author: CONGER, District Judge.

text:
    AMERICAN BLOWER CORPORATION v. B. F. STURTEVANT CO.
    District Court, S. D. New York.
    July 20, 1945.

      Toulmin & Toulmin, of Dayton, Ohio (H. A. Toulmin, Jr., and R. A. Greer, both of Dayton, Ohio, and Frederick S. Duncan, of New York City, of counsel), for plaintiff.
    Howson & Howson and W. F. Sonne-kalb, Jr., both of New York City (Harry Dexter Peck, of Providence, R. I., and Melvin R. Jenney, of Boston, Mass., of counsel), for defendant.
   CONGER, District Judge.

Defendant appears specially and has moved to quash service of process herein and to dismiss the complaint for lack of proper venue in the proceedings and for insufficiency of service.

It appears from the complaint and the motion papers that plaintiff is a Delaware corporation, having its principal office in Detroit, Michigan; that defendant is a Massachusetts corporation. Both parties are nonresidents of the State of New York. It is asserted by the plaintiff and not denied by the defendant, that defendant maintains a regular and established place of business in the City of New York, within the jurisdiction of this Court and that it has obtained a license to do business in the State of New York pursuant to the New York General Corporation Law, Consol.Laws N.Y. c. 23, and in accordance therewith designated the Secretary of State of the State of New York as its agent to receive process in New York.

Service of process herein was made upon the Secretary of State and upon Raymond H. Keith in New York City, designated as resident manager of defendant. There seems to be no question but that service upon the Secretary of State complied with the requirements of the General Corporation Law.

This is a suit by plaintiff for judgment that defendant’s patents be declared invalid and that the “machines of the plaintiff do not infringe either one of such patents.”

As the complaint states, this is an action in equity, also a suit arising under the Federal Declaratory Judgment Act, 28 U. S.C.A. § 400, and under the patent laws of the United States.

While this is an action commonly termed a Declaratory Judgment action, it arises out of a controversy over the validity of two patents. There can be no question that this controversy is one arising under the patent laws. The Declaratory Judgment Act does not create new substantive rights or legal relationships, but adds to previous remedies, an additional one for relief in the form of a judgment declaratory in cases of actual controversy. Prior to the passage of this Act no one had a right under the patent laws to sue for affirmative relief that another’s patent was invalid or was not infringed. Still it has been held and now is well established that an action of this nature is essentially an action ensuing under the patent laws. E. Edelmann & Co. v. Triple-A Specialty Co., 7 Cir., 88 F.2d 852.

The Federal Court has exclusive jurisdiction of the subject matter of this litigation. 28 U.S.C.A. § 41(7).

Defendant, therefore, argues that inasmuch as this is an action under the patent laws, the provision of the Federal Law as to venue of patent suits as set forth in 48 of the Judicial Code, 28 U.S.C.A. § 109, must apply here.

There is now no question but that Section 48 of the Judicial Code is the sole provision for and governs the venue of patent infringement litigations. Stonite Products Co. v. Melvin Lloyd Co. 315 U.S. 561, 62 S.Ct. 780, 86 L.Ed. 1026.

As the Court said in the above case: “Section 48 gives jurisdiction of suits for patent infringement to the United States district courts in the district of which the defendant is an inhabitant or in any district in which the defendant shall have committed acts of infringement and have a regular and established place of business.”

If this action may be classed as a patent infringement action, then defendant must be successful here. Even if it be assumed that defendant has a regular and established place of business in New York, it cannot be charged with any act of infringement here, since it is the owner of the patents. Defendant, therefore, argues, that under Section 48 this suit should have been brought “in the district of which the defendant is an inhabitant” (Massachusetts).

There is another section of the Judicial Code to be considered, namely, Section, 51, 28 U.S.C.A. § 112.

This section fixes the venue generally of suits in district courts. The pertinent part reads as follows:

“ * * * No civil suit shall be brought in any district court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant; but where the jurisdiction is founded only on the fact that the action is, between citizens of different States, suit shall be brought only in the district of the residence of either the plaintiff or the defendant ; * *

Even under this section with nothing else disclosed except that the parties are citizens of different states and that neither are residents of the district, the venue requirement is not satisfied.

As I view it, however, it is necessary for the' reasons set forth hereafter to first determine which of these venue sections applies here.

I am satisfied that the venue of a declaratory judgment action of this type is fixed by Section 51 of the Judicial Code. Borchard on Declaratory Judgment, Second Edition Page 822; Automotive Equipment, Inc. v. Trico Products Corporation, Inc., D.C., 10 F.Supp. 736; Crosley Corporation v. Westinghouse Electric & Manufacturing Co., 3 Cir., 130 F.2d 474; E. I. DuPont De Nemours & Co. v. Byrnes, 2 Cir., 101 F.2d 14.

Having thus determined that the venue of this case is governed by Section 51 of the Judicial Code, I am satisfied that the holding in Neirbo Co. v. Bethlehem Shipbuilding Corporation, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437, solves, this question.

Pursuant to the Corporation Law of the State of New York the defendant in order to do business in the State of New York has filed with the Secretary of State a certificate designating that officer as a. person upon whom process might be served within the State of New York as to any cause of action in any court in this State.

By so doing defendant has waived the venue privilege, which it might have otherwise had, not to be sued in this court in this action. Neirbo Co. v. Bethlehem Shipbuilding Corporation, supra.

Recently there has been a trend toward allowing state law to govern jurisdiction and venue over foreign corporations and this trend reached its furthest step in the Neirbo case. Cohen et al. v. American Window Glass Co., 2 Cir., 126 F.2d 111.

In the Neirbo case, the court was passing on a question of venue (as here) under Section 51 of the Judicial Code. In that case venue was also asserted against the defendant, a foreign corporation, because it had filed (as here) a certificate designating a person upon whom a summons might be served in the State of New York.

The Supreme Court in the Neirbo case [308 U.S. 165, 60 S.Ct. 155] held that Section 51 “merely accords to the defendant a personal privilege respecting the venue, or place of suit, which he may assert, or may waive, at his election, Commercial Casualty Ins. Co. v. Consolidated Stone Co., 278 U.S. 177, 49 S.Ct. 98, 73 L.Ed. 252,” and accordingly it found that the filing of such a certificate as we have here constituted such a waiver. The court further said: “ ‘The stipulation is therefore a true contract. The person designated is a true agent. The consent that he shall represent the corporation is a real consent. He is made the person “upon whom process against the corporation may be served.” * * * The contract deals with jurisdiction of the person. It does not enlarge or diminish jurisdiction of the subject-matter. It means that, whenever jurisdiction of the subject-matter is present, service on the agent shall give jurisdiction of the person.’ Bagdon v. Philadelphia & Reading Coal & Iron Co., 217 N.Y. 432, 436, 437, 111 N.E. 1075, 1076, L.R.A.1916F, 407, Ann.Cas.1918A, 389.”

Defendant urges that the Neirbo case refers only to diversity cases in which both the State and Federal Courts had jurisdiction of the subject matter and that it does not apply to cases where jurisdiction of the subject mátter is solely in the Federal Court. A reading of the case convinces me that the Supreme Court made no such distinction between the two classes of cases and intended to make none. See Crosley Corporation v. Westinghouse, supra; Monroe Calculating Mach. Co. v. Marchant Machine Co., D.C., 48 F.Supp. 84.

Plaintiff urges that by complying with the General Corporation Law of the State of New York in appointing the Secretary of State as its agent for the acceptance of process in actions in this state, defendant has waived venue; that it makes no difference as to which venue section applies; that even if the venue hereby governed by Section 48, the filing of the certificate with the Secretary of State still constituted a waiver of the venue privilege. By reason of Bulldog Electric Products Co. v. Cole Electric Products Co., 2 Cir., 134 F.2d 545, I am not prepared to go that far.

Defendant now raises this last issue, i. e. whether or not a state law can compel a waiver of venue in a suit where a fede'ral court has exclusive jurisdiction. I think it can,. particularly with the situation we have here. I think the Neirbo case, supra, is a complete answer to this issue. I have decided that venue in this case is governed by Section 51. The court in the Neirbo case was construing the same section in connection with the same New York state law, and stated: “A statute calling for such a designation is constitutional, and the designation of the .agent ‘a voluntary act.’ ”

Feeling as I do that the Neirbo case is a complete answer to this contention of defendant, I see no need for discussing this point further. See also Bagdon v. Philadelphia & Reading Coal & Iron Co., supra.

Motion of defendant denied.

