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CUTLER HAMMER MFG. CO, v. BEAVER MACHINE & TOOL CO. INC., SAME v. DAVID KULLOCK CO., C. C. A., Second Circuit, Manton Cir. J., 5 F. (2nd) 457.

Klein patents 1,162,864 and 1,353,124 for Electric Switches held invalid.

Patent 1,162,864 covers a snap switch divided longitudinally in halves and adapted to be clamped about a flexible cord, one wire of the cord passing through the switch and the other wire being cut and the ends attached to fixed terminals in the switch. A pin slidable through the switch is provided intermediate its ends with an appositely tapered head and carries a frame and "garter spring" the spring in its movement over the tapered head snapping the frame into and out of contact with the fixed terminals thereby making and breaking the circuit. The court held that the distinctions in the claims over a prior patent which discloses a snap switch similarly divided and adapted to be clamped to a flexible cord and a prior patent to Klein which discloses a snap switch having a pin with a similar appositely tapering enlargement and "garter spring" to be merely matters of design and not patentable.

Patent 1,353,124 covers a snap switch divided and adapted to be clamped to a cord in the same manner as the switch covered by patent 1,162,864. In the later patent, by positioning the fixed terminals, sliding pin and other parts in the plane of separation, a comparatively thin flat switch was obtained. The court held that the assembling of switch mechanism disclosed in earlier patents of Klein in the plane of separation of a two part casing as disclosed in an earlier patent to another patentee did not involve invention.

Patent cannot issue for invention covered by former patent.

The court held that the invention covered by the later patent was not patentably distinct from the inventions

covered by the earlier Klein patents although the term of the claims differed.

F. M. H.

Patents-Lease and License Contract Construed.

WICKWIRE SPENCER STEEL CORPORATION v. PITTSBURGH STEEL CORPORATION. Page 776, Vol. 4 (2nd), No. 6, Federal Reporter Circuit Court of Appeals, Third District, March 4, 1925.

Plaintiff, owner of patents for inventions embodied in welding machines built by it, negotiated with defendant, whose experts suggested certain modifications which would be necessary in order to render the machines suitable for defendant's purpose. Plaintiff made acceptable modifications and license contract was entered into which provided that the contract should run for the life of the youngest of twenty-nine listed patents whose improvements were embodied in the machines; that the defendant, at the expiration of the license, should have the privilege of purchasing the machines by the payment of a specified sum; and that the defendant should have the right to use any new improvements on such machines if plaintiff should acquire patents thereon and that if such new improvements should be added by the plaintiff to the machines, all the stipulations of the contract should apply to the altered machines with the same effect as if the patents therefor were included in the list set forth. Plaintiff several years later applied for and was granted a patent on the improvements suggested by defendant. On the expiration of the contract defendant exercised privilege of purchase. Plaintiff's suit is for the infringement of the patent last-mentioned.

Held, That the parties intended the plaintiff should retain its patent monopolies on the machines throughout the term of the license and that these monopolies embraced not only the patents listed in the contract but also those later issued when their inventions became embodied

in the machines. The parties also agreed that upon the termination of the contract the defendant should acquire the machines free from the monopoly of the patents listed and, since after-acquired patents were to apply to the machines thereby modified with the same effect as if those patents had been included in the list set forth in the contract, the parties also meant that on the expiration of the contract the purchaser should take the machines free from those patents likewise. On the expiration of the junior patent of the list, therefore, the defendant became the absolute owner of the machines, free of all patent restrictions, as though the patent in suit, as well as the others, had expired.

Decree for defendant affirmed.

F. W.

SCHWEYER ELECTRIC & MFG. CO. et al. v. REGAN SAFETY DEVICES CO., Inc., et al. (Circuit Court of Appeals. Second Circuit, January 5, 1925).

License Agreements-Delivery in Escrow.-The plaintiff owned three patents and an application touching automatic railway control. He agreed to make the defendants exclusive licensees of his inventions on condition that within a certain specified period they would make tests of the inventions with such equipment as he specified. The plaintiff was to be present at the making of the tests and after the expiration of the period the defendants were to have 30 days within which to exercise their option to accept the license. Two copies of the agreement with copies of the license attached were executed and delivered to a stakeholder to be held by him for delivery in accordance with their terms.

Within the period stated the defendants made the tests but instead of using two locomotives and five stations as the agreement specified, the defendants used only one locomotive and four stations. The plaintiff was present and made no question of this failure. He expressed his satisfaction with the result and continued

thereafter to correspond with the defendants with respect to the prosecution of the application and at no time indicated any dissatisfaction with the conduct of the defendants. Immediately however upon the expiration of the time within which the defendants could make the tests the plaintiff notified the stakeholder that the defendants had not performed and the option was off. Within the prescribed 30 days allowed them within which to exercise the option, the defendants, ignoring the plaintiff's attempt to end the contract, notified the stakeholder of their election to accept the license and they began to proceed under it.

The stakeholder declined to deliver to either and some time thereafter the plaintiff filed this bill alleging infringement of his patents, charging the infringements to be what the defendants were making including the apparatus used at the test. The defendants counterclaimed and demanded delivery of the documents to themselves.

The plaintiff challenged the sufficiency of the test, first because the amount of equipment used was less than specified, and second because the control used in the test did not embody "his principles." He also alleged that the defendants did not use due diligence to exploit the invention, as the agreement required them to do.

The decree of the lower court directing the delivery of the documents to the plaintiff, and dismissing the defendant's counterclaim was reversed and remanded.

Patentee Precluded by Conduct from Objecting that Licensee Had Not Performed Conditions of Test and Demonstration. The court held that the apparent acquiescence of the plaintiff in the sufficiency of the tests could only have meant that he considered the test a compliance with the conditions and that his conduct presented a question akin to an estoppel in that the defendants so far relied upon his implied promise to accept the tests as sufficient that if the latter were withdrawn, their position would have been changed in such a way that they could not be fairly asked to comply. The plaintiff waited until the period, within which the defendants could have

make a test in accordance with the contract, had expired and then pounced upon them with a repudiation at which time it was impossible for them to remedy the defects and apparently he meant it to be too late. From all the evidence the plaintiff did not mean to treat the defendants fairly.

"Principles" of Patented Inventions Best Determined From Claims. With respect to the plaintiffs' contention that the control used in the tests did not embody his principles, the plaintiff both in his bill and on the stand insisted that the claims were infringed by the apparatus used and it is hard to see what better meaning could be assigned to the word "principles" of patented inventions than those elements which in combination compose the claims. Moreover it was agreed that the defendants might make modifications of their own in testing the equipment. Hence upon the plaintiff's own admission. the test in this respect conformed with the agreement.

Patentee Who Attempted to Repudiate License and Threatens Licensees' Customers With Suit Will Not Be Heard to Object to Licensees' Failure to Use Due Diligence to Exploit Inventions.-With regard to the question of due diligence the court found that this obligation only began after the license went into effect, at the time of the election by the defendants, but at that time the plaintiff had already repudiated the contract and was reclaiming the license and threatening the licensees' customers with infringement suits. He could not therefore complain that in such a posture the defendants should not push the inventions to the utmost. Moreover the license provided for arbitration of the question of due diligence and the defendants being plainly entitled to the license agreement, if the plaintiff questioned the sufficiency of their efforts he must proceed under the license itself.

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