Temler v. H. Stevenson and Sons. Temler v. The Actien Gesellschaft fur Cartonnagen Industrie. On the 11th of May 1896, the Plaintiff delivered his Statement of Claim in the second action, which was substantially to the same effect. Further particulars of the threats alleged were delivered in both actions, but for the purposes of this report it is not necessary to set out the particulars of the threats alleged. 5 The Defendants, H. Stevenson and Sons, by their defence (1) denied that at the time of making the alleged threats in the Statement of Claim referred to they knew that the Letters Patent therein referred to, or any of them, were invalid, and also denied that they knew that the Plaintiff's metal fastenings were not infringements, and stated that they would contend that the said 10 alleged threats were issued bona fide and without malice; (2) that the Defendants would deny that the alleged threats mentioned and complained of in the Statement of Claim and Particulars, and which were signed by the Defendants, were threats either at all or within the meaning of the 32nd Section of the Patents Act of 1883, and they would contend that the 15 letters and advertisements mentioned and complained of in the Statement of Claim and Particulars, which were not signed by them, were issued in accordance with the instructions of their principals, The Actien Gesellschaft fur Cartonnagen Industrie, and not by the instructions of them, the Defendants; (3) the Defendants would contend, alternatively, that if they had 20 issued threats as alleged in the Claim they were at the date of the issue thereof the agents of the said Actien Gesellschaft, and were not persons claiming to be the Patentees of any invention, and did not therefore come within the 32nd Section of the Patents Act of 1883; (4) on the 26th of October 1894, an action was commenced by the said Actien Gesellschaft against T. Remus and 25 Burgon and Co. to restrain the infringement of the following Letters Patent, viz. -No. 8590 of 1885, No. 273 of 1887, and No. 7807 of 1887, which action was commenced and prosecuted with due diligence. The Defendants would contend that if they did in fact issue threats they were, by reason of the above, brought within the provisions of the 32nd Section of the 30 said Act. The said Actien Gesellschaft, by their defence, raised the same defences as were raised by H. Stevenson and Sons, except the allegation in the said last mentioned defence, that the Defendants H. Stevenson and Sons were acting as agents and did not claim to be patentees, and also contained the further 35 allegation, that on the 2nd day of October 1895, an action was commenced by the said Actien Gesellschaft against Theodor Schroeder to restrain the infringement of the Letters Patent No. 8590, and on the 8th of July 1896, judgment was given restraining the infringement of the said Letters Patent, and certifying that the validity of the same came in question. 66 40 The Letters Patent mentioned in the said pleadings were granted as to No. 8590 of 1885, to Peter Jensen for "Improvements in and connected with "angle clamps for uniting the corners of boxes of wood, cardboard, leather, "and the like;" as to No. 273 of 1887, to Jean Scherbel and Teodor Remus for "Improvements in and connected with claw clamps or fittings for uniting, 45 strengthening, and ornamenting corners, edges, and other parts of boxes and "other objects of wood, cardboard, leather, and the like;" and as to No. 7807*, to Jean Scherbel and Teodor Remus for "Improvements in the manufacture "and application of claw clamps or fittings for uniting, strengthening, "and ornamenting corners, edges, and other parts of boxes and other objects 50 "of cardboard, wood, leather, and the like, and in machinery therefor." The said Letters Patent subsequently became vested in the said Actien Gesellschaft. The facts proved at the trial as to the commencement and prosecution of the action of The Actien Gesellschaft fur Cartonnagen Industrie v. T. Remus and 55 Burgon and Co., referred to in the said defences, were as follows:-The action Temler v. H. Stevenson and Sons. Temler v. The Actien Gesellschaft fur Cartonnagen Industrie. was commenced on the 26th of October, 1894, against T. Remus and T. Remus and Co., to restrain the Defendants from infringing all the three Letters Patent. On the 28th of November 1894, Burgon and Co. were added as Defendants; the Statement of Claim, which was delivered on the 12th of 5 December 1894, contained no reference to or claim in respect of the Letters Patent No. 273 of 1887. On the 28th of February 1894, the writ and claim were amended by striking out T. Remus and Co. T. Remus delivered his Defence with Particulars of Objections on the 8th of April 1895; Burgon and Co. making default in delivery of defence. A motion for judgment 10 against Burgon and Co. was made, but not dealt with prior to the trial. The Plaintiff's reply was delivered on the 29th of May 1895. The Particulars of Objections were amended on the 30th of July 1895. On the 11th of October 1895, the said Actien Gesellschaft, under an order of the 18th of July 1895, elected to proceed with the action, as regards both the Letters Patent relied 15 on in the Statement of Claim, and gave notice of trial; on the 14th of November 1895, the Particulars of Objection were re-amended by