United States District Court, Northern District of Illinois, E.D
June 7, 1966
AMERICAN NEEDLE AND NOVELTY CO., A COPARTNERSHIP COMPOSED OF BRUCE KRONENBERGER AND ANNA KRONENBERGER, PLAINTIFF,
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
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.
"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
as a warning to others of what the patent claims as a
monopoly, is sufficiently definite to sustain the
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 behalf of Schuessler and
its licensee, Joel, we are interested in learning
more about the American Needle and Novelty Co. cap."
This was preceded by the following paragraph:
"We are interested in obtaining a sample of the cloth
visor caps which have knitted mask inserts and which
are being made for you by American Needle and Novelty
Co., 2846 West North Avenue, Chicago, Illinois. If
you would be good enough to send us such a sample and
advise us of its cost, we would be happy to send you
our check by return mail."
22. Bruce Gustafson, the recipient of the letter at Sears
Roebuck and Co. advised Bruce Kronenberger of the letter,
who thereupon conferred with his attorney and decided to
institute this suit.
23. The initial complaint was filed on August 28, 1964, and was
against Schuessler Knitting Mills, Inc. It was for a declaratory
judgment of invalidity and noninfringement of Patent No.
2,998,611, for unfair competition, and for false marking of the
Joel caps with Patent No. 2,998,611 in violation of 35 U.S.C. § 292.
24. Substantially prior to this, on January 2, 1964, Patent No.
2,998,611 was assigned by Walter E. Schuessler to Schuessler
Knitting Foundation, and the same recorded in Reel 1407, Frame
070 of the United States Patent Office records.
25. Although the plaintiff, Bruce Kronenberger, had previously
instituted two patent suits against competitors in the cap field,
wherein he was represented by the same attorney as here, it was
not until the filing of the Second Amended Complaint that
Schuessler Knitting Foundation, the owner of the patent at the
time the suit was filed, was named as a co-defendant.
26. At the trial of the case, representatives of the defendant
saw a cap of American Needle and Novelty Co. for the first time,
this being identified as Plaintiff's Exhibit 1. This cap
(Plaintiff's Exhibit 1) is identical to the Joel cap with the
exception that the knitted insert lacks a thin edge of knitting
immediately above the face opening and below the visor of the
cap. The caps operate in the same way and Sears Roebuck and Co.
sells the two interchangeably. At the trial, Walter E. Schuessler
testified that the American Needle and Novelty Co. cap
(Plaintiff's Exhibit 1) compares element for element with the
language of claim 1 of Patent No. 2,998,611 and the court so
finds. It was therefore, not improper for Schuessler to charge
American Needle and Novelty Co. a royalty on caps made with
inserts obtained from Schuessler.
27. The Court finds under the controlling authority of Walker
Process Equipment Inc. v. FMC Corp., 356 F.2d 449, (7 Cir. 1966)
that the activities of the defendants herein did not constitute a
charge of infringement. Specifically, the offering of licenses
under the patent does not constitute the type of threatened
activity which justifies a declaratory judgment suit. Here the
court is aware that an indemnification agreement was given to
Sears Roebuck and Co. by American Needle and Novelty Co. shortly
after the receipt of the August 18th letter (Plaintiff's Exhibit
6) but finds that the same was voluntarily proffered by American
Needle and Novelty Co. so that there is no inference that Sears
Roebuck and Co. considered the August 18, 1966 letter
(Plaintiff's Exhibit 6) to be a charge of infringement.
28. The Court further relies upon the rationale of Aralac, Inc.
v. Hat Corporation of America, 166 F.2d 286 (3 Cir. 1948) quoted
with approval in the above-cited Walker case. Here the Court
finds that the plaintiff was, in fact, not accused of
infringement by the patent owner.
29. What was sought here was a sample of the American Needle
and Novelty Co. cap to ascertain the correctness of the assertion
by Bruce Kronenberger that the cap was different from the Joel
cap. The investigation by Schuessler is justified as a prudent
business activity, not amounting to a charge of infringement.
Thermo-Plastics Corp. v. International Pulverizing Corp.,
42 F. Supp. 408, 410 (D.N.J., 1941):
"A holder of a patent has a right to investigate and
inquire with relation to other devices of a nature
similar to those he or it is manufacturing, and such
investigation or inquiry does not seem improper nor
does it contain a threat of infringement."
30. Besides considering the jurisdictional question, the Court
also received evidence from both sides on the question of patent
validity to resolve the conflict between the parties if
defendants' activities did amount to a charge of infringement.
Bearing in mind the admonition
of the Supreme Court in Sinclair & Carrol Co. v. Interchemical
Corp., 325 U.S. 327
, 330, 65 S.Ct. 1143, 89 L.Ed. 1644 (1944)
about the desirability of investigating validity as a matter of
public importance and the propriety of continued patent marking,
the Court finds that the prior art advanced by plaintiff,
principally the Schwarz Patent No. 160,844, (Plaintiff's Exhibit
35) comes no closer to the patent in suit, No. 2,998,611, than
does the Sanborn Patent No. 1,235,927 which was considered by the
Patent Office. Thus, the presumption of validity accorded Patent
No. 2,998,611 under 35 U.S.C. § 282 remains unimpaired. The other
prior art references had been before the Patent Office during the
prosecution of the application which resulted in the patent in
suit and thus the presumption of validity applies particularly to
them. Ekstrom-Carlson & Co. v. Onsrud Machine Works, Inc.,
298 F.2d 765
, 768 (7 Cir., 1962).
