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Zephyr American Corp. v. Bates Mfg. Co.

May 15, 1942


Appeal from the District Court of the United States for the District of New Jersey; Guy L. Fake, Judge.

Author: Jones

Before BIGGS, JONES, and GOODRICH, Circuit Judges.

JONES, Circuit Judge.

The plaintiff, Zephyr American Corporation (hereinafter referred to as "Zephyr"), brought the instant suit under the Declaratory Judgments Act*fn1 against the Bates Manufacturing Company (hereinafter referred to as "Bates") and one Edmund W. A. Peter, charging them with unfair competition and seeking an injunction restraining the alleged unfair practices, an accounting for the damages Zephyr claims to have suffered as the result of such practices and an adjudication with respect to the validity and infringement of two patents (Drucker Patent No. 1,895,409 and Peter Patent No. 2,115,537), in connection wherewith the alleged unfair competition was carried on by the defendants. Bates is the owner of the Drucker patent and the exclusive licensee of the Peter patent, whereof Peter is the record title owner. Jurisdiction of the suit is made to depend upon the diversity of citizenship of the parties and the amount in controversy.The matters of patent validity and infringement, it will be noted, are involved because of their bearing upon or relation to the unfair competition alleged.

In their answer, the defendants counterclaimed, charging Zephyr with infringement of the two patents by a device known as the "Autodex," which admittedly was manufactured and sold by Zephyr. The defendants sought damages against the plaintiff for the infringement charged and an injunction against such infringement in the future.

After a trial on the merits, the court below denied the plaintiff any relief and sustained the defendants' counterclaim, holding that the Drucker and Peter patents were valid and infringed by the plaintiff and awarding Bates damages by reason thereof and an injunction restraining Zephyr from future infringements or violations of the defendants' rights under the patents. From the judgment entered, the plaintiff took the present appeal.As the plaintiff's charge of unfair competition necessarily calls for a determination as to the validity, and the plaintiff's infringement, of the Drucker and Peter patents, we proceed immediately to a consideration of the latter matters.

The devices covered by the defendants' patents are desk indices, or list finders, for ready reference in locating names, addresses and telephone numbers or other data catalogued alphabetically. In 1923, Bates had put upon the market a rotary telephone index which met with considerable commercial success. In 1936, Peter contacted Bates with a view to interesting the latter in what Peter considered a superior device for somewhat similar uses. An agreement was entered into by bates and Peter respecting the latter's conception and an application for a patent of the Peter device was filed. In the prosecution of this patent application if was discovered that the Peter device might infringe the patent which had been granted to Drucker in 1933. Bates thereupon brought the Drucker patent (No. 1,895,409) and proceeded with the Peter application whereon the patent (No. 2,115,537) was granted in 1938. Thereafter Bates manufactured and sold what it called the "Bates List Finder" based on the Peter patent.

The plaintiff challenges both the Drucker and Peter patents on the ground that they were anticipated by the prior art and, therefore, are lacking in invention. For an understanding of the prior art in relation to the Peter patent, it seems unnecessary to go back of Drucker. The latter's patent consists of sheets of paper piled one upon another in a horizontal position within a casing having a hinged cover top. To the end of the cover, opposite the hinged end, there is attached an adjustable gripping member which can be moved on a horizontal slide. The loose outer, or bottom, edges of the sheets are cut so as to form tabs which overlap. When the gripping member is moved backwards or forwards on the slide to a desired point, as selected on an alphabetical index, it engages only the corresponding portion of the sheets to be lifted.Depending, therefore, upon the position of the gripping member, as so determined by the operator, the required number of the sheets can be lifted, when the cover is pulled up by hand, so as to expose to view the particular sheet desired for inspection. The cover can be held in an open or upward position by a stop, clamp, or other device.

In the Peter device the sheets or cards, piled one upon another, are mounted in a horizontal position within a container having a hinged cover top. THe gripping member moves on a slide along one side of the cover on the cut side of the sheets or cards and under the tabs (left by the cutting) which overlap.At the hinged end of the container there is a coil spring so that when pressure on a button releases the catch which holds the cover in closed position, the cover is raised upright by the spring action.

It is plain that all that Peter did over Drucker was to place the gripping member and the tabs on the cards at the side of the container instead of the end and to provide the coil spring and release catch for opening the cover. The use of a release catch and coil spring for the intended purpose is old, having been used in many objects, such as in the jack-in-the-box of ancient origin. The utilization of an expedient common to many diverse arts, of itself, amounts to no more than the exercise of mechanical skill. No new use or service is ascribed to the coil spring and release catch as they are employed in the Peter patent. We think it is too clear to admit of any doubt that Peter was anticipated by Drucker and that his device lacks invention. The fact that Bates in pursuing the Peter application purchased the Drucker patent upon learning of it because of a fear of infringement is at least evidentiary of a like recognition on the part of Bates. If Bates can point to invention at all in this case, it must necessarily be on the basis of the Drucker patent.

