Appendix — Clapper v. Original Tractor Cab Co.

Supreme Court brief1960

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Clapper v. Original Tractor Cab Company. Exhidit A Al

‘EXHIBIT A. ,

Clyde E. CLAPPER, Plaintiff,

; v. ° =

___ ORIGINAL TRACTOR CAB COMPANY, Incorport@ed,

and Stanley Williams, Defendants.

Civ. No. 2255. —

‘United States District Court *

S. D. Indiana,

Indianapolis -Division.

Findings of Fact and Conclusions of Law

Jan. 13, 1958.

Correcting Entry ‘Jan. 14, 1958.

Memorandum July 9, 1958.

' Action for patent infringement iin which . defendants

counterclaimed for damages on ground of antitrust vio-

lations. The. District. Court. Steckler, Chief Judge. held

that patent respecting tractor covers for deflecting. heat

from engine of tractor around operator “was invalid be-

cause of anticipation in the art, and agreement by which

it was attempted to’ monopolize, - by combining of non-

competing patents in’ a single. agreement by competitors

which gave to parties to agreement veto power over ~

patent rights that were not referable to individuai busi-

nesses, or license grarited, constituted violation of anti-

trust laws for which defendants were entitled to damages,

and on motion with respect to bill of costs, costs were

‘allowed prevailing defendant as disclosed in opinion.

165. F. Supp. 565

Az Clapper v. Original Tract): Cab Company. Exhrbit A

, Judgment for defendant. . ™

Thomas E. Scofield, Kansas City, Mo,, Lockwood.

‘Gault, Woodard, & Smith. by Harold -R. Woodard, |)

_dianapolis. Ind., for plaintiff.

J. Preston Swecker.’ Washington, D.-C.. Kenneth 1.

Earnest, Rushville, Ind.. Linder & Linder by some F: Lin-

der, Indianapol.s, Ind., for, defendants.

The above entitled. cause came on regularly for tric.

_ and the court having duly considered the evidence. to

gether with the post-trial briefs of the ‘parties, the pro-

posed findings of fact and conclusions of law.-and the oral

argument: had thereon, and the court being. fully advised

in the premises, now makes its findings of fact and con-

clusions of law - by adopting substantially | the proposed

findings of fact and conclusions of law as submitted bv the:

defendants. with the exception’ however, of certain amend:

‘ments and deletions as made by the court in order to

- more accurately reflect the views of the court in regard

to the issues and. the ev idence pertaining thereto. The

court's findings of fact nd conclusions of law are there- -

fore as follows:

. * Findings of Fact *-

1. Plaintiff, Clyde FE. Clapper, is a resident of nes

Blue Springs, Missouri.

2. Defendant, Stanley. Williags, is a resident of nea

Arlington, in the County of Rush, State of Indiana.

3. Deféndant, Original Tractor Cab Company. In.

corporated, is a corporation organized and existing unde:

the laws of the State of Indiana and havirig’ its principa!

place of business at Arlington, Indiana.

4. Plaintiff filed this action under the Patent Laws

of the United States, U, S. Code. Title 35, Section 281. +

Clapper v. Original Tractor Cab Company, Exhibit A "AB

enjoin the defendants from infringing patent No. 2,452,834,

granted to the plaintiff, on November 2, 1948.

5. The defendant, Original Tractor Cab Company, In-

_ corporated, in answer to the complaint, included a counter-

claim. for damages claimed to have. been caused by the

plaintiff and others as a.resalt of violation-of the antitrust

laws of the United- States. under U. S. Code, Title 15,

Section 15.

6... Thereafter, the plaintiff filed an amended com-

plaint seeking (11 a declaratory judgment that the de-

‘ fendants were estopped from denying’.the validity and

infringement of the plaintiff's patent and further that the

defendants were estopped from charging a violation of the

antitrust laws; (2) claiming an infringement of the plain-

tiff's patent and unfair competition; (3) that the defend-

ants have, for the purpose of deceiving the public, falsely

marked articles of manufacture with the patent number

of the plaintiff's patent: «4) that che defendants have

‘breached an agreement entered into with the plaintiff; and

(5) that the defendants. have been unjustly enriched, which.

latter was aismissed voluntarily by the plaintiff prior to

trial.- ,

7. The court has jurisdiction of the parties and of

the causes of action presented.

8. All of the causes of action presented by the plead-

ings between plaintiff “and defendants were ‘presented to

the.court in a trial which consumed twelve full days. and

all evidence presented by ‘the parties with respect to all

of such issues has been received by the’ egurt.

9. $Thttreafter. briefs were filed on behalf of the

plaintiff ‘and defendants, together with proposed findings

of fact and conclusigns of law. After the post-trial briefs

and proposed findings of fact and conclusions of law were

“

“3

At Ch Pper v- Orrginal oe Cab Company. Exhibrt A

filed, the proposed findings or fact and conchulions of ae

“were subjected to oral argent for the’ benefit of | oe

court. \ :

10. In his biete. the plaintitt has abandoned the

causes of action for unfair competition and false patent

v marking, and ‘the amended complaint: will be dismissed |

as to these causes. of action. — ,*

11. In. 1945, the atsilt co one ‘Lee Flora, of Dai

ville, Illinois, separately clay to have _made inventions

in tractor covers for deflecting th¢ heat frorn the engine

of the tractor around. the operator, and each led: an ap-

plication for a patent thereon. In 1946, one Michael A

Halligan, of Fort Dodge, Iowa, claiming to have’ made a

like invention, filed an application for a patent thereon.

.. 12. During -the pendency ‘of these three patent ap-

plications, thé Patent Office, recognizing that they claimed °

substantially the same invention, declared an. interference

between all three of them, for the purpose of. determining

priority of invention @ to said three patent applicants.

It also declared a separate interference between the Flora-

and Halligan applications on an auxiliary feature of that

tractor cover. r

-- While his application for patent was pending.

Clapper ha granted an exclusive license to Bearing Dis-

tributors Company to manufacture and sell the tractor

cover included in his patent application and the patent to

be granted thereon. Later that company’s corporate name |

was changed to Comfort Equipment Company. J

14. Flora had granted an exclusive license under* his

patent application to the Cabette Company. of Danville.

Illinois, to manufacture and sell the tractor cover included |

‘in his application and the patent to be granted therecn.

Clapper v. Original Tractor Cab Company, Exhibit A Abd

15. Halligan likewise‘had granted an. exclusive license

to the Fort Dodge Tent & Awning Company to manu-

facture and sell the tractor cover included in his patent

application and the patent to be granted thereon. Later

that company’s corporate rime was changéd to Burch |

Manufacturing. Company. os

16. After licenses were granted to the above cor-

porations, Comfort began manufacturing and selling trac-

tor covers in 1945 and Burch and Cabette bégan like

operations in 1946, sales being made largély through dis-

tributors located throughout santas portions of the

United States.

“In April, 1948, after the declaration. of the ahi

said pit es interferences, representatives of. the above- -

named licensees ‘and the three named invento and their

respective attorneys met. in Chicago, Illinois, am effort—

to settle their differences with respect to priority of in-

vention. At the outset of said meeting and prior to dis-

closures ‘between themselves of the ene dates of ©

invention, it was agreed by. all of the parties there pres-

‘ent, or: represented by others, that each of the \corporate

‘licensees under the then pending patent applications would

have a. right to a, license under each patent application

then, pending and ywnder any letters patent that: might be .-

granted thereon, upon the same terms as granted ‘to the

others. ° ;

18.. Thereafter, at said meeting some evidence of

"+ priority of invention was adduced. and discussed, by the

~ parties, but the discussion was concerned more, particu-

larly with the question of royalties to be paid by the re-

_ spective licensees to the respective patent applicants. At

- the conclusion of the-meeting. although specific agreement

‘was not reached thereon, by .reason of the earlier filing

date of his patent application. it was generally understood ~

Au Clapper v. Original Tractor Cab Company, Exhibit A

that Clapper should have priority of invention to the basic

unit of a tractor heat deflector; that Flora, who was second

in point of time in filing his patent. application, - should

have priority as to the part of the tractor cover that sur-

"rounds the operator; and that if Halligan had any priority

ofclaim with respect to an invention, it was. minimum.

19. The parties were unable to settle at-that nieeting

the question of priority of invention and the amount of roy

- alty to be paid by the respective licensees, and it was

agreed that another meeting be held by the interested |

parties or “their representatives to formulate specific agree-

ments regarding the question of royalties to be paid by

the respective licensees to the several patent applicants.

Later. two such meetings were held in St. Louis, Missouri, o

_ at which the interested parties: or their representatives

and ‘their attorneys attended. At these meetings in St._

Louis, Missouri, various topics were discussed, such as

the amount of, royalties to be. paid, the establishment of a

litigation fund, costs of manufacture and the selling price

per unit of tractor covers and other related ‘subjects.

20. From ‘the conferences had in said meetings in St.

Louis, Missouri, and correspondence later passing between -

the interested parties, a final meeting was agreed to be

held at Des Moines, Iowa, when the Licénse Agreement of |

_ August 3-4, 1948, was formally executed by or on behalf

of said three aforesaid inventors and: their several. re-

spective licensees. | rah

21. At that. same -meeting in August 3-4. 1948.

“Priority Award Agreements” were consummated | by the

three inventors, whereby Clapper was awarded priority of

invention on the counts involved-in the three-way inter-

_ ference, and Flora. was awarded priority of invention on

" the counts involved in | the Two-way - i ReTERERER. There-

Clapper v. Original Tractor Cab Company, Exhibit A - ’ A?

after, on November 2, 1948, Clapper was granted Letters

Patent Nga#52,834; and on February 15, 1949, Flora was

‘ granted Letters Patent No. 2,461,974. No patent was granted |

on the Halligan application,”

a : - ;

22. By the. terms of the License Agreement executed

at Des Moines, Iowa, on August 3-4, 1948.>the priority

of Clapper and Flora to their respective inventions was —

_ recognized ard agreed upon. Cabette, Fort -Dodge and

. _ Bearing were. each granted a separate license to manu-

‘facture and to sell heating units embodying the Flora and

Clapper ‘inventions, subject to the following conditions,

among others: (1) that the licegsees manufacture such

heating units “at their respective addresses and in- no

other place or places except upon written cansent™ of the __

ner’ of the respective patents; (2) that the licensees

(oi Clapper $1 “as a royalty fee on each and every unit

sold and shipped ‘by them" and pay a proportionate roy- .

alty on parts, including specifically a royalty of 15¢ on

“windshields When sold separately from completed unit”;

(3) that the licensees pay Flora 25¢ on each and every

unit-sold by them, and.also a “proportionate royalty” on

parts, the same as Clapper; (4) that if any party to the.

Agreement m: de. or became the owner of any “improve-

meht# in said heating units,” then Cabette. Fort Dodge

and Bearing could manufacture and sell. the improve: —

- ments without paying any further royalty. except as set

forth in paragraph 13 of the Agreement; (5) that Flora

‘and Clapper would not grant any licenses under any patent

that ma¥ be issued to them, respectively, ° ‘or any other

patents that might fall within (the) license-agreement,

without first obtaining the written consent thereto of the

‘remaining parties to (the) Agreement,” “and each of the

_ licensees agreed not to grant any sub-licenses or any li-

censes on “any other patent that might fall within (the)

Ab Clapper v. Origine! Tragtor Cab Company, Exhibit A

License Agreement, without * * * the consent thereto of

the remaining parties”; (6) Flora and Halligan agreed

» “file applications for Canadian patents” on the subject

‘matter of their respective United States patent applica-

tions, and Clapper «and Flora granted licenses and the

right to “manufacture and sell” heating units under their

respective Canadian patent applications “then on file or

to ‘be filed"; (7) that af any patent was issued on the

“Halligan application” (or “any improvement made by

Halligan relative to the subject matter of his application”

then Bearing and Cabette would have an option “to ‘take

a license under such patent” and to pay royalty therefor

“on equal terms with Fort Dodge: (8) Sections 13, 14 and

15 of said license agreement read as follows:

“13. In the event any of the, claims included in

patents that may be issifed on said Flora, Clapper

or Halligan application, or any patents. issued cov-

ering any improvements thereon, are infringed, or in

the event any party to this agreement is sued for

infringement, for the manufacture of heating units

under said patents, then any party to. this agreement

having knowledge of such infringement or any party

to this agreement who is sued for infringement shall

send written notice thereof to the remaining parties

and within a reasonable .time thereafter, not to ex-

- geed twenty days, all of the ‘parties hereto agreed to

discuss said intringements for the purpose of arriv-

ing at a mutually agreed eupon procedure for Yeir

disposition.

“14. To prosecute infringers and defend against |

infringement, the parties hereto agree to set up a li'i-

gation fund of $8,000.00 in.the following manner:

coincident with the execution of this agreement, Clap-

per shall pay’ into the said“fund $3.000.09 and Cab-

Ette, Fort Dodge and Bearing the sums of $1,000.00

each; that Cab-Ette. Fort Dodge and Bearing sha‘!

pay into said fund the additional sum of 5¢ on cach

Clapper v. Original Tractor Cab Company, Exhibit A AY

heating unit sold by them, respectively, from and

after the Ist day of August, 1948, and said Clapper

shall pay into said fund the sum of 5¢ for each $1.00

royalty by him received from and after the Ist day

* of August, 1948, until the funds amount to $8,000.00.

That if at any time during the life of this agreement

said fund shall be depleted to the sum of $6,000.00,

thén in any.such event, the said parties hereto shall

again contribute to said fund at the rate of 5¢ per

unit as hereinabove in this paragraph provided, until

said fund shall again amount to the sum of $8,000.00.