Settle order on five days’ notice.


source: Caselaw Access Project

author: BRYANT, District Judge.

license: Public Domain

text:
    BERGSTEIN et al. v. LOWMAN FOLDING BOX CORPORATION et al.
    District Court, N. D. New York.
    June 28, 1945.
    Allen & Allen, of Cincinnati, Ohio (Marston Allen and Gibson Yungblut, both of Cincinnati, Ohio, of counsel), for plaintiffs.
    Carlson, Pitzner, Hubbard & Wolfe, of Chicago, Ill., and Ball & Ball, of Utica, N. Y. (Richard Russell Wolfe, of Chicago, Ill., and Donald J. Ball, of Utica, N. Y., of counsel), for defendants.
   BRYANT, District Judge.

Plaintiffs claim infringement of claims 15, 18, 24 and 34 of Anderson Patent No. 2,197,089, which defines, with varying degree of particularity, a machine for folding paper boxes. Defendant Staude Company is a manufacturer of machines for making paper boxes. It manufactured and sold to defendant, Lowman Folding Box Corporation, the accused machine and is defending this suit. The defenses are non-infringement, invalidity because of lack of invention, invalidity because of failure to disclaim, and lack of title sufficient to maintain suit.

1. The patent in suit relates to a machine for manufacturing paper board boxes of the type commonly known as “knocked down infold boxes”, which are furnished to the trade in collapsed condition to save space and transportation costs. The patent discloses a machine for infolding and gluing pre-cut and pre-creased box blanks, of the kind shown in Figure 2 of the patent, into infolded and collapsed form, shown in Figure 7. The type of box designed to be produced is, in all material respects, shown in patents to -Beers, Nos.. 738,516, issued September 8, 1903, and: 1,032,645, issued July 16, 1912.

2. Anderson was a late entrant in an old and highly developed art. Wholly automatic machines for making collapsed boxes of the outfold type have been known in the art since at least 1898 and have been made and used commercially. The box, which the Anderson machine was designed to fold, has been known in the art since at least 1912 and automatic machines for making the same have been in use since about 1921. In fact, boxes of this type were manufactured on automatic machines and sold commercially by plaintiffs several years prior to the development of the machines covered by the patent.

It may be well to state generally the difference between infolded and outfolded boxes. Infold boxes are made by folding, all four walls inwardly over the main panel of a blank. An outfold box is made by folding a blank with two of its opposite, walls still extending in the plane of the blank.

3. Patentee Anderson was the first to-devise a straight line machine for the manufacture of the Beers type of box-Straight line machines have many points, superior to angular machines. They are-more compact. They occupy less floorspace, simplify factory lay-out and avoid the complexities and time loss of transfer of blanks from one machine section to. another. However, in the face of the prior-art, the making of a straight line machine would not, of itself, prove invention nor do plaintiffs so contend. Their contention, is that Anderson took known parts and. arranged them in forms and combinations, that solved the problems of making infold, boxes in a straight line machine and that his new forms and changed combinations, constituted invention. Coming, as he did,, into an old and highly developed field and at a late date, he must show a contribution of high order to overcome the expectations of mechanical development.

4. All four claims in issue are machine claims. Machines, both right angle and. straight line, for folding and gluing boxes,, infold and outfold, have followed a common pattern from almost the inception of.' the art. They all embody in some form a mechanism for supplying the blanks to the machine, a conveyor mechanism for carrying the blanks through the machine, folder mechanism for folding the blanks during their progress, mechanism for applying glue to the partially folded blanks as they pass through the machine, and a stacker at the end of the machine. The Anderson machine follows this pattern.

Instrumentalities of various types for the •performing of all of the above named functions were well known. In laying out .a machine in accordance with the common pattern, the box to be folded must be determinative, to a large degree at least, of the selection and location of elements known in the art. Having determined the folds to be made, it is within the expected skill of a mechanic in this art to select any desired type of feeding, conveying, folding and gluing instrumentalities, and to arrange the selected ones in proper form and sequence to perform their respective and individual functions in moving the blank, making the folds and applying the glue in a predetermined order of operation.

5. The place the machine, shown in the patent, has taken in industry has a bearing upon the question of validity and invention over the prior art and the breadth of construction to be given the claims in issue.

Anderson was a designer and experimenter with limited experience with box making machinery. He was given a box to be folded. His company had no machine that could do the work. He designed one, selecting instrumentalities from the prior art and arranging them in proper sequence and correlation to perform the functions required. His employer built two of the designed machines. None have ever been sold. Plaintiffs, who now claim title, have never built any. They do have five machines of their own design which substantially follow Bergstein patent No. 2,-149,111. The latest of these five machines was put into service about 1939. Their explanation of lack of impress is that they, and their assignor, are box manufacturers and not box machine manufacturers and, therefore, had no incentive to commercialize the patented machine. The record fails to show that Anderson’s disclosure made any appreciable impression on the art unless it is shown, as plaintiffs contend, through the making and sale of the accusing machine.

The patent claims at issue will be considered in the order in which they are considered in plaintiffs’ briefs.

6. Claims 18 and 24 set forth distinct statements in claim phraseology of the meat of the claimed Anderson advance. It is a machine that will take the Beers type box with the side walls transverse to the direction of motion and, while carrying it along, fold the front wall rearwardly and the rear wall forwardly and the triangular end portions of said walls in opposite directions. In the face of the prior art, do the features embodied in the two claims constitute invention?

Straight line outfold machines were in operation prior to Anderson. In order to infold, the machine has to turn the leading side wall rearwardly and the trailing side wall forwardly on score lines transversely to the direction of motion. Feeding the blank into the machine with side wall transverse to the direction of motion and the folding'of the forward wall backward do not constitute invention. Both of these functions, and instrumen-talities to perform them, are shown in the prior art. In regard to folding the trailing wall forwardly, the following is taken from plaintiffs’ brief: “For this bare function, there were folding fingers in the prior art which might be employed. The fingers could be arranged to travel along with the blank, as in Van Vleet et al. No. 567,014, or Von Thien No. 1,980,604, or they could be pivoted at fixed positions in the machine as again in the Van Vleet patent No. 1,528,753. Anderson adopted the latter, while the Staude Master Gluer (the accused machine) uses the former”.

In the Anderson machine the triangular tabs are reversely folded. The same is done by the accused machine. There are instrumentalities in the prior art that make such folds. They were shown as early as about 1913 in the Crawford machine (infold machine unpatented). Later, Butter-field, in patents Nos. 1,461,966 and 1,461,-967, and Bergstein, in patent No. 1,528,753, provided machines in which rotating sweeps were used to turn rear triangular elements forwardly while the forward ones were still struck out of line and folded by stationary sweeps. These were straight line outfold machines. LaBombard folded his side walls first and then folded back the triangular tab and Bergstein did the reverse, folding the tab first and then his side walls. Anderson provides mechanism which reversely folds the tabs simultaneously with the folding of the side walls. This is an improvement. However, in making this improvement he used nearly the identical action that was used in the W.M.P. machine (an unpatented machine manufactured by Staude and sold and in public use more than two years prior to Anderson’s filing date). A study of the two machines shows that each, in substantially the same manner, raises a flap or wall on the leading edge of a blank and folds the same rearwardly along a transverse crease line in the blank, and coinciddntly, with such infolding of the flap or wall, effects a reverse folding of a triangular tab attached to the wall. The main difference is that the W.M.P. machine, as constructed, folds tabs only along the leading edge whereas claims 18 and 24 make reference to folding along both leading and trailing edges. In the face of the prior art, a duplication of the folding mechanism in such form and position that it will fold tabs rearwardly on the trailing walls falls short of invention.

A machine, such as designed by Anderson, must have a feeding means that will leave the trailing wall free during the period of infolding. He solved this problem in an ingenious way. The feeding starts with a timed conveyor chain. At a certain point the blank is taken over by friction feeding means, which engages it, so as to leave the trailing wall free, and carries it along until after the folding. Then it is taken over from the friction feed by a timed chain and lug feed which engages the folded trailing wall and advances the blank in timed relation to the other instrumentalities. The friction feed, which must engage some part of the blank not being folded, prevents transverse buckling.

The feeding means, although not before paralleled in the art, falls short of patentable novelty. Concededly, chain and lug feeders and the friction types of feed were common in the art prior to Anderson. A machine designer knows the attributes of each. Admittedly, a designer “determines which of these conveying means he shall use, depending upon what the requirements are at a particular portion of the machine”. The employment of one of these well known feeding means to do one part of the work and a different means to do another is well within the expectations of mechanical skill.

Anderson’s claims 18 and 24 are so disclosed and crowded upon by the prior art that they are lacking in invention.

7. Claim 15 is a combination or, according to defendants, an aggregation. It sets forth the sequences of operating means. The seven “means” named therein are all found in the prior art. It is not contended that any are independent inventions. The results obtained from the designed combination are old results, viz., infolded boxes of the Beers type. All of the elements perform the functions for which , they were originally designed. The patentable novelty, if any, must be found in the assemblage of the various instru-mentalities. The claim is not so limited. It is broad enough to monopolize straight line infold machines. In a crowded art this cannot be done. Many of the “means” set forth in the claim are found, doing the same work and in the same manner, in both straight line outfold machines and light angle machines. Because of breadth, the claim must fall. Moreover, in view of the prior art, special reference being made to LaBombard patent No. 1,488,756 and the Staude W.M.P. machine, the claim must be held anticipated or lacking in invention.

