Motor Wheel Corp. v. Rubsam Corp.

92 F.2d 129, 35 U.S.P.Q. (BNA) 344, 1937 U.S. App. LEXIS 4503
CourtCourt of Appeals for the Sixth Circuit
DecidedJuly 3, 1937
DocketNo. 7175
StatusPublished
Cited by11 cases

This text of 92 F.2d 129 (Motor Wheel Corp. v. Rubsam Corp.) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Motor Wheel Corp. v. Rubsam Corp., 92 F.2d 129, 35 U.S.P.Q. (BNA) 344, 1937 U.S. App. LEXIS 4503 (6th Cir. 1937).

Opinion

ALLEN, Circuit Judge.

Appeal from a judgment on a jury verdict in an action for royalties claimed to be due under a patent license contract. The parties are engaged in the manufacture of wheels and wheel parts for motor vehicles. Appellee is the owner of certain patents on mechanisms which aim to secure the proper centering of demountable rims on the felloe or that part of the wheel .rim which is supported by the spokes. When the demountable rim came into use, bolts, nuts and clamps were used to affix it to the wheel, and if not evenly tightened, the wheel was out of proper alignment, and at high speed would wobble, or “shimmy.” This resulted in unusual wear on the tire, and created hazards in fast driving which were accentuated by the use of the balloon tire, with its relatively wide rim and small diameter. Appellee claims to have solved this problem [130]*130through its centering principle patents by two methods, one in which clearances were sheared off the front flange of the felloe, the other the method of the “depression type,” in which the outer flange of the felloe was of lesser diameter than the inner flange and arcuate depressions were stamped inwardly in the ripi. The sheared clearance patent is not involved in this case, which concerns only the centering principle patents disclosing depressions in the rim.1

For some years prior to the institution of this suit appellee’s “bulge felloe” and “floating clamp” patents (Nos. 1,403,439 and 1,601,455) had been the subject of a written license between the parties. Payment of all royalties due thereunder have been-made. In the instant action appellee sued for royalties under its so-called “centering principle” and clearance patents (Nos. 1,395,362, 1,-576,225 and 1,576,226). It set forth (1) that the agreed royalty was two cents per wheel; (2) an implied contract together with a prayer for reasonable royalty, and (3) certain of the common counts. During the trial, after appellant had moved .to require appellee to elect, appellee abandoned the common counts, and claimed that an express contract was declared on in each of the other two counts, but that the first count set forth an agreed royalty, namely, two cents per wheel, and that the second count set forth that the royalty was undetermined, and therefore a reasonable royalty was due.

Appellee admitted in its pleadings that it had entered into a license contract covering the clearance patents, but claimed that it was to pay no compensation for their use so. long as it paid royalty under the bulge felloe and floating clamp patents.

Appellant’s principal contention is that the trial court erred in failing to require appellee to elect between two counts of the declaration,2 and in denying its motion for directed verdict.

Appellant’s first contention is premised on the projfc-lition that the court denied its motion to require appellee to elect, and charged the jury upon both an express and an implied contract. But this is not ihe case. Appellee abandoned all theory of implied contract. The court expressly charged the jury not to find for appellee unless an express contract existed. On the question of royalty, the court left it to the jury to determine whether the contract provided for a royalty of two cents per wheel, as alleged in the first count, or whether a reasonable royalty arose by implication from the conduct of the parties, or whether the contract provided for a free license for the use of these particular patents. The submission of such .issues is not error under Michigan law, which governs here. Way v. Root, 174 Mich. 418, 140 N.W. 577; In re Moon’s Estate, 219 Mich. 104, 188 N.W. 457; Brandt v. Munz, 250 Mich. 172, 229 N.W. 463; Board of Supervisors v. Bennett, 185 Mich. 544, 545, 152 N.W. 229, 153 N.W. 814; City of Kalamazoo v. Standard Paper Co., 182 Mich. 476, 148 N.W. 743. As appellee elected to proceed on the theory of an express contract and the [131]*131court adopted this theory in its charge, appellant’s first contention has no merit.

On the questidn of directed verdict appellant contends that the court in effect left it to the jury to determine the scope of the patents. The interpretation of a patent is a question of law for the court. Singer Mfg. Co. v. Cramer, 192 U.S. 265, 24 S.Ct. 291, 48 L.Ed. 437; Sanitary Refrigerator Co. v. Winters, 280 U.S. 30, 50 S.Ct. 9, 74 L.Ed. 147; Hurin v. Electric Vacuum Cleaner Co., Inc., 298 F. 76 (C.C.A.6); Edward G. Budd Mfg. Co. v. C. R. Wilson Body Co., 21 F.(2d) 803 (C.C.A.6). In a royalty case the contract is limited by the scope of the patents, and the court must construe them. Cf. Western Electric Co. v. Robertson, 142 F. 471 (C.C.A.2); General Motors Corporation v. Swan Carburetor Co., 88 F.(2d) 876 (C.C.A.6). Here the court ruled upon the scope of the patents. It held, and so charged the jury, that the invention was limited to “a vehicle wheel consisting of a demountable rim seated upon a wheel felloe with circumferentially spaced apart bearing surfaces between the rim and the felloe where the internal diameter of the demountable rim at the bearing surfaces is no greater than the external diameter of the wheel felloe at the bearing surfaces.”

The amount of the verdict is the exact amount due at two cents per wheel upon wheels manufactured by appellant. Substantial evidence exists that it was agreed that these patents should be used at a royalty of two cents per wheel. Rubsam, appellee’s president, testified positively to the making of such a verbal agreement. He said that Harper, appellant’s president, persuaded him not to give a license on these “centering principle patents” to two other prospective licensees, because, Harper said, “If you want to go along with us, it will be greatly to your advantage.” Rubsam continued : “And I believed him, and- so I said, ‘All right, if you pay the royalty which we get from the General Motors on the clearance type, and that is a special royalty, that is not the same thing as the royalty you have on the bulge and clamp type, if 'you pay that royalty you can have it. * * * '” There was some more negotiation between Rubsam and Harper as to the question of Rubsam’s leaving other connections. Rubsam said Harper did not insist on that, and that he said, “All right, I pay the royalty whenever we use it.” To the question, “What royalty ?” Rubsam answered, “Clearance royalty at the same basis as the General Motors * ' * *.”

This testimony is denied by Harper, but it is corroborated by the fact that when Rub-sam demanded royalty of Harper in September, 1928, Harper referred the 'matter to the secretary of his company and wrote Rubsam, “With reference to the discussion of our license with you, just as soon as Mr. Carlton and I can • get together and check the details, will get in touch with you.” There was no difficulty with reference to the payment of bulge and clamp royalties, and therefore this letter must refer to the royalties on the centering principle patents. The correspondence does not show that at the time of this demand appellants made any claim of free license, or that the royalty of two cents per wheel had not been agreed upon. Rubsam said* that a later demand for royalties on wheels for Nash and Essex was made, and again Harper said that he would look into it. Consistent with Rubsam’s testimony is the fact that a license under patent No.

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92 F.2d 129, 35 U.S.P.Q. (BNA) 344, 1937 U.S. App. LEXIS 4503, Counsel Stack Legal Research, https://law.counselstack.com/opinion/motor-wheel-corp-v-rubsam-corp-ca6-1937.