HAT SWEAT MANUF'a CO. ". PORTER.
745
damages for the infringement of a patent. The summons and complaint are in the forms approved in state practice. The defendant contends that because section 4919 of the Revised Statutes prescribes that such damages "may be recovered by action on the case," the only method of securing such relief is by the archaic form and procedure of the commonlaw action of case, modified only by the rules of this circuit in force before the passage of the act of 1872, now preserved in section 914 of the same Revision. He is unquestionably correct in the proposition that sections 914 and 4919 are to be construed together, but to such construction it is by no means necessary to exclude actions brought under section 4919 from the operation of section 914. An action on the case is undoubtedly the mode in which such damages can be recovered. but the forms of pleading and procedure in such .action in the federal courts should be the same as those employed in the same action in the state courts. The substance of an action on the case was not abolished by the refornied procedure, though its pleadings and practice were reconstructed in conformity with the new system. By the operation of section 914 an action on the case in the federal courts is assimilated to the state model, except so fllr as it is modified by express enactment of congress, as by section 4920. Motion granted.
HAT SWEAT MANUF'G
Co.
f'. PORTER
et al.
(Oircuit Oourt,
n. New
Jersey.
Ar-lI 16, 1888.) CONTRA,CT-INJUNCTION.
PATENTS FOR INVENTIONS:-LICENSES-BREACH
A bill in equity alleged that complainant licensed defendants to use the former's patents on certain terms, among which Were payment of royalties, the rendering of monthly accounts, etc.; that defendants soon refused to fulfill 8nypartof the agreement, but continued to use the patents: that they had . conspired with other licensees to destroy complainant's license system, and irreparable injury would result. Defendants answered that the agreement was obtained by fraud on the part of complainant, and was therefore void. Held, that complainant has no adequate remedy at law. and an injunction will issue against defendants, unless they will give satisfactory bonds pending .
In Equity.
Motion for preliminary injunction.
John R. Bennett, Roscoe Conkling, and A. Q. Keasbey, for complainant. Edmund Wetmore, for def'endahts.
WAr,ES, J. The question presented for consideration is, does the bill exhibit a case for equity cognizance? The defendants insist that the complainant has an aGlequate remedy at law. The bill sets forth these facts: The complainant is a Pennsylvania corporation, having its general place, of business in Philadelphia. The defendants are citizens of New Jersey. On the 7th of Maroh, 1884, the complainant, being the owner of several· patents, all of which relate to sweat-bands for hats or caps, the
, ma'ilufactilre thereof, and the rnachilller;y used in making them, licensed :the def1mdants to use the patelltf:l, on certain termsan,d conflitions, among which ,were the payment of royalties., the renderjJ)g' of monthly accounts, with'remittances of cash, and a stipulation that the agents of the comat aU reasonable times to inspeot their books plainant should be for the purpose of verifying their accounts, and to have free access to the . prel:nises where the patented machin,e..'! were operated or /Stored, to verily , their number and examine their condition. The defendants also cove, nanted'llot to dispute the validity oiany of.the patents. Afteracceptjng. the license, the defendants made many thousand dozens of hat bands under ,the patents, paid the royalties as they feU due, and performed all . of their, covenants up to June 1,J887,sinoe which time they have refused to pay royalties, render accolints, or fulfill any part of their agree'mentwith the complainant, althoughrthey have continued to use, and 'arestiH,using, the patented machines·.. The complainant has