121 F. 827 | 2d Cir. | 1903
This is an action in equity to restrain the defendant from the publication of circulars and letters asserting the violation by the complainant of the defendant’s rights under letters patent, and threatening the complainant’s customers with suits. The court below dismissed the bill.
The facts bring it within the principle of the decision of the Circuit Court of Appeals for the Third Circuit in a suit brought in the District of New Jersey against the present defendant. The doctrine there declared is well settled by the authorities, and the opinion in that case contains a sufficient citation of them without further reference. A. B. Farquhar Co. v. The National Harrow Company, 102 Fed. 714, 42 C. C. A. 600, 49 L. R. A. 755.
The complainant is a manufacturing corporation having its place of business at Poughkeepsie in this state, and in January, 1897, commenced manufacturing spring-tooth harrows, known as the “Buckeye Harrow,” built conformably to the patent of Henry J. Case, an application for which was then pending, and which was subsequently issued to the complainant as assignee. The defendant is a New Jersey corporation, doing business at Utica in this state, which has acquired title to a great number of patents for improvements relating to spring-tooth harrows. It is not a manufacturer of harrows, but makes it its business to grant licenses upon royalties to manufacturers. It's licenses provide a uniform scale of prices for harrows and harrow parts, and bind the licensees not to sell their machines at any deduction or allow any rebate. During the season of 1897 the complainant sold about 700 harrows; in the season of 1898
“We have from time to time written you and mailed you circulars regarding your handling the Adriance, Platt & Company spring-tooth harrows, which are claimed to infringe our patents. * * * We are in duty bound to protect our licensees, their customers, and ourselves, and shall sue all dealers who persist, after our repeated warnings, in handling infringing goods. We are constantly bringing suits wherever these dealers are found. This we shall continue to do till our rights are fully respected.”
The following is an extract from another:
“It is claimed by this company that it is impossible to construct a modem spring-tooth harrow, such as can be sold at the present time, without infringing several of the numerous patents owned by us. We do not deem it necessary to give you further warning notice than this at this time.”
The learned judge of the court below was of the opinion that the defendant was acting within its rights, and that the letters and circulars were legitimate notices to infringers of these rights. In his opinion he states:
“There is not a false statement of fact to be found in the circular quoted above, or in any of the other circulars or letters in evidence. Necessarily, the claim of infringement is based upon opinion, but it is an opinion which a perfectly sincere and honest man might entertain. Certainly it cannot be said that the opinion was without justification, ■ malicious, and false.”
Undoubtedly the owner of a patent is acting within his rights in notifying infringers of his claims, and threatening them with litiga
When the manufacturer is financially responsible, is accessible, and his infringements readily provable, and when the patent owner is financially able, and is one who makes it his sole business to grant licenses, and is under a duty to his licensees to prosecute extensive infringers, the sending of such circulars to customers would seem to be merely a.preliminary or cumulative measure, and the bringing of an infringement action the paramount and imperative proceeding. As, ordinarily, the patent owner would be prompt and zealous to assert his claims, if he halts and purposely procrastinates, and attempts to effect by threats and manifestoes that which he can compel by the strong hand of the law, a strong inference arises that he has not any real confidence in his pretensions. This inference becomes irresistible if he refuses to bring suit during a considerable period of time when the alleged infringement is open, notorious, and defiant, and so extensive as to threaten destruction to his alleged exclusive rights. The indicia of bad faith are persuasive in the present case. It is impossible to read the communications warning the complainant’s customers against selling its harrows, with which the defendant seems to have flooded the country, without being led to believe that they were inspired by a purpose to intimidate the complainant’s customers, and coerce the complainant, by injuring its business, into becoming a licensee of the defendant. In view of its failure to bring an infringement action, under circumstances which piade an action practically compulsory, the defendant cannot shelter itself behind the theory that its circulars and letters were merely legitimate notices of its rights. Wé are satisfied that they were sent, not for the purposes of self-protection, but in execution of the defendant’s threat to stop the complainant from building harrows by other means than legal remedies.
Until the present action was brought, the defendant contented itself with warnings and threats to the complainant’s customers, and made no attempt to prosecute an infringement suit. The publicity of the complainant’s suit neutralized these threats, and the defendant brought several actions against customers of the complainant. Out of its numerous patents it selected one, presumably the least infirm, as the basis of its attack upon the complainant’s alleged infringing harrow. Those suits, after the proofs were taken, came to
We conclude that complainant was entitled to an injunction and an accounting. The decree is accordingly reversed, with costs, and with instructions to the court below to decree accordingly.