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Darwin & Milner Inc. v. Kinite Corp.

June 26, 1934


Appeal from the District Court of the United States for the Eastern District of Wisconsin; Ferdinand A. Geiger, Judge.

Author: Fitzhenry

Before ALSCHULER, EVANS, and FITZHENRY, Circuit Judges.

FITZHENRY, Circuit Judge.

This appeal involves a decree entered in a suit wherein a bill in equity alleged the infringement of United States Patent, No. 1,277,431, issued September 3, 1918, to Paul Richard Kuehnrich, and by him assigned to appellant. In addition to seeking an injunction and an accounting for the infringement, it asks an injunction from using the designation "Kinite" or "Kompite" as a trade-mark; also damages for alleged unfair competition against appellees Dorr and Fleming, the president and secretary, respectively, of the appellee Kinite Corporation, and for an award of treble damages on account of the wanton and willful disregard of appellant's rights. Appellees filed an answer in which they alleged nonpatentability, noninfringement, and denied the unfair competition with which they are charged, claiming to be the owner of the trade-mark "Kinite" and "Kompite." The cause was heard by the District Court, which found the patent to be invalid, that there had been no infringement, no unfair competition, and that appellees Dorr and Fleming were not liable personally. The court dismissed the bill for want of equity and appellant took this appeal.

The patent in suit sets forth an alloy steel for use as a substitute for tungsten high-speed steel. The patent states that the steel has red-hardness, is high-speed, and may be cast, machined, or forged. The patent claims a steel containing approximately: Carbon 1.2 per cent. to 3.5 per cent.; chromium 8 per cent. to 20 per cent.; cobalt 1 per cent. to 6 per cent. Appellant asserts that prior to the production of the steel covered by this patent, a cast high-speed tool was unknown. Attempts to cast tungsten high-speed steel had failed. Appellee contends, on the contrary, that the steel covered by the patent, which was sold by appellant under the name Cobaltcrom PRK 33, and was also known to the trade by such contractions as Cobaltcrom, PRK 33, and PRK, merely represented a difference of proportion of known ingredients, producing no new result, and that it is, therefore unpatentable.

Alloy steels were first conceived about 1858. After that time, chemists experimented with countless combinations of alloys, in varying proportions. It was learned that a comparatively slight difference in the proportion in which these alloys were used often made considerable difference in the resultant product. For some purposes one type of steel with one certain property in a larger degree than others was found most desirable. For other purposes, another quality of steel was preferred.

In support of their contention of non-validity, appellees cite numerous patents in the prior art, among them the Haynes Patent, No. 1,150,113. This Haynes patent describes the making of a series of alloys of cobalt, chromium, and iron, with a constant per cent. of chromium, around 20 per cent., and with iron content varying from 10 per cent. to 75 per cent. of the mixture, with cobalt correspondingly varying from 70 per cent. down to 5 per cent. The specifications of the Haynes patent recite:

"In these alloys it is desirable not to have any material amount of carbon; say, not above 1 per cent carbon; while a carbon content below 0.60 is better.

"* * * By adding carbon to these ternary alloys they may be hardened to a considerable degree without losing very much in malleability, and for certain purposes carbon may become a valuable constituent."

From a study of the Haynes Patent, No. 1,150,113 it becomes apparent that the metals are the same in both patents, the proportions only varying, and that Haynes disclosed the fact that the addition of carbon to the other alloys would produce a harder steel, which for some purposes would be more valuable.

In Bethlehem Steel Co. v. Churchward I. Steel Co. (C.C.A.) 268 F. 361, 364, the court said:

"Patentable novelty may reside either in the elements of alloys or in the proportions of the elements. * * * But novelty of proportions in the sense of the patent law involves something more than figuring out proportions differing from any that were known before. It involves new results from new proportions, developing a new metal, or, it may be, an old metal with new characteristics of structure or performance, embracing entirely new, or at least substantially enhanced, qualities of utility."

The question before us therefore narrows itself down to this: Does the record support appellant's claim that the steel of the patent in suit "was the first high-speed heavy-duty steel successful in cast form?" If it does, then upon the record before us, it must be conceded to have "new characteristics of structure or performance * * *, substantially enhancing its utility." Cf., Siekert & Baum Stationery Co. v. Stationers Loose Leaf Co. (C.C.A.) 51 F.2d 326.

The evidence upon this subject is contradictory. Appellees, on their part, made some ex parte tests purporting to compare appellees' Kinite, appellant's PRK 33, chrome steel, and tungsten high-speed steel. From these tests, they conclude that the tungsten steel was a high-speed steel and that none of the other three should be so classed. Granting to these tests the probative value which they deserve, we find a large amount of evidence in the record to the contrary effect. It was shown that appellant's PRK sells under the price arrangements peculiar to high-speed steel and is generally recognized in the trade as a high-speed steel; that for 90 per cent. of the uses to which high-speed steel is put, PRK is equal or superior to tungsten high-speed steel; that it competes with tungsten high-speed steel and for some uses has supplanted it; that the United States Navy has found PRK to be a high-speed red-hard steel. From these facts, from the history of the development of this steel ...

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