55O,823 et al.
No. 1.
Opinion—Court of Appeals.
Duncan Meter Case.
Duncan Patents Nos. 550,823 et al.
Siemens & Halske Electric Company of America,
* Complainant-Appellant,
TVS.
Duncan Electric Manufacturing Company et al.,
Defendants-Appellées.
...”
Opinion filed in the U. S. Circuit Court of Appeals,
Seventh Circuit, October 3, 1905.
C. G. BURGoyNE, Walker and Centre Streets, N. Y.
[Printed from certified copy.]
IN THE
UnitàStates Cirúlit00urtofAppeals
FOR THE SEVENTH CIRCUIT.
No. 1147, OCTOBER TERM, 1904, APRIL Session, 1905.
SIEMENS-HALSKE ELECTRIC CoMPANY.,
Appellant,
WS Appeal. from , the
* Circuit Court of
the United States
DUNCAN ELECTRIC MANUFACTURING fººpistric Of
COMPANY, THOMAS DUNCAN, ET AL,
Appellees.
EDWARD RECTOR and DRURY M. CoopFR for appellant.
ROBERT H. PARKINSON for appellees.
Before GROSSCUP, BAKER AND SEAMAN, Circuit Judges.
The case is stated in the opinion. -
BAKER, Circuit Judge, delivered the opinion of the
Court.
The appellant, complainant below, brought this suit
against Duncan, the Duncan Company, Cragg and
Brown, to restrain their alleged infringement of claim
3 of patent No. 550,823, issued December 3rd, 1895;
claims 3, 6 and 7 of patent No. 604,465, issued May
24, 1898; and claims 2, 3, 4, 5, 7 and 11 of patent No.
698,653, issued April 29, 1902.
2
These inventions were all made by Duncan, and
related to electric meters. In March, 1899, Duncan
began service for the complainant as an electrical
engineer, and continued until March, 1901. His con-
tract required him to assign to the complainant all
inventions made by him during the term of his em-
ployment. In January, 1900, for $10,000, he assigned
to the complainant, among numerous patents and
applications therefore, the two first patents in suit
and the pending application for the third and
the inventions therein described. During Duncan's
term of service with the complainant, and both before
and after that time and until March, 1902, Brown and
Cragg were the complainant's patent attorneys and had
charge of patent matters between the complainant and
Duncan. Shortly after Duncan left the complainant,
which was in March, 1901, Duncan, Brown and Cragg
organized the Duncan Company to exploit the inven-
tions of Duncan made subsequent to March, 1901, in
the line of electric meters. The Duncan Company
immediately made a contract with Duncan to issue to
him one half of the $100,000 capital stock and to pay
him $3,600 a year for ten years, in consideration of
which he engaged to act as general superintendent of
the Company’s work for ten years, to assign certain
inventions and to allow the use of the name Duncan
as a trade-mark. Brown was made president and
Cragg treasurer. Brown and Cragg took $25,000 of
the capital stock, and the remaining $25,000 was sub-
scribed for by seven other persons. It does not ap-
pear but that each of these others had at the time full
knowledge of the prior relations between Duncan and
the complainant, Brown and Cragg and the complain-
ant, and Duncan and Brown and Cragg, and of the as-
signments from Duncan to the complainant.
In the view we take of the case it is needless to
cumber these pages with the claims in suit and the
specifications relating thereto, or with a description of
the meters alleged to be infringements, for there is no
doubt that in the defendants' meters there is either
3
identity with, or mechanical equivalency of, the com-
plainant's inventor's claims “ as he made them, the
prior art being left entirely out of view º' (Standard
Sewing Machine Co. v. Leslie, 118 Fed., 557, 561);
and that, on the other hand, if the prior art is in the
case, there is no infringement of many, if not all,
of the claims. In the trial Court, the complain-
ant was denied relief against T)uncan and the
Duncan Company (Brown and Cragg were not served
with process and did not appear), because there was
found to be no infringement in view of the prior art.
I. As to Duncan. The claims in suit were presented
to the Government for allowance, and were allowed,
as Duncan made them. He thereby asserted that the
inventions described in these claims were exclusively
his property. The Government, by allowing the claims
and issuing the patents, granted him the franchise to
exclude all others from practicing the inventions with-
out his consent, and certified to his ownership of what
he claimed as his property. True, the grants imported
Only prima facie validity as against strangers thereto.
They could defend on the ground that what purported
to be described in the grant as property, had no exist-
ence (want of invention), or that the title to the prop-
erty was in themselves (the public) by prescription
(want of novelty by reason of prior publication or use),
or that, although they were occupying a part of the
property within the stated metes and bounds of the
grant, the title to that part was in themselves (limita-
tion by the prior art). The defendants admit that
parties who come into relation with an invention de-
scribed in a patent, whether by deed or lease or other
form of contract, stand on a different footing from that
of strangers. They admit that there is some sort of
an estoppel, but insist that it does not apply in this
case. The contentions may be stated and answered
quite summarily.
Granting, they say, that Duncan is estopped from
asserting that the claims are void for lack of invention
or lack of novelty, he may nevertheless bring in the
4
prior art to limit the claims and thus defeat the suit.