8. Claim 34 is perhaps the broadest and, in some ways, the most vulnerable. With one or more exceptions it can be read upon the Von Thien patent No. 1,-980,604. Tho»e exceptions seem to be the elements which fold the walls transversely and the triangular tabs reversely and the changing of the moving means from a chain and lug to friction while the trailing walls are being folded and then changing back to the original moving means. The inventive features of these elements have already been discussed. Many of the features of claim 34 are disclosed in Staude patent No. 1,910,413 and the Staude W.M.P. machine. The claim is anticipated by the prior art mentioned.

9. In view of findings already made, it is unnecessary to consider claims of invalidity because of failure to disclaim claim 17. It is also unnecessary to consider questions of ownership of patents.

10. In view of foregoing, consideration of claims of infringement is academic. However, it can be said that a finding of validity of the Anderson claims in issue would have had to be followed by a finding of noninfringement. In view of the prior art Anderson must (had validity been found) be limited to a very narrow construction and an extremely limited range of equivalents. His machine and the accused machine are alike in respect to features which are common to machines disclosed in the prior art. They are alike, or very similar, in other respects. Both have means for folding trailing walls forwardly and triangular tabs reversely. As stated before, means to perform these functions cannot, in the face of prior use and disclosures, be monopolized. The same can be said in regard to the changes made in the moving means. Outside of those, the claim of infringement must be based upon the folding instrumentalities used prior to the time the blank reaches the gluing section of the machine. The two machines (Anderson and the accused) employ folding instrumentalities of different construction. The Anderson machine folds all flaps on the rear edge of the blank during its first folding operation and all flaps on the front edge in the second folding operation, whereas, Staude folds a part of the flaps on each edge in each operation. In folding sequence Staude follows LaBambard rather than Anderson. The two machines also differ quite radically in the instrumentalities used in making the folds. One utilizes a series of fingers pivoted on transverse shafts and the other carriages, with pivoted folder fingers, fixed to endless chains. Both of these devices have long been known in the art. Anderson, by using one, cannot monopolize the other through claim of equivalency. The folding sequence and the folding instru-mentalities, found in the two machines, lack that identity of means and operation which must be combined to constitute infringement.

The facts support the following conclusions :

1. Claims 15, 18, 24 and 34 of Anderson patent No. 2,197,089 are invalid for anticipation by, or lack of, invention over the prior art.

2. Said claims are not infringed by the accused machine.

3. Defendants are entitled to judgment of dismissal.

The facts are herein set forth sufficiently to obviate the necessity of formal findings.


author: DUFFY, District Judge.

text:
    FRASER et al. v. WILLIAMS.
    No. 1403.
    District Court, E. D. Wisconsin.
    July 14, 1945.

      Brezina, Buckingham & Spengler, of Chicago, Ill., and Alvin M. Strnad, of Milwaukee, Wis., for plaintiffs.
    Lecher, Michael, Spohn & Best, of Milwaukee, Wis., for defendant.
   DUFFY, District Judge.

Plaintiffs bring this action for alleged infringement of the trade-mark, trade name, and trade brand “RU-EX” and 'also for unfair competition. Defendant by counterclaim makes similar charges against the plaintiffs with reference to his trademark and trade name “RUX.” Both RU-EX and RUX were and are used to designate pharmaceutical products in powder form for the treatment of rheumatism.

The defendant has established by abundant evidence, including documentary, proof, his adoption and use of the name R.U.X. for his product as early as January, 1934, and the continuous use thereafter, first in the form of R.U.X., and after the latter part of 1936 as RUX. The principal sales of RUX have been on the West Coast and in various States west of the Mississippi River, although it also has been distributed in .most of the other States. The largest volume of sales was between 1937-1941 inclusive, with 1938 being the peak year. R.U.X. and RUX were advertised principally over the radio and in newspapers and magazines. RUX was usually referred to as Rux Compound. During the same period defendant marketed another remedy known as Williams S.L.K. Formula, a stomachic.

As to the adoption and use of RU-EX prior to 1934, plaintiffs are forced to rely almost entirely upon the recollection of witnesses. Thai plaintiffs’ business predecessor sold RU-EX in Canada in December, 1934, was sufficiently proved however. A Canadian license dated September 26, 1934, was granted to Ru-Ex Remedy Company of Toronto, Canada, and a certificate of registration was issued to the same company on November 2, 1934. The Canadian business was conducted solely in Canada, the labels and supplies being purchased there. A Canadian firm name and address were used.

It is doubtful that such proof is sufficient to establish in plaintiffs the exclusive trade-mark rights to the name in the United States. Moxie Co. v. Noxie Kola Co. of New York, D.C., 29 F.Supp. 167; Le Blume Import Co., Inc. v. Coty, 2 Cir., 293 F. 344. In any event the date of the Canadian sales' is subsequent to the time when defendant had adopted and used R.U.X. in the United States.

Plaintiffs insist, however, that the sales in Canada show that the product had been successfully tried -out at an earlier date in this country, and that a Chicago manufacturer would not undertake to market a remedy in Canada which had not first been established in the United States. While such is a permissible conclusion, it is one which does not necessarily follow. In a letter dated June 5, 1941, plaintiffs’ business predecessor who supervised the Canadian business said, “There is one thing about Canada, it is good testing ground.”

Any rights which the plaintiffs may have to the exclusive use of RU-EX stem from Charles G. Foucek who was the proprietor of a drug store at 1801 South Racine Avenue in Chicago. Foucek was of Bohemian nationality, and prior to 1924, in addition to the retail sales at his drug store, carried on a small mail order business in pharmaceutical preparations with others of his nationality, referred to in the testimony as the “Bohemian trade.” He advertised in Czech almanacs and sent out catalogues to those replying, listing about twenty remedies. No catalogue or advertisement was produced wherein the name of RU-EX was used, but witnesses were produced who recalled that in the days when he operated his drug store, Foucek had a liquid preparation for rheumatism called “Rum-ix” and also a powdered preparation which he sometimes designated as RU-EX or Ru-Ex Powder.

Milton W. Folds, son of C. G. Foucek, was associated with his father during most of the period from 1917 to 1941. In 1924 the father sold ithe drug store at 1801 South Racine Avenue. From 1924 to 1929 he conducted a laboratory at 1832 South Racine Avenue, and one at 1020 South Wabash Avenue from 1929 to 1931, and another at 510 North Dearborn Street for a portion of the year in 1931, but separated from his son and opened a store and laboratory on Blue Island Avenue in the latter part of 1931; thereafter, from 1933 to 1940, he conducted a laboratory at 3635 West Cermak Road, at which place his son was again associated with him. The business relationship between father and son was somewhat informal. The son claimed ito be a partner and testified, “We acted as partners, like father and son would. We always had a verbal partnership agreement.”

The principal product made and sold by Foucek was Aurine Ear Balm. Fou-cek carried on the business sometimes under his own name but usually under the name of Aurine Remedy Company. Later an Illinois corporation was formed under the name, Aurine Co., Inc. Milton Folds devoted most of his time to promoting the sale of Aurine Ear Balm, especially after the father sold the drug store in 1924.

In addition to Milton Folds, the principal witnesses for plaintiffs were Miss Loy who was employed by Aurine Remedy Company from 1929 to 1932, and from late 1933 to the present time, and witness Michalek who was employed by Foucek from 1919 to 1933. Both testified that one of the remedies sold was RU-EX. In answer to the following leading question, “Did Mr. Foucek put on those rheumatic powders some trade-mark, the same trademark which is shown on. this label, Exhibit 1, namely ‘RU-EX ?’ ” Michalek testified, “Well, the old man had several different names for the same. Sometimes he would call it ‘RU-EX’ and sometimes he would call it ‘Foucek’s Rheumatic Powders,’ and he had different terms to call it, it was not consistent, but he did call it, I recall, ‘RU-EX’ and I also recall ‘Rheumatic Powders.’ ”

Exhibit 1 referred to is a small partially printed and partially typewritten label. “Foucek’s Premium Prescription” is printed across the top, under which, on separate line's, the words “No.,” “Remedy For,” and “Directions,” are printed, each followed by a line for an insert, and the words “RU-EX,” “Rheumatism,” and “Follow Directions Enclosed In Box” are respectively typewritten in the blank spaces. Not much weight can be given to the label itself, as the name RU-EX easily could have been typewritten on an old unused label long after Foucek sold his store in 1924. In fact the testimony disclosed that on occasions some old labels had been used after plaintiffs’ predecessors moved to a new location, but usually the address was then altered. However, Exhibit 8 is a label which contains the printed name RU-EX as well as directions for the use of the powder with the juice of four lemons. At the foot of the label appears “Aurine Remedy Company, 1020 So. Wabash Ave., Chicago.” This is the only documentary proof that the name RU-EX was used by Foucek at all prior to the defendant’s adoption and use of RUX in 1934.

