incorporated; James G. Wilson becoming president and owning 94 per cent. of the capital stock. In that year the factory was moved to Norfolk, Va., maintaining an office in New York City. Lester G. Wilson, the complainant in this suit, an adopted son of James G. Wilson, who had then recently graduated from Columbia College as a mechanical engineer, was placed in the factory to learn the business, and subsequently, upon the factory being moved to Norfolk, he was made engineer in charge of the steel department, the drafting room, and mechanical work, at a high salary. During the employment of the said Lester G. Wilson it was part of his duty to design improvements, as the needs of customers required, or as were necessary, looking to keeping the company abreast of the times in the conduct of its business. Such improvements, when deemed of sufficient importance, were patented in the name of the said Lester G. Wilson, the company paying all expenses connected with the making of models, furnishing material, etc., the work being done in the company's factory, and the costs and expenses incident to procuring the patents, including attorney's fees, were likewise borne and paid by the company. The patents secured were as follows: No. 917,983, cable release for fireresisting shutter, patented April 13, 1909. No. 929,741, wicket door for rolling shutters, patented August 3, 1909. No. 929,742, mechanism for operating rolling metallic shutters, patented August 3, 1909. No. 939,650, electrical controlling system for rolling or sliding shutters, elevators, etc., patented November 9, 1909. No. 945,660, electrical trolley device, patented January 4, 1910. No. 972,426, fire-resisting shutter, patented October 11, 1910. During this entire period, Percy H. Wilson had been connected with the company, as factory manager, at Olean, N. Y., and as vice president, general manager, and director, after the removal to Norfolk, and he had been continuously in the employ of the company for 30-odd years. He owned 160 shares of the capital stock of the company. On the 29th day of April, 1914, James G. Wilson, desiring to retire from the business, gave an option on his stock holdings in the company, of 2,693 shares, to Moss & Moss, of Norfolk Va., brokers, together with the patents standing in the name of the said James G. Wilson. The said Percy H. Wilson, together with several associates, acquired the stock of the said James G. Wilson from the said Moss & Moss, under the option, and formed a new corporation, under the name of the "J. G. Wilson Corporation," taking over the entire assets and stock of the said James G. Wilson Manufacturing Company, and merged the old company into and continued the business under the new corporation, the only apparent difference being that James G. Wilson retired from the company, and the word "Corporation" was substituted for "Manufacturing Company," as used by the old concern. The stock was acquired in the fall of 1914, and the new company took over the business on the 1st day of December, 1914. Under the new company, Lester G. Wilson, the complainant, was continued as engineer, at a large salary, and remained with the company for some six months. A few days after the consummation of the sale aforesaid the complainant asserted a claim against the new corporation, for royalties from the 1st of December, 1914, on the patents which had been issued to him while employed as engineer of the old company as aforesaid, and claimed the absolute ownership of said patents, which claims were denied by the corporation. The said Lester G. Wilson, although connected with the business from 1893 to 1915, never demanded royalties of the old company for the use of the patents, nor claimed to be the owner thereof, nor were any royalties ever paid to him; the company claiming to be the equitable owner of the rights under the patents, if not the owner of the patents, and to have the right to use the same, without return of any kind. A short time after giving the option upon the stock as aforesaid, to wit, on the 22d day of May, 1914, James G. Wilson, while still president of the old company, but acting individually, delivered to the complainant the six letters patent standing in his name as aforesaid, and informed him that the same belonged to him. This action of the said James G. Wilson seems to have been taken without the knowledge of the company, or by its authority, and the said Percy H. Wilson, vice president and general manager and director, had no knowledge thereof. The said Lester G. Wilson is now permitting his present employers, competitors of the new corporation, to use the rights under said patents in the manufacture of folding shutters and doors. Williams, Tunstall & Thom, of Norfolk, Va., for complainant. WADDILL, District Judge (after stating the facts as above). The object of this suit is to determine the ownership of the letters patent aforesaid, issued by the United States to the complainant, Lester G. Wilson. Complainant avers that the defendant corporation is engaged in using and infringing his said letters patent, and prays for an injunction, an accounting, and profits and damages arising from the infringement. The defendant corporation denies infringement on its part, and insists that, in the circumstances under which the patents were issued, it has at least a shop right in and a perpetual license to use the patents, and by its cross-bill sets up a claim of ownership to the patents, and avers that, while the several patents were issued in the name of the