introducing (inter alia) allegations of prior publication of the Letters Patent, No. 8590 of 1885, by Letters Patent (U.S.A.) No. 121,156, granted to Joseph Cohn, and dated the 21st of November 1871, and certain re-issues thereof, by the same 20 being placed in the Patent Office Library. Notice of discontinuance as regards the Letters Patent, No. 8590 of 1885, was given by the Actien Gesellschaft on the 10th of January 1896. The Particulars of Objections were further re-amended on the 11th of March 1896, by introducing an allegation of prior publication of the Letters Patent, No. 7807 of 1887, by the Specification 25 of W. R. Lake, No. 3475 of 1873. The action was finally discontinued by the Actien Gesellschaft on the 25th of April 1896. This was the trial of the two actions in respect to threats. Neville, Q.C., and H. Terrell (instructed by Hutchinson and Sons), appeared for the Plaintiff; Moulton, Q.C., T. Terrell, Q.C., and J. C. Graham (instructed 30 by W. J. and E. H. Tremellen, agents for A. Macdonald Blair of Manchester), appeared for the Defendants in both actions. Neville, Q.C., for the Plaintiff.-Temler purchased the business of T. Remus in England. There is no question now of invalidity: the questions are, first, the general question of threats; secondly, whether the threats against the 35 Plaintiff and his customers are within the 32nd Section of the Patents &c. Act 1883; and thirdly, whether the Defendants come within the proviso to that section. The invention was the use of clamps having small acute-angled spikes which required no clinching. The Defendants made an attack on us far beyond any rights which they could possilbly have supposed that they had. There could 40 be no pretence that our method could be an infringement of the patents mentioned in the pleadings. (The letters and advertisements containing the alleged threats were then referred to). After the discontinuance of the patent action against Temler, they sent a circular of the 1st of May 1896, which gives an absurd reason for discontinuing the action. The action was never bona fide; it 45 was not an attempt to uphold patent rights, but to destroy the Plaintiff's trade. The patent of 1885 was construed in Actien Gesellschaft fur Cartonnagen Industrie v. Schroeder, 13 R.P.C. 466. They knew there was no infringement of this patent or of the patent of 1887. Then as to the legal position :-The German company came within Section 32 of the Patents &c. Act, 1883. 50 [ROMER, J.-Yes, that must be so.] The other Defendants are sole licensees; there may be a question as to them, but they are really principals. As to whether the German company come within the proviso, there must be a bonâ fide intention of carrying the action through. It is not necessary to go to trial; if a man is satisfied of the invalidity of the patent before trial, and, bonâ fide, 55 abandons the acton, he brings himself within the proviso: English and American Machinery Company v. Gare Machine Company, Ld., 11 R.P.C, 627, Temler v. H. Stevenson and Sons. Temler v. The Actien Gesellschaft fur Cartonnagen İndustrie. But first, the patent action was not a bona fide action at all and, if that is so, it does not matter whether or not it was duly prosecuted; secondly, it was not a case of their throwing up the action on the ground that they had ascertained that they had got no case. The ground they gave, that by order of the German Courts they had an assignment of two other patents, is unintelligible. The case of 5 Challender v. Royle, 4 R.P.C. 363, shows that the patent action must be brought in respect of the same act. [Terrell, Q.C., I should not contest that.] That puts the action against Schroeder out of Court. Then the Particulars of Breaches in the patent action against Temler and Burgon and Co., only refer to the corners of the boxes; and the action thus does not cover the whole of the ground of the 10 threats, which extended to the flat studs. The following witnesses were called on behalf of the Plaintiff, viz. :-Messrs. Burgon, Temler, C. V. Boys, Morris, Pretty, and Bloodstone. Terrell, Q.C., for the Defendants in both actions.-The Plaintiff has to show that we threatened mala fide. [ROMER, J., mentioned Lord Blackburn's 15 judgment in Wren v. Wield, L.R. 4 Q.B. 730.] They must show that we had no reasonable or probable cause for thinking that our patent was good and that they were infringing. There is no doubt that we threatened. We believed that our patent extended wider than we now, knowing of Cohn, contend for. Construction is for the Court, but an expert may say that a certain con- 20 struction is what a reasonable man might put on the patent. Apart from the statute they must show mala fides. With regard to the 32nd Section of the Patents, &c. Act, 1883, we are clearly within the proviso, we have brought and prosecuted an action. It is said it was not bona fide, but brought for the express object of getting rid of our liability. The burden of proof is on the Plaintiff. 