The opinion of the court was delivered by: Austin, District Judge.
1. This is a civil action for declaratory judgment of
invalidity and noninfringement of United States Letters Patent
No. 2,998,611, unfair competition, false marking and patent
misuse brought by American Needle and Novelty Co. against
Schuessler Knitting Mills, Inc. and Schuessler Knitting
2. Jurisdiction is asserted under the patent statutes 28 U.S.C. § 1338
and 35 U.S.C. §§ 282 and 292, and relief was sought
under the Declaratory Judgment Statute, 28 U.S.C. § 2201.
3. The plaintiff is a copartnership and the partners, Bruce
Kronenberger and Anna Kronenberger, are residents of Chicago,
Illinois; the copartnership having its office and principal place
of business at 2846 West North Avenue, Chicago, Illinois.
4. The defendant, Schuessler Knitting Mills, Inc., is a
corporation organized under the laws of the State of Illinois
having its office and principal place of business at 1523 North
Fremont St., Chicago, Illinois.
5. The defendant Schuessler Knitting Foundation is a charitable
organization organized under the laws of the State of Illinois
having its office at 1523 North Fremont St., Chicago, Illinois.
6. Patent No. 2,998,611 was issued September 5, 1961 to
defendant Schuessler Knitting Mills, Inc., upon an application of
Walter E. Schuessler filed March 23, 1960. On February 1, 1963,
the patent was reassigned to Walter E. Schuessler. The subject
matter of United States Letters Patent No. 2,998,611 is a cap for
boys of ages 6-12. The cap has a top portion with a cuff or band
around its lower edge as seen below. Further, the cap has knitted
face mask or hood sewn inside the top portion which is adapted to
be pulled down over the face of the wearer. This also is shown
below; the two views being Figures 1 and 2 of Patent No.
7. The cap shown in United States Letters Patent 2,998,611 is
an improvement over the "Balaklava" cap shown in Sanborn Patent
No. 1,235,927 issued August 7, 1917 and Schwarz Patent No.
160,844 issued March 16, 1875. The Balaklava-type cap derives its
name from the fact that soldiers in the Crimean War wore such
8. The Schuessler cap differs from the Balaklava cap in
employing a cuff which is independent from face hood and
separately movable relative thereto. Both the cuff and hood can
be made to extend downwardly from the top portion of the cap to
give double protection about the ears and neck, the cuff causing
the face hood to cling tightly about the ears and back of the
head of the boy wearing the cap. When the face hood is not in
use, it is telescoped within the top portion of the cap. This is
not possible in the Balaklava-type cap where the face hood was
folded on itself to form the cuff. When the cuff was unfolded to
provide the face hood, the cuff necessarily disappeared. Because
of the separate provision in the Schuessler cap of both the cuff
and the face hood, it is possible to constrict the lower end of
the face hood so as to obtain a tight fit about the neck of the
boy wearing the cap and, thereby preventing entry of cold air.
Again, this is impossible with the Balaklava-type cap.
9. Caps made according to the drawing in Patent No. 2,998,611
were marketed by the defendant, Schuessler Knitting Mills, Inc.,
prior to 1963 and were an immediate commercial success.
10. A month or two prior to February 4, 1963, the date of a
license and buy-and-sell agreement among Joel Manufacturing Co.,
Inc., of 2215 Everett St., Richmond, Virginia, Schuessler
Knitting Mills, Inc., and Walter E. Schuessler, Irving Joel,
president of Joel Manufacturing Co., Inc., cut out the face-mask
portion of Schuessler caps to test-market a modified form of the
cap — because the
Schuessler cap was the "biggest deal around." Comparison of the
Joel cap (Plaintiff's Exhibit 29) with that of Schuessler reveals
that the cap shown in the patent has a "knitted" crown or top
portion while the Joel cap has a cloth crown or top portion. In
each case the face mask is a tubular-knit portion having a
generally elliptical opening spaced above the lower edge to
expose the boy's eyes and nose.
11. After Irving Joel had ascertained that the cloth cap with
face mask was a desirable product and after he had difficulty
making his own masks, he met briefly with Walter E. Schuessler.
Joel met with Schuessler because he knew that the Schuessler cap
was covered by a patent and because he was interested in having a
source of knitted inserts which were adapted to be sewn into his
regular caps to provide pull-down face masks. With these
objectives in mind, licensing and a supplier, Irving Joel and
Walter E. Schuessler arrived at the above-mentioned buy-and-sell
and license agreement. Joel felt that the arrangement whereby
Schuessler would fill Joel's requirements of the knitted inserts
at $3.00 per dozen (including a 50¢ royalty) was a good deal —
one at his (Irving Joel's) suggestion and that was why he
insisted upon having it in the agreement.
