Ward Baking Co. v. Weber Bros.

230 F. 142, 144 C.C.A. 440, 1916 U.S. App. LEXIS 1441

• Court: Court of Appeals for the Third Circuit
• Decided: January 17, 1916
• Docket: No. 2010
• Status: Published

Opinion

McPHERSON, Circuit Judge.

The four devices in controversy relate to machines for working and shaping dough, and are capable of being used conjointly. The principal patent is reissue No. 11,751, dated June 20, 1899, the original having been issued September 14, 1897; the other three are for minor improvements, No. 611,563, issued September 27, 1898, No. 649,437, issued May 15, 1900, and No. 672,414, issued April 16, 1901. The Ward Baking Company acquired title to all the patents, and in December, 1912, brought this suit to restrain Weber Brothers from infringement. In paragraph XVI the bill specified the claims upon which the company relied, these being 19 in number, 9 belonging to the first patent, 5 to the second, 1 to the third, and 4 to the fourth. After a final hearing on pleadings and proofs, an interlocutory decree was entered declaring the reissue to have been properly granted, and upholding the novelty of the 19 claims in suit. The decree also declared the 9 claims of the reissue to be otherwise valid, and decided that 7 of them had been infringed. The 5 claims of the second patent were held void for lack of invention over the reissue, and 3 claims of the fourth patent were also held void for lack of invention over the only claim (the sixth) of the third patent that is involved. The remaining 2 claims of the reissue, the only claim of the third patent that is involved, and 1 claim of the fourth patent, were held to be infringed. No finding was made concerning the validity of the 6th claim of the third patent. From this decree the Baking Company alone has appealed, and assigns for error so much of it as affects the company’s interest adversely. Tfie defendants have not appealed, but they assert, nevertheless, that the whole decree has been brought up by the company’s appeal, and that any part of it is open to attack by either side. Accordingly they specify the parts to which they object, and cite in support of their position Smith v. Vulcan Iron Works, 165 U. S. 518, 17 Sup. Ct. 407, 41 L. Ed. 810. The argument requires us to consider the scope of that decision and of some later cases.

The decision turned on the construction of section 7 of the act of 1891 (Act March 3, 1891, c. 517, 26 Stat. 828) establishing the Circuit Courts of Appeals; and the question was stated by the court to be:

“ * * * Whether, in a suit in equity for the infringement of a patent, an appeal to the Circuit Court of Appeals from an interlocutory order or decree of the Circuit' Court, granting an injunction, and referring the case to a master to take an account of damages and profits, may be from the whole order or decree, or must be restricted to that part of it which grants the injunction, and whether the Circuit Court of Appeal's, upon such an appeal, may consider and decide the merits of the case, and, if it decides therd in the defendant’s favor, may order the bill to he dismissed.”

Having pointed out that the federal courts were not completely in harmony on this subject, the court called attention to the fact that in England and in New York and New Jersey.the appellate courts in chancery had power on appeal from an interlocutory decree to examine the merits of the controversy, and to dismiss the bill if the merits were with the defendant, thus saving both parties the needless expense of going on with the suit. But this practice had never prevailed in the federal courts; there no appeal in equity would lie except from a final decree, and “an order or decree in a patent canse, whether upon preliminary application or upon final hearing, granting an injunction and referring the cause to a master for an account of profits and damages, was interlocutory and not final, and therefore not reviewable on appeal before the final decree in the cause.”