25 So he has to show either mala fides in the threats, Halsey v. Brotherhood (15 Ch. D. 518), or mala fides in the action. The Court is asked to infer mala fides from the facts as to the patent action. We prosecuted the action as long as we reasonably could. There is no evidence that we knew of Cohn. The effect of Cohn was that our patent must be limited; Particulars of Objections 30 may affect the question of infringement by limiting the scope of the invention. We went on with regard to the machine patent, but they then brought up Lake, and we discontinued altogether. In respect of No. 273 of 1887, we had discontinued as soon as we realised that it was covered by the other clip patent. The facts show bona fides. We thought Temler was wrongfully taking our 35 monopoly, and our threats were legitimate with the object of getting it back. In the action against Schroeder our clip patent was held valid, although limited. As to the advertisement of the 1st of May 1896, we then gave an excuse for discontinuing our action; we did not wish to publish to the trade the narrow ground we stood on. There was, however, some substance in the excuse. In 40 any case it is not evidence of mala fides in the threats or the action. With respect to the action against Stevenson and Sons, the latter are not persons claiming to be patentees, and are not within Section 32; therefore mala fides in the threats must be shown; and there was no mala fides. Then it is said that the threats extended to flat studs. The letter as to this of the 16th of 45 October 1894 is not a threat, but flat studs as well as corner studs were in fact in the patent No. 273. Their flat studs are used to join edges by claws, and are driven in by a blow, and, except for Cohn, we should have contended that these infringed. The following were called as witnesses on behalf of the Defendants, 50 namely, Messrs. A. M. Blair, A. W. Stevenson, S. W. Gillett, Dugald Clerk, and Heinrich Wollheim. Graham summed up the Defendants' case. The real issue is whether the threats were made bona fide. As regards the allegation of mala fides, it is contrary to the evidence. The Defendants acted on the advice of well-qualified persons. As 55 to No, 273, every one thought that it covered little, if any more, than the Temler v. H. Stevenson and Sons. Temler v. The Actien Gesellschaft fur Cartonnagen Industrie. patent of 1885. There was at any rate only a technical grievance as to that patent, and the Plaintiff was not damnified. Whether the patent of 1885 covered studs other than corner studs does not matter; the Defendants were acting under advice, and, at any rate, it was not an unreasonable supposition 5 that the patent might be infringed by the use of things not applied to the corners of boxes. Neville, Q,C., in reply.-The patent No. 273 of 1887 and the patent No. 12,907 of 1886, referred to in the first advertisement, have not been sued on at all. The decision of Chitty, J., in The English and American Machinery Company, Ld. v. 10 The Gare Machine Company, Ld. cannot apply to the mere issuing of a writ and then dropping the action. Such an action is not duly prosecuted. The patent of 1886 is mentioned in the first advertisement. [ROMER, J.-That by itself is harmless.] They issue their threats upon advice, which was based on all the four patents, not on any one of them. Then they drop two of the patents, and 15 only sue on the other two. In respect of the two patents dropped, they have never brought an action on them so as to bring themselves within the proviso to the section. So far as they come within Section 32 bona fides does not matter; the only way they can get out of it is under the proviso. So far as the threats under these two patents are concerned, I am entitled to damages. 20 The evidence is that they were advised with regard to the flat studs that it came under these two patents. Their statements as to acting under advice and also on their own judgment are inconsistent. [ROMER, J.-They may have relied partly on one and partly on the other.] Not if the two are inconsistent. [ROMER, J.-I look upon it as a question of substance. If you have several 25 patents more or less overlapping or more or less bearing on one another, it may be difficult to know on which precise patent you may threaten, and yet you may have reason to believe that you might threaten on one or the other.] One must assume that they had not a right to proceed on any. As regards No. 273 the mere issue of the writ does not help them. [ROMER, J.-The whole thing 30 is a question of good faith.] That is only so if they have sued on the patent. They must also carry the action to its legitimate conclusion. It must not be brought to whitewash them, nor can a mere change of opinion be sufficient excuse for abandoning it. The only justification for threats as to the flat studs was the patent No. 273 of 1887, and that was never really sued on, therefore the 35 Plaintiff can recover damages as to that. With regard to the other part, it is a question of good faith. The Courts will watch the conduct of traders in these matters strictly. Although having no legal rights, they have caused us tremendous damage. They made a deliberate attack on our trade under cover of the patents. There was no investigation by the patent agent as to validity, 40 he was told to assume that. [Mr. Gillett was here recalled and further crossexamined by Neville, Q.C., as to this.] At any rate no instructions were given to investigate into the question of validity. It was a case of wilful blindness on the part of the Defendants. The claim in the 1885 patent was very narrow. Apart from Cohn it could only receive a narrow construction; it is for the 45 apparatus described. The judgment in the action against Schroeder shows that. The patent agent never suggested that this particular patent was infringed. They were careless as to their rights. ROMER, J.