The monies -to be paid into said fund as above pro-—

vided shall be paid to Clapper, who shall deposit and

hold the. same in trust in the Commerce Trust Com- .

pany of Kansas City, Missouri, for the prosecution

of infringers and the defending against infringement

of any patents* because of the manufacture, by Cab-

Ette, Fort Dodge, or Bearing of heating units under"

the above recited patent applications, or patents is-

suing therefor, or any future patents that may fall

within the terms of this agreement. That said funds

_are to be used for the prosecution of infringements

of any of said patents only upon the approval of a

_ majority of the parties to this agreement. That ‘said

oie fund shall also be used ‘to defray the expense that

may be necessarily. incurred in the investigation of .

claimed infringements and: the necessary correspond-

ence, -negotiations and the giving of legal notice of

infringement to infringers. That in the event any of

the parties to this agreement shali claith’an anfringe-

ment materially affecting their business and shall. :

have given notice thereof to the other parties hereto

_as provided in paragraph numbered 13 hereof, and a

majority of the parties hereio agree that such claimed

infringement should be prosecuted, then such prose-

cution shall be instituted within ninety days, but if

a majority of the parties hereto shall fail to give their

approval to the prosecution-Of such an infringement

within a period of ninety days after the giving of

such notice, then in that event, such party hereto.

claiming to be materially affected as aforesaid shall

AlO Clapper v. Original Fractor Cab Company. Exhibit A

have the right and privilege at its own expense to

prosecute such infringement without any claim. to.

any of the monies in the said fimd in this paragraph

provided for, unless such prosecution. shall have been

finally resolved in favor of the complainant, in which

event said complainant shall be entitled..to be reim-

bursed from said fund for their expense incurred 1.

the prosecution of such infringement. That in the

event a majority of the parties agree’ to the prose-

cution of any infringement. or to undertake thé de-

‘fense of any claimed * infringement by any of the

parties hereto, that in any such event, the owner of «

the patent being infringed shall, and with the aid and

advice of the remaining parties‘hereto if he so chooses.

select and engage required counsel. That Clapper shall

render unto Cab-Ette. Fort. Dodge. and Bearing upou

_ request an itemized statement of all sums, if any, with-

drawn from said fund accompanied by a copy of the

bank statement thereof. That the liability of Flora.

Clapper, and Halligan to prosecuté infringements or

to defend against infringements shall be limited to

the monies in said fund in this numbered’ paragraph

provided for. Upon the termination of this agreement

by expiration gf the patents i.saued-to Flora and Clap-

per on US. applications 617.049 and 583.345, respec-

tively. or otherwise. or by the mutual consent of: the

parties. said fund shall be liquidated by dividing °

among the parties the monies in said fund in pro-

portion to the amounts paid in by said parties as herein

provided for. ' ;

“15. That in the event a patent shall be Vissued _

for improvements upon said heating units -to persons

other than parties to this agreement. then in’ such

‘event, it is agreed that the parties hereto shall call

a meeting and act as a unit in the negotiatio ‘for

the use of such improvement, if desired. so ‘as to

make the same mutually available and on the same

terms to all parties to this agreement. but that if the

“majority of the parties to the agreement determine

not to contract for such improvement. then the par-

’

Clapper ¥. rine Tractor Cab Company, Exhibit | A All

ties to this agreement are pr —- to contract there-

for individually or collectiv ely.”

(9) said ‘agreement was “based not only on the patents

to be issued on said Clapper or Flora application which

(were) the “subject matter of (said) agreement, but also

upon those issued upon any renewals, continuations, divi-

sions of, or substitutes “for, said applications. and also. on

any reissues or ‘extensions of said, patent or patents”;

and (10) that unless otherwise terminated, the licenses

‘granted were to “extend. to the latest expiration date of

any patent issued on said Clapper and Flora applications.”

23. Under the original license that Comfort had

from Clapper; Cab-Ette had from Flora: and Burch had

from Halligan: and the license. agreement executed by

plaintiff on’ August 3-4, 1948, the licensees, Comfort,

Cab-Ette and. Burch, built. up substantial businesses,. each

doing several milion ‘dollars. of business, in interstate

commerce, manufacturing and selling tra¢tor heating units

during the time referred to herein. Each had numerous

distributors in this country and Canada. Their collective

sales-value 6f tractor covers ranged from $200,000 to over

a million dollars a year. Royalties paid to the plaintiff have

amounted to over five hundred thousand dollars.

24. Adhering to the agreement of August 3-4. 1948,

the licensees and Clapper set up a “Litigation Fund”

therein provided, for the purpose of defraying: the expense

of investigating and prosecuting infringers and. defending

against infringements of the Clapper and Flora patents.

Said fund continued. in existence from: 1948 and the’ par-

ties proceeded to use and control the same jointly as pro-

vided in said ‘license agreement until on or about May 6, |

1953. On that date the “L‘tigation,Fund” was disbursed

to Clapper and Flora, propo tionately and the agreement

of August 3-4, 1948. was tofminated by the exec ution of

Al2 Clapper v. Original Tractor Cab Company, Exhibit A

i “Termination Agreement” which . mainly resulted from

a civil anti-trust action instituted against the licensees and

Flora’ and. Cab-Ette by the United States in the. United

States District Court, Western District of ‘Missouri, West-

ern Division, entitled United States v. ‘Bearing: Distrib-

utors Company, 11 F.R.D. 591: 18 F.RD. 228.

25. Thereafter, separate non- exclusive licenses. were.

granted by the patentees, Clapper and Flora, to. Burch,

Comfort and Cabette, under which these three corpora-

_ tions conducted their business operations in tractor cov ers,

and any and all interim effects of the Agreement of Au-

gust 3-4, 1948, thereafter ceased to exist on May 6, 1953.

26. On November 24, 1948, plaintiff servede riotice

_ on the defendant, Original, of | iniringement of the afore-

said.Clapper patent, No. 2,452,834" However. no action was:

‘taken immediately against the said -defendant.

27. . During all'of the times herein mentioned, the

plaintiff was represented by Mr. Fred M. Roberts, an at-

tornev with offices jin Kansas City, Missouri. After con- |

summation of the License Agreement of August 3-4, 1948,

~ and establishment of the litigation fund prov ided for

therein, Roberts, under instructions from Clapper and

/ with full knowedge and undérstanding of the other parties

to the Agreement ‘of August 3-4. 1948. caused the notices

of infringement to be sent to the defendant. Original, and

to all of the known distributors who were selling tractor

covers manufactured: by the defendant. Notice? of those

and other claimed infringements were sent to Roberts by ©

. the plaintiff and by the licensees and from various other

sources. When knowledge of a claimed infringement was

made known to Roberts, he cansed infringement notices to

be served on the alleged infringers. Copies of said notices

were sent to the plaintiff and to the licensees. and ther

‘ were generally informed by -Roberts of the. giving of said

Cinpper vy. Original Tractor Cab Company... Exhibit A Al3

notices of infringement and were consulted from time to

time with respect thereto. <*". ‘

“98. In August, 1949, a aa notice of: infringement

was sent’ by Mr. Fred M. Roberts; as attorney for the plaih-

tiff, Clapper, to. the defendant, Original; and a number of

“letters were sent by Roberts to the distributors for the de-

fendant, informing. said distributors that the tractor Covers.

manufactured by the defendant, Original, were ‘infringe-

ments of Clapper’s Letters Patent, whereby the sale thereof

-*by such distributors constituted an infringement, and sub-

jected the said distributors to infringement actions by the

said poorne: |

39. As a consequence of such infringement ‘notices,

the defendant, Original, did cease’ for a time the manu-

facture and sale of tractor covers, and also some of the

distributors thus notified of infringement also ceased sell-

ing tractor covers manufactured by the said defendant and

began the sale and distribution of tractor covers manufac-

tured by Cornfort Equipment Company; w hereby the sale

of the tractor covers by the said defendant to the public

‘were-thereby directly curtailed and limited.

30.. Clapper and Roberts were obligated under Sec-

tion 13 of the Agreement of August 3-4, 1948 to give no-

tice and to take action against claimed infringement of

Clapper’s Letters Patent within ninety days after notice

thereof was received from the licensees or from any other

_source, and generally did su by serving notices. of infringe-

ment. Clapper. as trustee of the litigation fund, built by

‘ himself and the licensees, expended $15, 288.24 from the

litigation fund with the approval of Flora and the licensees,

to defray the costs incurred in the giving of infringement

notices and the prosecution of infringement: actions, in-

cluding the one here involved instituted against the de-

fendants.

Al4 Clapper vy. Original Tractor Cab Company, Exhibit A

31. After the giing of notice of infringement by the |

-_pilairitiff to the defendant. Original, the defendants sought

a license under the Clapper patent, but all such requests

were denied by the plaintiff because of his obligations to

Flora and the licensees, parties to the Agreement of Au-

gust 3-4, 1948. ge ‘

32. After the notices of infringement were sent by

Roberts in August, 1949. to the defendant, Original, and to

its distributors as aforesaid, the defendants were invited

to a meeting held in Chicago, Ilinois, on September 12,

1949, with the plaintiff, together with Flora:and the several

licensees under Said License Agreement, their representa-

tives and attorneys, for the purpose of discussing’ the li-

cense .requested. oa} : |

33. At the meeting on September 12, 1949, the de-

fendant, Williams, sought to perguade the plaintiff, together

with Flora, and represéntatives of and attorneys for their

_ several licensees, that a license should be granted to the

defendant, Original, but such request for a‘license was

rejected by those present acting im concert.

34. The parties to the Agreement of August 3-4, 1948,

including the plaintiff, acting through Roberts and through

the spokesman for the group at the meeting mn September

12. 1949, concertedly acted to stop the defendants from

manufacturing and selling tractor covers in wiffingement

of the Clapper patent. The full extent of all economic du-

ress thus imposéd -by the plaintiff together with Flora and

the licensees, the other parties to the said Agreement, in

respect to that matter through 1e giving of notices to the

defendant and to its-distributor® was that if such claimed

infringemert was not abated, patent infringement proceed-

‘ings were imminent.

35. The spokesman for the several Purties: to the

Agreement of August 3-4, 1948: upon rejecting the appli-

Clapper v. Original Tractor Cab Companyt Exhibit A — Al5

cation of the defendants for a license under ‘the Clapper

patent, in the meeting on September 12, 1949, informed

the defendants that the defendant, Orivinal, would be given

a limited period of time within which to dispose of its stock

of tractor covers then in- course of manufacture and that.

if the defendants, then ceased the manufacture of tractor

covers, no action \or pate infringement would be insti-.

tuted. The evidence does not establish that an agreement

was reached between the plaintiff and defendants“in that

meeting in Chicago on September 12, 1949, or subse-

quently. Any proposals made .to the defendants in that

meeting were in furtherance of a conspiracy in violation

of antitrust laws, with respect to which the court will

elaborate further in subsequent findings herein. Plaintiff

has alleged and relies upon-the theory that a contract was

entered into between the defendants and the several par- ~

ties to the Agreement of August 3-4, 1948, and that he,

plaintiff Clapper, has been damaged as a result of the ©

breach of said contract on the part of the defendants. There

is no evidence in the record of damages to the plaintiff

flowing from the alleged breach, even if it were assumed

that an agreement was reached, which the court does not

find. = - | |

36. Thereafter, the defendants entered into a work-

ing arrangement with Cabette, formed for the use of the

-Original facilities to manufacture parts of tractor ‘covers

for Cabette,, which working arrangement became effective

the latter part of October, 1949. A proposed contract to

formalize the working:arrangement was reduced to a writ-

ing dated }.uvember 4, 1949. Before the execution thereof

by both parties, disagreement arose, and the proposed con-

tract was not. executed. The working arrangement was

terminated: by mutual consent. A proposed settlement con-

tract datéd November 23.-1949, was, prepared. Before the

‘ oe ‘

:-- .

Al6 Clapper ¥. Original Tractor Cab Company, Exhibit A

execution by both parties, ‘a “controversy arose, and the

’ contract was unexecuted by both parties.

. 37. The defendants piior,to the filing of this action

by the plaintiff} had no knowledge of. the terms and pro- -

. Visi ieense Agreement of August 3-4, 1948. ex-

éépt respect to the place of manufacture of the tractor

- covers with the permission of Clapper.

38.:. The defendants discontinued the manufacture

and sale of the Original products- and entered into a work-:

ing arrangement with Cabette. This arrangement was

made in order to afford Cabette the working fu ilities of

Original whereby Original could manufacture parts for

Cabette, and at the same time, it was a means of keeping

Original in operation.

39. ‘During the working arrangemer.t between Cab-

ette and the defendants, the defendants notified: the plain-

tiff that they were discontinuing the manufacture and sale

of tractor covers in accordance with the direction by the

spokesman for the. group at the meeting in. Chicago, as

«aforesaid, on September 12, 1949. which notice was. re-

tracted, however, after the discontinuance of the ‘working

arrangement with Cabette in Nov ember, 1949. | .

40. During the working arrangement with Cabette.

the defendants operated only. as suppliers for Cabette by

direction of the latter and did not thereby become licensees

under the Clapper patent nor parties to the conspiracy :

_Whereby the defendants are not estopped from contesting

the validity of the Clapper patent nor from claiming dam-

ages for violation of the antitrust laws. according. to-the

first cause of action “ the amended complaint.

41. Thereafter. pon ‘the insistence of the licensee.

* @Comfort. a meeting . the parties to the License Agreement .

@of August‘ 3-4, 1948. was held early in the vear (19 '. to

* Clapper v. Original Tractor Cab Company,’ Exhibit A Alt

determine what course of ‘action should be followed with

‘respect to the claimed infringement by the defendants:

and subsequently, in accordance with an understanding

reached by the parties to the Agreement of August 3-4, |

1948, at that meeting, this action was. instituted in April,

1950, claiming infringement- -of the Clapper and Florg.pat-

ents. Thereafter, this action was dismissed as to the Flora

patent. orate |

42. The Cheaper patent epptication was filed March

17, 1945, ‘on which patent No. ‘2,452,834 was granted on

November 2, 1948. F 7

43. This patent disclosed a conventional farm. trac-

tor, indicated generally at 10 in Fig. 1, with a rear deflec

member\ 44 (Fig. 1) extendifig over the vrimcsione

of the tractor and down along opposite sides of the oper-

ator’s station at the seat 30. The rear open side of the

deflector“44 is supported by a bow 36 (Fig. 7), adapted to

be mounted on the rear axle housing 20 of the tractor and

extending upward in front of the operator on the. seat 30.

.\ separate front deflector. member 88 extends on opposite

. sides of the engine 22 of the tractor and down beneath the

bottom of the engine-as an extension of the deflector, so_as

to increase the supply of heat to the operator when needed.

This deflector 88 is removable for the purpose desc ribed in

the patent of varying the amount of heat to’be supplied to

the operator (see column 3, lines 55-56). The Clapper hot

air deflector takes advantage of the: known principle that

the fan of the tractor would blow air over the engine .dur-

ing operation and be heated thereby, which -heated air is

then channeled back to the region of the operator.

