Home/E.D. Wisconsin/Howard Industries, Inc. v. Rae Motor Corp.

Howard Industries, Inc. v. Rae Motor Corp.

165 F. Supp. 646, 119 U.S.P.Q. (BNA) 94, 1958 U.S. Dist. LEXIS 3730
CourtDistrict Court, E.D. Wisconsin
DecidedSeptember 25, 1958
DocketCiv. A. 6396
StatusPublished
Cited by3 cases

This text of 165 F. Supp. 646 (Howard Industries, Inc. v. Rae Motor Corp.) is published on Counsel Stack Legal Research, covering District Court, E.D. Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Howard Industries, Inc. v. Rae Motor Corp., 165 F. Supp. 646, 119 U.S.P.Q. (BNA) 94, 1958 U.S. Dist. LEXIS 3730 (E.D. Wis. 1958).

Opinion

GRUBB, District Judge.

This action is brought for alleged breach of an agreement settling a patent infringement case.

The principal defenses relied upon are: (1) That the settlement agreement has not been breached; (2) that if it were breached, plaintiff is estopped from prosecuting this action because of laches; and (3) a defense which was first asserted on the trial, i. e. that if the contract is interpreted as plaintiff would interpret it, it is void as against public policy as creating an unreasonable restraint of trade.

In August 1945 plaintiff, Howard Industries, Inc., hereinafter referred to as Howard, purchased the assets, including the patents, of the Electric Motor Corporation, hereinafter referred to as E-M-C. E-M-C had been engaged in the manufacture of fractional horsepower electric motors, which business Howard carried on after the sale in August, 1945.

In the winter of 1945-46, defendant, Rae Motor Corporation, hereinafter referred to as Rae, was formed and Messrs. A. J. Peterson, I. H. Dunham, H. P. Rothering, and E. K. Hansen, all former employees of E-M-C, became Rae’s key personnel. By early Spring, 1946, Rae had on the market a fractional horsepower motor.

In May, 1948, Howard commenced a patent infringement action'against Rae.

On August 15, 1949, Howard and Rae entered an agreement in settlement of Howard’s patent infringement suit. The pertinent parts of the agreement are as follows:

“Whereas, there is pending in the United States District Court for the Eastern District of Wisconsin, an action in which Howard, as plaintiff, charges infringement of its patent No. 2032084 by Rae and Dunham, Defendants, said action being identified as Civil Action No. 4554, wherein issue has been joined; and
“Whereas, apart from any cause of action pleaded in said litigation, Howa/rcl complains that the shells or casings of motors made by Rae too closely resemble in appearance those previously made by Howard.
“Now, Therefore, in consideration of the agreement of the parties hereinafter set forth, it is agreed as follows:
“First: Rae and Dunham covenant and agree:
“1. That the brush holder and the contact slip of the electric motor first manufactured and sold by Rae are acknowledged to have infringed the patent in suit No. 2,-032,084.
“Second: Rae Covenants and agrees:
“That as soon as its present stock of motor shells or casings is used up it will adopt a different shell or casing for its motor either like Exhibit A attached hereto or some other casing design which is not confusingly similar in appearance to the casing design now embodied-in the E. M. C. motor. The present stock of Rae’s motor casings being not in excess of 3500.
[648]*648“Third: Howard covenants and agrees:
“1. That Howard waives any claim or right it might have or make now or in the future based upon infringement by the motor currently manufactured by Rae upon Patent No. 2,032,084.
“2. That it does hereby acknowledge the receipt of Thirty-five Hundred ($3500.00) dollars to it paid by Rae.
“3. That in consideration of the said Thirty-five Hundred ($3500.00) dollars to it paid by Rae and of the agreement of Rae and Dunham herein set forth it does for itself, its successors and assigns hereby remise, release and forever discharge Dunham and Rae of and from all claims, controversies and demands accruing to the date hereof, jointly or severally against Dunham or Rae or either of them and based upon matters set forth in the complaint of this action or upon alleged simulation of casing design.
“4. That a shell or motor casing design, of the type indicated by the attached print marked ‘Exhibit A’ is adequately differentiated in appearance from the motor shell or casing design of Howard.
“Fourth: It is mutually covenanted and agreed by and between the parties hereto that the aforesaid Civil Action No. 4554 shall be dismissed without costs to either party or parties, upon the written stipulation of the parties or their counsel being filed in the United States District Court of the Eastern District of Wisconsin.” (Emphasis supplied.)

At the time this settlement agreement was entered, and prior thereto, Rae was using a motor shell or casing which resembled Howard’s casing except in the method of attaching the brush holders to the end of the shell. Plaintiff’s brushes were attached to the shell by crimping. Those of defendant Rae were welded.

Shortly prior to the entry of the settlement agreement, Rae ordered for manufacture a casing identical in appearance to its previous shell except that each end of the new casing had a groove running around its periphery. This casing is marked “Exhibit 6”.

Although defendant had ordered these casings prior to the settlement agreement, this was not known by plaintiff until after the agreement, and nothing was disclosed to plaintiff concerning the fact that defendant, notwithstanding Exhibit A attached to the contract, had ordered and intended to market a casing identical to its old casing excepting for the small groove on the ends.

On August 25, 1954, Howard commenced this suit alleging breach of the settlement agreement.

The first issue before the court is whether the groove or indentation running around the ends of Rae’s casings is enough of a distinguishing feature to satisfy the terms of the settlement agreement.

Exhibit A is distinguishable from Howard’s casing in two respects. The first and primary distinction is that Exhibit A shows a raised wide band located in the middle of the casing and encircling the cylinder. The second difference is that Exhibit A has the same groove treatment of its end bells that was adopted by defendant Rae and displayed in Exhibit 6.

There is attached hereto a photostatic copy of Exhibit A which was made a part of the contract. Unfortunately this photostat does not show as plainly as Exhibit A that the center band is raised, but the photostat does show the general appearance. Exhibit 5 was an exhibit made up to show the appearance as it would be had Exhibit A been followed by Rae.

[649]

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Related

Howard Industries, Inc. v. Rae Motor Corp.
186 F. Supp. 469 (E.D. Wisconsin, 1960)
Howard Industries, Inc., a Corporation v. Rae Motor Corporation, a Corporation
267 F.2d 430 (Seventh Circuit, 1959)

Cite This Page — Counsel Stack

Bluebook (online)
165 F. Supp. 646, 119 U.S.P.Q. (BNA) 94, 1958 U.S. Dist. LEXIS 3730, Counsel Stack Legal Research, https://law.counselstack.com/opinion/howard-industries-inc-v-rae-motor-corp-wied-1958.