The use of the term RU-EX on a remedy for rheumatism was old, as is shown by the trade-mark registration No. 116896 by Albert S. Glass under date of June 5, 1917. The basis for trade-mark rights is the association in the public mind of the mark with the goods. American Photographic Pub. Co. v. Ziff-Davis Pub. Co., 7 Cir., 135 F.2d 569, 573. Something more than mere adoption is essential. The use must be general, continuous, exclusive, and applied to the goods and used in trade under such circumstances of publicity and length of use as to show intention to adopt the mark for specific goods. Continental Corporation v. National Union Radio Corporation, 7 Cir., 67 F.2d 938.

The burden of proof rests heavier in this case than the usual preponderance of evidence required in civil cases, for plaintiffs must establish their contentions by evidence so cogent as to leave no reasonable doubt in the mind of the court that the transactions occurred substantially as stated. H. Mueller Manufacturing Co. v. Glauber, 7 Cir., 184 F. 609, 618; Moline Plow Co. v. Rock Island Plow Co., 7 Cir., 212 F. 727, 732; American Lecithin Co. v. Warfield Co., 7 Cir., 128 F.2d 522, 526. Although the foregoing cases relate to the proof of prior invention, no good reason is perceived why the same rule should not apply to a prior use of a trade-mark. See Brewster-Ideal Chocolate Co. v. Dairy Maid Confectionery Co., 62 F.2d 844, 20 C.C.P.A. (Patents) 848. In a recent case, Empire Crafts Corporation v. National Silver Co., D.C.S.D.N.Y., 60 F.Supp. 1020, the court stated: “ * * * The law applicable to patents where priority of invention is involved is equally applicable to trade-marks in that the plaintiff cannot rely on a mere preponderance of evidence, but must overcome the prior decisions by testimony which in ‘character and amount carries thorough conviction.’ * * * ”

I do not think the plaintiffs have presented the requisite degree of proof for the period prior to January, 1934, in order to establish priority of appropriation and use. True it is that Foucek’s two sons and three other witnesses testified from recollection that Foucek had used RU-EX as the name for his powdered rheumatic remedy in the period before January, 1934; however, courts do not look with favor upon memory testimony given many years after the events occur. Adam Hat Stores, Inc. v. Monroe Shirt Co., Cust. & Pat. App., 143 F.2d 993; Becker v. Electric Service Supplies Co., 7 Cir., 98 F.2d 366; Raymond v. Royal Baking-Powder Co., 7 Cir., 85 F. 231. In addition, other circumstances cast a grave doubt upon the accuracy of the recollection of these witnesses. None of the business books or ledger sheets kept by plaintiffs’ predecessors, such as ledger sheets pertaining to purchases of supplies, lists of names, printing bills or rental payments, makes any mention of RU-EX. They do, however, make mention of other products such as Aurine, Auro Capsules, Kleerex, Cherry Cough Balm, and Mykol, the latter being a liquid rheumatic remedy. The invoices, letterheads, order blanks, etc. which were used during the. same period make no reference to RU-EX. The catalogue and copies of ads produced by plaintiffs are silent as to RU-EX, but do mention other products by their trade names. Recent orders sent by customers to the old addresses of plaintiffs’ predecessors refer to Aurine, but not to RU-EX. Testimony that RU-EX ads had appeared in Chicago and Nap-erville newspapers was presented, but neither the records of the publishers nor copies of the ads were produced.

Because of all this I reached the conclusion that the plaintiffs have not met the burden of proof required to establish the priority of appropriation and use of RU-EX.

I have also considered defendant’s contention that the plaintiffs lost any right to the trade-mark RU-EX by reason of a sheriff’s sale upon execution in July of 1932. Certain physical assets used in the manufacture and sale of products at 510 North Dearborn Street were sold, but this was after C. G. Foucek had moved to the Blue Island address and was there carrying on his mail order business in a limited way. Milton Folds was in possession of the goods at the Dearborn Street address and whatever transfer of title to the physical assets may have occurred had no effect upon any right that Charles G. Foucek may have had to make use of the name and mark RU-EX.

Considering now the defendant’s counterclaim, I am of the opinion that he conducted his business in such a manner that a court of equity should not grant him affirmative relief.

In 1936 defendant sent an application for registration of the name RUX to the United States Patent Office, which application, after some time, was denied. However, the defendant used the phrase, “Reg. U. S. Pat. Off.” on its cartons and labels from 1937 to the date of trial. Defendant and his counsel admit that the defendant had no right to use such notation and claim it was unintentional and an oversight, and that Harry Williams had given instructions that the notation be eliminated. It is difficult to believe that the notation appeared for a period of years without the knowledge and acquiescence of the defendant. It is more likely that defendant desired to use up his old cartons and labels and took a chance. This constitutes misrepresentation to the public and is sufficient to bar equitable relief. Notaseme Hosiery Co. v. Straus, D.C., 231 F. 243.

Furthermore, since 1939 the plaintiffs have expended more than $500,000 in a vigorous nationwide advertising campaign. They have featured the use of their product with lemon juice and have copyrighted some thirty-two phrases such as “For Rheumatic Pain Try This Lemon Juice Recipe,” and “For Rheumatic Pains Use Lemon Juice Recipe.” After this advertising campaign was under way and in the latter part of the year 1940, the defendant began to feature the lemon juice recipe, using the phrase, “Rheumatic Pain Try New Lemon Juice Recipe.” This obviously was an attempt by defendant to benefit from plaintiffs’ extensive advertising campaign and could only cause confusion to the public.

Moreover, prior to 1939 defendant had operated under the name of Williams S.L.K. Laboratories and all of his labels and cartons were marked accordingly. But in 1939, after the start of plaintiffs’ advertising campaign, he changed the labels and cartons by substituting Rux Laboratories for Williams S.L.K. Laboratories. However, he continued to invoice his customers as Williams S.L.K. Laboratories. This manner of invoicing of course would not come to the notice of the purchasing public.

In defendant’s earlier labels the name “Williams” and R.U.X. appeared in the same size letters, and in some cases the name “Williams” even predominated. Then later the name “Williams” was deleted from the top of the label, and the word “RUX” was given the predominant position. It was not until after plaintiffs had demanded that the defendant cease using the word “RUX” that the name “Williams” was restored to the top of the label. Such business conduct was not playing the game fair. Selchow & Righter Co. v. Western Printing & Lithographing Co., D.C., 29 F.Supp. 569, 572. Defendant is not entitled to equitable relief.

While the decree to be entered will not enjoin the defendant from using the trade-mark RUX for reasons heretofore set forth, he may be enjoined from featuring a lemon juice recipe in phrases similar to those widely advertised and copyrighted by the plaintiffs. He may also be enjoined from using the name “Rux Laboratories” on his cartons and labels, and may be required to use the word “Williams” in conjunction with the word “RUX” when the latter word dominates the label or carton, the letters in the word “Williams” to be at least one-half the size of those in the word “RUX”. Defendant will also be enjoined from using the notation “Reg. U. S. Pat. Off.” on his cartons and labels, at least until such, time as a registration may be approved


author: LEAHY, District Judge.

text:
    CHICAGO PNEUMATIC TOOL CO., et al. v. HUGHES TOOL CO.
    No. 463.
    District Court, D. Delaware.
    Aug. 7, 1945.

      William F. Hall, of Washington, D. C., and Raymond G. Mullee, of New York City, and William S. Potter (of Southerland, Berl & Potter), of Wilmington, Del., for plaintiffs.
    George I. Haight (of Haight, Goldstein & Hobbs), of Chicago, Ill., Robert F. Campbell and Lester B. Clark (of Andrews, Kelley, Kurth & Campbell), both of Houston, Tex., and Arthur G. Connolly, of Wilmington, Del., for defendant.
   LEAHY, District Judge.

This is an action containing three counts and based on the Anti-Trust Laws, the Patent Laws and the Declaratory Judgment Act. Defendant filed a consolidated motion to strike portions of the complaint, to dismiss the three counts, or for summary judgment as to counts 1 and 2.