This being the condition of the federal law in 1891, the court took up section 7 of the act establishing the Circuit Courts of Appeals, which provided as follows:

« =:• * * Where, upon a hearing in equity in a District Court, or in an existing Circuit Court, an injunction shall be granted or continued by an Interlocutory order or decree, in a cause in which an appeal from a Anal decree may be taken under the provisions of this act to the Circuit Court of A3jpeals, an appeal may be taken from such interlocutory order or decree granting or continuing such injunction to the Circuit Court of Appeals”

—and declared that this section authorized, “according to its grammatical construction and natural meaning, an appeal to be taken from the whole of such interlocutory order or decree, and not from that part of it only which grants or continues an injunction.” The object of the section was stated in the following paragraph:

“The manifest intent of this provision, read in the light of the previous practice in the courts of the United States, contrasted with the practice in courts of equity of the highest authority elsewhere, appears to this court to have been, not only to permit the defendant to obtain immediate relief from an injunction, the continuance of which throughout the progress of the cause might seriously affect Ms interests, but also to save both parties from the expense of further litigation, should the appellate court be of opinion that the plaintiff was not entitled to an injunction because Ms bill had no equity to support it.”

In Re Tampa R. R. Co., 168 U. S. 588, 18 Sup. Ct. 179, 42 L. Ed. 589, the court again considered the subject, and said:

“We are not called on to say that an appeal would lie from an order simply appointing a receiver, but where the order also grants an injunction, the appeal provided for may be taken, and carries up the entire order, and the case may indeed, on occasion, be considered and decided on its merits.”

In Highland Railroad v. Equipment Co., 168 U. S. 630, 18 Sup. Ct. 241 (42 L. Ed. 605), the court had before it the 1895 amendment of section 7 (Act Feb. 18, 1895, c. 96, 28 Stat. 666), which changed the section so as to read:

“That where, upon at hearing in equity in a District Court or a Circuit Court, an injunction shall be granted, continued, refused, or dissolved by an interlocutory order or decree, or an application to dissolve an injunction, shall be refused, in a case in which an appeal from a final decree may be taken under the provisions of this act to the Circuit Court of Appeals, an appeal may be taken from such interlocutory order or decree granting, continuing, refusing, dissolving, or refusing io dissolve an injunction to the Circuit 'Court of Appeals.”

And the court declared that, when an appeal is taken from an interlocutory order or decree, either granting or dissolving an injunction—

“the whole of such interlocutory order or decree is before the Court of Appeals for review, and not simply that part which grants or dissolves the injunction, and' that on the hearing in the Court of Appeals that court may consider and decide the case upon its merits.”

But the court went on to say that Smith v. Vulcan Iron Works and In re Tampa Railroad proceeded upon the ground that in each of those cases tliere was a distinct order granting, continuing, or dissolving an injunction, while in the case then before it there was no such order, although a receiver had been appointed and as a part of such appointment there had been the usual command to the receiver to take, and to the defendant to surrender, possession of the Highland Railroad’s property. The court stated that the question was not whether some directions of a mandatory nature in the nature of an injunction might not properly be included in an order appointing a receiver, but whether Congress in this legislation (section 7, as amended) had provided for appeals in any case except where an injunction, technically speaking, was either the sole or a principal part of the order or decree; and the question was answered by deciding that if Congress had intended to permit appeals from orders appointing receivers, as well ,as from orders in respect to an injunction, an express provision to that effect would doubtless have appeared in the statute:

“Its omission of tlie one and the mention of the other is a clear declaration that only one should be the subject of appeal and the other not. And it would savor of judicial legislation to hold that, although Congress has not authorized appeals from orders appointing receivers, the mere fact that in such an order there is a direction of a mandatory character, either expressed or implied, in respect to taking possession, makes it appealable, as an order granting an injunction.”

In Kirwan v. Murphy, 170 U. S. 209, 18 Sup. Ct. 592, 42 L. Ed. 1009, the ruling of Smith v. Vulcan Iron Works was stated to be that the Circuit Court of Appeals, on appeal from an interlocutory order or decree granting an injunction or ordering an accounting in a patent suit, might consider and decide the case on its merits, and thereupon render or direct a final decree dismissing the bill.

And in Mast v. Stover Co., 177 U. S. 494, 20 Sup. Ct. 712 (44 L. Ed. 856), the decision in Smith v. Vulcan Iron Works was again said to be:

“ * * * That, if the appellate court were of opinion that the plaintiff was not entitled to an injunction because his bill was devoid of equity, such court might, to save the-parties from further litigation, proceed to consider and decide the case upon its merits, and direct a final decree dismissing the bill.”