44. All of the claims’of the patent define- the combina-

tion of the tractor 10, deflector’44 and bow 36. None of the

claims define a hot air deflector comprising just the de-

flector and bow, In view of the limitations of the statute

are,

The: application was thereafter- amended “by inserting a

description of the passageway 23 and the application of

~ that numeral 23 to the drawings, but the additional dis-

_channel the heat of the engine back to the operator.

operator. -In some instances it is’ necessary‘to use blocks

‘of this ‘heat deflector, without which the —: could not

Ats Clapper v. Original Tract or Cab" Company. Exhibit A

(U.S.Code. Title 35, Setvtion 112), if a patentable inv ention

is to be found, it must ‘be in-the-combination of the parts

referred to comprising the fractor, deflector and bow.

| 45. Some of the claims in suit include the detachable

front deflector 88 which is removable to adjust the amount

of air supplied to’ the operator, and others include the

windshield 72 which is detachably mounted on the bow in

front ‘of the operator. These are parts of the deflector

structure but do not affect materially the combination

claimed. ' . &. ‘

46. An” examination of the file Wwapper of the appli-

cation for the Clapper patent reveals “that the examiner

called attention to a defect in the application as filed,

that such application did not disclose “Ss

“a full description of the continuous passage through

which warm air may flow from the engine to reach

the seat area.’

elosure thus incorporated in the application constituted

new matter which was not_a part of the’ application as

filed. Consequently, no reliance can be placed, in the claim

for patentability of the combination, on the parts tha‘

47. Furthermore, it was ‘shown by the evidence that -

many tractors have walls between the engine and the

or brackets to hold the canvas off away from various

parts of the structurdpso as to alje channeling of the

heat from the engine to the opéfrator. There was no dis- :

closure of such provisions needed for a practical application

' }

i F

; —

ices

4 pper Vv. Original Tractor Cab Company, Exhibit A Alg.

practice, the invention as required for a complete disclosure, .

according to Section 112 of the Patent Law (U.S.Code,

Title 35). |

48. ’ Beginning in the early days of the euiieatite, it

*-has been conventional practice to channel: the heat from

the engine to the region of the operator. Examples of that

principle are found in Standish, No. 1,287,495, and ‘in

Weiland, No. 1,988,875, as applied toa tractor. ae

. +49. ‘Several of the patents disclose: the application of

a canopy or cowl section to a vehicle, such, for example, as ©

- White,. ‘No. 1,020,336, Lorton, No. 1,083,108, Nobel British -

No. 2641 05; Carew-Gibson, British No. - 23,286°05, and

Winet, Swiss‘No. 112, 135. Disregarding the claim of chan-.

_ neling the heat from the engine through the deflector ‘or

cowl section to the. operator, as we must, since this was not

, disclosed in the Clapper patent application as filed, the full

combination in a motor vehicle of an engine, cow] section

and frame or supporting means, is found in all of these

patents. — “es : .

50. Evidence was submitted aiso of the manufacture ,

and sale of heat deflectors for tractors: by the Colorado —

Tent & Awning “Company «and the Denver Tent & Awn-

ing Company. both located in Denver. Colorado, by the

Duluth Tent. & Awning Company. Duluth.. Minnesota. and

‘by Sears: Roebiick & Company. several years prior to the

date when Clapper claims tc rave made his device: and

more than a vear prior, to the filing of* his patent appli-

cation. ; ;

“51. Contemporaneous recerds were produced, espe- -

cially of the Colorado Tent & Awning Company. disc!os-

ing not. only the use of a car.vas deflector. and metal. bow .

or frame for supporting the same on the tractor. but'also —

by photograph and description contained in advertising :

»-

: ae ' . . §

+ ASB Clapper V. Ofiginal. Tractor Cab Company, Exhibit A

¢ material/‘showing clearly the use of substantially the same

™ structure as. incorporated in the Clapper patent and for

‘a. the same purpose claimed here, namely, to channel the

"heat of the engine back to the driver of-the vehicle, This’

material fully’ supports the claimed anticipation of ‘the

Clapper heat deflector, as prior knowledge prior, public

use-or prior sale, under the patent statute, ” * ied

52. Substantially the same form of trac cover as —

made by Colorado: Tent Company, was included also in

».. the proofs’ of manufacture and sale (thereof) by. Denver

~ « Tent & ‘Awning Company and by Duluth Tent & Awning

‘Company. The proofs as to all of these confirm that such

"tractor covers, with a metal bow or frame for supporting

‘the same on the -tractor, were being made and sold as

early as 1941 by these several companies and that they had :

the effect, when applied to the tractors, of channeling the .

_ heat of the engine back ‘to the operator. For* the most

part, they were-sold for, Caterpillar type of tractors, but

the Clapper patent makes no distinction as to the type of

tractor.. All of these tractor covers also included side panels

for embracing opposite sides of the engine and connected |

with the cow! section to increase the quantity of heat sup-

plied to the operator where needed.’

53.’ In 1938, Sears. Roebuck & Company started. the

sale of a. tractor cover which was termed a “windshiéld”™..

and which comprised a canvas cowl member or deflecto~

| substantially like that: shown in -the Clapper patent and

’ also supe of a tractor by a metal bow. substantially

identical WHA that shown in the Cla per patent. The evi-

‘dence’ shows that this had the eff ct of channeling the

heat of the engine back to the region of the operator i

that it was sold for several years, as long as Sears. Roebuck

‘& Company -were selling the Graham-Bradley tractors, all

long prior to the date when Clapper claims to have con- _

a . . . a . Ba ;

Clapper v. Original Tractor Cab Conipany, Exhibit A ,A2) ~~

a ceived of‘his. idea, and more than a year prior, to the date -

of his patent application. (US. Code, Title 35, Section 102).

[1] 54. The evidence ants and the Court so finds,

» that the construction of a heat deflector for channeling the

‘heat of the engine back to the operator of a tractor, arid

mounting it by a bow or mefal frame ‘on the tractor, would _

_ have been obvious. to a person skilled in the art, at a date ©

w hen Clapper claims to have made his invention.

55. The fact that almost identical devices were con- .

ceived by the several patent applicants, Clapper, Flora and

Halligan, at about the same time, and’ apparently without -

knowledge of the developments of each other, is corrobora-

tive of the inestapable conclusion that this was an obvious.

adaptation, and that it did-not.amount to a patentable in-

vention. a

56. In any-event, Clapper’s sit todd clearly lacked

patentable merit as a-combinatidn. | Every element was old

_in the prior art, the tractor, the heat: deflector or cowl sec-

tion of canvas, and the metal bow or frame.” The manner —

of use of these in combination was what would have. been :

expected in putting them together in the maisher set forth.in y:

the Clapper patent.’' This is. the type of device which is un-

~’ patentable as a combination, because the. combination was

not new nor the ey individually.

|2| 57. . Since the Clapper patent is invalid, as indi-

cated above, the question of infringement is moos. There _

can. be no infringement, of ,an invalid patent: .

[3 58. Moreover, this Clapper patent has been used

as a basis for an agreement jn restraint ef trade in violation

‘of Sections 1 and 2 of the Sherman Act, .15 U.S.C. $$ 1, 2.

Such misuse of patent rights bars anytecovery: my patent

infringement.

‘ : ie

Qe , sf

a :

A22_ Clappersy. Origin-” * «tor Cab Company. Exhibit A

re [4] 59, By the \.vement of August. 3-4, 1948, the |

.» patentees, Clapper and Flora, granted Aa non-exclusive and

non-transferable -license to Comfort, Cabette and Burch

to manufacture and sell tractor covers. The limitations im-

posed on the licensees by said Agreement, that the licen-

sees would: manufacture the inventions “at their respec- -

tive * * * named addresses and in no other place or places”:

and that no other license would be granted “without ob- ee

» . taining the written consent thereto of the remaining par-

. ‘ties to the Agreement”: that if a license so granted was

terminated. as provided’ in Paragraph 8 thereof, Flora or

Clapper, respectively, shall be at liberty to license other

licensees; that the parties would “‘mutually agree upon pro- -.

‘cedure for. the disposition” of infringement Suits; and that’

- the paggies set up a “litigation fund” to be used for that pur-

pose, all are elements of illegality when’ used for an illegal

purpose, as. they were. - ." 7

15! “60. An, agreement by a patentee which gives a

non-exclusive licensee a veto power in the selection of other

licénsees is invalid according to Sherman Act standards,

Sections 1 and 2. .° (aoa

° 16] 61. The Agreement is also violative of Section

_ 2 of the Act, in that it manifests an attempt to monopolize —

by the. combining. of non-competing patents in the single :

agreement by competitors and gives to the parties to the

agreement veto power over patent rights that are not ref-

° erable to ‘their ingividual businesses, the patents or

licenses granted, and this is true even though the licensees *-

may have continued to compete with each other in the

manufacture and sale of- tractor covers after the execution

thereof. ‘They were jointly given an exclusive market

and control thereover by the terms ofysaid Agreement, and

not singularly as a consequence of patent privileges ac-

quired. —

e j ; : se

Clapper v. Original Tractor Cab Company, Exhibit A A23

62. By Section 13 of the Agreement the parties agreed

‘to and the evidence establishes that they did act jofntly in

‘respect to “infringements” of the letters patent in ques- -.

tion, and .“mutually agree upén procedure for their. dis-

grail "In Section. 14, ‘Clapper and the licensees set up

“Litigation. Fund" to be used for the prosecution of in-.

hingnineats of both.said letters patent, upon approval —-

a’ majority of the parties to the agreement, and the evi-

_. dence is that said” fund: was actually used by them for

that purpoge. The clear intent of the parties, gleaned from»

the verbiage contained in paragraphs 13 and 14, supra, and

from the evidence herein -was giving to each party’

_ thereto a separate and collective right to bring and

‘control. infringement actions,, when. ‘no such right or

- power legally existed: in. the licensees, - or opposite

patentee, so to do under patent, law; that they jointly and’

cooperatively intended to and did unite-in the prosecution,

and use of the “Litigation Fund” for: that purpose. The

action of the parties as revealed by the evidence is that they

did, pursuant to the said agreement, join hands, through

Roberts, in the giving’ of infringement notjces to defendant

and. its dealers, and in so doing they intended to curtail and

‘ultimately stop the manufacture and distribution of tractor

covers by defendants, and sale thereof by defendants’ dis-

tributors.

|7|. 63. The evidence ¢CleaNy establishes that the

licensees were the major manufacturers of tractor covers

and held a dominant position in that field of interstate trade

and commerce, and that if the Agreement of August 4,

' 1948, was carried out by the parties, according -to its terms,

as it was, that the monopoly granted to said licensees gave

them. virtual control of that market and made it -im-

possible for - defendants to obtain any rights under

the patents in issue, or legitimately enter the field of

manufacturing and selling tractor covers. It is ‘the fact

A24’ Clapper v:. Original Tractor Cab CoMpany. Exhibit A

of combination and concert of action by the parties to do

‘the very things that they claim they had a right to’ do °

under said agreement. collectively and jointly, ‘that spells

- Gut unlawful -use of patent monopoly by them. in Violation

of Sgctions 1 and 2 of the Sherman ‘Act. |

. . 18] "64. --It is no defense of the Agreement of August

~. 4, 1948, or for the giving of infringement notices and bring-

ing of the infringement action as mentioned above. to say

_that Clapper and Flora had the’ right to grant ‘separate

‘licenses - to’ defendants and. that said patentees had the

right under patent-law to give notices of infrinfsements of

their respective patents, and to bring infringement actions.

It is conceded that such are legal rights “accruing to’

a patentee or his assign or assigns. But What mov

be legally done by a patentee, or his. Assign, singulirly

or collectively,.is no criterion for the measurement of

legalitv of the agreement of - Augitt 4. 1948.) and ©

What was:actually done by the plaintiff and his licensees ©

in furtherance thgreof as shown by the evidence. What ‘

Clapper, or Flora, separately, might legally ‘have done and

what was done by them in concert of action with each other

and with the_licensees herein are two different matters.

The fact that concert .of action, violative of the Sherman

Act. is accomplished by legal means, does: not: remove the

terminal result thereof from the prohibitions of the Act.

[9-11] 65. A conspiracy of combination having as its

object, or effect, a restraint of interstate trade and com-

merce, whether accomplished by legal or illegal means,

falls within the ambit of Sections 1 and 2 of the Sherman

. Act and is condemned thereby. Patent rights give no pro-

tection’ from the prohibition of the Sherman Act. when

" they are. asserted, controlled, or used in consequence of an ~ ’ f

agreement that is in. restraint of interstate trade or com-

merce. Cf. United States v. New Wrinkle. Ine. 842 US,

WORE Ne 2

TI ss ES Cw 6s

C4apper v. Original Tractor Cab Company, Exhibit A A25

371, 72 S.Ct. 350, 96 L.Ed. 417. When two individual patent-

tees combine their patent monopolies and contract between |

- themselves and with their licensees to secure-mfutual bene-

fits for themselves and their Jicensees that are not given to ;

them by the patent laws, and which agreement gives te

the opposite patentee and the licensees a right of control .

over patent rights that may be asserted, and is used in re-

_Straint of interstate trade and commerce, the purpose and

result of such an arrangement and conduct is clearly in

violation of Sections 1 and 2 of. the Sherman Act. Cf. |

_ United States v. United States Gypsum Company, 333 U.S.

364, 68 S.Ct. 525, 92 L.Ed. 746; United States v. Line Ma-

terial Co., 333 U.S. 287, 68 S.Ct. 550, 92 L.Ed. 701; and United

States v. New Wrinkle, Inc., supra.

66.. The evidence shows that the impact of this con- -

Spiracy on-the defendants has been-substantial! has caused

a direct loss of customers, a shutdown in. business, and it is

inescapablé as a Conclusien ‘from all of the evidence that’

it has caused a material reduction in the potential sales of

- the defendant, Originals However the evidence before the

court upon which to estimate the loss of potential sales’ is

such as to preclude the court from relying upon it, and |

_.__.only for that reason is the‘court not able to fix the damages es

suffered by the defendants for loss of potential! sales in each.

of the years in question. :

. 67. The evidence is that the defendant, Original, sus-

tained damage as a direct result of the,actions of the plain-

tiff in concert with others. The: impact of that conspiracy

\. resulted in damages ‘to the business and property of the

_ defendant, Original. — a

. 68. The evidence shows direct loss was suffered by

the defendant, Original, in salaries, wages and other ex-

_penses of shutdown from August 22 to September 23, 1949.

; ° . _@ 7

\260 Clapper wv. Original Tracto; Cab Comfany. Exhibit A

in the total amount of $2,561.45. Defendant. Original: aiso -

claims ah average cost of $11@43 per day for eleven day

stoppage of production from November 18 to December 1.

1949, following the termination ofa working agreement with

Cabette. This would amount to $1,280.73. The defendant.

Original, also claims the sum of '$3.830 for the loss it, sus-

tained as a result of the unsuccessful working arrangement

it had with Copte from the latter part of September to on - :

or about November 23. 1949. Ne. j

In regard to the working arrangement. the court finds

the facts to be: _ «se ree: |

~ (1) that the arrangement wa&s voluntarily brought.

- about by the mutual desire of the officers of Cabette

and Original: eS .