Count 1. Plaintiffs allege the parties manufacture rotary bits for drilling oil wells. Defendant in 1933 sued plaintiff, Chicago Pneumatic Tool Company of Massachusetts, in the United States District Court for the Western District of Oklahoma for selling bits manufactured by Chicago Pneumatic Tool Company of New Jersey, charging infringement of Scott and Wellensiek patent No. 1,647,753 owned by defendant. Defendant procured an injunction and a Master was appointed to take an accounting. The Tenth Circuit affirmed. 97 F.2d 945, certiorari denied 305 U.S. 643, 59 S.Ct. 146, 83 L.Ed. 415. Defendant Massachusetts alleges that the claims there in suit were for a drill-bit assembly, although defendant’s theory of the case was that claims 2, 3, 4 and 5 were on cutters per se. It is urged that under the recent decisions of Mercoid Corporation v. Mid-Continent Investment Co., 320 U.S. 661, 64 S.Ct. 268, 88 L.Ed. 376, and Mercoid Corporation v. Minneapolis-Honeywell Regulator Co., 320 U.S. 680, 64 S.Ct. 278, 88 L.Ed. 396, a claim for a combination is not infringed by a sale of one element of the combination; and the injunction and accounting ordered in Oklahoma, on the basis of that contributory infringement suit, is an approval of a misuse of the patent and is therefore in violation of the Anti-Trust Laws. The relief sought under count 1 is for injunction against further proceedings in the Oklahoma case; that defendant be enjoined from further violations of the Anti-Trust Laws and be required to pay treble damages; and that defendant be enjoined from bringing suit anywhere on patent No. 1,647,753.

If the count’s purpose is to seek a retrial of the issues adjudicated by the Tenth Circuit, the count will be rejected. The Oklahoma court first acquired jurisdiction. It decided the issues between the parties. Awaiting a final report from its Master, it still retains jurisdiction of the subject matter of the controversy between the parties.

The major point in this count is the effect of the Mercoid decisions. If affirmance by the Tenth Circuit Court of Appeals of the decree in defendant’s favor is to be considered a violation of the Anti-Trust Laws, then plaintiffs are required to journey to that forum in order that that Court may correct its own error. As long as its decree remains in force it retains jurisdiction. It is unknown in our federal system for the District Court of Delaware, say, to emasculate a decree of the Tenth Circuit because what the latter Court thought the law to be in 1938, on the doctrine of contributory infringement, has now proved to be error in the light of what the Supreme Court said the law was on January 3, 1944.

Plaintiffs’ contention is that the Mercoid decisions have made it law that the grant of a patent is a special privilege, to be narrowly confined to the subject matter of its claims; and that a claim for a combination is not infringed by the sale of one of the elements of the combination, less than the whole number recited in the patent claim, even though a single element may constitute the nub of the invention (the advance in the art) and even though such part might have been sold for the intentional purpose of being associated with another part or parts to form the combination recited in the claims; in short, that the patent law, now, no longer recognizes contributory infringement. We hesitate to adopt plaintiffs’ point that Mercoid “announced * * * that should an injunction, or an accounting, be decreed for ‘contributory infringement’ it would amount to approval of a misuse of the patent and a violation of the Anti-Trust Laws.” Although there were some of us who ventured to suggest that the law of contributory infringement was not rejected in to to by the Mer-coid decisions, a postreading of the government’s brief, filed as amicus curiae in the Mercoid cases, prompts the suggestion that such skillful and learned presentation might well have been persuasive and it may be the doctrine of contributory infringement is no longer with us. A reading of these two cases at first led us to believe that when it was stated “The controversy centers around the license agreement” the rule of decision was when the patent owner by improper licenses extends the patent monopoly he is to be held as misusing his grant and violates the Anti-Trust Laws; or, he is rejected when he attempts to enforce the patent grant where he has unclean hands. It may be the tortfeasor, who aids and abets the direct infringer, is no longer called upon to exculpate himself in the courtroom. Clearly, the current emphasis is not on what is meant by “property” in a patent. Mr. Justice Holmes’ semantic definition of “property” seems apt — “You cannot give it definiteness of contour by calling it a thing. It is a course of conduct * * * subject to substantial modification according to time and circumstances both in itself and in regard to what shall justify doing it a harm.” The latest announcement at hand states: “The primary purpose of our patent system is not reward of the individual but the advancement of the arts and sciences. Its inducement is directed to disclosure of advances in knowledge which will be beneficial to society; it is not a certificate of merit, but an incentive to disclosure.” Sinclair & Carroll Co. v. Interchemical Corporation, 65 S.Ct. 1143, 1145. What proprietary interest — its metes and bounds —rests in a patent owner seems at the present writing to be difficult to define. Critical re-examination of the original constitutional purposes of the patent laws and suggested procedures for their administration have so far not come to fruition. See TNEC, Mon. No. 31, Patents and Free Enterprise, p. 145 et seq.

In the interim, as to the case at bar, the conclusion is the Supreme Court has not, so far, rejected the doctrine as applying to a “straight” contributory infringement suit where there are no licenses or other tie-ins and no evidence of intention to extend the grant in violation of the Anti-Trust Laws, If there is implicit in the Mercoid cases a complete abandonment of the doctrine, then it is preferred to have the Third or Tenth Circuits make such interpretation.

Plaintiffs’ theory supporting their cause of action contained in count 1 is that the devices under consideration in the Oklahoma proceedings were drill-bit assemblies and did not involve simply a cutter alone. Unless plaintiffs are correct and the District Court and the Tenth Circuit Court of Appeals were considering a combination, the violation of the Anti-Trust Laws argument must fail. Patent No. 1,647,753 is entitled a “drill cutter”; the claims claim cutters. The Circuit Court of Appeals, 97 F.2d 945, 947, refers to “conical cutters”; but in one instance, at least, there is reference to “one element in the combination covered by the patent is cutters” etc. Whether plaintiffs’ infringement of defendant’s patent was direct or contributory, should be left for the determination of the Courts in the Oklahoma proceeding, when plaintiffs seek — as they should seek if they are convinced of their cause — the cancellation of the decree on the basis of the law they urge is found in the Mercoid decisions.

No extended discussion will occur on argument that res adjudicata doctrine can not apply to the instant case because the decision of the Tenth Circuit Court of Appeals and the decision of the District Court does not constitute a final judgment. Where substantial rights of parties have been adjudicated and nothing remains but the ascertainment of the amount of award plaintiff should receive, the decree adjudicating the rights of the parties is regarded as the final decree. Victor Talking Machine Co. v. George, 3 Cir., 69 F.2d 871. Moreover, an action for declaratory judgment cannot be maintained for the veiled purpose of relitigating questions as to which a former judgment is conclusive. 154 A.L.R. 743.

Count 2. This count likewise seeks declaratory judgment relief. It contends the Master in the Oklahoma proceeding assumed to be included within the reference and considered not only two-cone bits but three-cone bits as examples of infringing devices. After argument, over objection, the District Court sustained the ruling of the Master. The prayers under this count seek findings, here, that the three-cone bits do not infringe patent No. 1,647,-753, i.e., that such devices are not properly within the reference issued by the District Court in Oklahoma; that if the three-cone bits are construed to come within the patent then Scott and Wellensiek is invalid; that defendant ought to be restrained from asserting the three-cone bits come within the patent; that further proceedings before the Oklahoma Master with respect to this item should be restrained.

As just stated, declaratory judgment remedy is not available to a party concerning matters already adjudicated. 154 A.L.R. 743. If plaintiffs think error has been committed by the Master and the District Court in permitting the three-cone bits to be included within the reference, such error is subject to review by appeal to the Tenth Circuit Court of Appeals. At most, inclusion of this type of bit can only pertain to the question of damages. The Scott and Wellensiek patent No. 1,647,753 has now expired. Nothing is present to move this court by declaratory judgment relief to take from the Courts in Oklahoma an issue which is presently before them. Jurisdiction here will not be assumed as an alternative for the plaintiffs’ taking an appeal from the District Court m Oklahoma to the Tenth Circuit Court of Appeals to test the question raised in count 2. Assuming jurisdiction, the Delaware court would, at best, have concurrent jurisdiction. The court which first acquires jurisdiction of a cause must first decide issues which are pending in the court which later acquires jurisdiction; Connecticut General Life Ins. Co. v. Pierce, 3 Cir., 110 F.2d 27; Milwaukee Gas Specialty Co. v. Mercoid Corp., 7 Cir., 104 F.2d 589; American Automobile Ins. Co. v. Freundt, 7 Cir., 103 F.2d 613; Staley Elevator Co. v. Otis Elevator Co., 35 F.Supp. 778; Mutual Life Ins. Co. of New York v. Brannen, D.C., 31 F.Supp. 123. Cf. Lockhart v. Mercer Tube & Mfg. Co., D.C. Del., 53 F.Supp. 301; Old Charter Distillery Co. v. Continental Distill. Corp., D.C. Del., 59 F.Supp. 528, especially when it appears the Master’s ruling was correct that he was permitted to consider as infringing devices specimens other than those actually before the Tenth Circuit Court of Appeals. Union Oil Co. of California v. American Bitumuls Co., 9 Cir., 109 F.2d 140; A. B. Dick Co. v. Marr, D.C., 48 F.Supp. 775. Clearly, the District Court in Oklahoma had jurisdiction to decide whether the Master had properly before him the three-cone bits. It said he did. The Declaratory Judgment Act was never contemplated to transfer a pending cause in one district to another district in order that a rehearing might be had in such latter district to review an alleged error of law.