In the Courts of Appeals, the following cases are in line with the foregoing decisions: United States Co. v. American Co. (C. C. A. 7) 82 Fed. 250, 27 C. C. A. 118; Carson v. Combe (C. C. A. 5) 86 Fed. 210, 29 C. C. A. 660; Stover Co. v. Mast (C. C. A. 7) 89 Fed. 336, 32 C. C. A. 231; Texas Ass'n v. Storrow (C. C. A. 5) 92 Fed. 9, 34 C. C. A. 182; Tornanses v. Melsing (C. C. A. 9) 109 Fed. 711, 47 C. C. A. 596; Berliner Co. v. Seaman (C. C. A. 4) 110 Fed. 33, 49 C. C. A. 99; Worth Co. v. Bingham (C. C. A. 4) 116 Fed. 793, 54 C. C. A. 119; Frye Co. v. Meyer (C. C. A. 9) 121 Fed. 535, 58 C. C. A. 529; Kerr v. New Orleans (C. C. A. 5) 126 Fed. 925, 61 C. C. A. ; and Co-operating Co. v. Hallock (C. C. A. 6) 128 Fed. 597, 64 C. C. A. 104.

With one exception, each of these cases, whether in the Supreme' Court or in the Courts of Appeals, has to do with an interlocutory decree granting an injunction against the defendant, and in each it was the defendant that appealed. The exception is Frye Co. v. Meyer, where an injunction had been granted originally against the defendant, but had been afterwards modified to the plaintiff’s disadvantage, and it was the plaintiff that appealed from the modification. But the Court of Appeals of the Ninth Circuit, saying that “this appeal is, in effect, an appeal from an order of the District Court dis - solving an injunction,” held that the merits of the case were brought up, and decided them in the plaintiff’s favor, setting the modifying order aside.

This brings us to Ex parte National Enameling Co., 201 U. S. 156, 26 Sup. Ct. 404, 50 L. Ed. 707, a case that requires careful consideration. The National Company had sued the New England Company for infringement of a patent, and had brought the case to a hearing on pleadings and proofs. The Circuit Court sustained 9 claims, but held the remaining 3 to be void. Of the 9 claims, 5 were held tol be infringed, and 4 not to be infringed. As to 7 claims, therefore, the bill was dismissed, while it was sustained as to the remaining 5, and on these an account was ordered and the New England Company was enjoined. Thereupon the New England Company appealed to the Court of Appeals of the Second Circuit, and within a few days the National Company took a cross-appeal. Soon afterwards the cross-appeal was dismissed for want of jurisdiction, whereupon the National Company asked for a mandamus to reinstate the appeal. The Supreme Court refused the writ on the following ground: After pointing out that the decree in the Circuit Court was interlocutory, and not final, and that in the federal courts no appeal could ordinarily be taken except from a final decree, the opinion turned to section 7 of the act of 1891. This section had then been twice amended — once by the act of 1895 already referred to (28 Stat. 666), and once by the act of 1900 (Act June 6, 1900, c. 803, 31 Stat. 660); but the amendment of 1900 had in effect repealed the act of 1895, so that in 1906, when the Enameling Company’s Case was decided, the section read as follows :

“Where, upon a hearing in equity in a District Court or in a Circuit Court, or by a judge thereof in vacation, an injunction shall be granted, or continued, or a receiver appointed, by an interlocutory order or decree, in a cause in which an appeal from a final decree may be taken under the provisions of this act to the Circuit Court of Appeals, an appeal may be taken from such interlocutory order or decree granting or continuing such injunction or appointing such receiver to the Circuit Court of Appeals.” Act April 14, 1906, c. 1627, 34 Stat. 116.

