Chadeloid Chemical Co. v. Charles McAdam Co.

298 F. 713, 1924 U.S. App. LEXIS 2702
CourtCourt of Appeals for the Second Circuit
DecidedApril 7, 1924
DocketNo. 339
StatusPublished
Cited by3 cases

This text of 298 F. 713 (Chadeloid Chemical Co. v. Charles McAdam Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Second Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Chadeloid Chemical Co. v. Charles McAdam Co., 298 F. 713, 1924 U.S. App. LEXIS 2702 (2d Cir. 1924).

Opinion

MAYER, Circuit Judge

(after stating the facts as above). The record presents a rather curious situation. The complaint was in the usual form familiar in the ordinary patent infringement suit. Two patents were involved, but, at the opening of the trial, the controversy was narrowed to claims 7 and 8 of the Dosselman patent.

Plajntiff introduced in evidence a license agreement between plaintiff," as licensor, and Charles McAdam; as licensee, dated June 28, 1915. Under this agreement, the Dosselman patent was not specifically mentioned, but there was an all-gathering clause as to letters patent “now or hereafter owned by the licensor covering paint or varnish or other finish removers,” under which the Dosselman patent could be included. The Dosselman rights had been duly assigned by mesne assignments to plaintiff, so that the patent was issued to plaintiff, which thus had been its owner since January 9, 1912. The license set up a minimum price list, and the license was granted, inter alia, on condition that the licensee would not sell under this price list. Plaintiff also introduced' in evidence an assignment of this 'license, dated August 23, 1916, from McAdam to Charles McAdam Company, an Illinois corporation.

Defendant’s answer alleged noninfringement and invalidity, but at the trial, without formally anjending its answer, defendant offered proof which showed that the Illinois corporation had been dissolved, and that, [715]*715in May, 1921, this defendant, a Delaware corporation, -had succeeded tó all the rights and obligations of the Illinois corporation, including this license. Much of the case then revolved around the question as to whether defendant had violated the license agreement by selling its product under the minimum prices set forth in the license.

The court found this issue in favor of plaintiff, and, on the authority of Bement v. National Harrow Co., 186 U. S. 70, 22 Sup. Ct. 747, 46 L. Ed. 1058, held that the price-fixing feature of the license was valid, and further held, under Indiana Mfg. Co. v. J. I. Case Threshing Mach. Co., 154 Fed. 365, 83 C. C. A. 343, that suit for infringement is properly brought, where the terms of the license regulating prices to be made by the licensee on the first sales are disregarded.

We remark, in passing, that the decision in 154 Fed. 365, 83 C. C. A. 343 (1907), has now become debatable; but it is unnecessary in the present case to consider whether a suit for infringement is maintainable upon the ground there discussed. It is 'sufficient, on the facts here, to determine whether defendant has infringed claims 7 and 8 of the Dossclman patent by the sale of defendant’s product known as “X-Cell-A1L”

This leads to an outline of the history of the Ellis patent. Ellis, in his specification, stated:

“My new process consists in the dissolution of a wax or waxy body in a hydrocarbon oil or other suitable solvent and the subsequent precipitation of this wax in a gelatinous state by the addition of an alcoholic body miscible with the solvent employed. * * * A suitable composition for general purposes can be obtained by the solution by heat of four parts each of paraffin and currier’s hard grease in eight parts of benzol”—i. e., one-third a waxy substance.

Nine claims were allowed. Claim 1, typical of the broad claims reads: ,

“The process herein described for producing a composition for removing paint and varnish, which consists in adding an alcoholic body to a solution of a suitable wax.”

'i

Claim 9 was limited as follows:

“A composition for removing paint and varnish, consisting of four parts . each of paraffin and currier’s hard grease, eight parts benzol, and seven parts methyl alcohol, substantially as described.”

Every claim referred to alcohol, while acetone was not mentioned. The courts promptly recognized that Ellis was a pioneer and accorded to his claims most liberal treatment.

In Chadeloid Chemical Co. v. De Ronde Co. (C. C.) 146 Fed. 988 (1906), claims 1 to 9, inclusive, were in issue. In that case' defendant was manufacturing and selling a remover consisting of a mixture of benzol and similar hydrocarbons acetone and paraffin wax—the latter from 1 per cent. up. Then followed Chadeloid Chemical Co. v. Daxe Varnish Co. (C. C.) 180 Fed. 1004 (1910); Chadeloid Chemical Co. v. Wilson Remover Co. (D. C.) 220 Fed. 681 (1915), affirmed 224 Fed. 481, 140 C. C. A. 189 (1915); Chadeloid Chemical Co. v. F. W. Thurston Co. (D. C.) 220 Fed. 685 (1915).

In addition to the cases, supra, plaintiff sued Charles McAdam and Charles McAdam Company, of Illinois, in the United States District [716]*716Court for the Northern District of Illinois, Eastern Division, on the Ellis patent, before the license agreement was entered into. At that time, defendant’s “X-Cell-All” was made of acetone, benzol, and wax. In that suit the Chadeloid Chemical Company asked for and obtained on June 28, 1915, a decree granting a motion for a preliminary injunction against both defendants. The license agreement in the case at bar was dated the same day—i. e., June 28, 1915—and, inter alia, licensed McAdam to manufacture, use, and sell removers under the Ellis patent.

When, therefore, McAdam took this license, he was free as against plaintiff to use acetone or alcohol, and much or little wax, and there can be no question that plaintiff, which on June 28, 1915, was the owner of the Dosselman patent, could not have succeeded in a suit against McAdam, or any assignee of his license, because of alleged infringements of claims 7 and 8 of the Dosselman patent, in using alcohol or acetone and a small amount of wax.

The decisions of the courts at the suit of plaintiff having confined Ellis neither to alcohol nor to a small amount of wax, it follows that plaintiff granted the license to McAdam with as much breadth as if acetone and a very small amount of wax had been written in so many words into the claims of the Ellis patent. In such circumstances, plaintiffs, during the life of the Ellis patent, would not have been heard to say that the Ellis claims were susceptible of a narrower construction; and, on a proper record, the interesting question might now arise, on the particular facts in this case, as to whether such estoppel survived the expiration of the Ellis patent on December 2, 1919.

Defendant, however, in the case at bar, employs (and has employed since the Ellis patent expired), in its “X-Cell-All,” benzol, alcohol and wax, there being a relatively small amount of wax, to wit, 3 per cent, or 4 per cent. While the Ellis patent specifically mentions alcohol, benzol, and wax, such as now included in the defendant’s “X-Cell-All,” the Dosselman patent specifically claims a composition of acetone, benzol, and wax, such as the defendants De Ronde and Charles McAdam were employing when they were held to be infringers of Ellis in 1906.

[ 1 ] This brings us to the question as to how the claims of the Dosselman patent should be interpreted. It is the settled rule in this circuit that, while a licensee may not question the validity of the patent, he may attack the scope of the claims and to that end may resort to the prior art. This doctrine has been recently again stated by this court in Pressed Steel Car Co. v. Union Pac. R. Co., 270 Fed.

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298 F. 713, 1924 U.S. App. LEXIS 2702, Counsel Stack Legal Research, https://law.counselstack.com/opinion/chadeloid-chemical-co-v-charles-mcadam-co-ca2-1924.