Count 3. The final count also seeks declaratory judgment relief. It, too, was originally based on an alleged violation of the Anti-Trust Laws. This particular contention was withdrawn at oral argument, however.

This count plaintiffs urge “concerns a very live horse”. In substance it alleges plaintiffs Massachusetts and New Jersey sold and made a three-cone bit circa 1934-38 and other types circa 1937-42. Since 1942 additional types have been sold to the government, and of these a few sets have been sold to the general trade.

That which looks at controversy between the parties, in order to support the relief sought, is suggested by the following circumstances. Defendant gave notice in 1935 of two of its patents — Scott & Garfield No. 1,983,316 and Garfield No. 1,983,283 — to plaintiffs on their then three-cone bits. Plaintiffs allege these patents are “coextensive” with a third patent, Garfield & Scott No. 2,030,442, and as such the latter patent is equivalent to an infringement notice. In 1939 plaintiffs’ attention was again called to Scott & Garfield No. 1,983.316 and Fletcher No. 1,856,627. In 1942 plaintiffs claim that, in addition to Scott & Wel-lensiek, defendant issued an “omnibus charge” of infringement. In short, plaintiffs aver that defendant owns a number of unexpired patents relating to rotary roller earth-boring drills, all late-comers in a crowded art, and among which eleven patents are named. Plaintiffs say that they are uninformed as to what additional patents to those it has specifically identified were within defendant’s contemplation when it made its omnibus charge of infringement; and as plaintiffs have no way of knowing which or how many of defendant’s patents they are alleged to have infringed or are infringing, they are required to institute the present action. Reference is made to an action for infringement brought by defendant against the Williams Iron Works Company where defendant urged a construction of the Scott & Wellensiek and Fletcher patents and other patents of defendant, on its bits, which might bring within these patents devices sold by plaintiffs.

The prayers under this count are that none of plaintiffs’ three-cone bits infringe any of defendant’s patents, that none of the eleven specified patents are valid if construed to cover plaintiffs’ three-cone bits or, in the alternative, that defendant be required to file a statement in this proceeding of any patents which it intends to assert have been, during the past six years, infringed by plaintiffs’ devices. The usual injunctive relief is also sought

The substantive question raised by count 3 (now that the Anti-Trust Laws issue has been abandoned) is whether the count should be dismissed for failure of an actual controversy between the parties, for the statute is available only in those cases involving an actual controversy. Coffman v. Breeze Corporation, Inc., 323 U.S. 316, 324, 65 S.Ct. 298, and cases cited.

PX, P, Q and R show cutters secured in a bit-head to form a turn-cutter assembly and may be taken as typical of plaintiffs’ cutter units referred to in count 3. These have been sold almost exclusively to the government during the war. These are the devices, among others, which plaintiffs fear may come within the patents construed in the Williams Iron Works Company case, for, it is said, in that case defendant successfully contended for a construction of Scott & Wellensiek et al. which would bring within the Scott & Wellensiek et al. claims a drill-bit assembled from the parts disclosed as used by plaintiffs. Ever since Judge Phillips filed his opinion in that case, plaintiffs charge defendant has been holding the decree based upon that opinion over plaintiffs in terrorem. Plaintiffs fear unless relief is granted in the Delaware District they will be damaged and suffer irreparable loss.

Defendant’s conduct which is offered to support controversy, and hence jurisdiction, centers, after bringing all the allegations of count 3 into focus, on the following circumstances: Ten years ago and six years ago defendant stated it considered the devices then made by plaintiffs infringed three of defendant’s patents. There is the “omnibus charge” of 1942 contained in a letter from counsel in an attempt to settle a pending lawsuit (“general contentions between the parties * * * will not suffice”). Finally, there is the fact of the contentions urged by defendant, on the scope of its patents, in the Williams Iron Works Company case, which contentions, to repeat, plaintiffs fear may some day be asserted against them.

Settlement of a difference of opinion on the range of a decree rendered by another court as it may bear on possible future controversies between the same parties calls for an advisory opinion. It forms no structure for declaratory judgment relief. The “omnibus charge”, an incident in the Oklahoma proceeding, contained in defendant’s attorney’s letter to opposing counsel, looking toward settlement, was nothing more than traditional lawyer’s chess. The ten year old infringement notice should rest in peace. The day for justiciable resurrection has long since passed. Here, in the present, no charge appears the three-cutter assembly represented by PX. P, Q and R infringes any of defendant’s patents, viz., that what plaintiffs now make or sell has been called into question by defendant with respect to any of its patents.

There remains the lone question as to what disposition should be made of Dewey & Almy Chemical Co. v. American Anode Co., 3 Cir., 137 F.2d 68, 70, certiorari denied 320 U.S. 761, 64 S.Ct. 70, 88 L.Ed. 454, which is plaintiffs’ main reliance under count 3. The persuasive fact which compelled that decision, according to the opinion, was the extraordinary licensing program which the patent-holder was forcing on the industry. The particular method of doing business prompted the Court to observe: “The patentee has used its patents as an economic weapon against other alleged infringers who declined to take a license. In its suit against the Lee-Tex Company, Anode has asserted that the coagulant-dip process practiced by that company constitutes an infringement. It is not denied that Anode has thus publicly asserted such a scope for its patent claims as to embrace the similar methods practiced commercially by Dewey & Almy. * * * It is a fair inference that Anode in bringing suit against the Lee-Tex Company was counting on the in terrorem effect upon other manufacturers * * The declaratory judgment plaintiff in that case had been advised, during negotiations for a proposed license, the extremities to which it would be required to go. It was an example of the “or-else” doctrine which euphemistically suggested: ‘“You may take a license or not; it is purely mandatory.” There was nothing in the factual situation in that case comparable to the case at bar.

Aside from the portions pertaining to pleading deficiencies, defendant’s motions, challenging plaintiffs’ right to maintain the present action, should be granted. Let an order be submitted.

       15 U.S.C.A. §§ 2, 15 and 26.

       28 U.S.C.A. § 41(7).

       28 U.S.C.A. § 400.

       The motions are based on Rule 12 (f), 28 U.S.C.A. following section 723c, for failure to state a claim on which relief can be granted; on Rule 12(b) for lack of jurisdiction over the subject matter; on Rule 8(e) for absence of concise pleading as to all counts; ' and on Rule 56 for summary judgment as to Counts 1 and 2.

       Called herein “Massachusetts”.

       Called herein “New Jersey”. It is tacitly conceded that there exists an identity between both companies.

       Judge Maris in reviewing a somewhat analogous situation has said: “It is of obvious importance to all the litigants to have a single determination of their controversy, rather than several decisions which if they conflict may require separate appeals to different circuit courts of appeals. No party has a vested right to have his cause tried by one judge rather than by another of equal jurisdiction.” Crosley Corporation v. Hazel-tine, 3 Cir., 122 F.2d 925, 930.

       See Detroit Lubricator Co. v. Toussaint, D.C.N.D.Ill., 57 F.Supp. 837; Patent Infringement and the Public Interests — The Mercoid Cases, 12 George Washington L.Rev. 360; Patents — Contributory Infringement — Effect of AntiTrust Acts, 44 Col.L.Rev. 447; Girdler Corporation v. E. I. Du Pont de Nemours & Co., D.C.Del., 56 F.Supp. 871.

       Landis Machine Co. v. Chaso Tool Co., 6 Cir., 141 F.2d 800, 801.

       Mr. Justice Douglas [320 U.S. 661, 64 S.Ct. 270],

       Truax v. Corrigan, 257 U.S. 312, 343, 42 S.Ct. 124, 133, 66 L.Ed. 254, 27 A.L.R. 375.

       Is this a sub-conseious admission, or a suggested implication, that the first two counts are concerned with “dead ones”?

       Admittedly, Scott & Wellensiek, having expired November 1, 1944, has no pertinency under count 3.

         The “omnibus charge” is based upon this situation. During the course of the Oklahoma litigation one of defendant’s counsel, communicating with one of plaintiffs’ counsel, in a letter, stated: “One of the difficulties in attempting to go beyond the issues of the suit itself arises from other patents owned by Hughes Tool Company [defendant], which are contended by Hughes Tool Company to have been infringed by Chicago Pneumatic Tool Company. If we are to go beyond it in our Hughes Tool Company patents a consideration of such questions would further no possibility of settling.”

