Frank F. Smith Hardware Co. v. S. H. Pomeroy Co.

299 F. 544, 1924 U.S. App. LEXIS 3089
CourtCourt of Appeals for the Second Circuit
DecidedApril 7, 1924
DocketNo. 316
StatusPublished
Cited by21 cases

This text of 299 F. 544 (Frank F. Smith Hardware Co. v. S. H. Pomeroy 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
Frank F. Smith Hardware Co. v. S. H. Pomeroy Co., 299 F. 544, 1924 U.S. App. LEXIS 3089 (2d Cir. 1924).

Opinions

MANTON, Circuit Judge.

Letters patent No. 970,656 were issued to the appellant on September 20, 1910, on an application filed January 28, 1909, for a transom adjusting device. Below the patent was held valid and infringed, and from this determination the defendants do not appeal. However, the court denied the appellant all profits and damages prior to the commencement of this suit, on the ground that it was guilty of laches and that an equitable estoppel was established against its claim. The invention relates to a means adopted to limit the extent of opening windows of the reversible pivot sash type, and particularly to automatically closing fireproof windows, and has for its object to simplify its means and to render the same positive in its action.

[1] The question to be decided upon this appeal is whether the appellant was guilty of such laches as bars its right of recovery of the profits made by the appellees and consequent damages sustained by the appellant. The bill of complaint was filed July 15, 1921. In the answer filed, the defense of laches is interposed. The decision below rests on the delay in the commencement of the action. On an application of the appellant, an injunction pendente lite was granted in the District Court on August 3, 1922, and the case went to final hearing in May, 1923. The validity of the patent has been in continuous litigation since 1913, up to the commencement of this action, except during the period of 1914 to 1916. The litigation was with an infringer with whom it appears the appellees maintained business and friendly relations. See Smith v. Yates (D. C.) 216 Fed. 362; Smith v. Yates, 244 Fed. 793, 157 C. C. A. 241; Yates v. Smith (C. C. A.) 271 Fed. 33. Yates’ infringement of the patent in suit resulted in a price-cutting competition, which was conducted throughout much of the period between 1913 and 1919.

During the pendency of the Yates litigation, the appellant was in poor financial condition. Its officers consisted of father and son, both of whom were married and they drew salaries of $50 and $30 per week, respectively. The patentee was the managing officer of the appellant, and was incapacitated from business for a period of a year because of ill health — having suffered a stroke of paralysis — and he died in 1920. The appellees were advised of the patent in suit, and a stipulation is [546]*546found in the record to the effect that it notified the appellees of the alleged infringement of this patent on May 27, 1913. The appellees were not manufacturers, but users, and their use of the device, it was testified, was not thought to be extensive. The record also demonstrates that the appellees never built up nor extended their business, and it does not appear that their position has been so changed hy reason of the use of this device as to result in an inequity to them caused by the delay. The president of the appellant testified that the appellees were supplying Yates with funds in his litigation. These facts, the poverty of the appellant, the extensive and expensive litigation carried on in establishing the validity of its-patent in the Yates suits, the illness of the patentee, together with the nature and extent of the infringement, the appellant urges, excuse the long delay in commencing and prosecuting this suit against the appellees for their infringement.

The Yates litigation was stubbornly contested. It began in 1913, and resulted in a decree holding that the patent was valid and infringed. Smith v. Yates (D. C.) 216 Fed. 362. And this was affirmed by this court. 216 Fed. 359, 132 C. C. A. 503. It was then that the appellant learned of the appellees’ infringement of the patent, and notice to that effect was served upon them. Before the Yates Case reached this court, an application for a rehearing was made on the ground of newly discovered evidence, which was supported by affidavit of the president of the Pomeroy Company and one of the appellees. It thus appears that these appellees were actively assisting in the efforts to defeat the patent in the Yates litigation. Later this motion was denied. The accounting in the case was concluded in 1915. Thereupon Yates went into bankruptcy, and the appellant, through a trustee, prosecuted to conclusion a suit to set aside a fraudulent transfer of-property. This terminated in 1916. Frank Smith Co. v. Yates, 244 Fed. 795, 157 C. C. A. 241.

Yates was found to be infringing again, and the appellant filed a petition to have him adjudged in contempt. These proceedings were stubbornly contested. He contended then that he was a licensee under another patent, which justified his use of the device. In 1917 he was adjudged in contempt, and that decision was affirmed by this court. Frank Smith Co. v. Yates, 244 Fed. 793, 157 C. C. A. 241. In 1917, Yates brought suit in the District" Court of New Jersey against the appellant for infringement of the Bogenherger patent, contending that the device made by the appellant was an infringement of that patent. It was argued that the Smith patent was therefore invalid. This suit was contested in the District Court until 1920, during which time depositions were taken in various cities of the country. Had Yates been successful in this suit, it would invalidate the patent in suit. However, in 1920, the New Jersey suit on the Bogenberger patent was dismissed, and the patent in suit upheld. Yates v. Smith (D. C.) 271 Fed. 27. An appeal was thereupon taken to the Court of Appeals for the Third Circuit, and the decree below was affirmed. 271 Fed. 33.

During the trial of the New Jersey suit, the appellees took an active part in that attack upon the patent in suit. It thus appears that the appellees voluntarily and openly assisted Yates, and must be charged with full knowledge of the nature of the litigation over the patent and [547]*547its severe financial strain upon the appellant. The president of the appellant was taken with what proved to be a fatal illness in 1916, and there is testimony that all these circumstances made it impossible financially for the company to prosecute the instant suit.

Nowhere in the record is there any testimony which would justify a belief on the part of the appellees that they would be free from suit for infringement, nor were they - in any way permitted, by express or implied consent, to manufacture or use the device in question. The bill of complaint pleaded — and the proof justifies that plea — that the appellant was excused for the delay in suing for infringement by reason of the previous Yates litigation, taken in connection with the concurring circumstances above described. We regard these facts and circumstances as justifying an appeal to the conscience of a court of equity as a sufficient excuse for the delay. Such delay should not work to the advantage of one who has fraudulently and deliberately infringed, and who has stood behind and actively participated in a stubborn attack upon the validity of the patent by another litigant. They should not profit by the appellant’s helpless condition, nor be permitted to escape from the results of their wrongdoing.

[2] While poverty alone, no matter how real or extensive, is insufficient to excuse a delay in asserting a claim -for infringement (Hayward v. National Bank, 96 U. S. 611, 24 L. Ed. 855; Tompkins v. St. Regis Paper Co., 236 Fed. 221, 149 C. C. A. 411), still it may be considered as a factor if there be other reasons which excuse the delay. Want of knowledge or means of obtaining knowledge that the patent is being infringed, is an excuse. Wortendyke v. White, Fed.

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Bluebook (online)
299 F. 544, 1924 U.S. App. LEXIS 3089, Counsel Stack Legal Research, https://law.counselstack.com/opinion/frank-f-smith-hardware-co-v-s-h-pomeroy-co-ca2-1924.