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AM. NEEDLE & NOVELTY CO. v. SCHUESSLER KNITTING MILLS

June 7, 1966

AMERICAN NEEDLE AND NOVELTY CO., A COPARTNERSHIP COMPOSED OF BRUCE KRONENBERGER AND ANNA KRONENBERGER, PLAINTIFF,
v.
SCHUESSLER KNITTING MILLS, INC., A CORPORATION, AND SCHUESSLER KNITTING FOUNDATION, DEFENDANTS.



The opinion of the court was delivered by: Austin, District Judge.

FINDINGS OF FACT

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 Foundation.

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. 2,998,611.

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 caps.

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 reads:

  "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. 968 (1902):

  "The specification of the patent is not addressed to
  lawyers, or even to the public generally, but to the
  manufacturers of steel; and any description which is
  sufficient to apprise them in the language of the art
  of the definite feature of the invention, and to
  serve

  as a warning to others of what the patent claims as a
  monopoly, is sufficiently definite to sustain the
  patent."

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 ...

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