       See 10 Cir., 109 F.2d 590.

       Defendant raised in this count, as it did in the others, that the count should be stricken under Rule 8(e) (absence of concise and direct statement) and Rule 12(f) (immateriality, impertinence and scandal). The issues in this case are understood by the court and they may be determined without recourse as to whether there has been compliance with the proper technics of pleading. For the purposes of this case, then, the objections to the pleadings in all three counts are rejected.

       See note 15, supra.

       The devices made by plaintiffs are for the United States. If defendant’s patents are infringed by such manufacture and sale, defendant is required to sue the government in the Court of Claims, 35 U.S.C.A. §§ 68, 94.

       Board of Commissioners for Buras Levee Dist. v. Cockrell, 5 Cir., 91 F.2d 412, 413.


author: SWINFORD, District Judge.

text:
    ROWE et al. v. CHESAPEAKE MINERAL CO.
    No. 58.
    District Court, E. D. Kentucky.
    July 30, 1945.
    O. T. Hinton, of Pikeville, Ky., for plaintiffs.
    LeWright Browning, of Ashland, Ky., for defendant.
   SWINFORD, District Judge.

This action involves the title to the oil and gas rights in and to a tract of land containing approximately 1100 acres, situated in Pike County, Kentucky. In August, September and October, 1887, one John J. Stuart went into the locality of the land in question and took deeds for the mineral rights in several tracts of land. These deeds were prepared by John J. Stuart and were on a printed form. Each of the deeds contained the following language in the granting, habendum and warranty clauses, “coal, salt water, oil gas, and minerals”.

The deed involved in this case was executed on October 14, 1887, by William H. Reynolds, Orlando Reynolds, Andrew Adkins, and their wives, all of whom signed their names by mark. This deed is the only one with which we are concerned here and will be referred to as the Reynolds deed.

There was one distinction between the Reynolds deed and all of the other deeds to the adjacent and neighboring tracts of land. In the Reynolds deed there was a line drawn through the words “salt water, oil, gas”. A photostatic copy of the original deed is in the record and for clarity I will quote from that deed, indicating the lines as they appear:

The granting clause of the deed is as follows:

“The said parties of the first part do hereby sell and convey to the said party of the second part all the coab-salt-^waisfr-oilrgasj and minerals, lying and upon and under our farm,” etc.

The habendum clause of the deed is as follows:

“To have and to hold unto the said party of the second part, his heirs and assigns, forever, with the right of said John J. Stuart, Trusteee, his heirs or assigns of entry to mine said coal, salt-water-i-ci!, — gasr and mineral, with all the usual mining privileges ; reserving to ourselves the fee simple to the surface of said farm,” etc.

The warranty clause is as follows:

“The parties of the first part warrant generally the title to the coal, -salt water— ell; •gas, and mineral hereby sold.”

All parties to this action claim the title to the salt water, oil, gas through William H. Reynolds, Orlando Reynolds and Andrew Adkins. The defendant acquired whatever rights and interests it now owns by mesne conveyances from John J. Stuart, Trustee. The original plaintiff, G. C. Rowe, and the intervening petitioners claim through later conveyances but through these same grantors.

The sole question involved is whether or not John J. Stuart, Trustee, acquired the salt water, oil, and gas in the 1100 acre tract by his deed of October 14,1887.

There is an additional fact which should be stated for the sake of clarity. When the deed was lodged for record in the office of the Clerk of Pike County, in recording the deed, the clerk erroneously failed to record the instrument as it appeared on its face and did not record the words, “salt water, oil, gas”, evidently considering that since they had lines drawn through them, they were not a part of the deed.

The determination of this case rests upon a very narrow issue and that is, does the appearance of this deed indicate what was in the minds of the parties at the time it was executed ? Does that intention bind a bona fide purchaser?

There are many rules of construction. Much has been said in briefs and many authorities cited, but I do not see that it would serve any good purpose to indulge in an academic discussion of the laws of contracts as they deal with the construction of instruments or to quote from the many authorities found in textbooks, encyclopedias, or from reported cases from this and many other states, as well as from the Federal Courts. This case must rest on its own facts. No similar case can be found.

From the appearance of the instrument it is clear to me that the grantors in the deed of October 14, 1887, expressly intended to reserve the salt water, oil and gas, and to assist them in carrying out this intention, the grantee, or his agent, struck out the words, “salt water, oil, gas” by drawing a line through them. All of the other grantors of the mineral rights used the printed forms of deeds, which were provided for them by the grantee, conveying all of their mineral rights including salt water, oil, and gas, but here was the special case, which stands out like a light. It is obvious that the parties here intended the unusual. It is manifest that a different kind of instrument was intended by the contracting parties. There can be no other explanation, and no evidence has been offered that can overcome this intention as presented by the written instrument.

It is very true that in determining what this intention was the court cannot ignore the language of the instrument or imply words not used. To do so would be to substitute the court’s contract for the contract of the parties. However, in determining what this intention was and in applying these rules of construction as guiding the court to the correct intention, all things which appear on the face of the instrument may be considered. These “things” may be marks, erasures, deletions, or lines drawn through words. As stated in the case of Maynard et al. v. McHenry et al., 271 Ky. 642, 113 S.W.2d 13, it is only where the language of the grant is ambiguous that extrinsic evidence is admissible and if there are no restrictive words, a conveyance or passage of minerals will include oil and gas. I do not think that the term “ambiguous” should be applied to language alone but to anything which might appear from the instrument that calls for an explanation or leaves the mind in some doubt as to what the parties intended. While the opinions use the word “language” they certainly do not mean to exclude other indications appearing on the face of the instrument.

There is nothing ambiguous in the language here used. The ambiguity arises when the words are stricken out by a pencil or pen mark through them. The words left in and not stricken are not ambiguous but the words stricken out with a pencil or pen are ambiguous and subject to explanation by extrinsic evidence. The mere fact that oil and gas had not been discovered in the vicinity of the land conveyed or was unknown at the time the deed was executed does not alter the case. Maynard et al. v. McHenry et al., supra.

The doctrine ejusdem generis has no application here. The word “minerals” and four kinds of minerals, coal, saltwater, oil, gas, were expressly named and then before the instrument was executed or at least simultaneously with its execution, certain of these minerals named were stricken out of the instrument. It is generally accepted as a rule of evidence that if nothing appears to the contrary the alteration will be presumed to be contemporaneous with the execution of the instrument. Greenleaf on Evidence, 16th Edition, page 702.

Where an erasure, interlineation, or alteration appears it seems to be the better opinion (in pursuance of the maxim, omnia rite acta praesumtur), that the presumption is that all of the changes were made before the execution of the writing. In 17 Corpus Juris Secundum, Contracts, pp. 734, 735, § 317, it is said that: “Contracts must be construed with reference to the words which they contain, and words which have been erased or crossed out are not, under some authorities, to be considered; it has been said, however, that such words may be considered in ascertaining the intention of the parties where the contract is ambiguous.” This text cites the case of Curtis v. M. L. Virden Lumber Co., 159 Miss. 454, 132 So. 341. I do not have this case before me and of course do not know that it holds as the text states, but assuming that it does, it is good authority on the question presented here. This is an ambiguous contract. The words put in it and then stricken out make it ambiguous. Since it is ambiguous it would be essentially unjust and unfair to ignore the facts appearing on its face. While I again call attention to the fact that the authorities in Kentucky speak of ambiguous language, I cannot conclude that they have narrowed the rule of construction to mean only language and not contract as it appears in its full context.

As is well said in the case of Combs et al. v. Combs et al., 292 Ky. 445, 166 S.W.2d 969, 970, quoting from the case of Combs v. Fields, 211 Ky. 842, 278 S.W. 137, 138: “If the intention of the parties can be ascertained, it must control. The intention is gathered from the entire instrument, giving proper effect if it can be done to each and every part, and considering all of the clauses without reference to the place at which they appear in the instrument.” See also McKinney’s Heirs v. Central Kentucky Natural Gas Co., 134 Ky. 239, 120 S.W. 314, 315, 20 Ann.Cas. 934, from which I quote as follows :

“ ‘This rule is of especial importance when the question arises whether a specific mineral is included in a. general designation.’ The words ‘other minerals,’ or ‘other valuable minerals,’ taken in their broadest sense, would include petroleum oil; but the question here is: Did the parties intend to include such oil in the mining right? Taking all the terms of the conveyance in the light of the surrounding circumstances, and in view of the above rule of construction, and upon authority of the case of Dunham & Short v. Kirkpatrick, 101 Pa. 36, 47 Am.Rep. 696, we conclude that the title to the oil did not pass under said conveyance, but remained in the owner of the soil, and upon his death passed to his heirs. There is nothing to show that it was the intention of the parties that oil should be included in the word ‘minerals,’ and the easements granted in connection with the mining right are not applicable to producing oil, and show that oil was not intended to be included in the conveyance. If it had been, apt words would have been used to express such intention.”