' (2) it'wasa business expedient for both parties:

(3) its termination came about through disagree-_

ment of the parties to: the arrangement: :

~~ (4) there is not a preponderance of the evidence

to indicate that the plaintiff.Clapper and his licensees,

through any censpiratorial act. caused the termination-,, .

of the working arrangement. - ae os Ps

. ——

e- >

Accordingly, defendant. Original, is not entitled to loss

claimed for the eleven days’ work stoppage and the claimed

loss of $3.830 Trising out of the’ unsuccessful working ar-

rangement. ie: ot,

: 69. The eviderice shows that the defendant: Original, . °

had negotiated for financing for continued operation which

had to be dropped entirely by the shutdown following the

notices sent by the plaintiff in concert-with-others, in Au- -

~~~ Sust, 1949, the cost of which to the defendant. Original, was.

$317.20. which it is entitled to recover. .

_ 70., The evidpncé shows that the defendant, Original.

had expended advertising the sum of $4,563.70, which

—

Ny ~ , re Qe: Sh fs VoaeLB

ae ‘ \ : —-. » o~ eee >

aan el v. Original Tractor, Cab Company® Exhibit: A _AaT

was rendered valueless by the forced shutdown in August,

1949, as a result of said notices of infringement sent to the

.defendant:and to its distributors.

12) 7 71. The evidence’ shows that the. defendant.

‘Original, has incurred in fees and expenses obligations for.

$28,244.31 in defense of the patent infringement action in-

‘stituted by the. plaintiff and Flora as- a part of the con-

spiracy in violation of the antitrust laws. The court finds

these legal fees and experises to be reasonable for the serv-

ices rendered by counsel for the defendant, Original, in the .

defense of the patent infringement litigation, and should

be awarded to defendant’s counsel for such services. Said

sum, however, is not to be included.as an. element of dam-

ages in the antitrust Action to be increased threefold, as .

defengants-would have the court do. It is to be awarded —

counsel for the defendants by reason of their representing

the successful parties in the patent infringement action,

and by reason of the exceptional circumstances involved in

the case concerning the validity of the patent and its use

by the patentee and his licensees, all as found in these

- findings of fact. Set

[13] 72. “The e evidence shows that there has been a

direct loss of sales by defendant, Original, to Farm Equip-

- ment Sales Co. ahd Stover- Winsted’ Co.\as a. -consequence

of the notices of infringe:nent: sent pursuant to the con-

spiracy created by the: License Agreement of August 3-4,

1948. Defendant, Original, has: vigorously contended and

. attempted to show ‘that it. also sustained loss of sales to

__. Firestone r Co. as a consequence of notices -

of infringement sent pursuant to the aforesaid conspiracy.

In respect to the iatter company, the court fails to find from

the record sufficient evidence to support the defendants’

-. Claim of loss of sales to Firestone Tire & ‘Rubber Co. -by’—

» @ ¢

° .

as “428 . Clapper Vv. Original Tra tor Cab Company, Exnibit A Lae

reason of the notices -of infringement sent pursuant to the . ~

_ conspiracy. it LR ES | .

Following the’ time Stover-Winsted, Co. and, Farm

- Equipment Sales Co. stopped doing business with the de-

fendant, Original, the evidence shows that during the |

- years 1949 through the first eleven months of/1956, Farm

Equipment Sales Co, purchased from Comfort Equipment

Company 9,084 eovers. Such purchases were as follows:—

Farm Equipment Sales Co. var es er ;

Year « — Comfort Covers Purchased

» + Aelmae i ,- —————

\ 1949, - + 1,339 ,

1950 asa 2 a

1951 ee ae” aad

1952 ras Yo

1953 | Spo hee

"1954 Pa ect or

1955 . 649

1956 (11 monthsy = "45,

9.084

Following the time Stover-Winsted Co. stopped doing

business with the defendant, Original,-it made the follow:

_ ing purchases of Comfort covers from Comfort Equipment */

. Oo oe oe: = rs orcs

-Stover-Winsted Co.

Near 4 Comfort Covers Purchased

oe | i

. ~ 1950 ala. ney fal

1951 . +2361 ff. |

-~ 1952 (Jan. thru May) | 660 F

5.856

} } oo. # rhe }

“ie .

Clapper v. Original Tractor Cab-Company, Exhibit A A29,.

The evidence shows that during nf the actual .

average. net profit .to defendant, Original, gn the sale of

" _half/Cabs amounted to $1535. per unit, Accordingly, the |

| loss sustained by defendant, Original, in. respett: to the -loss

of sales to Farm: Equipment Sales Co. amounted to $12,-

263.40, and the los$ of sales to’ ‘Stove Winsted Company

amounted to $7,905.60. Where there’ is certainty as.to the

fact of damage . which is thus established, there may be

_ uncertainty as to the.amount of damages. ° It is reasonable

"to conclude that the defendant, Original> could have sold

‘ment Sales Co: and Stover-WiySted Co. had said’ companies. °

at least an equal number of Wid covers to Farm Equip-

not. ceased to’ do business with the defendant, Original, as

a result of the notices of infringement sent to them pur-

‘ suant to the conspiracy <reated -by the License Agreemeht -

of ‘August. 3-4, 1948. “Therefore the court finds that the

defendant, Original, has been damaged by reason of the

loss:of sales to said companies. in the total amount of $20,-

169.00. -. /

.73.. Thé ev idence shows that an estimate was made by a

, “the defendant, Williams, ‘president of the defendant, Origi-

nal. Tractor Cab Co., Inc.. as to the total number of tractor

that could have beeri manufactured and sold by the

, ‘defendant, Original, but for the interferefice with the ©

‘business of the defendant, Original, by the plaintiff, to-

“gether with : Flora and their licensees ‘acting in concert.

A very considerable amount of time and record was de-

voted to the explanation of the defendants’ theory upon

which the asserted right te recover for loss of potential sales

1S predicated. : Briefly and generally, the theory of the de-

fendant, Original. as explained by its president. Williams,

and its accountant, Morgan, involved the process of taking

the number of dealers the defendant, Original, had prior

* to the summer of 1949, at which time it changed i its sales

“A320 Clapper y, Original Tractor Cab Company, Exhibit A

_ Cabs. By taking the number of purchases of half /Cabs and

a ae ° ‘ oe

methods from dealers over to distributors. Williams ex-

plained he was very careful in making jis calculations in

order to stay on the conservative side. In his survey of

existing dealers, he found the were 901 dealers listed.

-; But of the 901 listed dealers hé could find only 684 cards :

. showing-actual sales to such dealers. Therefore in his cal-_

culations he used the. figure of 684 dealer.cards as the

| basis from which to test the -average potential sales. to

the established dealers. Among the 684 dealers; he

“found that. 336 had sent orders in. and had _pur-

¢hased half ‘Cabs. - The 336 dealers purchased 1,275 half

relating thém to the number of dealers who had agtualiy

purchased ° half /Cabs, he found that the company sales

amounted to three’ and eighty hundredths half/Cabs per

dealer. By relating the. company sales of half /Cabs to all

of .its dealers, he found that the- company’s average sales

of half ‘Cabs per dealer amounted to 1.86 half ‘Cabs.

After the establishment of ‘the distributorships, Wil-

-liams made a survey in order to determine the total num-

bér of dealers served by the distributors. It was found that

the distributors serviced 17,450 dealers. Commencing with

the vear 1949, the first year defendant, Original, had dis-

__tributors, and the first year of the impact of the conspiracy,

” the ‘defendant, Original, estimated the sale of one unit to

each dealer served by its distributors. Thus, it estimated

_its potential sales for the year 1949 at 17.450 units. Taking

the vear 1950.as the base year and applying the annual

- percentage growth in tractor population in the Unitéd States

~ and applying such percentages of tractor population growth

to the subsequent years to and including the year 1956, and

by applying the estimated unit sales per dealet of 1.86, de-

fendant thereby arrived at the respective total unit poten-

tial salgs for the years 1950 through 1956. Page 8A of

et een

“

Cleoper v. Origin al Tractor Cab Company, Exhibit A A31

fondant Exhibit. JJJ soli forth the computation of ‘the

number of units of potential Original half/Cab sales as es:

timated by Williams and the socountanit “ren: - hey

_ are as follows:

~ Computation of Number of Units of

-. Potential Original Half/Cab Sales

_ Tractor.

Year Population

° % .

- 1949 3,230,000

1950 3,442,000 -

1951 3,778,000_

1952 - 3,859,000

"1953 — 3:950,000 -

1954 As 122,000

1955 4,198,000 .”

1956 4,320,000

Per Cent of °

Base Year

- (1950) .

~ 10:00

109.76

112.12

114.75 -

"119.75 ~

121.96

125.50

Estimated Total Unit

Unit Sales

per Dealer

Potential

Sales

1.86

17,450

32,457

35,625*

' 36,391*

- 37,244*

38,867*

39,585*

40,734"

- 278,353

By eliminating what defendants’ -accountant deter-

mined to be abnormal operating expenses by reason of the

impact of the conspiracy and the attendant litigation, the

accountant arrived at an adjusted net unit profit per half/

Cab. By further applying the estimated unit potential sales

as-estimated by Williams according to his estimated sales

per dealer as related to tractor population growth, defend-

-ant established a different and higher net unit profit through

“Increaséd by percentage of tractor population .over “base

sear 1950.°. 6 *

A32 | Clapper vAOriginatTrastor Cab Company. Exhibit A

: 4

the commensurate savings in overhead: costs per unit due

» to the greater estimated production. By applying+ the

‘greater net unit profit to the respective annual estimated 3

potential sales,.the accountant arrived at the total dollar

profits which defendants’ claim ‘could have been /realized

on potential sales except for the impact of the conspiracy .

. for the periéd 1949-1956, which amounted to $1,364.200.10.

From .this' was deducted the actual, profit realized from

sales of half/Cabs as reflécted by the accountant's- pro-

forma earnings statement adjusted’ to eliminate .the- ab-

“normal effects of the conspiracy and litigation. The real-

ized profits from actual sales of half Cabs during the pe-

_ riod amounted. to $79,996.17. Subtracting the realized prof-

its from the total estimated profits, the accountant arrived

at the figure of '$1,284,203.93, which the defendants claim

represents the total profits that could have been realized

on the estimated potential sales except for the antitrust

violations by plaintiff Clapper, together with Flora and ;

their licensees. ; ‘ ’

[14] The court has spent numerous hours analyzing

and weighing the defendants’ evidence in regard to the.

damages sustained, and although it is convinced, even be-

yand a reasonable doubt, that the defendant. Original

Tractor Cab Co., Inc., has been damaged as a result of the’

-impact of the conspiracy of the plaintiff Clapper, and

Flora and their licensees, the court is firmly ofthe opinion

that the Williams-Norgan theory of computing the esti- |

mated potential sales, is‘unrealistic and‘is based upon as-

sumptions and conclusions which would lead the court into

too much speculation and conjecture if reliance were to be -

placed upon it. For example, in order to rely upon the .

theory, it must be assumed that each of the distributors

and the dealers included in Williams’ estimate would con-

tinuously and consistently handle and sell the Original

a -

of "a

‘sei and that they would do so ) throughout the years in-

‘valved. As a matter of fact, the record discloses that Fire-

stone Tire & Rubber Co., whose stores were included among

the 17.459 dealers, ‘completely discontinued the’ sale of

_ tractor cabs either in the year 1952 or 1968. Likewise... in

ive order to rely.upon the Williams-Morgan theory, it must’ be

assumed that all of the dealers operate in states having

~ climatic.conditions wherein tractor covers would have sales

potential. Further,.it: must be assumed.that the sales of

the defendant, Original. would consistently nee

nually and that there would be no peaks : and valleys in

annual sales. The evidence in the’ case indicates that this

- was not true in, the case of any of the defendant, Original’ Ss,

. competitors who were engaged . in the tractor cover busi-

ness in each of the years here: ‘involved. In short, the

formula upon which the defendant, Original, would have

the court find its loss of profits is so fraught with pitfalls‘as

' . towrender it completely unreliable as an aid to.the court in-.

estimating - reasonably the damages defendant; Original.

has sustained. The court must have. before it such facts

and circumstances, or comparisons, for example, as to }

- enable it te make an estimate of damage based upon judg- ( 4

ment ‘and not (upon conjecture or guesswork. The evidence |

as a whole is not sufficient: from which to draw a feason-

- able inference to support the conclusion, that except for \

. the interference with the business of the defendant, Origi-

“hal, by_ the plaintiff and Flora and their licensees, the’ de

fendant, Original, gould have sold the number: of tractor

covers indicated ‘by the estimate of potential sales with the

resultant profit claimed thereon. . ©

| [15) 74. The losses. heretofore stated resulted in

|“ " damage to ‘the business and property 6f the defendant,

| Original, as a*consequence of the illegal conspiracy of the

oh plaintiff. Clapper. and Flora and their licensees acting in

vis

SS Eee

Nasal

: :

~ A34— Clapper v. Original Tractor Cab Company, Exhibit A.

ee \. 2 }

concert. For such damage, defendant, Original, is entitled

to recover the following amounts of compensatory dam-

' ages: -:

(1) Costs resulting from forced stoppage

of production, from: August 22,. 1949 .

through September 23, 1949. ' $ 2,561.45

(2) _ Expenses incurred in finance negotia-’ .

‘tions :; 317.20

(3) Advertising costs rendered useless wx

ee reasor/ of fprced work stoppage 5 4,563.70 |

(4) Loss of potential sales to Farm Equip-

ment Sales Co. for the ‘years 1949

through the first eleven months of

~ [a gids: a 12,263.40 _

¢ (5) Loss of potential sales to Stover-Win-

sted Co. for the years 1949 through the .

first five months of 1952 °F \ 7,905.60

Tota]... ~~~... $27,611.35

75. The licensees under the Agreement of August 3-4,

1948, were added to this action as cross-defendants. : There-

after, the counterclaim was dismissed as to said: licensees

and Flora and the defendants entered into covenants not

to sue upon payment by fhose parties to the defendants

the amount of $110,000. Those covenants not to sue are

| plainly intended’ by their terms not as releases but only

covenants not to sue, and it. is expressly set out that the

amaunt paid was not satisfaction which would discharge

the liability of the remaining tort-feasor; Clapper. How- .

ever, the amount paid should be considered as a pro-tanto

credit, which in this instance, exceeds the liability of the

plaintiff, Clapper to the defendant. Original, even after

trebling the amount of compensatory damages sustained by

.the defendant. Original, as*a result of the ae his ©

y :

Clapper Nv. Original Tractor.Cab Company, Exhibit A .A35

co-conspirators’ antitrust violations. That is to say, by

trebling the compensatory damage sustained by the de-

fendant, Original, the figure of $82,834.05 is obtained. By

screditing against this sum the amount, of $110,000, the

amount paid the defendants under the covenants not to

sue, the liability on plaintiff Clapper for compensatory ,

damage to.defendants is completely liquidated. But even

though there is no further liability. on the plaintiff Clapper

for compensatory or general damages, there still remains

his ability for the pay ment of defendants’ attorney's fees

for services rendered in defending the patent infringe-

‘ ment action, which the court finds to fall within the cate-

gory of: “exceptional cases” as evidenced by the whole

of the. findings herein. As heretofore found, a reasonable

_ attorney fee and reimbursement of counse! for miscellane-

‘ous expenses: in rendefing legal service in the patent in-

fringement phases of this case is ‘the sum of $28,244.31. As

a ‘part of the judgment ‘in this proceeding, the plaintiff

Clapper will .be ordered to’ pay such sum to defendants’

counsel of record. In addition to the payment of attorney's

_ fees in connection with the patent infringement action, the

defendants are entitled. to have ard recover from the plain-

tiff Clapper, reasonable attcrneys’ fees for the services’ ot

| their attorneys in the prosecution of defendants’ counter-

claim and crosscomplaint for antitrust violations on the

part of plaintiff Clapper and Flora and their co-tonspira-

tors. Such attorneys’ fees will be fixed by. the court upon

petition, of counsel for the defendants and after hearing

thereon. &

In addition te the foregoing attorneys’ fees. defendants

“are entitled to recoveh fully the costs of suit laid out and

-expended by them in their defense tg-each cause of action |

brought against them in the five paragraphs of complaint,

and in the prosecution of their counterclaim and cross-

~ complaint for: the antitrust violations. eos

A36 Clapper v. Original Tractor Cab Company, Exhibit A

76. -The general release dated November 23, 1949, be-

tween the Cabette Company and Original Tractor Cab

Co., Inc. was executed and signed. by Cabette. but was ne;

- executed by Origimal or Williams. }

77. The-unexecuted general release Was, prepared as

and for settlement of the controversy between thé parties

thereto. It did not contemplate or involve any settlement

for violation of the antitrust laws and would not settle

such matter. Consequently it does not release the plain-

tiff from liability for damages to the defendant. Original.

78. Some evidence is in the record tending to indi- -

cate that tractor covérs sold during the werking arrange-

ment between Original and Cabette in 1949 were identified |

as “half Cabs” rather than “Original Cabettes”. as con-

templated by the parties. If this was a violation of the

arrangement between Original and Cabette. it is nothing of

which the plaintiff may complain and does not constitute,

without more, any evidence of unclean hands with respect

to the subject matter of the. counterclaim for damages for

violation of the antitrust laws. -The evidence does not show _

that the defendants had knoWledge of the illegal con-

spiracy at and subsequent to’ the meeting in Chicago on

. September 12, 1949. The acts of the defendants under the

economic duress imposed by such conspiracy in yielding

_to the pressure imposed by the conspiracy does not make

the one who thus yields a party to the conspiracy. The -

evidence does not show unclean hands on the’ part of the

defendants with respect to this action for damages.

| Conclusioris of Law

From the foregoing facts the court concludes:

1. That this court has jurisdiction over the parties and

the subject matter in this causé of action.

Clapper v. Original Tractor Cab Company. Exhibit A A37

2. The first cause of action for declaratory judgment,

having been withdrawn by ‘the plaintiff, is dismissed.

3. The-charge of unfair competition included in the

second cause of action is dismissed. -

4. The third cause of action, for false patent marking,

? having been withdrawn by the plaintiff, is dismissed.

5. There was no valid agreement between the plain-

tiff and the deféndants entered-into on September 12, 1949,

or subsequently, with respect to discontinuance of manu- -—

facture of tractor covers, and judgment on the fourth cause

fa of action for breach of contract, is entered for the defend-

ants. “ .

6. The Clapper patent is invalid.”

| 7. The subject matter of the Clapper patent was fully ©

anticipated in the art, was an obvieus adaptation, and an

unpaténtable aggregation.

8. Whether the Clapper patent has been infringed by

the defendants is moot in view of the court's conclusion

- of law that the Clapper patent is-invalid. , ;

9. The plaintiff's second cause of action is dismissed.

10.. The Agreement of August 3:4, 1948. ‘is per se

violative of Section 1 ofthe Sherman Act. ?

11. The Agreement of August 3-4, 1948, also violates.

Section 2 of the ‘Sherman Act, in that it manifestS an at- .

‘tempt to monopolize, by the combining of nonecompeting

. patents | in a single agreement by eompetitors, and gives

to the parties to the agreement veto power over patent *

rights that are not referable to their individual businesses,

or licenses granted, even though the licensees may have

continued to compete with each other, after the execution

thereof. They are. jointly given an exclusive. market and

. . . , ‘ . . .

438° Clapper v. Original Tractor ‘Cab Compang. Exhibit A

control thereover by the terms of the agreement. and not

singularly as a consequence of patent privileges acquired.

i2. A conspiracy or combination having as its object

or effect a restraint of ‘interstate ‘trade and ‘commerce.

whether accomplished by legal or illegal means, falls within .

the ambit of Sections 1 and 2 of the Sherman Act, eand }

condemned thereby. Patent rights give no protection teen

the prohibitions of the Sherman Act, when they are asso-

- ciated, controlled, or used in consequence of an agreement,

that is in restraint of interstate trade or commeyce.

13. When the two individual patentees, Clapper and

Flora, combined their patents, they monopolized and con- -

tracted between themselves and with their’ licensees. to

secure mutual benefits for themselves and their licensees.

that are not given to them by the patent laws, and which

. agreement gave to the opposite patentee and licensees. a

right’ of contro! ovér patent rights that may be. associated

and: used in restraint of interstate trade and commerce:

the purpose and result of such an arrangement and conduct

was a violation of Sections 1 and 2-of the Sherman Act.

14. The patentees and their licensees had no legal

right. to act in concert and join hands. in_an agreement

shown to be in violation of the Sherman Act, thereby re-

fusing a license to another manufacturer in the field, even

though the latter was carrying, on some business in viola-

tion of those patents.

‘15. Defendants are - entitled to recover. damages from

the plaintiff as a result of losses suffered as a result of |

actions of the plaintiff, together with Flora and their.

. licensees, and resulting to the business of the defendant, *

Original, ‘in the following amounts: +

Copper v. Original Tractor Cab Company, Exhibit A A39

(1)

Costs resulting rig forced stoppage of

production, from gust 22, 1949

through September : 3, 1949 . - $ 2,561.45

‘Expenses incurred in finance negotia- 7 ‘

; tions 317.20.

Advertising costs rendered useless by

reason of forced work stoppage 4,563.70

Loss of potential sales to Farm Equip-

ment Sales Co. for the years 1949

through the first eleven months of 3

1956 12.263.40

Loss. of potential sales to Stover-Win-

sted Co. for the years 1949 through the <a

first five months of 1952 7,905.60

Total $27,611.35

16. The damages assessed ‘nisin the plaintiff shall

be increased threefold in-accordance with the Clayton Act;

_however as against that threefold amount, the: plaintiff

Clapper is entitled to credit the sum of $110,000. hereto- .

.” fore paid

by Flora and the cross-defendants. ee sae

—_—-—

17. The covenants not to sue entered into between ~

‘the defendants and Flora and the. cross-defendants, were

not releases, and do not discharge ‘the liability of-the plain-

tiff for violation of the antitrust laws.

; 18. The defendants are not estopped from asserting

their counterclaim for damages under the Clayton Act by

the arrangement made with the Cabette ‘Company in Octo-

ber, 1949.

19. The third ‘cause of ection for breach of contract is

dismissed.

A40- * Clapper v. Original Tractor Cab Company. Exhibit A

20. Judgment shall be entered for the defendants on

the counterclaim, and in the judgment it shall be ordered

that the defendants have and recover of the plaintiff Clap-

per, attor ney fees and reimbursement of miscell ine

legal expense in the amount of $28,244.51 for the services

of defendants’ counsel in their defense to the patent in-

fringement action in this case. It shall also be ordered that

defendants are entitled to reasonable attorney fees. to be

fixed by the court upon petition and hearing. covering the

services of defendants’ counsel in the prosecution of the

counterclaim ‘and -cross- -complaint for antitrust violations

on the part of plaintiff Clapper. together with Flora and

their co-conspirators. In addition to the payment of the—

attorney fees aforesaid, the defendants shall fully recover

of the plaintiff their total costs of suit laid out ‘and ex:

pended in this cause. .

Let judgment be entered accordingly.

Correcting Entrv for January 14. 1958