-I will start by saying that in this case I feel the greatest sympathy with the Plaintiff for undoubtedly there were threats made by the Defendants 50 which seriously affected the Plaintiff's business. He was caused great injury by those threats. It has turned out as a matter of fact that the Defendants had no legal rights to make those threats, in this sense, that it turns out that they have no legal right to stop the Plaintiff in doing what he was doing, at the time of the threats, in his business. But, as the law now stands, and under the 55 circumstances of this case, I think the Plaintiff has no remedy against the Defendants for the injury so caused to him. D Temler v. H. Stevenson and Sons. Temler v. The Actien Gesellschaft fur Cartonnagen Industrie. : The first question is this will an action for damages or for an injunction lie by the Plaintiff against the Defendants apart from the statute of 1883 ? That simply depends upon this: were the threats made in bad faith-that is to say, without reasonable ground for making them? Now, I by no means think that this case is one free from doubt, but the conclusion I come to is that the 5 Plaintiff has not established to my satisfaction that the Defendants acted in bad faith or without reasonable ground in making the threats they did. After hearing the evidence, I believe that the Defendants did believe, and I think on the whole they had reasonable ground for believing, that they could stop the Plaintiff from doing what they complained of in his business. I think that the 10 Defendants had not finally made up their minds, so far as a Company can have a mind (I am speaking of course of the Company's advisers) on what particular patent or patents they could base their claim, but I think they did believe, and think they had good ground for believing, that on the three patents to which my attention has been called, or some or one of them, they were entitled to stop 15 the Plaintiff from doing what he was doing, both in respect of the corner fastenings, and in respect of what have been called the flat fastenings. It was suggested that on behalf of the Defendant Company and of the Defendants Stevenson and Sons there was no proper investigation before they issued their threats and took action as to the existence of prior patents so as to enable 20 them to be certain that their patents were valid, and valid to the extent to which they believed that they were, and that they had the operation that they believed they had. I come to the conclusion that there was certainly no wilful or intentional abstaining from any such enquiry, but that the circumstances did justify the belief that the patents were valid without any such special search 25 being made, partly by reason of the state of the market and what was known to have been put on the market in respect of the goods in question, and partly because of what had happened on a prior investigation which had been made with respect to some of these patents. This finding on the question of good faith—and dealing with the question of good faith, I do not think it is necessary 30 or proper to go through the details of the evidence or the details of the reasons which lead me to the conclusion I have come to this finding of fact disposes of the action, as against Stevenson and Sons absolutely, for they cannot be sued under the statute inasmuch as they are not persons claiming as Patentees in making the threats at all. But I have to consider, as against the Company, the 35 action, so far as it is based upon the Statute, Section 32; and the question here narrows itself down to this :-do the Company bring themselves within the proviso at the end of that section? I think they do. They did bring an action based upon their patents-an action for infringement of those patents. I think that action was brought in good faith, and I further think that it was prosecuted 40 within the phrase as used in the section. The section does not say that an action of the kind within the proviso must be brought successfully, nor does it say that the action must be prosecuted until trial. If, in the course of the proceedings, the Plaintiff finds that the action cannot be successfully prosecuted, acting in good faith, he is then entitled, in my opinion, to cease prosecuting the 45 action further, but still he would be within the proviso. That is in accordance with what has been previously decided by Mr. Justice Chitty, and I respectfully agree with what he decided. It is said that in this case there was really no action in respect of the Patent No. 273 of 1887, because as between the writ and the delivery of the Statement of Claim, it was dropped out of the action, but 50 I consider that it was dropped out in good faith, because, as between the date of the writ and the date of the Statement of Claim, the matter had been investigated, and I think that the Plaintiff Company came to the conclusion in good faith, that it was unnecessary and unwise to further prosecute any special claim on the Patent No. 273 on the two grounds, first, that if they were right in 55 saying that what the Defendant was doing was an infringement of the |