Freeman v. Altvater

66 F.2d 506, 18 U.S.P.Q. (BNA) 186, 1933 U.S. App. LEXIS 2695
CourtCourt of Appeals for the Eighth Circuit
DecidedJuly 24, 1933
Docket9602
StatusPublished
Cited by31 cases

This text of 66 F.2d 506 (Freeman v. Altvater) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Freeman v. Altvater, 66 F.2d 506, 18 U.S.P.Q. (BNA) 186, 1933 U.S. App. LEXIS 2695 (8th Cir. 1933).

Opinion

SANBORN, Circuit Judge.

The appellants were plaintiffs in the court below, and the appellees defendants, and they will be so referred to in this opinion.

This suit is to compel specific performance of a license agreement under United States letters patent No. 1,681,033, issued to Benjamin W. Freeman August 14, 1928, upon an application filed December 3,1923, for a cutout machine for shoe uppers; to enjoin acts alleged to be in violation of that agreement; and for an accounting.

Briefly, the situation out of which the controversy arises is this: Both parties are and were designers, manufacturers, and sellers of shoe machinery. In 1922 and 1923 shoes with cut-out designs in the uppers came into vogue. There was consequently a demand for an improved method for making such designs. Shoe machines for making cut-outs in flat work were known, but a closed or completed shoe upper is not flat. Freeman in 1923 produced a machine to make cut-outs in such uppers. It was an adaptation of a Knight type press, or fiat bed machine, well known in the art. The Freeman machine met with favor, and the defendants copied it in order to meet the demands of their customers. After Freeman had been granted his patent, the controversy which arose between him and the defendants over the sale by them of similar machines was settled by the license agreement which is the basis of this suit and which was entered into on January 1, 1929, between Freeman, as licensor, and the defendants, as licensees. Under this agreement the licensees were granted the right to make and sell, within a limited territory, upon payment of royalties, parts known as dies, anvils, and masks, of the patented machine, and were permitted to repair, but not to rebuild, the machines they had already sold. The licensees agreed not to sell any machines falling within the scope of the patent, not to contest its novelty or validity nor the title of the patentee, and “to co-operate in the protection of the patent” and “in the development of the business thereof and thereunder.” Within a few days after the execution of this agreement, the defendants placed upon the market *507 a cut-out machine, known as the “Model T”, designed by the defendant Altvatcr, president of the defendant company, for which he was granlod United States letters patent No. 1,-807,952 on June 2,1931, upon an application filed J anuary 25,1929.

The plaintiffs in bringing this suit charged that the Model T infringed the Freeman patent; that, moreover, its sale was in violation of tho co-operation clause of the license agreement; and that tho defendánts had rebuilt machines which under that agreement they might only repair. The plaintiffs asked that the license agreement be specifically enforced, its violation enjoined, and the damages caused by its breach ascertained. The defendants denied that they had in any wa.y violated the terms of tho license. The suit was tried, and the court below, being of the opinion that the defendants’ Model T machine did not infringe the Freeman patent, that the license agreement did not prohibit the, defendants from marketing a noninfringing cutout machine, and that no machines had been rebuilt by the defendants in violation of the license, filed findings and a decree in their favor.

The finding of the, lower court that the defendants had not rebuilt machines is, we think, justified by the evidence and should not be disturbed.

It may be that the parties to the license agreement intended that the licensees should be prohibited from making or selling even any noninfringing cut-out machines, as the plaintiffs assert and as the defendants deny; but the court below thought that the written agreement failed adequately to express any such intention. In view of our conclusion upon the question of infringement, we find it unnecessary to review this issue.

The important question in this ease is whether tho Model T machine infringes the Freeman patent. The validity of the patent is not in question, since the defendants, being licensees, are estopped to assert its invalidity; but their contention is that the claims of the patent, as limited by the prior art, do not cover their cut-out machine. They say that they are required to accord to the patent only such novelty as is sufficient to sustain it, and that (he differences between the Freeman construction and their construction are such as to avoid infringement.

In Westinghouse Electric & Mfg. Co. v. Formica Insulation Co., 266 U. S. 342, 351, 45 S. Ct. 117, 120, 69 L. Ed. 316, the Supreme Court said with respect to such cases as this: “'Of conree, the state of the art cannot be used to destroy the patent and defeat the grant, because tho assignor is estopped to do this. But the state of the art may be used to construe and narrow the claims of the patent, conceding their validity. The distinction may be a nice one but seems to be workable.”

In Noonan v. Chester Park Athletic Club Co. (C. C. A. 6) 99 F. 90, 91, Judge Lurton, afterwards Mr. Justice Lurton, said: “The court will not assume against an assignor, and in favor of his assignee, anything more than that the invention presented a sufficient degree of utility and novelty to justify the' issuance of tho patent assigned, and will apply to the patent the same rule of construction, with this limitation, which would be applicable between the patentee and a stranger.” This language is quoted with approval in the Westinghouse Case. See, also, Smith v. Ridgely (C. C. A. 6) 103 F. 875, 877; Bradford Belting Co. v. Kisinger-Ison Co. (C. C. A. 6) 113 F. 811, 815; Schiebel Toy & Novelty Co. v. Clark (C. C. A. 6) 217 F. 760, 764, certiorari denied 235 U. S. 707, 35 S. Ct. 283, 59 L. Ed. 434; West v. Premier Register Table Co. (C. C. A. 1) 27 F.(2d) 653, 651; Moon-Hopkins B. Mach. Co. v. Dalton Adding Mach. Co. (C. C. A. 8) 236 F. 936, 937; Leather G. & D. Co. v. Christopherson (C. C. A. 9) 182 F. 817, 822; Robeson Process Co. v. Robeson (D. C.) 293 F. 70, 74, affirmed (C. C. A.3) 1 F.(2d) 1022.

However, in litigation such as this between a licensee and his licensor or between assignor and assignee, there is a tendency on the part of the courts to give to tho patent a liberal rather than a narrow construction.

In Leader Plow Co. v. Bridgewater Plow Co. et al. (C. C. A. 4) 237 F. 376, 377, the court said: “The patents set up by the plaintiff being nothing more than improvements on the prior art, the general rule on the subject would require that they be given a narrow construction. Singer Mfg. Co. v. Cramer, 192 U. S. 265, 24 S. Ct. 291, 48 L. Ed. 437. But this general rule is elastic enough to allow the application of tho dominant equitable rule that as between the assignor and assignee the construction of the patent must be broad and liberal enough to give full value to the patent assigned, and shut out the assignor from every structure within the fair meaning of the claim. When Thomas assigned the Hanger and Thomas and Hanger patents, he asserted them to be valid, and he is estopped to deny their validity. He was not estopped, however, from showing the limits of the assigned patents by evidence of the prior art, or any other relevant fact. Martin, etc., Co. v. Mar *508 tin, 67 F. 786, 14 C. C. A. 642; Automatic S. Co. v.

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Bluebook (online)
66 F.2d 506, 18 U.S.P.Q. (BNA) 186, 1933 U.S. App. LEXIS 2695, Counsel Stack Legal Research, https://law.counselstack.com/opinion/freeman-v-altvater-ca8-1933.