complainant, they were one and all procured by him while in the employ of the James G. Wilson Manufacturing Company, a corporation engaged in the manufacture of rolling doors, rolling shutters, and partitions in bronze, steel, and wood, and of which this corporation is the successor, the complainant securing said patents while he was chief engineer of said company, charged especially with the duty of developing its business, and with devising and procuring such improvements as would tend to develop and keep the defendant's products up to a high standard and abreast of the times; that the inventive skill exercised and the mechanical work done was while complainant was in the employ of the defendant, and as a part of his employment, and the same was done at its cost and expense in every respect, from the furnishing of material used, to the employment of counsel in procuring the patents, and the payment of the patent office fees. The case was heard on bill and answer, and cross-bill and answer thereto, and upon the evidence adduced, most of which was taken orally at the hearing, and the conclusion reached by the court, upon consideration of all the evidence, and the facts and circumstances surrounding the same, and the law applicable thereto, is: First. That the complainant was not entitled to claim any of said patents as against his employer, the James G. Wilson Manufacturing Company, by reason of the circumstances under which they were procured, and that said company was entitled to a right in and indefeasible license to the use of said patents, as against the complainant and his assignees. McClurg v. Kingsland, 1 How. 202, 11 L. Ed. 102; Solomons v. United States, 137 U. S. 342, 11 Sup. Ct. 88, 34 L. Ed. 667; Gill v. United States, 160 U. S. 426, 16 Sup. Ct. 322, 40 L. Ed. 480; Wilson v. American Circular Loom Co., 187 Fed. 840, 109 C. C. A. 600; Schmidt v. Central Foundry Co. (D. C.) 218 Fed. 466. Second. That the defendant J. G. Wilson Corporation, which acquired the stock of the James G. Wilson Manufacturing Company, and became the lawful successor thereof, changing the name from the James G. Wilson Manufacturing Company to the J. G. Wilson Corporation, likewise is entitled to a right in and irrevocable license to the use of the said patents, as the lawful successor of the said James G. Wilson Manufacturing Company, as against the said complainant and his assigns. The suggestion that the right in and license to use said letters patent is a personal one, existing in favor of the James G. Wilson Manufacturing Company, and does not, in the absence of an express contract, pass to the defendant company, is not well taken, and cannot be maintained, for the reason that the defendant company is but a continuation of its predecessor company, and the complainant in good faith and fair dealing is as completely estopped from claiming the right here set up against one as the other. In a word, these patents were procured by the complainant while in the predecessor company's employ, with a view to the successful transaction of its business, and they are no less essential to the successor corporation's operation of its business than they were to the original company; and to allow the original company to sell and dispose of its stock and assets, which included these patent rights and privileges, and which added to the value of the assets, at a profit, and then to give the patents, or relinquish their privileges in them, to one having the relation to the business that the complainant had, would operate as a fraud upon the successor company. Lane & Bodley Co. v. Locke, 150 U. S. 193, 14 Sup. Ct. 78, 37 L. Ed. 1049; Lightner v. Boston & Albany R. R., 1 Lowell, 338, Fed. Cas. No. 8,343. Third. That the complainant, subject to the rights of the defendant, as herein set forth, is the owner of the letters patent. Taking into account the circumstances under which these patents were issued, as above indicated, there is much force in the position of the defendant. company, under the doctrine laid down in Solomons v. United States, 137 U. S. 342, 346, 11 Sup. Ct. 88, 34 L. Ed. 667, supra, and Gill v. United States, 160 U. S. 426, 435, 16 Sup. Ct. 322, 40 L. Ed. 480, supra, that the James G. Wilson Manufacturing Co., in whose employment complainant was at the time the patents were procured, became the owner of the same, and that the complainant was merely the legal owner, and held a naked trusteeship in such patents, with no beneficial interest therein, still the court, upon the whole evidence and under the authorities, inclines to the view that he is the beneficial owner of the patents, subject to the free and unlimited use thereof by the defendant corporation, the successor to the James G. Wilson Manufacturing Company, without royalty or charge of any kind. Hapgood v. Hewitt, 119 U. S. 226, 7 Sup. Ct. 193, 30 L. Ed. 369; Pressed Steel Car Co. v. Hanson, 137 Fed. 403, 71 C. C. A. 207, 2 L. R. A. (N. S.) 1172, 1182, and note. A decree in consonance with the views herein expressed will be entered on presentation. 241 F.-32 . PATENTS DIAMOND IRON WORKS v. FILER & STOWELL CO. (District Court, E. D. Wisconsin. April 5, 1917.) No. 690. 