Opinion
No. 4585.
November 11, 1926.
Appeal from the District Court of the United States for the Eastern Division of the Northern District of Ohio; D.C. Westenhaver, Judge.
Patent infringement suit by the Fleischmann Company against the Beyer Company and another. Decree for complainant, and defendants appeal. Affirmed.
Donald M. Carter, of Chicago, Ill. (Parker Carter, of Chicago, Ill., and Day Day, of Cleveland, Ohio, on the brief), for appellants.
Berkeley W. Henderson, of Cleveland, Ohio (Baker, Hostetler Sidlo, of Cleveland, Ohio, and Mayer, Warfield Watson, Frederic P. Warfield, and Leonard A. Watson, all of New York City, on the brief), for appellee.
Before DENISON, DONAHUE, and MOORMAN, Circuit Judges.
This suit in equity charges defendants (appellants here) with infringement of letters patent Nos. 1,148,328 and 1,151,526. The patents relate to a process for the manufacture of bread. The infringement was alleged to have resulted from the manufacture and sale of a yeast food used in the making of bread. The bill sets up as ground for the relief sought, among others, the proceedings in Ward Baking Co. v. Hazleton Baking Co. (D.C.) 292 F. 202, wherein the two patents were adjudged valid, and alleges that the plaintiff herein was the plaintiff in that case, and that defendants herein were the real parties defendant in interest in that case. The proceedings and judgment in that case were pleaded in bar of defendants' right to question the validity of the patents. By joint answer defendants put in issue that plea of adjudication, and also denied the other averments of the bill, presenting the questions: First, as to whether defendants were in such privity with the Hazleton Baking Co. Case as to make the judgment in that case binding upon them; and, second, if so, whether there was equivalency in the legal sense between the process involved in that case and defendants' present process, or from a broader consideration, whether the later process is an infringement on the claims of the patents. Upon both issues the trial court found for the plaintiff.
At the hearing on the first of these questions the defendants introduced no evidence, but plaintiff introduced certified copies of the proceedings and judgment in the former case. They showed that the main defense was anticipation by long-continued prior use by David Beyer, the owner of the Beyer Company; that in the opening statement in that case it was said by counsel for plaintiff, and not denied, that his understanding was that the defense was being conducted by the Beyer Company; that Beyer was present throughout the trial and testified for defendant; that counsel for defendant, who was originally counsel for defendants in this case, in stating the case for the defense, among other things said: "There is nothing inventive in the process which they claim under the first patent. It is not new. We have used this since 1898. When I say `we,' I speak of the Beyer Company. We have used calcium salts, ammonium salts, and bromates, and stand ready to prove it, separately and in combination with other chemical compounds, since 1898;" that the trial judge in an opinion said: "In fact, the Beyer Company has been present at the trial and assisted in the defense against the charge of infringement; hence the essential question remaining is whether the use of Beyer's yeast food makes defendant liable to plaintiff's charge;" that an interlocutory decree was entered sustaining the validity of the patents, and before the final judgment of like effect was rendered on August 29, 1924, an order was entered substituting the Fleischmann Company as plaintiff for the Ward Baking Company.
The general rule is that one who prosecutes or defends a suit in the name of another, to establish or protect some interest of his own, or who openly assists in an action in aid of some such interest, to the knowledge of the opposing party, is as much bound by the judgment as he would be if he had been a party of record. Penfield v. Potts Co. (6 C.C.A.) 126 F. 475, 61 C.C.A. 351; Greenwich Ins. Co. v. Friedman Co. (6 C.C.A.) 142 F. 944, 74 C.C.A. 114; Foote v. Parson, etc. (6 C.C.A.) 196 F. 951, 118 C.C.A. 105; Southern Pacific R. Co. v. United States, 168 U.S. 1, 18 S. Ct. 18, 42 L. Ed. 355; Souffront v. La Compagnie Des Sucreries, 217 U.S. 475, 30 S. Ct. 608, 54 L. Ed. 846. Upon an application of this principle, the lower court found that defendants were bound by the decree in the first case. It is insisted in their behalf that the finding is without warrant of evidence. Objection is also made to the admission in evidence of the opening statements of counsel for the Baking Company in the former case on the ground that they were incompetent because of a purely hearsay nature.
Under different or the usual circumstances this latter objection might present a question of substantial merit. But, taken in connection with the admitted use of the Beyer Company's product, its natural interest in the first case, and the presence at the trial of Beyer, the president and sole owner of that company, the statements were entitled to some consideration in determining whether in fact Beyer was an interested party to that proceeding. Of like consequence, perhaps with added force, because of a common interest, to say the least, was the use of the word "we" by counsel for defendant, followed by the explanation that he referred to the Beyer Company. We do not think that the definition of that particular reference had the effect of excluding the Beyer Company from the meaning of the term as thereafter used, except where expressly included. As to the sufficiency and effect of the evidence, it is enough to say that the facts referred to, in our opinion, constitute a showing of such participation by defendants in the former proceedings as to make the judgment therein binding upon them.
The second issue is in a measure simplified by a comparison of the patented and alleged infringing processes. Plaintiff's first patent shows a bromin compound operating with the yeast, flour, and other ingredients of the dough batch. It is less specific as to quantities and associated elements than the second patent, which claims a "composition of matter for use, associated with yeast, in the making of leavened bread, flour containing in admixture therewith ammonium chloride, calcium sulphate, and potassium bromate, substantially as described" in the specifications. The last-mentioned ingredient is the new and efficient element in both patents, being associated definitely in the second with the other two ingredients in substantially the proportion described in the specifications. This new ingredient is also used by defendants, and, except for an added ingredient, its new formula C more nearly approximates the later patent of plaintiff than does the infringing product in the Hazleton Case. Defendants have increased in their newer formula the quantity of ammonium chloride, and have brought into it calcium carbonate, which they claim possesses functions and produces results that make an entirely new process.
Illustrative formulas of compounds given in the specifications of the patents, and made according to the infringing product in the Hazleton Case and plaintiff's new product, are shown in the record. The evidence touching the chemical workings of the various ingredients of these formulas when in contact with their associated elements is somewhat involved and technical. Much of it, as respects functions and results, is conflicting. The ultimate fact, however, we think, is that the difference in substance — not in the functioning of the substance — between formula C and defendants' former process is the added ingredient, calcium carbonate.
It is claimed by defendants that this ingredient modifies the action of all associated elements, producing a novel process. One of the advantages claimed for it is that the dough can be withheld from the oven for a long time without spoiling, which cannot be done, it is said, with plaintiff's dough. Perhaps this is another way of saying, what is also claimed as a difference, that the calcium carbonate neutralizes the excess of acidity caused by the increased quantity of ammonium chloride, and thus prevents the speeding up of the fermentation and the too rapidly maturing of the dough. These theories, with others advanced by defendants as indicating novelty in their formula, are disputed. In our opinion they are not sustained by the evidence.
Nor are we impressed with the contention that the larger proportion of ammonium chloride, of itself or in connection with the calcium carbonate, produces a formula that is chemically different in its workings from the older process. We concur in the view of the court below that the added quantity of calcium carbonate was introduced to neutralize the added quantity of ammonium chloride, and the only purpose of using them was to practice, if possible without infringement, the process shown by plaintiff's patents.
Judgment affirmed.