~~~ After the court entered its findings of fact ‘and con-

clusions of law herein, it occurred to the court that in find-

ing and concluding that defendants were entitled to have

‘and recover from plaintiff Clapper.. reasonable attorney

fees for the services of their attorneys for prosecuting the .

‘ defendants’ counterclaim and cress- -complaint, that the

court erred invincluding services rendered by defendants’

counsel in hee of defendants’ cross- s-complaint

against the cross dants. .

Accordingly. it is now ordered that the findings of fact.

and conclusions of law heretofore entered by the court in .

this, cause be amended to exclude from consideration, at-

Z torney fees for defendants’ counsel covering services ren-

dered in the prosecution of the defendants’ eross-complaint

against the cross-defendants. That is to say, the attorney

—

charges for services on the ‘antitrust cause of action.

Clapper v. Original Tractor Cab Company. Exhibit A A41

fees to be allowed defendants’ counsel. in connection with

the prosecution of the antitrust phases of this action will

be limited to services rendered upon the Getentams coun-

- terclaim:

Memorandum

_ July 9, 18

STECKLER. Chief Judge.

This cause is now, before, the court upon the following

matters: |

(1) The fixing of attorneys’ fées | to be awarded de-

fendants’ attorneys for ‘Prosecuting the counterclaim for —

antitrust violations. Sheers . 2 .

(2) Motion of defendants for admission of attorneys’ )

itemization.

(3) Motion of pigintit for an order requiring defend-

ants’ counsel, John F, Linder, to file an itemization of h®

(4). Motion of defendants to amend findings of tect

and conclusions of law.

(5) Plaintiff’ s post-hearing brief anent attorney fees,

— and motion to: amend findings of fact and conclusions of

law, etc.

(6) Plaintiff s objections to defendants’ bill of costs.

(7) Motion for production or for leave to take addi-

tional depositions.

(8) Motion for admission of plaintiff’ s Exhibits 199

and 200. : a

Since the list two above mentioned motions go- to the

matter of admitting additional evidence into the record, the

3 _—

“

Ad? Clapper Vv. Original Tractor’ Gab Company. Exhibit A’

court deems it advisable to take up and dispose ‘of such

motions before turning to the other motions. * ’

On May 2, 1958. plaintiff filed his motion for an order

- requiring defendants to produce, for inspection, photograph-

ing and copying, all: written: documents, instriiments and

agreements made or entered into contemporaneously v with ;

plaintiff's Exhibits 172 and 173. containing any other terms

_or conditions of the settlemert agreement. etc. ( privileged

_ communications “between - _attorney and client to be ex-

' cepted): or in the alternative, for an order permitting:

plaintiff on five days’ notice to take the deposition of anv

one or more of the parties listed in paragraph IV of the

motion for the purpose of establishing the existence of the —

“hitherto undisclosed terms and co conditions of the settle-

ment,” a. a

Since the defendants made satisfactory ‘voluntary pro-

duction of the documents sought (plaintiff's proffered Ex-

hibits 199 and 200), the motion for; production or the alter-

native request for depositions are now moot ind of course,

: the court will make no ruling thereon. ;

On June 9. 1958, plaintiff filed his motion for: admis-

sion of his preffered Exhibits 199 and 200. The court has

carefully considered i this motion, including the contents and

substance of the exhi its which were attached thereto

(plaintiff's proffered Exhibi s_199 and 200). After such

_ consideration ‘and a further re-evaluation-of the evidence,

‘including ‘the settlement agreement and the covenant not -

to sue which were entered into with plaintiff's co-conspira- -

tors, the court is-of the opinion that nothing would be -

gained.on the part of the plaintiff through ‘an admission.

of plaintiff's proffered exhibits: and that accordingly the

motion should be and the same. is hereby ov erruled. “——

. . . x .

° . .

eel vas x) we

*% - - ' :

‘ Clapper ¥. Original Tractor, Cab Company, Exhibit A -A43 |

' The court will stand on ité prior ruling whereby it has

found that the plaintiff has not been released as a tort-

feasor by’ the terms of the. settlement and covenant not to

“sue executed by the defendants in«connection with their

settlement with the other alleged joint tort-feasors. --More-

over, plaintiff's ‘proffered “Exhibit 200, the waiver and _re-

lease of attorneys’ lien, would not ‘give aid to the plaintiff

in his contention that he is absolved from payment of at-

torneys’ fees by reason of his claimed release based upon

this construction of the covenant not to sue. The waiver

and release of attorneys’ lien amounted to no-more than.

what it purported to accomplish, i.e., to cause defendants’

counsel not to look to Comfort Equipment Company, Burch

Manufacturing Company, ‘€ab-Ette Company and.Lee Flora,

plaintiff's co-conspirators, for the payment of any fees what-

‘ soever, in any of the then pending litigation in three differ-

ent district courts, in consideration of the execution of the

agreement of settlement. The defendants, Williams and

Original, were not parties to the waiver and release of

attorneys’ lien. Only their attorneys had such a lien to

waive and release. Surely plaintiff cannot seriously con-

tend that by such action on the part of defendants’ counsel,

the defendants are now precluded from recovering as a

part Of.their statutory remedy, a reasonable attorneys’ fee

and costs’ as. provided by the antitrust faws. Such-an argu-

. » ment seems frivolous beyond words when considered in the

_ light of the éntire record in this case. Suffice to say that

this court /relieves that-the defendants as parties litigant

- are — to recover ‘a reasonable attorney fee for

the use’ of their attorneys against their remaining defeated

adversary in this long and expensive litigation:

~{1] The court will next take up the matter of fixing

the attorney fees to be awarded defendants’ attorneys for

their: serv’ ices in: prosecuting the counterclaim for damages

’

A i

A44 Clapper v. Original Tractor Cab Company. Exhibit A

sustained by defendants as a result of a" s’V iolation of. *

the antitrust laws.

Defendants’ counsel have submitted evidence by way

of expert. testimony and, itemized statements tending to

show that they have earned attorneys’ fees for services in

- _ their antitrust cause of action totaling $141 035. This thev

are claiming in addition to the attorneys’ fees in the amount >

of $28,244.31 @eretofore fixed by the court for their serv-

ices im the defense of the patent infringement action.

The ‘court hdawarded compensatory damages to the

defendants in the amount of $27,611.35 which, when trebled.

‘amount to $82,834.05. Against this sum has been credited

$110,000 received by the defendants from plaintiff's co-

conspirators fora covenant not to sue.- Thus the court

now finds what remains to be done is the fixing of de-

fendants’ attorneys’ fees in the antitrust phase of the law-

> suit. ni

The court has carefully considered the evidence and

post-trial briefs relating to attorneys’ fees in the antitrust

cause of action. The court is not unmindful of the com-°

plexities of the case, nor of its far-flung reaches. The case

has been in process for over eight years and has consumed

* hundreds of hours of the court’s time. Nor is the. court

overlooking the fact that. it is convinced that this action was

brought as a furtherance of the conspiracy, which the court

believes had its inception prior to the granting of the patefit,

~in issue. Notwithstanding all-of this, the court_is bound.

by the authorities relative to the matter of ee torney

. fees in this type of action, particularly the rule as followed |

in the Seventh Circuit. See Milwaukee Towne Corp. v.

Lowe’s, Inc., 7 Cir., 1951, 190 F.2d 561. See also Twentieth

Century- Fox Film Corp. v. Brookside Theatre Corp:, 8 Cir.,

1952, 194 F.2d 846.

Clapper v. Original Tractor Cab Comp,

J Exhibit A . A45

With the’Milwaukee ‘Towne Corp, fase as a guide, the

court concludes, and ‘therefore finds. that the request

for attornevs’ fees in the amount of $141,035 for

services of defendants’ attorneys in- the anti-trust -

cause of action, does not bear. a..realistic relation tg

the amount of compensatory damages awarded. With re-

gard to this finding, the court is not in accord with the

views of. the defendants whereby they would have the

court include as a part of the basis of compensatory dam-

ages, the amount of $28,244.31, the attorney fees fixed for

their services in defending the patent infringement action.

No convincing authority has been ‘shown to. support their

position in that regard. Nor does the court agree with the -

defendants in respect to their position that the court ought

‘to readjust the credit allowed: on. the damages awarded:

Defendants would have the court deduct their expenses

and claimed attorneys’ fees in connection with the venue

issue from the $110,000 paid defendants pursuant to the

covenant not to sue, using the balance as a credit against -

the trebled compensatory damage. Likewise, AS in their

claim that the attorneys’ fees for defending the patent ac-

tion should be included as a part of the compensatory dam.-

age in computing the treble damages, they have shown no

authority to support their. position and the afer has been

unable to find any.

Approaching the issue of attorneys’ fees ‘from the

_ other side, plaintiff would have the court disallow: all fees

for defendants’ attorneys prior to the entry of December:

14.' 1954, the order of dismissal, whereby the complaint

was dismissed by Flora as against the defendants, Williams

and Original, and the counter-claim and cross-complaint

dismissed by Williams and Original against Flora, Com:

. fort, Burch and Cab-Ette. This is on the theory that at-

_ torneys’ fees are to be included as part of the costs and

that item four of the otder ‘of dismissal provides, “That”

. / > . . R |

a : - ° ° 4 : ;

Me a les v. Original Tractor Cab Company, Exhibit A.

* no costs be “awardéd_to to any party litigant designated in .

7 this order, the respective. parties litigant bearing their own

‘costs.’ This theory, as so many others proffered by plain-

tiff, at first’ blush might seem to have some merit, and.

the court is not wholly ignoring it. But the plaintiff does

not stop there, he goes on and asks to be completely exon-

‘erated from payment of all costs and attorneys’. fees ‘in-

curred during the three-year period devoted to the venue

issue involving his co-conspirators and the appeal taken

from the order of. this court in respect thereto. He would

have the court believe his hands are stainless of the part.

he played in. the conspiracy. During that time he was as

much of a litigant in the antitrust cause of action as at

- any other time throughout . the long course of thig. con:

troversy. It was he who reaped the. greatest vesisteliibten é

the conspiracy. The presence of the co-conspirators before

the court, more than anything else, made it possible for

the court to ascertain the true gelationship between them

and ‘the plaintiff and thtis the existence of thé conspiracy.

Not only that, it should be borne’ in mind that the District

Court for the Western Diétrict of Missouri, on October

» 27, 1953, jhad “enjoined and restrained the plaintiff ftom

instituting any proceeding, judicial ow administrative, for

infringement of plaintiff's patent alleged to have occurred

prior to such date: It can be concluded from that injunc-

tive decree that the Missouri District Court intended to

- Jar deprive the plaintiff of the fruits of his patent during the

; period of the existence of the conspiracy, which this court

has also found to have existed prior to the Missouri Dis-

# trict Court action. And this court has found’ that by the

, bringing of this. action in the Southern District of In-

diana, the conspiracy, wa rthered, that this action was

a part of ‘the conspirators’ scherne to effectively carry

forth their conspiracy and help bring it .into complete:

fruition. Why the Missouri District Court made no men-*

@: :

” !

Clapper v. Original Tractor Cab Company, Exhibit A Aai

‘tion in its decree of the “maintenance” of any pending

_inffingement action at the time of its decree is -unex-

plained. But to say the least, it is not logical to believ#

that that court intended to exempt this action inthis dis-

' trict Merely because .it had een brought prior to the date

of its injunctive ‘decree. Since there is no conclusive, evi- ,

dence-on this point before this court, it is assumed ‘that

the Missouri District Court, out of judicial conservatism

and comity, left the matter of the pendency of this action

to ‘the discretion of this court ‘in view of the pending

counterclaim and cross-complaint. The decree there was

a consent decree withgut the benefit of findings of fact -

and ‘conclusions of law. Certainly the spirit of that court's

decree wduld digtate that this action for patent mfringe-

ment: especially in view. of the record in this proceeding,

should have abated at the time of that decree. Instead of

withdrawing the” complaint for: patent infringement, the ©

plaintiff ‘and his co-conspirator, Flora, chose to pursue the

action beyond the date of that decree, even though they

knew it was a remnant of theix earlier conspiratorial

‘ ¢ ' a

‘

actions. * ¥

Of course the plaintiff does not agree with such a

construction of that decree. 4nd the court here being some- .

what in doubt as .to its: full meaning, concluded that this .

entire litigation should be heard on the. merits.” Except

for such doubt, this court should have dismissed the com-

plaint here in suit. ea ti ode

With the foregoing in mind, the court cénéludes that

its order of December 14, 1954, did not relieve plaintiff

from payment of a just portion of the attorneys’-fees and

costs during the pendency of the venue litigation. Out of

* fairness, however, the court. should not fail to consider as :

a weight factor in determining a reasonable attornéy fee

- for defendants’ attorneys in’ the antitrust Aitigation, the

. . ec

4 .

- ‘ ?

. »° e

.. ~~ ¢ °

A48 Clapper Vv. Original Tractor Cab Company, Exhibit, A —_?

- recovery made. and the attorneys’ fees received in connec- -

tion with the $110,000 paid by plaintiff's. co-conspirators.

Though .the arrangement between defendants and their

“counsel was a private one, not prenenee to the.control of

the court at the time of payment, nonetheless, it cannot be

altogether ignored in the separate matter of assessing at-

torneys’ fees at this time.

Therefore, considering the evide: ice in the light ‘of

the court's first-hand knowledge of much of the services

performed by defendants’ attorneys, and the value thereof,

the court finds that a reasonable fee fer their combined

services should be, and is hereby fixed in the amount of

$25,000. As to the division of such amount, ‘counsel will ‘be

left to their own discretion.

The court is well aware that this sum. 1. represerits Fust

a little less than the compensatory ‘damage found to have

been sustained by defendafits, but except for the difficulty

of proof, it is ventured that the actual damage suffered -

as. a direct result. of the Violation of the antitrust laws

by the plaintiff and his co-conspirators would have been —

found to be far greater.

Motion of Defendants for huidiaiilaan of Attorneys’ Item:

ization, and Motion of Plaintiff for an Order Requir-

' ing Defendants’ Counsel, John.F. Linder, to File an

Itemization of His Charges, for Services on the Anti-

trust Cause of Action

Since the.court has now .disposed of the matter of -

fixing the amount of attorneys’ fees for the defendants’

attorneys in prosecuting the antitrust cause of action, the

motion of defendants for admission of attorneys’ itemiza-

tion, and motion “of plaintiff for an order requiring de-

fendants’ counsel, John F. Linder, to file an itemization’

‘of his charges, are considered to be moot. .

. . ’ < * “ °

= ‘ *

Clapper v. Original Tractor Cab Company - exfiibit A A49

| Motions to-Amend Court's Findings of Fact and.

| Conclusions of Law Ia

Next the court turns to the respective motions filed

by. each side for amendment of the court's findings of

fact and conclusions of law. Their motions and supporting °

briefs have been carefully read and considered. After such

consideration ‘and further review of the pertinent parts

of the record, the court concludes that it will stand on the

findings of fact and conclusiags of law heretofore made.

Plaintiff's Objections to Defendants’ Bill of Costs

’ The court now turns to the plaintiff's objections to

the bill of costs submitted by the defendants. Their_ bill

_of costs was. filed on January 27, 1958. On February lM,

-- 1958, the plaintiff, filed; objections thereto. Due to “the

complex issues involved, many of which were previously

argued, the clerk of the court made no attempt to tax the rts

- costs. Therefore, this matter is not being considered on

’ review of the actions of the clerk, but by the court in the

first. instance.

The bill of costs totals $39,257.26, and. with certain

minor exceptions, the’ plaintiff objects to the whole thereof. |

.Following is a categorical breakdown of the items listed

in the original bill of costs:

Item 1 Fees of the court reporter for all or any

‘part of the transcript necessarily obtained

a for use in the case. $ 1,453.76

Item 2 Fees for witnesses (28 U.S.C. § 1821) _ 75.28

Item 3 Fees for exemplification’and copies of pa--- ~

pers necessarily obtained for use in case 207.98

Item 4 Docket fees under 28 U.S.C: 5.1923 > «* ie

* Item 5 Costs incident to taking of depositions “1,077.09

Item 6 Schedule I—Services, travel and telephone

. expense of defendant Williams | 27,189.53

A50_ Clapper v. Original Tractor Cab Company, Exhibit A

Item 7 Schedule II—Travel and telephoné ex-

, penses of defendants’ attorneys 3,979.17

Item 8 Schedule III--Expense for services of de-

fendants’ accountant 4,950.00

Item 9 Schedule [V—Miscellaneous costs of certi-

fied’ copies of Patent Office records and —

notary fee. - * 251.95

- $39,257.26 |

Since filing the original bill of cost. defendants were:

ordered to itemize with greater particularity Items 1,°3

and 5 of the bill. In their response 0 that order, which.

incidentally was not a satisfactory response and therefore

required an additiona] itemization defendants called the

court’s attention to “slight differences” in the amounts of

court reporter charges and deposition charges, and asked

that the amounts as set forth fo such items in the original *

the sum of $1,733.64 for —

bill of costs be changed to sh

court reporter charges, and the sum of $1,050.04 for costs

incident to taking of depositions. After such correction,

the total amount of the bill of costs wouid amount to

$39,510.09, an increase of/$252.83. However, it is apparent

' that these figures must further be amend:d in view of:

defendants’ “Further /Itemization of Costs” which was

filed on May 20, i958. According to the last itemization,

the charges for court reporter amount to $1.688.73, and ..

the costs incident to the taking of depositions amount to —

$1,049.64 The gourt will therefore treat the bill of costs

to be amended as requested and -according to the latest

_ itemizatign amounting to $39,464.78.

_ Before taking up the objections to the various items

in the bill of costs, it wotild be helpful to the parties if

the court would set aright what appears to be a misgiving

on the part of ‘the defendants with respect to the meaning

' oft certain language used in the court's findings of fact

Clapper ‘v. Original Tractor Cab Company, Exhibit A ‘A51

and conclusions of law dated January 13, 1958. In its find-

ings and conclusiohs, the court stated, “In addition to

the payment of attorneys’ fees aforesaid, the defendants

shall fully recover of the Plaintiff. their total ‘costs of suit

laid out’and expended in this cause.” This was not the

best choice of words in view of what the court ‘had in-mind

at the ‘time. The court intended merely to have the stat-

utory costs, includ... the reasonable costs, incident to the

taking of depositions, assessed against the plaintiff. It was

not the intent of the court to go beyond what is normally .

‘and customarily included in the assessment of costs in

thas type of action. Therefore a great bulk of the de-

-fendants’ bill: of costs will be disallowed in fixing the-

costs to be taxed against the plaintiff.

Perhaps it would also be well at this point to dispose

of certain objections ‘which the plaintiff interposes and.

which flow to the question ° of whether the.defendants _

should be permitted to recover any costs after the date.

‘of the settlement with the plaintiff's’ co-conspirators, and

to the question of whether plaintiff should be taxed with —

any of the costs incurred in connection with the trial and

disposition of the issue of venue. These objections affect

all of the items of costs and must be considered in addi-*

tion to the specific objections to the respective items. ,

Plaintiff says that by reason of the terms of the agree-

ment made in connection with the execution of the cov-

enant not to sue and the order of the court of December

14, 1954, approving the simultaneous dismissal ‘of the

complaint .on behalf of Flora as against. the defendants

Williams and Original, and the counterclaim and cross-

complaint on behalf of said defendants as against Flora,

Comfort, Burch and Cab-Ette. he. the plaintiff, is exon-

erated from the payment of \costs. Then, moreover, ‘the

plaintiff says he took no active part in the trial and dis-

AS2—€tapper+-Original Tractor Cab Company, Exhibit A

. position of the issue of venue. He says that during. the

period “from the spring of 1951 through the fall of 1954

the: venue dispute occupied the stage; with the Clapper

issue completely sidetracked.” He claims. that he’ did not

participate in .the long venue battle. in any way; that

during the long period of delay the battle was confined to

the defendants on the one hand and the cross-defendants

on the other."

cS)

The settlement agreement which was..made’ at the;

time the covenant not to sue was given by the defendants

to’ all of the co- -conspirators, except the plaintiff Clapper.

provided that the dismissals “shall be entered without

an award or payment of costs:* * * all parties paying ,

their own _gosts.””

' The court's order of dismissal of December 14, 1954,

specified, “4. That no costs be awarded to any party

litigant, designated in this order, the respective parties —

litigant bearing their own costs.” In view.of the terms of

the agreement and the court's order of dismissal, plaintiff

concludes that the defendants. are thereby bound to bear

their own costs up to the date of the order, December 14.