328-VALIDITY AND INFRINGEMENT-MILL REFUSE CUtter. The Dittbenner patent, No. 777,779, for a mill refuse cutter, or "millhog" for cutting up slabs, edgings, and other refuse from mills and furniture factories into fine wood for burning, covers a patentable combination and is valid; also, held infringed as to claims 3, 4, and 6, and not infringed as to claim 2. In Equity. Suit by the Diamond Iron Works against the Filer & Stowell Company. On final hearing. Decree for complainant. Frank A. Whiteley, of Minneapolis, Minn., for plaintiff. Flanders, Bottum, Fawsett & Bottum, of Milwaukee, Wis., for defendant. SANBORN, District Judge. Infringement suit on patent for a refuse cutter, grinder, or wood-chopping machine, known as a "millhog," taken out by Herman G. Dittbenner December 20, 1904, No. 777,779. The machine is used in furniture factories and mills to chop up the slabs, edgings, etc., into fine wood for the engine, as well as for sale. The product can be readily burned to make steam, no matter how green the wood may be. The machine somewhat resembles a fanning mill for grain, and consists of a large revolving power cylinder carrying knife plates which carry the wood against a cutting bed or throat plate and anvil, where it is cut into small pieces, and provided also with a large hopper into which the material is conveyed by a chute. Plaintiff's machine has two end sections (one provided with the anvil), the cylinder, and the hopper, centrally located above the cylinder. The important points in which it is claimed there was invention are the centrally located hopper, the "anvil knives," so called, and the shearing action of the disk knives against the anvil knives. The anvil knife is a steel blade fastened to a V-shaped anvil head on one of the movable sections of the machine. This construction makes it easy to remove the anvil and knives for frequent sharpening and adjustment to take up wear. Former constructions had bed plates. The anvil plates were supported by the bed of the machine, not by the movable section. The shearing action was of itself old, but had not been used in this combination. The novelty in the Dittbenner patent was in putting the anvil and anvil knives in the movable section, and the centrally located hopper of claim 2, both in connection with the shearing action described in the specification, impliedly covered by claim 2, and expressly so by claims 3 and 4. It is true that original claim 1 counted upon "an adjustable anvil block, anvil knives applied to said anvil block, and a cutter head carrying a plurality of knives, co-operating with the said anvil knives substantially as shown"; and claim 2 counted on anvil knifes. movable with the case section. So it is insisted that by canceling these For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes two claims Dittbenner gave up his whole invention, which is substantially described, by reference to the description, in canceled claim 1. Plaintiff replies that the cancellation was made only to meet a reference, being the Brown patent, No. 542,075, and that the patentee is only estopped by his surrender from maintaining that his substituted claim covers the device of the reference. Drum v. Turner, 219 Fed. 191, 135 C. C. A. 74. It is also plain that Dittbenner did not intend to give up his right to the elements covered by original claim 1, because he claimed them all in the new claims 2, 3, and 4. Gray Telephone Pay Station v. Baird Mfg. Co., 174 Fed. 417, 98 C. C. A. 353, in this circuit. There the inventor seemingly abandoned his basic claim, but continually returned to it, was defeated, and had to appeal. It was held that his cancellation of claims did not surrender the invention. The patentee improved on the prior art by a central hopper instead of a side-feed, and adjustable anvil knives instead of the old throat plate or the old bed plate. The shearing action, by itself, had been used before; but he brought these elements together and claimed then all in claims 2 and 6 and all but the central feed in claims 3 and 4. Claims 2 and 6 do not expressly mention the shearing function, but substantially do so by claiming the cylinder knives co-operating with the anvil knives. Defendant's machine is the same as plaintiff's, except that the hopper is made in the case section opposite the anvil section, instead of being literally between them. The difference is one of form merely, as respects claims 3, 4, and 6. As to claim 2 defendant does not use that element of this claim which counts on a movable case section, to afford a line of vision to the anvil knives. Decree for infringement of claims 3, 4, and 6, with injunction and accounting. UNITED STATES v. NINE BARRELS OF BUTTER. (District Court, S. D. New York. April 9, 1917.) FOOD 24-CONDEMNATION-IMPURITIES "RENOVATE”—“LADLING." In an action for the destruction of butter, shipped in interstate commerce, which contained impurities, and a portion of which had become rancid, the claimant will be allowed to "renovate" the butter-that is, to melt it to a fluid, so that all solid matters fall to the bottom, and then strain and blow it into a spray, in which condition hot water is allowed to percolate through the oil, after which the water is drawn off and an emulsion made with milk, cooled into crystals, and packed, under a bond that, after renovating, the butter will be submitted to inspection, and destroyed if the renovation has not removed the impurities and the rancid oils-but will not be permitted to cleanse the butter by the process known as "ladling," which consists merely in picking out with a trowel such parts as show impurities to the eye, and then molding it into pats and coloring it for sale to bakers. [Ed. Note. For other cases, see Food, Cent. Dig. § 17. For other definitions, see Words and Phrases, Second Series, Renovate.] For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes |