J"OEWER SOLE-ROUl\'DER CO.

v.

GIBBON.

555

the crank "presented at the back face to receive the pressure of the finger or thumb to open the crank when it is desired to operate it" is a new combination, and limited to this specific construction. The new feature in complainant's structure, set forth in this third claim, "is the feature of so arranging the hinged crank and the pivoted or hinged crank handle in their relation to the stationary central tube that the crank and handle mav be folded to cause the handle to pass through the central tube, and project at the back of the case sufficiently far to admit of the crank being again started from its folded position by pressure upon the projecting end of the crank handle." Limited to this respect, the third claim is valid. Does the defendant infringe? The defendant's crank handle is not pivoted to the hinged plate, D, C; it is swiveled to it. Complainant's crank handle, E, could not be inserted into the center of the case to project at the opposite side if it were not pivoted so as to fold in its relation to the crank plate. It is therefore doubtful whether the crank handle, E, or its equivalent, is found in the defendant's exhibit. I might follow the defendant's expert, and consider his reasons why he does not find in the defendant's exhibit an equivalent for the hinged plate, D, C, or the central tube, A2; hut I do not think this is necessary, in view of the fact that the patent under which the defendant makes these tape-measure cases was issued by the patent office seven years after the patent under which the complainant claims infringement. This raises the presumption of noninfringement. The patent office, it is safe to presume, had under consideration complainant's letters patent when the application for the letters patent now owned by the defendant was pending. Its experts and examiners ulldoubtedly compared the two, and held that there were features in the defendant's patent which distinguished it from the complainant's; and the grant of letters patent to the defendant was virtually a decision by the patent office that there was a substantial difference between the two inventions. This presumption has not been overcome by evidence showing infringement. I therefore conclude that there is no infringement of the limited specific construction of the third claim, as hereinbefore found. The bill will therefore be dismissed.

LOEWER SOLE-ROUNDER CO. v. GIBBON.

(Circuit Court, E. D. Pennsylvania. April 6, 1896.) No.80.
1.

COMITY TN PATENT CASES-CIRCUIT COURTS.

A decision of a circuit court sustaining a patent will be followed by the circuit court of another circuit when the new evidence produced before the latter would not have been sufficient, in the court's opinion, to the result, if it had been in the case as presented to the former. Spindle Co. v. Taylor, 69 Fed. 839, followed.
held valid and infringed, as to claims 1, 4, 5, 6, 9, and 14. Ford & Co., 55 Fed. 62, followed.

2.

PATENTS-VALIDITY AND INFRrNGEMENT-SOI.E-CUTTING MACHINES.

The LoeweI' and Blair patent, No. 407,735, for a sole-cutting machine, LoeweI' v. C, P.

556

74 FEDERAL REPORTER.

This was a suit in equity by the Loewer Sole-Rounder Company against Charles S. Gibbon, for alleged infringment of a patent relating to sole-cutting machines. Final hearing on pleadings and proofs. George B. Selden and George J. Harding, for complainant. Wood & Boyd, for defendant. DALLAS, Circuit Judge. This is a suit upon patent No. 407,735, dated July 23, 1889, granted to Henry Loewer and Barton L. Blair, for a sole-cutting machine. The claims in question are as follows:
"(1) In a sole-cutting machine, the combination, with the revolving cutter, C, and its shaft, of the revolving sole clamps, E, E', their supporting shafts, the movable carriage, and a revolving form, operating to vary the relative positions of the cutter and the sole clamps, substantially as described." "(4) In a sole-cutting machine, the combination, with the revolving cutter, C, and its shaft, and guide, s, of the revolving sole clamps, E, E', clamp plates, z, z', removable form, and suitable supporting shafts, substantially as described. "(5) In a sole-cutting machine, the combination, with the revolving cutter, a, and its shaft, and guide, s, of the revolving and traveling sole clamps, E, E', form, F, suitable supporting shafts, and movable blank guide, '1', substantially as described. "(6) In a sole-cutting machine, the combination, with the revolving cutter, p, and its shaft, and guide, s, of the revolving and traveling sole clamps, E, J!J', suitable supporting shafts, and movable blank guide, T, provided with adjustable plate, y', substantially as described." "(9) In a sole-cutting machine, the combination, with the main frame, A, A', supporting the revolving cutter, a, and its shaft, and the guide, s, of the movable frame, D, carrying the revolving sole clamps, E, E', and form, F, and mechanism adapted to secure . the simultaneous revolution of the sole clamps and the form, substantially as described." "(14) In a sole-cutting machine, the combination, with the revolving cutter, C, and its shaft, provided with the spring guard, S, of the. gUide, s, and the revolving sole clamps, E, E', form, F, and suitable supporting shafts, substantially as described."

J!"

In April, 1893 (Loewer v. C. P. Ford & Co., 55 Fed. 62), the dr.cuit court for the ]'II orthern district of ]'II ew York adjudged these claims to be valid, and that they had been infringed by the use of a machine which is admitted to be snbstantially identical with that used by the present defendant. The defense then interposed was the same as is now relied upon, and the evidence then adduced was mainly the same as is now before this court. Five patents which were considered by Judge Coxe in the Ford Case are again set up. These have been supplemented by some additional evidence; but, upon carefully considering it, in connection with the opinion delivered by that learned judge (Loewer v. C. P. Ford & Co., supra), I do not believe that, if it had been produced before him, it would have changed his decision. Therefore, under the well-settled rule, I will follow his judgment. This rule, with sufficient citation of authorities, is stated in Spindle Co. v. Taylor, 69 Fed. 839. A full-sized machine, substantially the same as the shown in the drawings of the Blanchard patent, has been exhibited in this case. This exhibit was not before Judge Coxe, but the Blanchard patent itself :was considered by him, and it does not appear that he experienced any difficulty in comprehending it, or that his views

NATIONAL SEWING-MACH. CO.

v.

WILCOX & GIBBS SEWING-MACH. CO.

557

respecting it would probably have been modified if the actual machine had been displayed to him. He said:
"An army of ingenious mechanics and inventors had the Blanchard lathe before them for over half a century, yet the idea of utilizing it in the sole· rounding industry never seems to have occurred to one of them."

This observation is equally true, and quite as pertinent, now that the machine has been produced, as it was when made with reference to the patent alone. Judge Coxe, after referring to the Blanchard lathe, and to the Hartford patent of 1884, also said:
"Besides these, the records show many machines for cutting and trimming the heels, and channeling and grooving the soles, of boots and shoes, and improvements in lathes for turning lasts and other irregular forms. It is unnecessary to discuss the various exhibits in detail, for neither alone nor aggregated do they show the combinations of the claims."

Among the machines thus referred to were those covered by the Smith, the Joyce, and the King patents, respectively, all of which were then in evidence. And, again, as to these, as well as to the Blanchard lathe, I am fully convinced that, if the machines, experiments, and testimony which have been added in the present case had been introduced in the former one, they would not have affected its result. The gist of the decision which was made by the circuit court in :Kew York is that the prior patents there presented did not show the combinations of the claims in suit, and had never suggested them to anyone; and the only patent not before that court and which is now in evidence, viz. the Thompson patent, No. 10,239, of November 15,1853, is so plainly not an anticipation that any particular discussion of it need not be entered upon. Decree for complainant.
SEWING-MACH. CO. v. WILLCOX & GIBBS SEWINGMACH. CO. (Circuit Court of Appeals, Third Circuit. May 13, 18116.)
PATENTS-CONTRACT OF LICENSE-HoYALTIES.

Defendant sewing machine company contracted to pay complainant company a royalty of 40 per cent. on the amount of its receipts from sales or leases of machines covered by complainant's patents. The contract, however, contained a proviso that if defendant "shall sell or lease, or cause to be sold or ieased," in any foreign country, the machines at less rates than those in this country, "then the royalty rate to be paid * * * shall be 40 per cent. in lieu of 45 per cent., as hereinbefore provided." After operating several years in the home market, defendant began selling and leasing in foreign countries at a less rate, and offered to pay 40 per cent. on all machines thereafter sold or leased. Plaintiff claimed that the proviso was retroactive, giving it a right, on the happening of the event, to '45 per cent. of all previous sales and leases, from the commencement of the contract. Held, that the contract was merely prospective, so as to require payment of 45 per cent. on all sales and leases both at home and abroad, after the commencement of sales, etc., at a less rate abroad.

In Error to the Circuit Court of the United States for the East· ern District of Pennsylvania.

558

74 FEDl1lRAL REPORTER.

Frank P. Prichard and John G. Johnson, for plaintiff in error. A. H. Wintersteen and George Tucker Bispham, for defendant in error. Before ACHESON, Circuit Judge, and WALES and GREEN, District Judges. GREEN, District Judge. This was an action brought by the plaintiff in error, the Sewing-Machine Company, against the 'Willcox & Gibbs Sewing-Machine Company, the defendant, to recover'the sum of $27,000 or thereabouts, which, it was alleged, had become due upon a certain contract executed by the respective parties, bearing date January 8, 1884, fixing and regulating the payment to the plaintiff of certain royalties or rentals, dependent upon and arising from the sale or lease by the defendant of a class or pattern of sewing machines which was protected by letters patent of the United States, owned by the plaintiff. By this contract, it was chiefly agreed by the defendant to pay to the plaintiff, by way of royalty, a sum equal to 40 per cent. of the receipts arising from the sales or leases of the sewing machines in question. So far as this part of the contract is concerned, there appears to have been no default in a strict compliance with its covenant by the defendant company. But, among other things, the contract contained a proviso which is in these words:
"And provided, further, and it is hereby distinctly understood and agreed, that if the said parties of the second part shall sell or lease, or cause to be sold or leased, for use, or shall cause to be used, in any foreign country, any trimming and overseaming machines at rates of royalty or rental less than those charged for the use of like machines in this country, then the royalty rate to be paid by said parties of the second part to said parties of the first part shall be forty-jive per cent., in lieu of forty per cent., as hereinabove provided."

And it is this proviso which has given rise to the controversy between these parties; for it appears from the record that in 1894 the defendant company determined to seek a marketfor the sewing machines in question in foreign countries, and, for reasons which were to it satisfactory, began to sell and to lease them at a rate or rental lower than it charged in the home market. This was not done in any secret or underhand manner, but as a matter of right. The defendant promptly made known to the plaintiff what it was doing in this respect; and because it had in this way entered a foreign market, and because it was there selling and leasing sewing machines at a rate lower than in the home market, it offered to account to the plaintiff for royalties at the increased rate of 45 per cent., as was stipulated in the proviso, quoted. This proposal was not satisfactory, however, to the plaintiff, nor in accord with its construction of the contract; the insistment of the plaintiff being that the proviso clause which measured the rate of royalty in the happening of the contingency stated retroactive in its effect; that it was intended to, and did, operate from the very commencement of the agreement of which it was part if the circumstances arose which gave it operative effect; and that

NATIONAL SEWING-MACH. CO. V. WILCOX & GIBBS SEWING-MACH. CO.

559

the defendant was indebted to it for the difference between 40 per cent. and 45 per cent. royalty upon every sale or lease made by the defendant since the contract was entered into. This controversy centered about the "then" as used in the proviso. By the plaintiff it was contended that the word "then" was merely a conjunction, in connection with the contingency before stated, signifying "in that case," and as it was thus clearly a word of condition, and not an adverb of time, it followed that the increased royalty provided for upon the happening of the contingency was necessarily operative from the very beginning of the contractual relation between the defendant and itself. On the other hand, the insistment of the defendant was that, as used in this contract, "then" was an adverb of time, bearing the meaning of "at that till).e," and that its office in the proviso was simply to fix and declare the period when the change of the rate of royalty from 40 per cent. to 45 per cent. of the receipts should take place, to wit, on the occurrence of the event stated. The court below adopted this view, and directed a verdict for the defendant, and this is the alleged error in the proceedings which is relied upop.. It is not strange that such diversity of opinion as to the proper signification of the word "then" should arise. The word in tact will bear two meanings, as its use shows it to be either a ronjunction or an adverb. Which is the meaning which should the more properly and certainly be adopted depends very often upon the circumstances which led to its use, very often upon the context of the writing in which it appears and forms a part; and it is entirely allowable for the court to resort to either or both for assistance in arriving at a just conclusion. Doubtless, it was with this idea that considerable testimony was taken concerning the preliminary negotiations which eventuated in the preparation and execution of this contract. But, after all, in this case it does not throw much, if any, light upon the proper signification of this word, as used. The testimony is contradictory, irreconcilable, and affords no safe criterion by which to judge of the motive or object of the contracting parties. Perhaps the writing itself is the safer source of legitimate aid, and to that resort l)lust be had. Critically examining, then, this clause of the contract, and bearing in mind the evident purpose of the whole contract itself, it seems that the construction adopted by the court below is far more reasonable than that for which the plaintiff so strenuously contends; for, in the first place, it will be noted that the parties evidently were dealing with things or acts which were to occur or to be done in the future alone. The language is, "If the parties of the second part shall sell or lease, or [shall] cause to be sold or leased for use, or shall cause to be used in any foreign country," the machines in question, "then the royalty to be paid shall be forty-five per cent.. in lieu of forty per cent., as hereinbefore provided." The word "shall," repeated as it is, and the phrase "to be paid," seem pregnant with signification. They relate necessarily to an event which will occur in the future, not to a past transaction. The words "shall be" suggest the meaning "from thence on." They point to

560

74

FEDERAL REPORTER.

a something which before had no existence. They mark the division between the "now" and the "hereafter." To paraphrase the clause makes the reading practically this: "Now, for the present, and while the present circumstances continue, the royalty is fixed at forty per cent.; but, if a foreign market be entered, the royalty thereafter shall be forty-five per cent." Clearly, this would deny any retroactive effect to the proposed change in the royalty. Again, the rule of construction which requires meaning to be given to all words in a written instrument which are not purely superfluous compels the consideration of the phrase "in lieu of." The entire clause in which these words appear is: "Then the rvyalty rate to be paid by the said parties of the second part to the said parties of the first part shall be forty-five per cent., in lieu of forty per cent." What does this phrase mean as commonly used? "In lieu of" means "instead" of, "in place of," "in substitutionfor." But, unless a rate of royalty has been regarded as fixed and definite, there can be no "substitution" for it of another rate; no putting of another rate "in the place" of one which, if the plaintiff's view be correct, never existed as settled. An increase or decrease of rate of royalty is not "substitution." The very phrase "in lieu of," or its equivalent, "in substitution for," indicates the prior existence of another definite rate, which thenceforth is no longer to exist, because the circumstances which gave it existence themselves no longer exist. If the plaintiff's contention be sound, there never was a fixed and definite rate of royalty established by this contract, but only a rate liable at any moment to be changed ab initio, by the happening of a contingency in the future. This is not in harmony either with the spirit or scope of the contract. Nor does a construction seem warranted which would result in regarding the new rate in the light of a penalty, to be exacted as for a breach of contract. It would be a very strained construction of this contract to read it as an attempt on the part of the plaintiff to prohibit sales of its sewing machines in foreign markets. The previous agreement between the parties of 1881 had nO such restrictive purpose; and the agreement of 1884 not only did not prohibit or restrict, but seems positively to have contemplated, foreign sales, by reserving to the plaintiff a higher rate of royalty when such sales were made. Clearly, the contract was framed to deal with sales both at home and abroad, and provided a rate or royalty suitable under either. Viewing the contract in this way, the word "then" must be taken to be an adverb of time, and held to refer solely to the date of foreign sales. There was no error in the direction to the jury of the learned judge who tried the cause below, and the judgment is affirmed.

KILMER MA:'>UF'G CO. V. GRISWOI,D.

.561

KILMER MANUF'G CO. v. GRISWOLD et a1. (Circuit Court of Appeals, Second Circuit.
PATENTS-ANTICIPATION- INVENTIOK- BALE

May 28, 1800.)

TIEs. The Kilmer patent, 1'\0. 282,991. for improvements in adjustable bale ties, of wire, in which the band wire is clutched in a V·shaped clasp made of heavier wire, is void, as to claims 1 and 2, because of anticipation, and for want of patentable novelty and invention over the Smith patent, No. 159,463.

Appeal from the Circuit Court of the United States for the :North· ern District of Kew York.
This was a bill by the Kilmer }lanufacturing Company against J. W. Griswold and F. B. Griswold for alleged infringement of patents 1\"os. and 372,37;), issued to Irving A. Kilmpr for improvements in bale ties. The circuit court entered an interlocutory injunction, finding that the claims of No. 2S2,991, sued on, were invalid, and that the second claim in No. 372,375 was valid and had been infringed by defemlants, and entered a decree for an accounting and an injunction thereon accordingly. 62 Fed. I1\). From this interlocutory decree both parties appealed, and this court, on April 23, 1S!)f), reversed the decree, holding that patent No. 37:l,375 was apparently wanting in invention. 15 C. C. A. 161, 67 Fed. 1017. Thereafter the cirCUit court entered a final decree, which, among other things, dismissed the bill as to patent No. 282,991. From this portion of the decree the complainant has now appealed.

W. H. Van Steenbergh, for appellant. Edwin H. Brown, for appellees. Before and Circuit .Judges, and TOWKSEND, District Judge. SHIPMAN, Circuit Judge. Letters patent No. 282,H91, dated August 14, 1883, and No. 372,375, dated November 1, 1887, were granted to Irving A. Kilmer for improvements in adjustable bale ties. The circuit court for the Northern district of New York dismissed, as to No. 282,991, the bill in equity which the owner of these patents brought against the defendants for an injunction against their infringement. This appeal relates to that portion of the decree which dismissed the bill. The patentee also invented a bale tie which is described in letters patent No. 242,655, which were issued to him June 7,1881. The buckle or clasp of this tie was a fiat plate of metal, in which a slot was cut with a die. One end of the slot was enlarged so as to afford a ready entrance to the band of wire. The specification further discloses the tie (omitting the letters) as follows:
"At the [other and smaller] end, the edges of the slot come in together, being somewhat V or wedge shaped, so that as the wire slips down there it is caught and held firm. The stationary end of the wire is slipped through the slot, and, being twisted is held at the larger end. The wire is then passed about the bale, slipped at its other end through the slot, and turned under the ma.in wire. \Vhen the ba.le is released this end is drawn into the [small] end of the slot and held tight, the closed-in edges gripping in on it firmly."

This tie was defective, because the sharp edges of the slot cut and weakened the wire; and, on the other hand, the wire cut into, and wore away the edges of, the slot. To remedy this defect, Kilmer constructed the tie which is the subject of the patent in suit. He v.74F.no.4·-36