issued 145 , licenses, which are all in force and complied with, except those of the ,defendantBand four other licensees, against whom similar motiQlls are "now pending. The bill,furthercharges that the defendants have com·,biJaed with certain otper l,icensees,of the complainant,and with other assOyiation parties, who are infringing these 'patents, and have for the contribution of money to embarrass the complainant by expensive litigation, and to destroy its license system. The damages claimed for these unlawful acts are estimated at $7,500; and it is also claimed that, if the defendants are permitted to continue the violation of their agreement, tb'e cornplainanll will receive" irreparable injury. The bill prays for a discovery and account, and for a deCJree for the payment of the royalties lind the:darnl1gesusta-ined,and enj-oining1the defendants in the mean time from using any of the inventions recited in the agreement Hf,l!oonse,:, The defen,dants do not deny the the exceptiQn:<ifthe charge ofcqmbip.ation or conspiracy, but ; justify their conuucton,the ground that they were induced by the false ; andJraudulent represlJDtn,tionS,9f tbecomplainant's the · agreement of license. , They also contend that the object the bill is to the J>aymentof the royalties, for which the complainant has an reJXledy atlltw. It that if, this was t1).e sole object 'of the bill it could not be sustained; but the complainant lsseekingfor something more than a mere naked account. A discovery is sought for as well, and an order, to .compel' the defendants to. perform theircov.enaritil" or ,toabstai'n from, the useo(the patents, such use, uLlder all the circumstances of the case, will cause irreparable damage. The defendants assume the right to use the patented machines without com;'pensiltion;, a right acquired 'under a contract which they now. repudiate. , By'their acts they are endangering the license system of the complainant, and, unless promptly restrained, will give encouragement to other , licensees to imitate their example. Actions at law for the royalties as they fall due would not afford.complete relief tp the complainant. A new ", Lion-would be necessary every mohth, not only against the' defendants, other licensees, who are now acting in like mann.er, by repui
of
SHIPMAN ENGI)iE,
co. tI.Ro'C!Igs'tEIl
'fOOL-WORKS.
diating their contracts with the ccmiplainaDt, alid are still usii'l.gtherights i acquired unmerthem. To refuse the injunction would lead,t6 a multi.: plicity of suits, which may be prevented on a final hearing of this case. The complainant is also entitled to a discovery. These are recognized heads of equity jurisdiction. Injunctions have been granted in this class of cases on a much narrower basis tban is here presented. Woodworth v. Weed, 1 Blatchf. 165; Wilson v. Sherman, ld. 536; Goodyear v.Rubber Co., 3 Blatchf. 449; Eureka Co. v.Bailey Co., 11 Wall. 438; McKay v. Mace, 23 Fed. Rep. 76; Mamifacturing Co. v. Owsley, 27 Fed. Rep. 100j McKay v. Smith, 29 Fed. Rep. 295. The facts in the present case distinguish it from Root v. Railway Co., 105 U. S. 189, and Purifier Co. v. Wolfe, 28 Fed. Rep. 814. An injunction should therefore be issued, unless the defendants, within 15 days after notice of the order herein entered, shall give bond with two or more sureties, to be approved bya commissioner of the court, conditioned to render month:y accounts aecording to the tenus of tbeir contract with the complainant; and to file such accounts, duly verified, in the office of the clerk of this court" and: to pay the amount of any final decree which may be rendered against:. them; the penalty of the bond to be in such sum as may be agreed on by the parties, or, if they are unable to agree, as may be fixed ,by-the court. " , '.::
SHIPMAN ENGINE
Co. et al. v.
ROCHESTEIt TOOL-WORKS, "
Limited, et al.' . I':
(Jourt. N. D. New Yorle. April 16,1888.) PATENTS FOR INVENTIONS",;",PATENTABILITY-PRIOR STATlJ: OF TIlE ART.