The best statement of the rule to be applied to the facts presented by the record in this case is found in Hudson & Collins v. McGuire, 188 Ky. 712, 223 S.W. 1101, 1102, 17 A.L.R. 148. I quote:

“As said in 8 R.C.L., p. 1041, ‘The ten dency of modern decisions is to disregard technicalities and to treat all uncertainties in a conveyance as ambiguities, subject to be cleared up by the resort to the intention of the parties as gathered from the instrument itself, the circumstances attending and leading up to its execution, the subj ect-matter and the situation of the parties as of that time.’ To the same effect is 18 Corpus Juris, p. 279.”

I am not impressed with the testimony of Mr. Dallas Justice or Mr. M. L. Hanks, in which they state that in 1941 they visited Orlando Reynolds at his home on Grapevine Creek; that at that time Mr. Reynolds was a man in his nineties and in bed. Mr. Reynolds, at this time, owned about 25 acres of what had originally been the approximately 1100 acres in question. According to the testimony of the witnesses he stated that he did not own any minerals under this land as he had long since sold all the minerals. The testimony is so vague that it is of little evidential value.

Notwithstanding the fact that it was the intention of the grantors at the time of the execution of the deed in question to expressly reserve the salt water, oil and gas, a determination of this question does not satisfy -the justice of this case. The defendant and its immediate predecessor in title according to the record, are innocent purchasers for value. The defendant acquired its title in 1907 from the C. & O. Railway Co. The railroad company acquired its title in 1906 from the Big Sandy Company. The deeds from the Big Sandy Company and from the railroad company to the defendant included, in addition to the 1100 acre tract, several other tracts of land, among them those mentioned in the statement of facts as having been conveyed to John J. Stuart,' Trustee, at or about the time of conveyance of the Reynolds tract.

It is urged by the plaintiffs that since all of these tracts were acquired at the same time, the purchaser must have noticed the difference between the deed from Reynolds, etc., to Stuart and the other deeds to Stuart and was thereby put on notice by the courthouse record that the salt water, oil and gas were excepted from the Reynolds tract. That being the case the purchaser should then have made further enquiry and demanded the original deed. I cannot agree with this reasoning. In examining the title to real estate, it is placing too great a burden to require the examiner to compare the various deeds with each other. Such reasoning as is advanced by the plaintiffs here on this question is to place an inference upon an inference and deduct from that the fact that the defendant had actual notice of the intention of the parties at the time of the execution of the Reynolds deed. It is the whole purpose of our recording statutes to enable a purchaser, by examining the record in the Clerk’s office, to determine what kind of title he is acquiring to an interest in real estate. He is not required to examine the original deed. If this were the case it would be totally impossible to carry on any business transactions wherein the title to real estate was involved. In this connection I quote the following pertinent statement from Hudson & Collins v. McGuire, supra:

"Adopting the views expressed in the authorities referred to, which are in harmony with our own views of the matter, it is very clear that as between Fraley and Casto, or volunteers claiming under or through them, it would be competent to show by extrinsic evidence that it was not intended by either of the parties to the conveyance that oil or gas rights and privileges should pass under a grant. But a different question arises when a controversy comes up between purchasers for value as to the meaning and construction of a deed in the chain of title under which both of them claim, as in this case. It is of course, of the highest importance that the stability and integrity of conveyances on which the right and title to practically all landed interest depends should be carefully preserved, and especially is it indispensable to the safety of purchasers for value, who have the right to look to and be governed in their dealings by the words of the recorded instrument, that nothing should be said by courts of last resort that would cast doubt on the sufficiency of a grant that on its face is free from obscurity or doubt.
“It is equally plain that it would be destructive of the security of deeds if the rights of purchasers for value should be made to depend on the intention in the mind of remote vendors that was not expressed in the conveyance, and of which intention they had no actual notice.
“A purchaser for value without actual notice of an infirmity in a conveyance in his chain of title need only look to the recorded instruments, and, if they are fair on their face and free from ambiguity, he may rest assured that the safety of his title will not be affected by the intention of the parties to instruments of which he does not have actual notice and which is not expressed in the instrument itself.”

The question here is most difficult. It is well reasoned that since it was not the intention of the parties to convey the salt water, oil, and gas, as I have held, consequently no title could pass and that the title to the salt water, oil and gas remained in W. H. Reynolds, and others, at the time of the execution of the deed of October 14, 1887. I think, however, that in the light of all the circumstances disclosed by this record that the defendant here, as an innocent purchaser, should not bear the loss occasioned by the ambiguity in the deed. The real difficulty, of course, is occasioned by the failure of the Clerk of the Pike County Court to record the instrument as it appears on its face. That would then have placed all subsequent purchasers on notice and no one could have claimed to be an innocent purchaser. This error on the part of the Clerk has occasioned a loss. This loss must fall upon someone. Should it fall upon the innocent purchaser whose examination of the record revealed to him that coal and minerals were conveyed by the deed of 1887 and who had knowledge that the Courts of Kentucky had declared such terms to include all minerals, or should it fall upon the grantor who placed this instrument in the channels of trade, even though innocently believing that he was only conveying the coal and hard minerals?

I must conclude that this is a case which calls for the application of the doctrine of equitable estoppel. It is a well-recognized rule of equity that whenever, by his conduct or declaration, one has induced another to act upon the belief in certain facts, he shall not thereafter deny the truth of such facts to the prejudice of the other. The reasoning upon which this rule is based is that where one party has induced another to act, or to refrain from action, upon a representation he should not thereafter be permitted to deny the truth of his representation.

It is a necessary element in all estoppels of this character either that the parties intended to mislead and deceive the other or that the natural consequence of their conduct was to mislead and therefore they were guilty of such negligence as is equivalent to a constructive fraud. There must be either a fraudulent intent or gross negligence which causes a loss to an innocent party. Equitable estoppels have been called estoppels in pais because they are created entirely by the conduct of the party. They are called equitable estoppels because formerly they were recognized and enforced only in equity. That, however, is not true of later cases. John Shillito Co. v. McClung, C.C., 45 F. 778.

The deed here actually stated that it conveyed coal and minerals. The original grantors, were they party plaintiffs, would be estopped to assert claim to the oil, gas and minerals against the present defendant. Their successors in title can stand in no better position. Watlington v. Kasey, 293 Ky. 382, 168 S.W.2d 988; Hargis v. Flesher Petroleum Co., 231 Ky. 442, 21 S.W.2d 818; Ginn’s Admx. v. Ginn’s Admr, 236 Ky. 217, 32 S.W.2d 971.

This can be termed a conveyance in pais. The rule applicable to the circumstances of this case is comprehensively expressed in 19 Am.Jur. § 87, page 743:

“The rule is well settled in the modern law that the title to land or real property may pass by an equitable estoppel, which is effectual to take the title to land from one person and vest it in another where justice requires that such action be done. Stating the principle in the concrete and negative form in which it is sometimes framed, with the exception of property taken by judicial process, no one can be deprived, without his consent, of real property to which he has the legal title, unless he has estopped himself to assert his title. Thus, by intentional misrepresentation, misleading conduct, or wrongful concealment, a person may preclude himself from asserting his legal title to land or from enforcing an encumbrance on, or maintaining an interest in, real estate. In order to establish an equitable estoppel against one asserting his title to real property, the party attempting to raise it must show an actual fraudulent representation, concealment, or such negligence as will amount to a fraud in law and that the party setting up such estoppel was actually misled thereby to his injury. It must be pointed out, moreover, that in all instances a clear strong case of estoppel must be made out where a clear legal title to land, requiring written conveyance to pass it, is to be divested out of its owners and vested in others as if a conveyance had been made.”

To summarize the facts produced by the record here and to bring it within the rule quoted, I find: (1) That the deed from Reynolds and others to Stuart, as it was originally executed, conveyed all coal and minerals. (2) The word “minerals” includes all minerals. (3) That while the grantors may not have intended to convey salt water, oil, and gas, it was their act, even though ignorantly or innocently done, that caused the record on which the defendant, and predecessors in title, were entitled to rely, to indicate that all minerals were included in the conveyance. (4) Had the word “minerals” also been stricken out at the time the deed was executed and launched into the channels of trade, no question of intention could have later arisen. (5) It was through the failure of the original grantors to have this deed reflect the actual contract that the defendants, in acquiring a title, were misled.

I feel that the justice of the case requires that I must therefore conclude that while it was the intention of the grantors to retain the salt water, oil, and gas, nevertheless, through their negligence the defendants and their predecessors in title were misled and there was a conveyance in pais of all minerals and that since the original grantors would be estopped to assert title to these minerals, their successors in title stand in no better position and their complaint should be dismissed.