Winchester Repeating Arms Co. v. Buengar

199 F. 786, 1912 U.S. Dist. LEXIS 1242

• Court: District Court, E.D. Wisconsin
• Decided: October 30, 1912
• Status: Published

Opinion

GEIGER, - District Judge

(after stating the facts as above). [1] Complainant’s case appears so clearly to be ruled by Henry v. Dick, 224 U. S. 1, 32 Sup. Ct. 364, 56 L. Ed. 645, and Victor Talking Machine Co. v. The Fair, 123 Fed. 424, 61 C. C. A. 58, that consideration of the license contract and system, with a view of determining its validity and scope, is unnecessary. The controlling authority of these adjudications forecloses any question respecting the infringing character of defendants’ acts.

[2] The complainant’s patents, though their validity has never been adjudicated, are shown to have received recognition through long and extended public acquiescence and use. Neither upon the argument nor in defendants’ answer, since filed, is this called in question. Such answer cannot, by mere formal denial or averment, avail to overcome or cast in doubt the specific and detailed averments of the bill and supporting affidavits. In a case disclosing long acquiescence, public use, utility of the patented device, as well as clear infringement, a temporary injunction may be issued, without prior adjudication, unless the validity of the patent is challenged in some affirmative or equally specific manner, giving rise to a fair doubt.

It was contended upon the argument, and it is now averred in the defendants’ answer, that complainant’s license system is a.mere scheme or pretense for keeping alive expired patents, the improvements covered by which are embodied in its guns; that the essential features of guns manufactured by it are set forth in certain expired letters patent, but that the letters patent in suit “are for trivial, frivolous, and ordinary shop expedients”; and, “in view of the state of the art as it existed at the time of said alleged dates of invention, the said letters patent and each of them do not, and did not at the time set forth, cover any patentable invention.” It is also charged, in substance, that the complainant has not enforced the so-called license system uniformly and in good faith, but has, in its dealings with certain wholesalers, disregarded it by allowing rebates, and that such system is used “simply for unlawful purposes.”

The first of these contentions, involving, as it does, the general claim of invalidity, should be supported, it would seem, by a disclosure of particulars wherein each of the five patents was fully anticipated by an expired patent. The issue tendered by the bill and affidavits, asserting a right founded upon five patents, is not. fairly met by the general allegation that such patents are all anticipated by a specified expired patent, which allegation at the same time acknowledges additional features, summarily characterized as trivial and frivolous; and, in view of the public acquiescence, established by complainant, I do not think that doubt is raised or suggested by such allegation.

[3] With respect to the claim that the complainant, since the adoption of its license system, has not enforced it uniformly, or in good faith, that it has granted rebates to wholesalers, it seems to me that, even if such is admitted to be the fact, it does not constitute a defense available to any particular infringer. This contention is doubtless based upon the assumption that a patentee, having adopted, as between himself and the trade, a license system, is bound to its.literal maintenance. He cannot thereafter discriminate, except under penalty of surrendering his reserved rights or discharging all the restrictions. Whether, as an abstract proposition, this is or ought -to be sound, need not be determined. It would seem, however, that, having the right to adopt the system, including a schedule of prices, he can at any time, as an incidental feature and as a part of the whole, make concessions based, for example, upon the volume of patronage. And it is difficult to see why, if he can adopt any system 'he sees fit, he cannot, in making concessions as indicated, at the same time require that such concessions shall not impair the integrity of the system in other respects. In other words, he may make concessions to wholesalers on condition that the retail price prescribed by the schedule shall not thereby be disturbed. Of course, if an alleged infringer can show the patentee’s course of dealing with or conduct toward him to be such as disclosed a purpose to surrender the reserved right, or to discharge the restriction, a different question might be presented. But here the defendants merely allege that complainant had not exacted literal compliance with the license agreement on the part of certain patrons, or had granted concessions. There is no suggestion of anything having the element of estoppel, no course of dealing on the part of complainant with defendants, or anybody, upon which defendants justifiably relied in making sales violative of the license schedule. On the contrary, the advertisements published by them, and their conduct and statements attending the alleged infringing sales, disclose a deliberate purpose to violate or evade the license, notwithstanding complainant’s protests.

The claim is made in defendants’ answer that the complainant’s license system is a “part and parcel of an unlawful scheme to maintain and fix the selling prices” of all its products, whether patented or not. If defendants, instead of selling a patented product which they well knew to be subject to the restrictive terms of a license, had sold an unpatented product, they might be in a position to urge the merit, if any, of this claim. But they can hardly insist that they should be relieved from compliance with the lawful stipulations because complainant may have endeavored to comprehend within the system situations not involving defendants, but alleged to” be beyond its lawful scope.

It is urged that because, in an action pending against the defendant Olmsted, in the District Court for the Northern District of Illinois, an injunction was refused, none should be awarded here.' Such defendant, alone, conducts a store in Chicago. At Milwaukee, he and the defendant Buengar, as copartners, conduct another. Different infringing acts are alleged in each suit, though the sales in Milwaukee are referred to in the former suit. Under such 'circumstances, the complainant could not obtain full relief in the first suit; and the parties, in their answer herein, have not attempted to claim its pend-ency as ground for abatement.

I think complainant has made a case entitling it to a temporary injunction. Such injunction may issue, the complainant to give an undertaking in the sum of $1,000; conditioned for the payment of such damages as defendants may sustain by reason thereof, if the court should ultimately determine that it was not properly awarded.