Letters patent No. 304. 365, granted to Albert H. Shipman for a bon furnace," cover a device consisting of a boiler of any known form, with; an oil reservoir containing liquid fuel. and from which said fuel is drawn 'lip;; two pipes, one for conducting the oil from the reservoir, and the oth(Ji'thc: steam from the boiler; a Bleam oil-atomizing jet, formed by arranging the oritic.es of the pipes in such relation to ench other that the steamwHI sucl( np the oil from the reservoir. and spray the on. with which it comesjncontact;; and a steam regulator, operating automatically by the pressure' pf steam in' the boiler, to diminish or entirely cut off the supply of steam totbe atomizing' jet. All previous devices lacked either the atomizing jet or the 'auiomatic regulator; the nearest approach being one by Dickerson, in which there is: no atomizer, and the oil sllpplyis obtained hy gravity and not bysuctiQD. It appears that Shipman's device has been snhl extensively both at hOme and abroad, as the others have not. Held, a patontable device as J:egards the prior : state of the art " '
In EquIty. On hill for an iqjtmcti011. John Lowell and George B. Selden, for plai.ntiff. B. F. Thur8ton and Jomah Sullil;a.n, fOJ'defendant. WALLACE, J.' This iniit is restrain ill fringernen( ofJetters i patent ,dated Septcll;JPCr 1884, granted to Albert H, I Shipman for "hydro-carbon furnace." 'rhe ,defense of priori}JulMic
748
FEDERAL REPORTER.
based upon the experiments made with the apparatus of Marvin E. Otis, :leed not be considered, as the record discloses nothing to modify the opinion expressed at'the hearing of the cause, that this defense only presents an instance of an experimental use, which did not and could not demonstrate a practical realization of the apparatus ot the patent. The real question in the case is whether there was any patentable novelty in Shipman's apparatus in view of the prior state of the art. He makes no pretensions to being a pioneer in utilizing liquid fuel as a substitute for coal or other bulkier or more expensive fuels for producing heat Or steam. He assumes to have invented certain improvements in hydro-carbon furnaces, which consist of a combination of devices for regulating more efficiently the rate of combustion by the degree of steampressure in the boiler. Although he contemplated the application of his devices more particularly to steam-engines designed for driving light machinery, what he devised, and what his patent describes, is an improvement in a hydro-carbon burner for use under a steam-boiler oiany kind, effected by a combination of parts, each of which was old and well known when he took up the subject, several of which had previously been used in such burners to perform in combination the functions they performed in bis apparatus, but all of which had never before been combined together in the same apparatns. The patent describes a steamboiler, which may be of any known form; an oil reservoir, which is to contain the liquid fnel, and from which the liquid fuel is drawn upward j two pipes, one leading from the reservoir for conducting the oil, and the other leading from the for conducting the steam; a steam oil-atomizing jet, which is an atomizer formed by arranging the orifices of the pipes in such relation to each other that the steam will suck up the 011 from the reservoir, and spray the oil with which it comes in contact; and a regulator, which operates automatically by the pressure of steulU in the boiler, to diminish or entirely cut off the supply of steam to the atomizing jet. The regulator is described in the specification as follows: "III order to provide for the regulation of the steam-pressure in the boiler, I COllluine with the pipe, K. which supplies steam to the atomizer, the reguhi,tot, L'. The regulator consists of a flexible diaphragm, N', (Figs. 3 and 4,) arranged, in cOllne\?tion a valve, 8", to operate to reduce the supply of steam to the l\tomizer when the pressure in the boiler becomes too great. The diapbragm. N', forms one side of a chamber, into which the steam is admitted through a pipe, t''', communicating with the boiler or steam-dome through a hollow' boss, b"'. 'fhe'diaphragm is provided at its center with a boss, u l /, into which the stem of the vah'e, s", (Fig. 3,) is screwed. The head of the valve is fitted to a suitable valve-seat, v fl , (Fig. 3,) and it operates, when the diaphragm. N is pressed outwarll,d.s represented by the in Fig. 3, by the steam in the chambol', to diminish or entirely cut off the supply of steam to the atomizer. The·amount of pressure which will be reqqired to accomplish this result may be regulated by screwing the valve, Slf, Jll or out of the boss" Uo'l. .:1.'1 shown in the drawings,. this can ollly be. effected When tliepipe. K, is removed; the intention being to a\ljust thereglllating valve at the factol·y before t,ile engi·nG is sent out, sfld to prevent ·auy SUbsequent ati(lu of .it. ,'rhe practical effect of the l'egulH.tol' is that, if the pressure in thE> I ,
SHIPMAN ENGINE CO.V. ROCHESTER TOOL-WORKS.
