FEDERAt. 'BEl'ORTEn. SEIBERT CYLINDER OIL-CUP CO. v. MANNING et ale
(Oircuit Oourt, 8. D. New York. March 26.
In an action for the infringement of a patent it appeared that the defend-· ants' licensors, who owned II. similar patent to thll one in dispute, had into a contract with plaintiff wherein It was agreed that so long as plaintiff shoqlq perform certain, cOvenants and said licensors should make certain payments to plaintiff, neitner partjr was to sue the other on their respective' patents. Held, that performan'ce:of, plaintiff's covenants was a condition pre' cedent to the payments, and the. plaintiff, after having broken the contract, could ,not claim the failure 'to make the payments as.an abandonment of the' contract, so as to authorize a suit on its patent.
FOR'(TSE-BREACH OF COVENANT!!.
In Equity. Hearing upon the sUffioiency of the' plea. Action by the-Seibert Cylinder Oil-Oup Company a.gainst Henry S. Manning et ale For former hearing see 32 Fed. Rep. ThornlUJ Wm. Olarlce and Edmundi' Wetmore, for complainant. O. A. Kentand Franci8Forbes, for defendants . . LACOMBE; J. The sole point arising upon this bearing is as to the' of the plea, lind lies witolna narrow compass. Concededly, the owns a patent, which is infringed by certain articles made by thl;l Lubricator Compaily, and sold by the defendant. The hesides 'other and ordinary averments showing anC!., of infringement, sets ,lout, in anticipation of the defense, that- ..... , '" " , sell by the Detroit LUbricator Company; which sale constitutes thp,'iilfringenient herein complained of; and the said defendants pretend that theYhavl:l a right to sell the same without suit by. or 'other molestation from. the 'complainant,lbecause on or about the 1st day of December, 1l:583, this complainant and said Detroit Lubricator Company made an agreement in writing whereby, among other things. it was covenanted that, , so long as thecovanants and agreem,ents to be observed and performed by the parties respectively are observed and performed, each party agret:s not to sua., or directly or indirectly authorize to be sued. the other party, its agents or vendees, under any of the letters patent now or hereafter owned by it.' And th!! said defendants pretend that agreelDent is still in force; but these complainants aver that said agreement has long since, and prior to the commencemllntof this suih and prior to the acts of infringement herein complaLnedof, rescinded,,,nd that said rescission w/loScaUsed by the wrongful acts and default of' the said Detroit Lubricator Company, because said company wa.Bol'lliged by toe terms of said agreement to rna.kecertain returns, and pay certain royalties to the complainant herein monthly, W hic1l the said Detroit Lubricator Company to for such neglect and refusal. and, because ,of the repudil\tion by the said, Detroit Lubricator Company of the covenants and agreements by it to be performed under said contract, the complainant herein elected to rescind tl16 r,@:ne;and the same was rescinded by the acts and defaults of the said Detroit Lubricator Company, and the act of the complainant. 'fhat at the time when the lubricators referred to herein, and containing the invention set forth and described in the said letters patent hereinbefore mentioned, were sold, and the acts herein
'Complained of were cominitted, the;said contract Qf the 1st of December, 1883, annulled, and the with the Detroit Lubricator Company was derived no rights thereunder." The plea sets out the agreement in full, and the circumstances preceding and attending its ex cution.It then proceeds as follows: .. And defendants further aver, on information and belief, that said Detroit Lubl'icator Company did perform 'the covenants in said agreement of settlement by it to be performed, and so continued to do, and to pay large sums of money· under said agreement: but, 'as it had a right to do, it ceased to make . oertain payments when it learned that complainant had a lung time before violated its covenants in said agreement not to authorize the use, except as in said agreement provided, of said N. Seibert patents outside of the N IlW En'gland states, '" '" ... and by imitating the shapes and styles of said DeCompany's lubricators. contrary to the covenants of complainants·; and 'Otherwise in divers ways .complainant tried to injure and damage, and. did .and still does greatly damage and injure, said Company, contrary to said agreement, whereby the business of said Detroit Company was and is greatiy damaged, and its profits greatly reduced, and said damagEl and loss by Teason thereof do still continue. And· the defendants aver that said agreement of settlement between said parties.is still in force, and they deny that .the same has been rescinded or canceled by complainant, or that complainant .had a right so to rescind or cancel the same, or that the same was ever rescinded or repudiated by said Detroit Company. Therefore these defendants aver and plead the same, and demand judgment." etc. Upon the amended bill and plea. which now contain the full agreement, it appears that by and under such agreement the Detroit Company I and defendant as its vendee. possessed a perfect defense to suits for infringement. The only question to be determined now is whether the facts admitted by the plea, and by setting down the same for argument, have destroyed this defense. The complainant's reliance is upon the fact that the Detroit Lubricator Company wrongfully refused to make certain monthly returns, and to pay certain royaltiea to the complainant monthly, for which neglect and refusal complainant elected to rescind the contract. The only. provisions of the contract requiring the lubricator company to make returns and pay royalties are these: .. (10) 'Ie '" '" The said Detroit Company agrees, so long as the covenants and agreements to be performed by said Seibert Company are performed by it, and so 10,ng ail this agreement remains in force, to report' to the treasurer of said Seibert Company in Boston, at the end of each and every month, the full number of lubricators [except certain specified kinds] made and sold by it during the month next preceding," etc. "(11) And said Detroit Company agrees that it will at the same time ,.. ,.. ,.. remit ,.. ... ... a sum equal to," etc. Further, by the fifteenth clause the Detroit Company guarantied that these payments should be at least $200 monthly. Of this covenant to make returns and payments it is to be noted that it is conditional only. "So long as the covenants and agreements to be performed by said Seibert Company are performed by it, and so long as this agreement remains in force," is the phrase used to quality its provisions. Compliance by the Seibert Company with its obligations is a condition precedent to the return and payment. It will not be contended that, if the covenant