It will he noted that the section thus amended contains no provision authorizing an appeal from the refusal or dissolution of an injunction, or from the partial dismissal of a bill, and of course the language of the opinion is to be applied to that condition of things:

“It vdU be noticed that the appeal is allowed from an interlocutory order or decree granting or continuing an injunction, that it must be taken within 30 days, that it is given precedence in the appellate court, that the other proceedngs in the lower court are not to be stayed, and that the lower court may require an additional bond. Obviously that which is contemplated is a review of the interlocutory order, and of that only. It was not intended that the cause as a whole should be transferred to the appellate court prior to the final decree. The case, except for the hearing on the appeal from the interlocutory order, is to proceed in the lower court as though no such appeal had been taken, unless otherwise especially ordered. * * * And the purpose of Congress in this legislation was that there be an immediate review of the interlocutory proceedings, and not an advancement generally over other litigation.”

Taking up the case of Smith v. Vulcan Iron Works, upon which the National Enameling Company mainly relied, the court went on to say that:

“In that case it was held that, when an appeal is taken from an interlocutory order granting or continuing an injunction, the whole of the order is taken up, and the appellate court may (if upon an examination of the record as thus presented it is satisfied that the bill is entirely destitute of equity) direct a dismissal, and is not limited to a mere reversal of the order granting or continuing the injunction. Take an ordinary patent case. If an injunction is granted by an interlocutory order, and the order is taken on appeal to the Circuit Court of Appeals, and that court is of opinion that the patent is on its face absolutely void, it would be a waste of time and an unnecessary continuance of litigation to simply enter an order setting aside the injunction and remanding the ease for further proceedings. The direct and obvious way is to order a dismissal of the case, and thus end the litigation. And such is the scope of the opinion in that case. * * * But nowhere in the opinion is it intimated that the plaintiff was entitled to take any cross-appeal or to obtain a final decree in the appellate court.”

It was argued on behalf of the National Company that, since the bill had been dismissed as to 7 of the claims, the decree was final as to these, and the plaintiff was entitled to appeal. Eor the reason already given, the company could not rely on the amended section 7 of the act of 1891 (since the section gave no appeal in such a case), and the earlier cases, upon which the plaintiff did rely to sustain the position that under the general rules of law the decree was final, were distinguished by the court, and were held to have no application to the case in hand.

Since the decision of the Enameling Case, the court has referred to it twice, but merely as authority for the proposition that on appeal from an interlocutory order the Circuit Court of Appeals “might direct the bill to be dismissed if it appeared that the complainant was not entitled to maintain its suit” (Metropolitan Co. v. Kaw Valley District, 223 U. S. 523, 32 Sup. Ct. 248 [56 L. Ed. 533]), or as authority for the proposition that the Court of Appeals might “review the whole of the interlocutory decree, not merely the' part granting the injunction, and [might] determine whether there was any insuperable objection, in point of jurisdiction or merits, to the maintenance of the suit, and, if there was, to direct a final decree dismissing the bill” (U. S. Fidelity Co. v. Bray, 225 U. S. 214, 32 Sup. Ct. 624, 56 L. Ed. 1055).

In several cases the Courts of Appeals have been called on to con-aider the scope of the decision. In Page Co. v. Dow, 168 Fed. 704, 94 C. C. A. 209, the second Circuit stated its understanding to be that the Enameling Case had “made it necessary, when a trial judge held some claims to be valid and infringed and other claims to be invalid, to have two appeals on practically the same record — sometimes years apart--to secure a determination of the controversy.” In Highland Glass Co. v. Schmertz Co., 178 Fed. 972, 102 C. C. A. 316, this court distinguished the Enameling decision from the case then under review, and showed its inapplicability to a situation where the defendant alone had taken the appeal. And in General Elec. Co. v. Allis Co., 194 Fed. 413, 114 C. C. A. 375, we followed the decision, where an interlocutory decree had dismissed the bill as to one of two defendants; such dismissal being held not to be an appealable order. In Electric Co. v. American Co., 184 Fed. 924, 107 C. C. A. 238, the eighth Circuit held the decision to cover in principle the case of “a suit for the infringement of different patents for the same or kindred inventions, which may be joined in one suit; and when in such a case the bill is sustained as to some of the patents but dismissed as to others by an interlocutory decree, no appeal lies from that part of the decree which dismisses the bill as to some of the patents until after the final decree.” And the following cases also refer te> the decision: Sheppy v. Stevens (C. C. A. 2) 200 Fed. 946, 119 C. C. A. 330; Howe Machine Co. v. Dayton (C. C. A. 4) 210 Fed. 804, 127 C. C. A. 351; Odell v. Batterman (C. C. A. 2) 223 Fed. 295, 138 C. C. A. 534; and Mershon v. Bay City Co. (C. C.) 189 Fed. 753.