749
boiler rises above any given point at which the valve is set, the supply of steam to the atomizer is entirely cut off, and the fire goes out. It will be noticed, also. that if the water should be entirely evaporated from the boiler there will be no more steam to supply the atomizer,and the fire in this case also will be extinguished. Provision is thus made for insuring entire safety under any circumstances. which may arise. I have demonstrated, by practical trials under various circumstances, that the regulator above described is highly effiCIent. and never fails to prod uce the desired results. In starting an engine provided with my improved regulator, I obtain a pressure of ail' in the boiler by means of an air-pump, or by turning the engine backward. I am aware that the supply of steam and liquid fuel to the furnace of a steam-boiler has been heretofore controlled by a diaphragm regulator operating to control valves in the supply-pipes, but such construction I do not claim. as in my invention the delivery of the liquid fuel is controlled by varying or cutting off the supply of steam to the atomizing device by a regulator operated by the pressure of the steam in the boiler. The construction of the regulator herein shown forms no part of the present invention, a..'l it is my intention to file a application for letters patellt on the novel features thereof." The claims of the patent are as follows: "The combination with a steam-boiler. of an oil reservoir, a steam oilatomizing jet. an oIl conduit. a steam-supply pipe, K, and a steam regulator operating to vary or cut off the supply of steam from the boiler to the atomizer, substantially as and for the purposl's set forth. (2) The combination, with a steam-boiler, of an oil reservoir, the stearn oil-atomizing jet and oil conduit located above the' oil reservoir, and arranged to draw oil therefrom, and a steam-supply regulator, through which the steam passes on its way from ,the boiler to the atomizer, substantially as and for the purposes set forth." The prior state of the art is illustrated by United States patents granted
to Van Norman, Brown & Morrison, dated August 1,1865; to Joseph K. Caldwell, dated September 12,1871, and March 19,1872; toAbner Burbank, dated November 5, 1878; to J. L. Kite, dated March 8, 1881; to Park & Heath, dated October 11,1881; and to E. N. Dickerson, Jr., dated Apri118, 1882. The patent to Van Norman, Brown & Morrison as showing all the devices of Shipman's appais cited by the ratus in combination. The patent describes a complicated apparatus for commingling oil vaporized in a retort with superheated steam. The apparatus is a hydro-carbon furnace, in which the steam is carried from a boiler through a coil in the fire-box, by which it becomes superheated, and is then delivered to a steam jacket or chamber, which adds heat to a retort already heated by the fire below it. Oil is delivered by means of another coil into theretort, and, after being there vaporized, the gas scapes through small holes in the retort, mingles with the superheated Bteam escaping through small holes in the steam jacket, and they are burned together. It does not contain an atomizer in anv sense. It does contain all automatic regulator which operates by pl'esstue in the boiler to shut off the steam in the coil. The apparatus is so remote in principle, as well as in detail of construction and arrangement, from Shipman's apparatus, that it could never have suggested any important feature in his. The patent does not contribute any light of value upon the case, and only incumbers the record. The patent to Park & Heath was not deemed of sufficient importance to be commented upon in the argu-
ment 9f,counsel at the hearing; but in,thebrief which has since then been submitted for the defendants it is cited as describing an apparatus which contains nn atomizer, asteam-generator'Rnd furnace, and an automatic regulating device, in combination with these parts. The apparatus contains an injector, in which three tubes are located concentrically, one for oil, oQe for steam, and one for air, all three of which materials are to be burned. together. Tht<defendants' expert says, "The steam does not meet the oil in the manner of the Shipman apparatus." In other words, there is no atomizer. The regulator is described in the specification as one by which "the amount of fuel and the combustion are steadily maintained,without regard to the amount of pressure in the