1954. Now in addition to, the foregoing, plaintiff further

contends that he is in fact released from all liability be-

cause the. agreeinents and the covenant not to sue consti-

tute a legal release of plaintiff’s joint tort-feasors, and by

operation of law, he too is released. ~

A similar position was taken by the plaintiff in his

opposition to the matter of awarding attorneys’ fees to

defendants for the services of their attorneys in the anti-

trust phase of this case. What the court has said in that

regard will not be fully repeated here. The court disagrees

with the theory of .the plaintiff, first, because throughout

the pendency of this action ne plaintiff has been a most

Clapper v. Original Tractor Cab Company, Exhibit A “A53

active litigant in the antitrust phase of the suit: Actually

that phase of the suit has overshadowed the patent in-

fringement action, both from the activities of the plaintiff

and the defendants. Had it not been for the fact that the

plaintiff's co-conspirators were brought into this court, thes. »

scope and effect of the conspiracy might never have been

known. Plaintiff's argument that he took no active part

in the case during the venue battle does not bear weight.

|2| Plaintiff seems to take the position that since

he did not participate in the venue dispute as much as the

other: litigants, he should only be taxed, if at all. in-pro-

portion to the extent. of his participation. Bearing in-mind

‘the court has found him guilty of violation of the anti-

‘trust laws, there is no logical reason why he, as one of

the joint-wrongdoers, should riot be held accountable for

the full amount ‘of the court costs. It is only in rare Cases

where one of several joint-wrongdoers is absolved from

full liability for court costs. In the case of Vrooman Vv.

-Penhollow, 6 Cir., 1911, 186 F. 495, 496, a patent, in-

fringement action, one of three defendants made a motion |

that the costs adjudged against them be distributed among

them in proportion to the extent of their participation in |

the infringement complained of. In the trial below, the

' evidence was scant as to the extent of the participation of

this particular deféndant in, the infringement. This minor

issue received little attention during the trial because. of

the larger contest over patent infringement. In denying

the motion of the-complaining defendant, the court said:

“It is apparently true that in some rare cases

where there were several wrongdoers, some of whom.

had participated in doing the wrong only in a trivial

or almost wholly unrelated manner, the court has

- exercised its discretion in their favor and cast the

heavier burden of’ the costs to which all are liable

AM Clapper v: Original. Tiacton Cab Company. Exhibit A

upon the Rise guilty parties, But such cases ure ex

ceptions to the general rule upon very special cir -

cumstances. We think the °position which Baker has

taken and held in this matter has not been such as

ought to induce the court to exercise its’ discretion

in his favor. We have the conviction,that he Was the

_ most potent factor in the infringement dnd that’ 7

was mainly because of his countenance and encour-

~~ agement that” the other defendants persevered 1 a

And so it was in the case at bar. The plaintiff Clapper

was the dominarit figure in the conspiracy. He stood to

gain the most and did gain the most from the fruits of the

joint-wrongdoings. How. then. can this court. exercise .

its discretion in his favor and shift the costs incident to

the venue question over and upon the successful defend-

ants? Certainly not merely because the plaintiff says he

did not participate ery much in that part of the litigation.

The terms of the agreement and the order of dismis-

sal of December 14, 1954, do ‘not preclude at this stage of

.the litigation. the taxing of the defendants’ costs against

the plaintiff. Plaintiff was not a party to the agreement .

‘nor the covenant not to sue, and he was not included in

the order of dismissal. Nor did the court by entering the

order of dismissal intend it to have the legal effect plain-

tiff now claims. The-cotirt kaows of no rule or theory

of law that would preclude the defendants from agreeing

wit a part of the other litigants that they would bea:

their own cests up to the time the covenant not to sue

was executed and the dismissal entered, and look forward

to an ultimate recovery of such cests from their Femainin:

ae defeated opponent, should * they ‘be successful. Whethe:

the court in assessing costs under such circumstances

should take into account the prior. consideration paid for

the covenant not to sue, seems to -be a matter to be left

to the sound discretion of the trial court. °:

Clapper v. Original Tractor Cab Company, Exhibit A A55

‘Throughout plaintiff's argument he fails to draw a

distinction between such costs as should be awarded the

successful defendants in connection with the patent in-

‘fringemeht issue, and the costs ‘which should be awarded

in regard to: the antitrust phase of:the case. Keeping. ir’

mind all of the issues in this action, it 1s doubtful whether

such a distinction can be accurately drawn. The court,

--therefore, must \ weigh and evaluate the respective items of

cost and: the objections "made. thereto, whether such items -

were incurred prior or subsequent to the dismissal. as

- against the other parties, or whether in connection with

the. patent or antitrust issues. — —

The court has previously ruled that the agreement

and covenant not to sue did not constitute a legal release

but was only a covenant not to sue.

’ {(3| . For these reasons the court now belts that the

plaintiff has not been relieved of paying the defendants:

legitimate costs of suit.

{4| The court will now deal with the items of costs —

as they are listed in the bill of costs and consider ‘them in

the light of —" epeion.

f- az ° oe

Item a A at

“ees of court” reporter for. all or any part of the

transcript’ necessarily obtained for use in the

case-— ; ; - ° $1,688.7

Plaintiff ohjects generally to the allowance of this item

but particularly objects to the assessment of any costs

‘against the plaintiff for am extra copy of the transcript

of the testimony taken during the trial. Plaintiff ‘argues

thatsuch extra ‘copy of the transcript was merely for the

convenience of counsel and therefore not necessarily ob-

tained for use in the case. By inference. plaintiff also ob-

—

~ AD6 " Clappei Vv. Oryinal Tractor Cab Company. Exhibit A

jects to: the cost of the original’ stenogr: aphic transcript

furnished the court. This is of the premise that the court

_ did not order a.transcript of the evidence. Plaintiff. for

“authority in support of the first. proposition. cites Hope

Basket Co. v. Product Advancement Corp.. D.C Mich.1952.

104 F.Supp. 444; Department of Highways v. McWilliams

Dredging Co.. D.C.La.1950; 10 F.R.D. 107: - Kenyon v.-

Automatic Instrument Co.. D.C.Mich.1950, 10 F.R.D. 248.

Stallo v. Wagner, 2 Cir.. 1917. 245 F. 636. For his second

proposition, plaintiff cites and relies upon Firtag v. Gen

dleman, D.C.D.C.1957,.152 F.Supp. 226: Marshall v. Seuth-

ern Pacific Co., D.C.Cal.1953. 14 FRD~228. ‘and Cooke

. Universal. Pictures Co., D.C.N.Y.1955. 135, F.Supp. 480.

nits a reading of these and other _ cases, one thing is

made abundantly clear; the fixing and allowing of court

costs vary. indifferent districts and according to the ju-

dicial discretion of the various judges in view of the |

varying circumstances in the respective cases. Of course

_ there are generally fixed standards which should be fol-

lowed, but in each case» the. matter of dllowing costs ”

must be determined according to. the or | favs and:

circumstances.

'5! In this court it has been a custom of long stand-

ing, amounting to an un€ritter, rule, that. in any Case ,

when a party orders a transcript of the evidence. the

original transcript must be furnished the trial judge and

the expense thereof must be borne by the party ordering

the same, or. as the court ‘otherwise directs. In the case

at bar, since the court early in the proceedings made i

known to counsel that in view of the complexities of the

case they would. be -required to prepare and subm't pro-

posed findings of fact and conclusions of law. it is nothing

more than reasonable. that counsel and the parties should

have anticipated the need of. a transcript of the evidence’

. 2s

Clapper v. Original. Tractor Cab Company. Exhibit A A57

and the cost incident thereto. Therefore the court con-

cludes ‘that defendants are entitled to recover as costs in

this proceeding their expenditures toward the cost of the

_ original, stenographic transcript of the evidence and min-

utes of the trial. Also, the cost.of one copy for the ‘use of

their counsel in the conduct of the trial and in the post

trial procedures which were required by the court. The

‘court will not, however, order the plaintiff to.pay the

costs of reporters’ fees and charges for transcripts of oral

arguments which were had at various times through the

‘pendency of this- action. ‘Such transcripts, it is felt, were

principally for the convenience of counsel and should be

borne by the party requesting them.

With these pronouncements as a guide, the following

costs under Item 1 of the bill of costs will be taxed against

the plaintiff, but in respect t6 all other costs thereunder

the plaintiff's objections are sustained:

May 18, 1953:

Walene E. Shields Transcript. from

‘trial of venue. One-half of cost of

original (391 pages) 23) 107.5%

One-half cost of two copies @ 25¢ per

‘page ($195.50) : 97.75 .

Postage ° 1.44 ©

$ 206.72

June 11,

E. Clifférd Powell Daily copy (car-

bon) of trial June 3, 4. 5. 6 57 869.

pages (A 40¢ . pana! * . 347.60

17 pages index @ 80¢ | 13.60

361.20

ASS ‘Clepee: v. Original. Tractor Cab Company, .Exhibit A

August 10, 1957

E. Clifford: Powell Transcript of trial,

6 20-28 957 -1,481 pages @ $1.05 1,555.05

26 pages index @ $2.10 * 54.60

1! days reporter @ $25 — 37.50. Ps

One-half due by Original aoa - $23.57

— italia

Total Allowed—Item os ' $1,391.49

Item 2

; Fees for Witnesses (28 U.S.C. ¢ 1821)—$75.28

| ate

[6] Plaintiff objects to the tines Ye this item ~

.of costs except with respect of Ralph L. Morgan—$19.20.

» Ray Steffey—ss. 62. and Harold B: Hood—$4.00. As to.

the witness fee and mileage for the defendant Williams.

‘plaintiff. points out that he being a party to the action

and a real party in interest, attended throughout the whole

~ of every day of both sessions of the trial, and actively

participated_in the management thereof: that therefore he

did not, in other words,attend_mere! ly as a witness. Such

being the case, the claimed witness fee and mileage for

him is not allowable. Plaintiff. cites Barnhart v. Jones:

D.C.W.Va. 1949. 9 F._R.D. 423: Picking Vv. Pennsy}vania R.

~ Co., D.C.Pa.1951, ll F:R.D:- ‘71; Ryan v. Arabian Ameri-

can Oil Co., D.C.NY. 1955; 18 F.R.D. 206: and Tvuek v. Olds.

D.C.Mich. 1886, 29 ‘F. 883. ,

~|7I Similarly. as-to the witness fee for defendants’

counsel, Messrs. Swecker, Linder and Earnest. plaintiff

argues that sincé all of them’ were attorneys of record in

this case and activ ely participated in the conduct of the

“trial, they should not be permitted to shift position from

counsel table to witness chair and thereupon be entitled

to witness fees: The court agrees with the plaintiff.: Ac-

cordingly only the following costs we be allowed under .

Item 2 of the bill of costs:

. \ a ‘

Clapper v. Qrigmal Tractor Cab Company, Exhibit A A59 .

Ralph L. Morgan. < | $19.20

Ray Steffey eis 8.62

Harold B. Hood - St

Total jadi tage “ee pee $31.82

Item 3° | | |

\ :

Fees for exemplification and copies of papers necessarily

obtained for use in case—$207.98 i

\ [8] To this item the plaintiff objects because there

has beén, no itemization of. the amount sought. Plaintiff

reliés upon Judge Hincks’ ruling in Perlman v. Feldmann, 4

D.C.Conn.1953, 116 F.Supp.’ 102, 112; There, upon timely

objection, Judge Hincks disallowed/an item of costs .cov-

ering the making of copies of unidentified documents. This

court would be inclined to rule sirhilarly on the item here

at hand except’ for the’ court's own knowledge of the”

manner in which. the parties dealt with each: other in

providing copies of the very great number of letters and

documents. hére involved. The court recalls the many

conferences and informal agreements among counsel with

respect to furnishing each. other documents or copies of

- documents... Admittedly it would be far better for the

problem now presented if “the defendants had kept an

“itemized list identifying ‘each letter, invoice, circular, cata-

log page.. work sheet, etc, which they had reproduced,

with a further explanation as to how it was used in the

“case. | ‘ P :

Counsel for the defendants point out that this item

covers photostatic and other reproduction costs of literally

hundreds of letters, invoices and many different types

and kinds of papers for use in this case only. A part of

the cost- here involved was: actually paid Mr. Scofield,

counsel for plaintiff. for copies of the Clapper letters that

———

A60 oo lapper v. Original Tractor Cab Company, Exhibit A

he furnished. Defendants say that when the plaintiff de-

- manded and received large quantities of records taken |

from the defendant, Original, letters, invoices, _ purchase

orders, shipping notices, etc. »/photostatic copies were made

of those and the cost theréof. is here: included. Couasel

for the defendants say it would be the work of supereroga-

tion to list all of the many documents thus copied, even

if the court had the time to read such a list. In other

words, it would be. beyond what is required. The court

agrees. oe bal

In view of the court's own ksiowtudap of the many,

many documents used in the case, and since this is a matter

within the court’s judicial discretion, And further ia view

of the oath of defendants’ counsel that the item of $207.98

_is correct and necessarily incurred in this action, this

of costs will be ordered taxed. |

Amount of Item 3 Allowed "$207.98

Item 4

Docket fees. under 28 U.S.C. § 1923—$72.50

*|9] Objection is made on the basis that this lump

—sum_item is not broken down. Defendants in their brief

say that they filed twenty-one depositions and are charg-

ing merely the $2.50 statutory fee per deposition. The-_re-

maining ‘portion of the $72.50 item represents the $20

statutory attorneys’ docket. fee.

In this court no charge is ever taxed by the clerk

for filing a deposition. The attorneys’ docket fee will be

allowed as a part of this item.