Why one defense and not the other ? They are of
as like blood as brothers. One is somewhat
larger than the other, is all. Lack of novelty
defeats the complainant's title to the whole of the
property within the metes and bounds of the claims ;
limitation destroys his title to a part. If a stranger
were occupying a part, but not all, of the property de-
scribed in the deed, he could answer, “I am not con-
cerned with your title to the residue, but what I am
occupying is not yours.” The contention that Duncan
can do likewise brings the estoppel to nothingness.
When these patents were issued, the public were
strangers to the grants. The grant to Duncan was the
right to exclude the public from using the inventions
described in the claims, subject to the right of the
public to strike down, if they could, the claims in
whole or in part. The defendants assert that all that
the complainant acquired by the assignment was the
franchise to exclude, which had been granted to Dun-
can. This may be taken as true so far as the rights of
strangers are concerned. But Duncan's assignment, in
fact and likewise by its very terms, was a conveyance
not only of the franchise to exclude strangers, but was
also a conveyance of the inventions described in the
claims. The right of Duncan to the inventions, if they
were inventions, existed prior to, and continued inde-
pendently of, the issuing of the patents. Fuller v.
Berger, 120 Fed., 274; Victor Talking Machine Co. v.
The Fair, 123 Fed., 424. If, in the face of this sale of
the inventions described in the claims, as existent
property into the possession of which he purported to
induct his grantee, he be permitted to defeat his
grantee's right of possession of the whole or a part on
the strength of a prior title outstanding at the time of
the grant, he would be put on the same footing as a
stranger, and the estoppel by deed would again be
reduced by nihility.
The defendants say that it does not appear that
Duncan deceived or misled the complainant with
5
respect. to the total or partial invalidity of the claim
as made in the patents. But the estoppel relied on is
not by conduct, but by deed,—an estoppel that, to be
of any appreciable weight or value, must be deemed
equivalent to an engagement by a grantor to refrain
from using what is described and claimed as his inven-
tions in the patents assigned. -
In our judgment the reason of the case leads to the
conclusion that, between contracting parties, extrane-
ous evidence is inadmissible if there is no ambiguity
or uncertainty in the language of the description and
claims ; and that if there is uncertainty, outside evi-
dence is admissible only to make clear what the appli-
cant meant to claim and the Government to allow, and
not for the purpose of showing, even in the slightest
degree that the applicant had no right to claim and
that the Government was improvident in allowing
what was in fact claimed and allowed. And the con-
clusion accords, we think, with the weight of authority.
See Trotman v. Wood, 16 C. B. (N. S.) 479 ; Clark v.
Adie, L. R., 2 App. Cas. 423 ; Chambers v. Chrichley,
33 Beavan 374 ; Crossley v. Diacon, 10 H. of L. Cas.
293 ; United States v. Harvey Steel Co., 196 U. S.
310 ; Faulks v. Kamp, 3 Fed. 898 ; Consolidated Co.
v. Gwilder, 9 Fed. 155 ; Underwood v. Warren, 21 Fed.
573 ; Parker v. McKee, 24 Fed. 808 ; Pope Mfg. Co.
v. Owsley, 27 Fed. 100 ; American Paper Barrel Co. v.
Jaraway, 28 Fed. 141; Adee v. Thomas, 41 Fed. 342 ;
Woodward v. Boston Lasting Mch. Co., 60 Fed. 283 ;
Babcock v. Clarkson, 63 Fed. 607; Natl. Conduit Co.
v. Conn. Pipe Co., 73 Fed. 491 ; Alvin Mfg. Co. v.
Scharling, 100 Fed. 87; Standard Sewing Mch. Co. v.
Leslie, 118 Fed. 557 ; Frank v. Bernard, 131 Fed.
269. Compare contra Moonan v. Chester Park Athletic
Club, 99 Fed. 90 ; Smith v. Ridgley, 103 Fed. 875.
II. As to the Duncan Company. The facts recited
in the statement of the case satisfy us that the Com-
pany is simply an incorporation of Duncan. There-
fore the corporation should be enjoined just as its
officers, directors and stockholders would be, if, as in-
6
dividuals and without resorting to the corporate form,
they were aiding and abetting Duncan in the infringe-
ment. Telegraph Co. v. Himmer & Casey, 19 Fed.
322 ; Parker v. McKee, 24 Fed. 808 ; Burr vs. Kim-
bark, 28 Fed. 574; Burdsall v. Curran, 31 Fed. 918;
Woodward v. Boston Lasting Mch. Co., 60 Fed. 283 ;
Natl. Conduit Co. v. Conn. Pipe Co., 73 Fed. 491;
Daniel v. Miller, 81 Fed. 1000; Alvin Mfg. Co. v.
Scharling, 100 Fed. 87. -
The decree is reversed with the direction to enter a
decree in the complaimant’s favor for an injunction and
an accounting.
t A true Copy.
Teste :
JEDWARD M. HoLLOWAY,
Clerk of the United States Circuit Court of
Appeals for the Seventh Circuit.
F. G. CAMPBELL,
T)eputy.
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