boiler," and in this ,respect ,differs in principle from Shipman's regulator. The patents to Caldwell, Burbank, and Kite cilo not show any apparatus in which an automatic regulator is employed, but the regulator the apparat'tlsofeaeh is a common stop-cock, to be manipulated by hand. The hydro-carbon furnace of each or these pawnts would contain the combina.;. tion of steam-boiler, oil reservoir, oil and swam 'pipes, and atomizer arranged'a.nd constructed substantially as described in Shipman's patent, and operating together to perform all the functions' df his apparatus, if hisdid'not contain a regulator. In the first Caldwell patent the specification states: 'bIy connected together in snch a mauner that the passage of steam. heated or
"This invention consists of an
of two or more pipes adjusta-
superheated, through one pipe, produces a vacuum in the other pipe. by means of which oils of any graVity are drawn out, driven into amist or tlpray, and, combining with the ateam, form into hydro-carlJonvapor. II
The later ,Caldwen patent describes an oil-pipe leading to an oil reservoir locawd on a lower plane, a .steam-pipe leading from a boiler, and an arrangement of orifices of the two pipes at a right angle to each other so as to make an atomizer, substantially such as is described in his earlier patent. The specification states that he uses these devices in connection with the boiler which supply steam to an engine, and' that the drysteam crossing the orifice of the oil-pipe causes a sutiicient vacuum in the latter to induce the hydro-carbon to rise, and the moment it reaches the orifice it is into spray by., and is intimately mixed with, the steam. The devic!c'S, thus. combined, resemble the devices of the Shipman apparatusso closely that it is unnecessary to refer.to the other prior patents which do not contain an automatic regulator. The patent to E. N. Dickerson, Jr., describes apparatus which approximates much more nearly to Shipman's apparatus than anything shown in the other prior patents. His specification states that the invention "relates to a method of automatically regulating the combustion or heat produced by a hydro-carbon burner under boilers or other similar places where pressure is generated; and it ('{)nsista.in combining with the naphtha or naphtha and water supplypipesl{jading to such burner,a valve or valves controlled automatically by the prei;l$ure produced by the combustion, and so arranged as to automaticallycontrol the supply of liquid fuel without completelyculr ting off the The apP!lt:atusdescribed contains, a fire-box under
SHIPMAN ENGINE 00.11. ROCHESTER TOOL-WORKS.
751
ling the naphtha supply. K is a connecting rod. moved vertically by the Clark damper, L. which may be made adjustable by llliding weight, M. The stems controlling valvesH ,and J are controlled by adjustable nuts. The upward movement of the rod K. may be limited by an ad311stable stop, P. for a , purp0l!letobe explained." ' ,
thc boiler ill which a naphtha burner or retort is located. In this retort, water froUl'the stearn-boiler and naphtha are burned together. The vaporized oil is conducted through an orifice in the retort by a pipe terminating under the retort, where it escapes, and where combustion takes place. Two pipes enter the retort, one connecting with the steam-generator, and the other with the naphtha reservoir, from which the naphtha flows by gravity into the retort. The regulator is decribed as follows: '''H represents a valve controlling the water supply, ,and J a valve control-
The specification then describes the operation of the apparatus as foliows: and before steam hR.'! been generated; water 8ndtlaphtba will be'allowed to flow into the burner and be there consumed, "thereby the boiler and making steam. As soon, however. as thepl1tlSSurein; tbeboiler sufficient to,counter.j)alance the weight, Y, the rod, K. will begin to rise, tberel:>Y shutting off the water and naphtha Rljpply.Theextent ,to which supply is reduced can be Iletel'mined by the adjustment of the stop, P. because it wiIllJe undesirable to' shut off the llowaltogether, as doing s6 would necessitate kindling the tire afresh. By having the positions of the valves relatively adjustable the apparatus may be so arranged that the water will be entirely shut off, leaving a limited supply of naphtha, which will burn at the point, G, (under the returt.) and keep the apparatus hot, and ready to start fresh when the steam falls in the boiler."
