Cold Metal Products Co. v. Crucible Steel Co.

247 F.2d 241, 114 U.S.P.Q. (BNA) 376
CourtCourt of Appeals for the Third Circuit
DecidedAugust 9, 1957
DocketNos. 12216, 12217
StatusPublished
Cited by1 cases

This text of 247 F.2d 241 (Cold Metal Products Co. v. Crucible Steel Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Cold Metal Products Co. v. Crucible Steel Co., 247 F.2d 241, 114 U.S.P.Q. (BNA) 376 (3d Cir. 1957).

Opinion

MARIS, Circuit Judge.

These are cross appeals by the plaintiff, Cold Metal Products Company, and the defendant, Crucible Steel Company of America, from a judgment entered in the District Court for the District of New Jersey. They involve questions as to the validity of certain patents owned by Cold Metal, as to the infringement of the patents by Crucible after April 1,1953, when a license agreement between the parties terminated, and as to Cold Metal’s right to royalties from Crucible under the license agreement for the period November 20, 1951 to April 1, 1953. The patents in suit, Montgomery No. 2,072,122, Montgomery No. 2,087,065 and Montgomery No. 2,214,107, relate to improvements in apparatus and methods for rolling heated metal ingots into long thin strips in a reversing hot rolling mill.

One method of performing this operation is to use a continuous hot mill consisting of a roughing mill plus a finishing mill, the latter consisting of a number of mill stands set in a row, one after the other. In the operation of such a mill the original ingot is reduced in the roughing portion of the mill to the dimensions of a slab or “breakdown”, which is then reduced to strip of the desired thickness by a single continuous pass through the row of mill stands comprising the finishing portion of the mill. The mill stands comprising the finishing portion of such a mill have conventionally been 4-high mills equipped with antifriction bearings.

The other method of performing the operation is by the use of a reversing hot mill. The roughing portion of such a mill is not different from that of a continuous mill but the finishing operation, instead of being conducted by passing the material once through a succession of mill stands as in a continuous mill, is conducted by passing the strip back and forth through a single finishing mill stand, the rolls of which are brought closer and closer together for each successive pass until the strip has been reduced to the desired thickness. The mill stand used in such a reversing hot mill ordinarily is the same sort of 4-high mill with antifriction bearings as is used in the finishing portion of a continuous mill. On each side of the finishing mill stand are a roll table over which the strip passes, a pair of pinch rolls for gripping and moving the strip, side guides for confining it in its path, a deflector to direct it into the coiler furnace, and a coiler furnace and a coiling reel therein upon which the strip is wound as it is passed through the mill and kept heated for its next pass through the mill in the reverse direction. The Steckel Patent No. 1,857,670, the Keeney & Ferm Patent No. 1,918,968 and the Steckel Patent No. 1,977,214, all owned by Cold Metal and all now expired, cover basic features of reversing hot mills such as we have described. The three subsequently issued Montgomery patents in suit cover improvements in the apparatus and process of such mills.

Reversing hot mills do not produce as fine a product as is produced by continuous mills and their productivity necessarily is not as high but they do have the advantage of costing very much less than continuous mills. This advantage apparently appealed to Crucible and on September 30, 1946 it entered into a license agreement with Cold Metal covering Cold Metal’s reversing hot mill pat[243]*243ents, including, inter alia, the six patents above mentioned. Under this license agreement Crucible installed in its plant at Midland, Pennsylvania, a reversing hot rolling mill which it began to operate commercially on April 1, 1949. Its installation comprised a single stand universal roughing mill for rough rolling ingots into rectangular slabs and into relatively long and thin breakdowns and a single stand reversing hot finishing mill for hot rolling the breakdowns into continuous strip. Roll tables were installed in advance of the universal mill, between the universal mill and the reversing mill, and extended beyond the reversing mill for conveying ingots, slabs, breakdowns and strip into, through and out of the mill.

The license agreement called for the payment of royalties at a fixed rate during the lifetime of the three dominating Steckel and Keeney & Ferm patents, the last of which expired on October 16, 1951, and at half the original rate after that date, provided that Crucible’s mill was thereafter covered by any claim of any of the remaining unexpired patents included in the license. Termination of the agreement was permitted on April 1, 1953 and it was terminated by Crucible on that date. Crucible paid Cold Metal royalties amounting to $655,189.54 until November 30, 1951, but none after that date, contending that its mill, as modified in October and November, 1951 was not covered by any claim of the licensed patents which still remained unexpired.

Cold Metal brought suit on December 18, 1952 in the District Court for the District of New Jersey for royalties allegedly due under the license agreement for the use of the mill and equipment for the period November 30, 1951 to April 1, 1953 and for royalties in addition to those already paid for the period April 1, 1949 to November 30, 1951. On July 2, 1954 it instituted an action in the District Court for the Western District of Pennsylvania against Crucible for infringement of the patents here in suit subsequent to April 1, 1953, the termination date of the license agreement. Crucible filed a motion in the District Court in New Jersey for leave to file a supplemental counterclaim seeking a declaratory judgment that Cold Metal’s three Montgomery patents are invalid and noninfringed and asked the court to enjoin the prosecution of the Pennsylvania patent infringement suit. Cold Metal moved, pursuant to section 1404(a) of title 28 United States Code, for an order transferring the New Jersey action to the Western District of Pennsylvania. Crucible’s motions were granted and Cold Metal’s motion was denied. 126 F. Supp. 546.

In its supplemental counterclaim Crucible sought a declaratory judgment that the three Montgomery patents in suit are invalid and not infringed and also asked the court to enjoin any further suits under these patents. Cold Metal, in a counterclaim annexed to its reply to Crucible’s supplemental counterclaim, charged infringement of its patents by the unauthorized use by Crucible of its mill after the termination of the license agreement, for which Cold Metal sought an accounting of profits and damages. In defense to this claim Crucible attacked the validity of the patents and asserted that the alterations in its mill and in the process employed in its operation which it had made in October and November, 1951 and which were completed on November 19, 1951 had taken its mill out from under the claims of Cold Metal’s unexpired patents.

Upon the trial of the present action in the District of New Jersey the district court found that Cold Metal was entitled to recover additional royalties under the license agreement for the period April 1, 1949 through November 19, 1951 and entered judgment in favor of Cold Metal in the amount of $146,210.38 together with interest amounting to $53,359.89, a total of $199,570.27. This amount was subsequently paid by Crucible and is not involved in the present appeals. The district court also found that the changes made by Crucible in its mill in October and November, 1951 did not relieve it from liability for royalties under the li[244]

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247 F.2d 241, 114 U.S.P.Q. (BNA) 376, Counsel Stack Legal Research, https://law.counselstack.com/opinion/cold-metal-products-co-v-crucible-steel-co-ca3-1957.