The opinion of the court was delivered by: GALSTON
This case is now before the court on an amended answer setting forth inequitable conduct of the plaintiff in the alleged misuse of the decision of the Circuit Court of Appeals, after the entry of an interlocutory decree in behalf of the plaintiff. See Art Metal Works, Inc., v. Abraham & Straus, Inc. (C.C.A.) 62 F.2d 79; Id. (D.C.) 2 F. Supp. 292.
The ultimate issue presented for determination is: Whether the plaintiff in its various activities was guilty of bad faith.
It is contended by the defendant that bad faith is the inevitable inference that must be drawn from a consideration of the plaintiff's acts. These, briefly, may be stated to be:
1. That on the day the opinion of the Circuit Court of Appeals was handed down, telegrams and letters were sent by the plaintiff to its salesmen throughout the country authorizing and instructing them to misrepresent the effect and scope of the opinion.
2. Also that immediately thereafter, plaintiff advised the trade of the decision by telegraph, circular letters, registered letters, advertisements in trade journals, and by the oral statements of its salesmen; and in so doing misrepresented the meaning, scope, and effect of the decision of the Court of Appeals.
3. By claiming profits from customers of the Evans Case Company on the sale of noninfringing articles, such as spin-wheel lighters, cigarette cases, humidors, and ash trays.
4. By representing that the Trig-a-lite did not differ in substance from the Evans Roller Bearing lighter and is an infringement of the patent in suit, No. 1,673,727.
The record includes depositions de bene esse of many witnesses taken in various parts of the United States, in addition to the testimony of a number of witnesses at the trial. The record is exceedingly voluminous. It is replete with instances of many occurrences, but for the most part they are largely cumulative.
Since the representations made by the salesmen must be considered in the light of the authority vested in them, it will be helpful to consider a telegram and a general letter, in evidence as Exhibits 11 and 12, respectively. The telegram reads as follows:
"This instant received decision of the United States Circuit Court of Appeals awarding us sweeping victory on every point involved in our suit against Evans Case Company for their infringement by their Automatic also Roller Bearing lighters of our patent 1673727 Stop Supremely happy to be able impart this wonderful news stop Further details will follow tomorrow meanwhile okay to advise your trade but be careful not to indulge in any threats until our definite plan of campaign for damages is completely worked out regards
i do not believe that there is anything in this telegram from which bad faith can be inferred. It was but natural that the executives of the plaintiff should have been elated at the successful conclusion of a litigation that had lasted for years between the parties and which was at all times conducted in a spirit of bitter controversy, involving also conflicts in the Patent Office in respect to priorities of invention. The affirmance of the lower court's decision in respect to the validity of the patent and the broad scope extended to its claims certainly justified the plaintiff in considering a definite plan of campaign for damages.
The defense in the case was always under the control of the Evans Case Company, the manufacturer of the infringing articles. Such articles had been widely sold throughout the United States. The plaintiff could reasonably, therefore, look to the customers of the Evans Case Company, as well as to the Evans Case Company, for damages in such proper proceedings as might be brought against them.
Now as to the letter dated August 24, 1933: This, in the opening paragraph, reiterates the elation on the part of the secretary of the plaintiff in advising representatives of the plaintiff: "We had sustained a complete victory in our case before the United States Circuit Court of Appeals involving the infringement by the Evans Case Company of our Patent No. 1,673,727."
The second paragraph of the letter states: "As soon as our Ronson De-Light commanded its instantaneous success, they set out to devise ways and means to imitate it and believed that with their first so-called 'automatic' form and with their later so-called 'roller-bearing' from, they would be able to circumvent our patent."
I must say that from the proofs before me, taken before the entry of the interlocutory decree, I was of the same opinion. It seemed to me that neither the Evans Case Automatic lighter nor the Roller Bearing lighter was independently designed by the Evans Case Company. It was apparent that the former was in direct inmitation of the Aronson device, and the latter showed a skilled effort to combine what Aronson taught with features, perhaps, suggested by the prior art. But as a result of those proofs I was left with the undoubted impression that the defendant sought to avail itself of the teachings of the Aronson patent and profit by its pronounced commercial success.
Then there is this passage, which, though somewhat ambiguous in terms if read by others, must have been entirely clear to the salesmen: "It must be borne in mind by you that this decision naturally covers not only the pocket form of lighters but also their combinations, whether in sets or as units imitating our Tuxedo. It covers also their table lighters."
The writer of that letter was not a skilled rhetorician. He was using commercial English, which frequently lacks precision; but I think the fair inference to be drawn is that the salesmen were told that the decision covered lighters not only of the pocket form but also such other lighters as might be found in combination with other articles, whether in sets, i.e., smoking sets, or in other units.
In the third paragraph of the letter, the representatives of the plaintiff are informed that steps will be taken against the manufacturers of other lighters known as the Marathon and the Golden Wheel. Certainly that was well within the rights of the plaintiff.
The fourth paragraph is a statement that the Evans Case Company and its customers are liable for the damage which they have done by reason of the sale ...