, , In the 'ordinary' condition,
From this description it is obvious that not only there is no atomizer in the Dickerson apparatus, but the mode of operation necessitated by the differences between his apparatus alld Shipman's is different from Shipman's. In Shipman's apparatus the oil supply is controlled solely py the flteam supply, anq, when the steam supply is diminished or wholly .cutoff, the .oil supply is thereby likewise dilllinishedor cut off; the regulator is not applied to the oil-pipe, but the flow of oil is controlled by the steam suction which .is automatically regulated in the steam-pipe. As in Dickerson's apparatus the oil supply is not obtained bysnction, but by gravity, his regulator required to be applied to the oil-pipe as well as the steam-pipe, and it is therefore so devised as to cut off the supply of naphtha by shutting off the naphtha supply pipe. Undoubtedly Shipman has'onlycotnb1ned in effective relations an automatic regulator that was not novel in· itself with the atomizers of earlier patents. One test of invention in such cases is whether a new result has been obtained by the combination of old parts as distinguished from an aggregation of old results. The new combination of Shipman can meet this test,because it isperfeetly clear that this combination enables the steam supply pi pe to perform a new function in an atomizer. -'-tha t is to exercise a varying suction upon the oil-pipe, graduated by the degree ofsteampressure iothe boiler. That Shipman's apparatus is exceedingly useful
7h2
Jl'JCDERAL BEPOR1'ER.
cannot be disputed; certainly the defendants who have appropriated it completely can hardly dispute the proposition. Everybody recognizes the advantage of having the fuel supply and the steam-pressure reciprocally regulated, so that when the pressure in the boiler reaches the designated point of safety or convenience the diminished fuel supply will relieve the pressure, and, when it falls below the proper point, the increased supply will bril1git back to the required power. Dickerson devised one set of contrivances adapted to his particular form d burner to acC()mplil311 this object. .Shipman devised another set adapted to the particular form of atomizer employed in his furnace to accomplish it. There wl1s inventive thought in ,the idea that he could make a valve in the steampipe of existing atomizers to do the work of a valve in both the steampipeand''the of Dickerson's apparatus. Still more was there inventive thought in the idea that he could make any form of existing :regulators lend a new function to the steam-pipe of existing atomizers. It is a significant fact that Shipman's apparatus immediately commended itself tlle public for its, practical efficiency, and has met wiih an ex,tensiveand increasing patronage both in this country and abroad, while none' of the devices described in the prior patents have ever gone into publktIse. This circumstance, while it suggests that the former devices may not'have been practically operative, is persuasive that WhlLt Ship:mim did by way ofimproving themwas:not such an obvious thing as to deprive, it of the merit ofJ'llnking as invention. A decree is ord fol' red the complainants.
HUBEBetal. 'II. MYERS SANITARY DEPOT.
(Oirooit Oourt, S. D. New York. April 16, 1888.) PATENT$.,POJ:l. Il{vENTIONs-INFRINGEMENT....,-INJUNCTION-PARTIES.
'1'hesole owner of orie patent and exclusive licensee of another may. in one actiun. joIning his!icensor as plaintiff, enjoin an apparatus infringing on bothpateuts. .
,In Eqnity.Bill for infringement. Albert Cornstock, for comp1l:Linants. William, H. Sage, for defendant. LACOMBE, J. The complainant Huberis sole owner of letters patent No. 260,232. The complainant Boyleis sole owner of letters patent No. 255,485. Huber is also exclusive licensee of Boyle's patent. The defendant manufacturesalld sells machines which, it is alleged, infringe both patents. Defendant demurs for. misjoinder of parties. Tpe point raised is a new one, and in determining it the "court is governed by those analogies which seem best founded ill general convenience, and will best. the, administration of justi,ccj without multiplying unnecessary litigatiop ,on the one hand, or drawing suitors into, unnecessary expensea