Now, if section 7 of the act of 1891 had undergone no change since the decision of the Enameling Case, we should be obliged to hold that the Ward Baking Company could not appeal from the interlocutory decree before us, because in that event Congress would have given the company no such appeal, and none would be allowable under the general rules governing the federal courts. But the section has been changed in essential particulars. Since January 1, 1912, it has become section 129 of the Judicial Code (Act March 3, 1911, c. 231, 36 Stat. 1134 [Comp. St. 1913, § 1121]), and now reads as follows:

“Wliore upon a hearing in equity in a District Court, or i>y a judge thereof in vacation, an injunction shall be granted, continued, refused), or dissolved by an interlocutory order or decree, or an application to dissolve an injunction shall be refused, or an interlocutory order or decree shall be made appointing a receiver, an appeal may be taken from such interlocutory order or decree granting, continuing, refusing, dissolving, or refusing to dissolve, an injunction, or appointing a receiver, to the Circuit Court of Appeals, notwithstanding an appeal in such case might, upon final decree under the statutes regulating the same, be taken directly to the Supreme Court.”

In other words since the plaintiff is the party adversely affected by the refusal or the dissolution of an injunction, the section now gives the plaintiff the right to appeal therefrom. This covers the situation where a bill has been dismissed as to certain claims of a patent, whether the dismissal be put on the ground that the claims are void or on the ground that they have not been infringed; for there can be no more effectual refusal of an injunction than to dismiss the bill that asks for such relief. It follows that the Baking Company’s appeal properly brings up the questions that were decided against it, namely:

(1) Whether claims 8 and 13 of the reissue have been infringed by the defendants’ machine.

(2) Whether claims 1, 2, 4, 5, and 16 of patent N'o. 611,563 involve invention over the reissue.

(3) Whether claims 10, 11, and 16 of No. 672,414 involve invention over claim 6 of No. 649,437; and

(4) Whether claim 6 of No. 649,437, claim 13 of No. 672,414, and the claims specified in (2) and (3) have been infringed by the defendants’ machine.

We need not discuss these questions, however, for the District Judge has considered and decided them satisfactorily and we adopt his opinion thereon as the opinion of this court.

It remains to say a few words about the defendants’ position. We find nothing in any of the foregoing cases that supports the argument presented on their behalf. It is a novel proposition that a party may have all the benefits of an appeal that has been taken by his adversary without taking an appeal on his own behalf. No case so decides, and no statute has so declared. There are legislative provisions and rules of court with which a party desiring to appeal must comply, and these would be impliedly nullified by such an irregular proceeding: A party appealing must ordinarily have his appeal allowed, and must specify the errors to which he objects. In order to protect his adversary, he must also give bond for such sum and for such purposes as may be required of him; and he must comply with the rules of court that define and govern his conduct as an appellant. It is true that the decree below does not place the defendants under injunction, but merely orders them to account, and it would seem,.therefore, under the decisions considered above, that the statute did not give them the right of appeal. Nevertheless they claim all the advantages of such a position although they did not have the statutory right to occupy it, and even if they had they neither presented a petition, nor gave a bond, nor assigned errors, nor complied with tire rules of court in any particular. In the absence of any authority sanctioning such a procedure, we decline to consider the questions that the defendants seek to raise.

The decree is affirmed.