12. Shortly after the agreement with Joel was completed, Walter
E. Schuessler licensed the following other cap manufacturers
under Patent No. 2,998,611: S & L Novelty Co., a copartnership
composed of Jacob W. Roller and Julius Litowsky with offices at
731 S. Wells Street, Chicago, Illinois; Clearasite Headwear,
Inc., having its office at 21-29 West 4th Street, New York, New
York, and Pekett Headwear Co., Inc. having its office at 44 West
18th Street, New York, New York.
13. When Joel Manufacturing Co., Inc., commenced marketing
caps, using the knitted inserts supplied by Schuessler, Irving
Joel independently determined to mark his caps and advertising
literature with the number of Patent No. 2,998,611. There was no
requirement of this in the agreement. The extent of defendant's
involvement in the marking by Joel, was a phone conversation in
which Irving Joel asked Walter Schuessler whether Schuessler had
any objections to the marking, the answer to which was "no".
14. The cap manufactured and sold by Joel Manufacturing Co.,
Inc., differs essentially from that shown in the drawing of
Patent No. 2,998,611 and likewise from the cap marketed by
Schuessler Knitting Mills, Inc., in having a visor-equipped top
portion constructed of leatherette or cloth material rather than
knitted material, and further in that the band or cuff does not
completely encircle the top portion but terminates near the edges
of the forwardly-projecting visor. The Joel cap possesses all of
the elements specified in claim 1 of Patent No. 2,998,611 which
"A cap having a face hood and a cuff, comprising a
top cap portion provided with a cuff, and a face hood
portion having an open lower end, a face opening
thereabove, and a horizontal line of stitching
securing said face hood within said top cap portion
and inwardly of said cuff-forming portion, whereby
said face hood may be telescoped within said top cap
portion of withdrawn therebelow into face protecting
position with said cuff thereabove".
15. Testimony on the correspondence of the Joel cap to the
above-recited claim was given by Walter E. Schuessler who has
been in the cap manufacturing business for over 40 years and is
therefore skilled in this art. It is proper for the skilled art
worker to apply the claims of a patent. Carnegie Steel Co. v.
Cambria Iron Co., 185 U.S. 403, 437, 22 S.Ct. 698, 711, 46 L.Ed.
16. In like fashion, caps of Schuessler manufacture
(Plaintiff's Exhibits 10-13) with knitted crowns but with inserts
that were split and equipped with snaps below the face opening
were found to respond part for part with those of claim 1 of
Patent No. 2,998,611.
17. Where the products marked with the patent number literally
correspond to the language of a claim of the patent in question,
the marking is not false, but is proper.
18. In August, 1963, well after the Joel cap was being produced
in quantity, the plaintiff, Bruce Kronenberger, requested Walter
E. Schuessler to sell him inserts to prepare sample caps like the
Joel cap. The first delivery of face hoods pursuant to this
request was on November 11, 1963, with the invoice (Plaintiff's
Exhibit 2) indicating that there would be an additional 50¢ per
dozen royalty if the insert provided was used as an inside
pull-out mask, i.e., according to the Patent No. 2,998,611.
Bruce Kronenberger further testified that Walter E. Schuessler
told him that the inserts could be purchased anywhere but that he
would always have to keep in mind that there would be a 50¢
royalty per dozen no matter where he bought the inserts.
19. An offer of a license does not constitute a charge of
infringement. Walter Process Equipment, Inc. v. FMC Corp.,
356 F.2d 449 (7 Cir., 1966).
20. In mid-August of 1964, Walter E. Schuessler was informed
that Sears Roebuck and Co. was selling Joel-type caps, i.e.,
cloth-crown caps with a knitted insert which could be pulled down
to provide a face mask and made by American Needle and Novelty
Co. Thereupon, Walter E. Schuessler telephoned Bruce Kronenberger
to check the truth of this information. Bruce Kronenberger first
told him that this was not the case, but subsequently in the
phone conversation told him that American Needle and Novelty Co.
was supplying a cap to Sears Roebuck and Co., but that it was
different from the Joel cap. Thereupon, Walter E. Schuessler
requested Bruce Kronenberger to send him a sample of the cap for
submission to Schuessler's attorneys in order to ascertain
whether it avoided Patent No. 2,998,611. This, Bruce Kronenberger
agreed to do.
21. Shortly thereafter, on August 18, 1964, Walter E.
Schuessler caused his attorneys to send a letter to American
Needle and Novelty Co. confirming this request. At the same time,
a letter (Plaintiff's Exhibit 6) including the following
paragraphs was directed to Sears Roebuck and Co. for the purpose
of corroborating the cap expected to be furnished by American
Needle and Novelty Co.
"Our firm represents Schuessler Knitting Mills of
Chicago, Illinois. Schuessler Patent No. 2,998,611
relates to caps with knitted mask inserts and is the
subject of a license which has been granted to Joel
Manufacturing Co. of Richmond, Virginia, one of your
suppliers. We understand that American Needle and
Novelty Co. is presently making and selling a boy's
cap which is very similar in appearance to the Joel
cap and that the new American Needle cap has been
included in your line. On ...