As evidencing the state of the art at the time of the Drucker patent, the plaintiff points to the disclosures made by the Shyer patent (No. 429,970) of 1890, the Hall patent (No. 467,131) of 1892, the Dickenson patent (No. 681,409) of 1901, and the Burgess patent (No. 753,849) of 1904. As has often been said, the presence or absence of patentable invention depends upon a question of fact. Thompson Spot Welder Co. v. Ford Motor Company, 265 U.S. 445, 446, 44 S. Ct. 533, 68 L. Ed. 1098; Radiator Specialty Co. v. Buhot, 3 Cir., 39 F.2d 373, 376; Walker on Patents, Deller's Ed., § 25. For the grant of a patent the statute requires that the alleged inventioni be new and useful. 35 U.S.C.A. § 31. In determining, therefore, whether there is patentable invention in any case, it is essential that the knowledge of the prior art be considered. Keystone Driller Co. v. Northwest Engineering Corp., 294 U.S. 42, 50, 55 S. Ct. 262, 79 L. Ed. 747; Powers-Kennedy Contracting Corp. v. Concrete Mixing & Conveying Co., 282 U.S. 175, 180, 181, 51 S. Ct. 95, 75 L. Ed. 278; New York Schaffolding Co. v. Liebel-Binney Construction Co., 254 U.S. 24, 31, 41 S. Ct. 18, 65 L. Ed. 112. Manifestly, what is already know to the art at the time of a patent applicatio is peculiarly of material bearing on the question of the novelty of the alleged invention. We come then to what Drucker (and Peter, for that matter), at the time of entering the particular field, knew or could have known from the disclosures which had already bee made by others.

The Shyer patent covers a series of cards of leaves mounted upright within a container, each card or leaf having a pin at its top. The pins on the respective cards or leaves are set at graduated distances for tabbing purposes. The pins lie behind a slotted latch against which they rest and which keeps the cards in their upright position. The latch is controlled by a knob or indicator on the outside of the container and can be moved so as to permit one or more of the pins in a series to come through the slots. When this is done and the door of the container is opend, the cards so released fall from the force of gravity, with the mounting of the cards at the bottom acting as an axis. The cards are returned to the upright position by hand. In the Hall patent the leaves or tablets are hinge-supported at their lower edges and are normally kept in an upright position by a confining appliance. This appliance, which is a finger shaped clip, may be moved across the top of the leaves or tablets on a runner bar. The leaves or tablets are cut to provide tabs which overlap so that as the clip moves across the tabs a desired portion of the leaves can be released from the confining appliance. When so released, they rotate from the force of gravity to a downward position. Like the Shyer patent, the leaves are returned to the upright position by hand. The Dickenson patent discloses a number of carriers of equal length mounted on an upwardly inclined base so that the cards overlap with the upper end of each carrier projecting above the upper end of the carrier in front of it. A holder or indicator may be moved through a slot cut in the edge of the container and by means of the indicator the desired number of the carriers can be released. When the door of the container is opened, the carriers so released are pulled down by the force of gravity to a horizontal position. In the Burgess patent there is a latch which is moved upward and back by hand until brought into the position desired. Then it is pushed down so that it engages the upright cards at a point thus relatively determined. By pulling the latch forward the cards so engaged within the latch are brought into horizontal position. The one end of the latch is fixed to the cover of the container.

From the description of the Drucker patent which we have already given, we believe it is evident that Drucker's idea was fully anticipated by the prior art, more particularly as disclosed by Hall and Burgess. In the Hall patent the overlapping tabs on the superimposed sheets are selected by a clip, while in the Drucker patent they are selected by the gripping member. In Hall, the clip confines, in an upright position, the sheets which are not intended to fall, while in Drucker, the gripping member carries the sheets, not desired for use, to an upright position. this reversal in the mode of operation is but an exercise of ordinary skill. The idea of a means to engage a number of sheets and to pull them away from others is disclosed by the Burgess patent. The principle of selecting for separation a number of contiguous sheets by means of an indicator and then moving them away from their normal resting position by the use of a clip or gripping member operating against the tabs of the sheets is but a mechanical adaptation of the teachings of the priro art in a combination which produces no new result.

Invention does not reside in mere skill. Altoona Publix Theatres, Inc., v. American Tri-Ergon Corp., 294 U.S. 477, 486, 55 S. Ct. 455, 79 L. Ed. 1005; Hansen v. Slick, 3 Cir., 230 F. 627, 632. As the Supreme Court said in Atlantic Works v. Brady, 107 U.S. 192, 200, 2 S. Ct. 225, 231, 27 L. Ed. 438 - "To grant a single party a monopoly of every slight advance made, except where the exercise of invention somewhat above ordinary mechanical or enginnering skill is distictly shown, is unjust in principle and injurious in its consequences." An aggregation of elements, old in the art, which does not bring about a new and useful result is not invention. Cuno Engineering Corporation v. Automatic Devices Corp., 314 U.S. 84, 62 S. Ct. 37, 86 L. Ed. ; Keystone Driller Company v. Northwest Engineering Corp., supra; Powers-Kennedy Contracting Corp. v. Concrete Mixing & Conveying Company, supra, 282 U.S. at page 186, 51 S. Ct. 95, 75 L. Ed. 278; Grinnell Washing Machine Company v. E. E. Johnson Company, 247 U.S. 426, 432, 38 S. Ct. 547, 62 L. Ed. 1196; Richards v. Chase Elevator Company, 158 U.S. 299, 302, 15 S. Ct. 831, 39 L. Ed. 991; Reckendorfer v. Faber, 92 U.S. 347, 357, 23 L. Ed. 719. An aggregation of known elements and their uses (such as the Drucker and Peter patents appar to be) is to be distinguished from "a new combination of the old ingredients, whereby a new and useful result is obtained". In the latter instance, there is ...

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