31. Notwithstanding the fact that Bruce Kronenberger had been
in the cap-manufacturing business since 1937, he knew of no cap
with a face mask insertable into the cap prior to that of
Schuessler. Caps of the non-insertable face-mask type, i.e., the
Balaklava, have been available since at least the Crimean War
(1854) and in this connection, the language of the Court of
Appeals for the Seventh Circuit in AMP, Inc. v. Vaco Products
Co., 280 F.2d 518, 520 (1960) is singularly pertinent:
"The Grover Patent was issued in 1855 which was
ninety-six years prior to the date of the patent in
suit. That it was not obvious to provide a threaded
hole for laterally supporting the threads of a square
bolt adjacent to the plane along which the square
bolt is being sheared, is shown quite conclusively by
the fact that for ninety-six years no one ever did
conceive this idea despite the recognized need for
some means of shortening bolts and screws without
32. The Court in the AMP case quoted (page 521) with approval
the language in a prior Seventh Circuit case, Charles Peckat Mfg.
Co. v. Jacobs, 178 F.2d 794
, 801 (1949):
"The apparent simplicity of a new device often leads
an inexperienced person to think that it would have
occurred to anyone familiar with the subject; that
the decisive answer is that with dozens and perhaps
hundreds of others laboring in the same field, it had
never occurred to anyone before. The practiced eye of
an ordinary mechanic may be sufficiently trusted to
see what ought to be apparent to everyone. Potts v.
Creager, 155 U.S. 597, 604, 15 S.Ct. 194, 39 L.Ed.
33. The Court finds that there is no diversity of citizenship
between the parties. Therefore, the second count relating the
unfair competition only can be supported if, at all, under
28 U.S.C. § 1338(b):
"The District Courts shall have original jurisdiction
of any civil action asserting a claim of unfair
competition when joined with a substantial and
related claim under the copyright, patent or
34. The allegation of trademark mismarking in the second count
of unfair competition is not a claim "related" to infringement as
defined by the Court of Appeals for the Seventh Circuit in Powder
Power Tool Corp. v. Powder Actuated Tool Co., 230 F.2d 409
"It must appear that both the federal and non-federal
causes rest upon substantially identical facts."
35. The activities of defendants did not constitute a charge of
infringement much less the harassment alleged in the second count
of the Second Amended Complaint. Still further, the marking of
caps with the number of the patent in suit was proper, so there
is no competitive injury to plaintiff from this.
36. The third count which has to do with false marking in
violation of 35 U.S.C. § 292 is without merit. Both the Joel cap
(Plaintiff's Exhibit 29) and the
Schuessler "Split-Insert" caps (Plaintiff's Exhibits 10-13) which
were marked with the number of the patent in suit, are literally
defined by the language of claim 1 of Patent No. 2,998,611.
37. The fourth count relative to misuse of the patent by virtue
of alleged tie-in sales falls with the first count. Misuse is an
equitable defense and, if present, serves only to bar the
enforceability of the patent. The patent is not sought to be
enforced in this action. Hence the question of misuse is moot.
CONCLUSIONS OF LAW
The Court has jurisdiction of the parties to this action.
The Court lacks jurisdiction of the subject matter of Count I
of the Second Amended Complaint, relating to Declaratory Judgment
of invalidity of United States Letters Patent No. 2,998,611 and
noninfringement thereof, there being no charge of infringement
present to support the justiciable controversy required under
28 U.S.C. § 2201 and 2202.
The Court lacks jurisdiction of the subject matter of Count II
relative to unfair competition. For the Court to have
jurisdiction of a count sounding in unfair competition when
joined with a federal question, the Court must first have
jurisdiction of the federal question. Hurn v. Oursler,
289 U.S. 238, 240, 53 S.Ct. 586, 77 L.Ed. 1148 (1932). The Court
additionally lacks jurisdiction under 28 U.S.C. § 1338(b) because
the federal and non-federal causes do not rest upon substantially
identical facts. Powder Power Tool Corp. v. Powder Actuated Tool
Co., 230 F.2d 409, 413 (7 Cir. 1956). To the extent that the
Court has jurisdiction under 28 U.S.C. § 1338(b) because of the
concurrent allegation of false marking under 35 U.S.C. § 292, the
Court concludes that there was no unfair competition on the part
of the defendants.
The Court has jurisdiction of the subject matter of Count III
relating to false marking. The marking of products by defendant
Schuessler Knitting Mills, Inc. and by licensees under Patent No.
2,998,611 was proper and lawful since the products so marked were
defined by claim 1 of the patent.
The Court lacks jurisdiction of the subject matter of Count IV
relating to misuse of Patent No. 2,998,611 since misuse is an
affirmative defense to the enforceability of the patent and here
the Court lacks jurisdiction to enforce the patent.
Where the prior art asserted against the validity of a patent
consists essentially of references before the Patent Office with
the only reference not so considered being no more pertinent than
those that were, the presumption of patent validity remains
unimpaired and is in fact strengthened. Power Curbers, Inc. v.
E.D. Etnyre & Co., 298 F.2d 484, 493 (4 Cir. 1962).
© 1992-2003 VersusLaw Inc.