or projections. These may be, and probably are more convenient and more ornamental. But the improvements are at most very narrowly patentable. The old iron McCreery expansion bolt, with the longitudinal guide flange or rib additions of the prior public use device, tells the whole story, though roughly. For instance, in the alleged infringed device of the Pleister patent, Fig. 1 of which is herewith reproduced, it will be seen that the principal difference is in the varying proportions of the horizontal ribs on the exterior of the bolt. These, it is claimed, serve also to keep the shields of the expansion bolt from turning with the action of the screw when it is forced in. The two part feature, per se, was not new.

(Image Omitted)

The Cook expansion shield is practically the same thing as the Pleister device, made from some 'soft ductile material.' It has the tapering bore of McCreery, the circumferential ribs or what is equivalent thereto, but differs, as the District Court says, in respect to the slots between the parts of the shield. The following cut is a reproduction of Figs. 1 and 4 thereof:

(Image Omitted)

These two patents, Cook and Pleister, while differing in minor respects from McCreery and the prior art, do not differ essentially, but only...