FliIDPAL REPORTER. \
provided that return and payment should be made each month upon the filing by the president of the Seibert Company of an affidavit setting forth that it had kept the contract, there would be any default on the part of the Detroit Company in delaying or refusing payment till such affidavit were first filed. There is no material distinction between such a covenant and the one at bar. If non-performance by the payee is shown, the payor is not in default for not making its return. Upon snch a breach the Detroit Company might either rescind the contract, or decline to make its return. The defendant by its plea avers that the Seibert Company failed to perform its covenants and agreements in two .particulars: First, that it authorized the use of the N. Seibert patents outside of the New England states, which is in express violation of the seventeenth clause of the agreementj and, seccmd, that it imitated the shapes and styles of the Detroit Company's lubricators, in violation of the seventh clause. The covenant of the Detroit Company to return and pay was at least suspended while the contract was thus hroken by the Seibert Company; and its failure to make returns nnd pay royalties, under those circumstances, would not be such a failure "to observe and perform its covenants and agreements"-to use the lnnguage of the sixth clause, on which complainant relies-as would authorize the latter to sue "under any of the letters patent * * * owned by it." So far the plea has been considered as distinctly averring preaches of covenant by the Seibert Company. Upon the nrgument stress was laid by complainant's counsel upon the language used, (q. v. supra,) and particularly upon the word "learned." This, it was contended, is merely equivalent to an allegation that at the time it ceased to make payments, the Detroit Company was informed that the complainnnt had violated its covenants, and believed the information. Strictly construed, the word "learned " perhaps menns more than this, but in ordinary speech it does not necessnrily import that degree of certainty which is implied in the assertion of a fact. The plea in its present form is insufficient, as not distinctly averring the breaches upon which defendant relies to excuse the failure of the Detroit Company to make returns. As the only valid objection to its sufficiency, however, is the technical verbal objecindicated, defendant may amend the same within such tion last 'reasonable time as may be fixed on the settlement of the order. As to the question of jurisdiction, I fail to see that the. plea has materially changed the situation since that point was considered by. Judge' W ALLACE, (32 Fed. Rep. 625,) and shall therefore accept his decision as the law of this case.
KUNDY fl. LIDGERWOOD MAlOUF'G CO.
(Oircuit (Jourt. 8.. D. New York.
PATENTS FOR INVENTIONS-COMBINATIONS-USE OF DIFFERENT ELEMENTS.'
Under the ruling in 20 Fed. Rep. 114, Icker's patent No. 9,299, for an improvement in friction drums for pile-drivers was confined to the peculiar' elements of the combination therein described, one of which waS a cross-grained friction surface; and the use bya defendant. against whom an injunction had been issued restraining the use of the patented device, of a drum bRving a sidewise friction surface, is not a violation of the injunction.
VIOLATION BY CARELESSNESS FAILURE TO NOTIFY
The carelessness of a defendant. against whom an injunction has been obtained res raining him from using a patented device. in omitting to notify his agent of such injunction and its effects, will render him liable for a technical contempt for sales of the patented articles by such agent after the injunction had been obtained.
In Equity. On motion for sequestration, and attachment for violation of an injunction. Prederick H. Betts and Ernest O. Webb, for complainant. Edward N. Dickerson and Livingston Gifford, for defendant.
LACO:lfIBE,J. This is an application for sequestration against the defendant, and attachment against its offieers for violation of an injunction. The decree enjoining defendant was made by Judge WHEELER upon the pleadings, proceedings, and proofs, May 5, 1884, and was duly served upon defendant. The grounds of decision are set forth in the opinion reported in 20 Fed. Rep. 114. The patent is for an improvement in friction drums (windlasses) for pile-drivers and hoisting machines. ltis claimed that the defendant has violated the injunction in three ways-First, by selling through one of its agents or consignees two machines with drums precisely like those which were held by Judge WHEELER to infringe the patent; second, through the furnishing by such agent or consignee.of springs for the use of purchasers pfits old machines, which had been sold without the springs, and which concededly did not infringe unless the springs were inserted; third, by making and selling friction drums of a new model, the variations from the old model being, as complainant contends, colorable only. The last of these propositions will be first considered. Both sides concede that, for the purposes of this motion, the construction put upon the patent by Judge WHEELER is to be taken as final. That construction, however, must be itself construed, and the parties not being in accord on this point, the former opinion must be analyzed in order to determine precisely what the injunction forbade to the defendant. The record and the arguments upon which Judge WHEELER'S decision was predicated (and which are presented .on this motion) show that it lies border land of the doctrine which finds inventive facwithin the ulty in mere mechanical recombinations of devices old, well know:n, .anG already ,otherwise combined. The opinion must, therefore, be strictly