Amount of Item 4 Allowed mae : $20.00

in)

‘DS

Clapper v. Original Tractor Gab Company, Exhibit A A61

“ Item 5

Costs incident to taking of depositions—$ 1,049.64

_|10| Quoting the plaintiff. his objection to this item,

is as follows: ° - : . re

“Most of the items under the heaijing ‘Deposi-

tions’. reflect disbursements made in 9 and 1952,

and these of course cannot be allowed in view of the

’ court’s order of December 14, 1954-requiring the de-

fendants,to bear their own costs as to all m tters up

to that date. Some of these deposition expenses would

not be allowable for the further reason that they were .

discovery depositions not introduced into evidence in

- the case. Insofar as the amounts reflect disbursements

for”carbon copies ‘of depositions obtained by _piain-

- tiff's counsel for their own convenience (the original

ing on file With the Clerk), no allowance for the

Plaintiff goes on to object to the tems of ‘expense

covering tthe depositions of the plaintiff Clapper, and the

defendant Williams, and also the expense of the carboy

copy of the deposition of McVicar taken at Bloomington,

Illinois. cr , :

| a |

‘Insofar as the-objection. is based on the court's order

of December 14, 1954., by reason’ Sf what the court has

previously said in this memorandum, it -follows that the

“objection must be oyerruled. As to the expense covering -

the extra copies of the various depositions, the court is

firmly of the view that it was not merely convenient for

counsel to have them. but it was imperative that they

have them. This case, in the experience the court, stands

ut singularly. Never before has the court witnessed such

vehemence on thé part of counsel.and the parties. Through-

out all the proceedings there has been an absence of the

customary trust and professional reliance a court is ac-

- fe :

opy would be proper.” ;

PY prope y : oF

A62 Clapper -v. Original’ Tractor Cab Company. Exhibit A

customed to see on the part of counsel. Not infrecuent!y,

accusations of misrepresentation, falsification and fra: du-

lence have been leveled by counsel at each other. From

their conduct and lack Of trust in each other, there shoul:

be little wonder as to why they wanted copies of every-

thing, includgps every statement made during their oral

arguments.

the court is of the view that the extra’ copies of the depo-

sitions were reasonably necessary fer thé use of counse!

in this case. This applies both with respect to the pre-trial

procedures and in connection with the trial and post-trial

procedures. Therefore, the court holds that defendants are

entitled to recover the costs incident to the taking of the

depositions listed in the itemization of this item of ‘he

bill of “wosts, including one curbon copy. Moreover, the

court recalls how often. it was required to call upon coun-

sel to brief and -argue certain points which necessarily

required reference to the. various depositions. 7

The court? although with some reluctance, agrees with

the plaintiff in his objections to the costs of the depo-

sition of the plaintiff Clapper taken by the defendants and

the cost of the carbon copy of. the depgsition. of the de-

fendant. Williams. It is felt that these depositions ‘fall

largely within the rule preeluding the recovery of’ ‘he

costs pf depositions taken solely for the converiience of

counsel ..in ‘the . preparation of their case. Consequently.

these two items of expense will nat be allowed as a part

of ‘defendants’ bill of costs. a

‘Therefore, as to Item 5 of. the bill of costs, the court -

will allow the following: —

n this setting and.with such a background. °

Clapper v. Original Tractor Cab Company. Exhibit A A63

1951 |

January 18° | _ eos e .

.Cost of reporting deposition taken

11/10 50 of Lee Flora and Snyder,

Danville, Ill. (antitrust) $ 71.70

January 18°

Cost of reporting depositions taken

11 28 50 in Kansas City of Robert D.

McCarthy and Harry Burch (anti-

trust) 79.49

January 24

Cost of reporting Heller ones

tion taken in Chicago on 11/8/50

- (patent infringement) 3 hrs. at-

tendance @ $4 $12.00 : a

34 pages original @ 70¢ 23.80 x

34 pages carbon @ 30¢ a 10.20

. ~ 46.00 .

January 24°

Cost of reporting Frein deposi-—

tion taken in Chicago 12 27/50:

(patent infringement) 1 hr at-

tendance ~4.00

8 pages original 5.60

' 8 pages carbon 5 2.40

° 12.00

: February 19

Cost of reporting Alveson, and others,

depositions at Duluth, 11/9 /50 (pen

infringement) x 47.66

A64 Clapper v. Original Tracto: Cab Company. Exhibit A °

1952

May 19 | ; °

Cost .of reporting Maumee Val-

ley Seed Co. depositions at Fort

Wayne-on 5 14 52 (venue) Re-

. porter’s bill ~ 154.00

Legal services—costs in obtain-

ing subpoenaes for witnesses -», 25.00,

| | 179.00

May 27

Cost of reporting Ruddel! and

Morton depositions at Indianap-

olis, 5 15/52 (venue) ' 73.50,

2 sets of photostats of corre-_

_ spondence produced 36.54 »

110.04

September 28

Cost of reporting McCarthy,

Dolan, Bowers and-Kimsey depo-

sitions at Kansas City 6 25-26 52

(venue) Attendance. 8 hrs. @ $3 24.00

Notarial certificates: _ 2.50

187 pages original @ 60¢ 112.20

187 pages carbon @ 20¢ 37.40

2 sets of photostats of corre- ;

spondence produced 10.45

Postage 1.80

188.35

Clapper v. Original Tractor Cab Company, Exhibit A A65

1956 .

-_-

December. 15

Cost. of reporting McVicar depo:

sition taken at Bloomington, Il-.

linois on 12/13/56 antitrust)

Attendance 3 hrs. @ $5 15.00 eas”

_ 35 pages original 2625

‘°35 pages. copy -= 8.75

Postage 75

- Marshal’s fees for serv ice of sub-

é | 68.95

~ ae —— .

Amount of Item 5 Allowed a $803.19

Item 6

Schedule I. Services, travel and telephone expense of

defendant Williams—$27, 189.53

11} This item is made up of expense purportedly

incurred by the defendant, Original Tractor Cab Com-

pany, Incorporated, and may be broken down into three

categories: a. 7

(a) The seatiin of defendant Williams’ salary “esti-’

mated to be chargeable to what are identified as —_

tion matters” 7

(b) Travel expenses of the defendant Williams in

connection with such “litigation matters”.

(ce) Telephone charges. for calls‘ also pertaining to

“litigation matters” ho

- There is little “doubt in the mind of the court that ,

the defendant, Original. did-in fact suffer material dam-

age as a result . this litigation. But the aroma had’

\66 Clapper v. Original Tractor Cab Company, Exhibit A

their opportunity during their day in court to establish

such damage. They attempted to establish the dam: ige suf-

fered by the corporation, but the court was not convinced

by their method and theory. Now is not the time to retry,

this element of their ¢ase. Nor is the taxing of costs of

suit the proper means of fixing such damage. For this

and the’ reason earlier set out in this entry, all of Item 6

w will be disallowed.

Amount of. Item 6 Allowed . $0.00

Item 7

Schedule II. Travel and telephone expenses of defend-

. ants’ attorneys-—$3,979.17

|12| As authority for its objection to this item plain- -

tiff cites Manley v. Canterbury Corp., D.C:Del.1955, 17°"

F.R.D. 234; Hope Basket Co! v. Product Advancement

Corp., D.C.Mich.1952, 104 F.Supp. 444, 451, and Brookside.

Theatre Corp. v. Twentieth Century Fox, D.C:Mo.. 1951.

11 F.R.D. 259. Upon the authority ‘of these cases plaintiff.

Says it is well settled that an attorney's travel and tele-

phone expenses are not allowable. Stated as the general

‘rule, the court would ‘agree. -

That this is the general rule is borne out by the

weight of authorities. It is only in exceptional and com.

pelling circumstances that courts are prone to depart frem

the general rule. Gibson v. International’ Freighting Corp.. .

D.C.Pa.1947, 8 F.R.D. 487. Such compelling circumstances ,

do not appear in the case at hand. Travel expense of coun-

sel in the preparation of suit and in attending the court |

proceedings must generally be classified as personal .ex-

pense. The same is true in respect to long distance tele-

phone expense. Neither of these:items can rightfully be

classified .as “costs of. suit.” Accordingly Item 7 of the

bill of costs is disallowed. -

Clapper v. Original Tractor Cab Company. Exhibit A A67

Item 8

Schedule III. Expense for services of defendants’

- accountant—-$4,950.00 ..

|13|, This item represents charges ‘for defend.

| accountant in the preparation of defendants’ statement of

losses and for attending hearings conferences and trial.

Such services were a part of the Aefendants’ detailed prep-

aration and presentation of t¥eir counterclaim, and, as

such, cannot be allowed as c&ts. It is true, a part of his

time was spent in furni g plaintiff's: accountants with

information they needed in making an audit of the de-

fendants’ operations.“ However. there is no specification

in the bill of costs as to how much time was so spent. The

court will hazard no estimate. For these reasons Item 8

of the bill of costs is disallowed. -

Amount of Item 8 Allowed $0.00

Item i)

Schedue IV. Miscellaneous costs of certified copies of ’

Patent Office records and notary fee—$251.95

All of the charges enumerated: in Schedule IV are

‘objected to with the exception of .the. certified copy of

the Clapper file wrapper and interference ($24.55). Plain-

tiff concedes that the notary fee of $3- may be allowable

a identified and shown to be applicable to this case. He

also. concedes that the defendants may be entitled’ to a

portion but not all of the costs of patent copies ($78.25).

Defendants counter by pointing out that some of the

cepies of patents were foreign patents and _ photostatic

copies had’ to be obtained, which increased, the cost. A

certified translation of the Swiss patent was required. A

book of patents was offered in connection with the motion _

for summary judgment, as well’as at the trial. They go

A68 Clapper v. Original Tractor Cab Company. Exhibit A

° : ; °

on, to say that the Alversor file wrapper was made neces

sary “by the misrepresentation of Plaintiff's counsel with

respect-to it.”

The court was materially aided in making its fina!

determination as to patent validity through the earlier

presentation and disposition of defendants’ motion -for

summary judgment. By the time of the trial the court

..was well acquainted with the history of the prior art i

this field.

The court availed itself of the Alverson file wrappe1

after the. dispute arose with respect to the Alyerson patent

‘application. It was a necessary part of the record.

As to the file history of the Clapper patent for use

of defendants’ counsel during trial. in view of the matter

in which the interference and concession of priority were

handled as between the applicants, who later were found

to be in conspiracy, ‘the court ‘is inclined to believe the

- extra copy of the history of the Clapper patent was neces-

sary for defendants’ counsels’ use in the trial All of Item

9. Schedule IV. will be allowed.

Amount of Item 9 Allowed. ak $251.95

Recapitulation of Costs \llowed

Item 1 Fees of court reporter for all or any part

of the transcript necessarily obtained for

use in the case oe fe $1.391.49

Item 2 Fees for witnesses 5 31.82

Item 3 Fees for exemplification and copies of pa- =:

' pers necessarily obtained for use in case 207.98

Item 4 Docket fees under 28 U.S.C. § 1923 20.00 |

Item 6 Services, travel and telephone expense of ae

- defendant Williams _ -0-

‘Clapper v. Original Tractor Cab Company. Exhibit A A69

Item 7 Travel and telephone expenses of defend-

ants’ attorneys - : -()-

Item 8: Expense for services of defendants ac-

countant 2 -0- -

Item 9 Miscelianeous costs of certified copies ‘of

Patent Office records and notary fee — » 251.95

oy ———————

Total costs allowed * “$2,706.43

The clerk. will tax the foregoing items of costs against

the plaintiff. ; aa |

It is so ordered.

A70 Clapper v. Original Tractor Cab Company. Exhibit B

‘EXHIBIT B. °

Clyde E. CLAPPER, Plaintiff-Appellee,

ORIGINAL TRACTOR CAB COMPANY, Inc. ‘and

Stanley Williams, Defendants-Appeljants.

_ Clyde E. CLAPPER, Plaintiff-Appellant,

’ eet ee, ' F

ORIGINAL TRACTOR CAB COMPANY, Inc. and —

Stanley Williams, Defendants-Appellees. —

Nos. 12470, 12471.

United States Court of Appeals.

‘Seventh Circuit.

-- ... Sept. 30. 1959.

‘Action for patent : infringement: in which . detentecss

counterclaimed for damages on ground of alleged violation

of antitrust laws. The United States District Court for the

Southern District of Indiana, Indianapolis Division, William

E. Steckler, J,. 165 F.Supp. 565, entered judgment for de- -

fendant and patentee appealed. The Court of., Appeals.

‘ Knoch, Circuit, Judge. held that under circumstances at-

tornev’s fees and expenses ineurred in patent infringement

defense should have been ‘entered as element of damages

in. antitrust action, and record supported finding as to

amount of attorney’ s fees to be allowed in antitrust claim.

Affirmed in part. reversed in part and remand d with

directions.

Parkinson. Circuit Judge. dissented in part.

212 F2d 371

Clapper v. Original Tractor Cab Company, Exhibit B A771

Thomas E. Scofield, Kansas City, Mo., Claude "W. Lowe,

Kansas: City, Mo.., for plaintiff- -appellant Clapper.

J. Preston Swecker. Washington, D. C., Kenneth L.

_ Earnest, Rushville, Ind., Swecker & Mathis, Washington.

D. C., of counsel for Original Tractor Cab Co.

Before SCHNACKENBERG. PARKINSQN and

KNOCH, Circuit Judges. =m

KNOCH, Circuit Judge.

This action was originally brought April 14. 1950, by

Cly ‘de E. Clapper and Lee Flora for infringement of Clap-

per Patent Nq. 2,452,834 (Hot Air Deflector for Tractors)

and Flora Patent No. 2,461,974 (Enclosure for Tractors).

The original defendants, The Original Tractor Cab Com-

pany (hereinafter called “Original” ) and Stanley Williams

(its president and a director) joined licensees of Clapper

and Flora as cross-defendants.' Original and Williams coun-

terclaimed for misuse of patents and violation of the anti-

trust laws. °

_ By settlement in December 1954, Flora dismissed his

claim for patent infringement and defendants agreed not to

proceed against him or the cross-defendants under the

counterclaim.

Clapper then filed an amended complaint setting up

five causes, of action, three of which Clapper -allowed to

be dismissed. Only one seems to be pursued in this Court:

_ the claim of patent infringement.

1. (or tort Equipr ent Co \.. Steckler, 7 Cir, 1994. 202 F 2d

T cide leensees rn oved to dismiss Original’. counterclaye

“ond cpossecosnplaint on the ground that proper venue did not

‘sist. The Taw ! Court ove pisoragetl the motions, whereupon the ts wh

‘Nsces ght writs of mi indamus, which this Court denied }

{

5 .

~ .

—

A7™?. Clapper v. Original Tracto: Cab Company. Ex ibit R

The District Court found the Clapper patent\ invalid;

dismissed the claim for unfair competition, found no ‘breach

of: contract by defendants, held that the settlement, of

December 1954-did not discharge Clapper from liability °

under the counterclaim and awarded defendants attorneys

fees incurred in connection with both the patent and the’ '

antitrust phases of the case, as well a _as omg for anti-

trust violation.

Clapper, appealed. relying on the following alleged er-

.rors in the Trial Court's rulings and judgment:

“(1). Exclusion of Plaintiff's Exhibits 199 and

200 relating to the settlement of Dec. 14, 1954.

“(2) Denying Plaintiff's Motion to Dismiss De-

fendants’ Counterclaim since such cross action should

have been released and dismissed Fis the settlement of

Dec. 14, 1954. '

“(3) Adjadicating the Clapper patent invalid.

“(4) Awarding defendants attorneys’ fees- for

prosecution ef the patent defense phase of the case

* based upon its being an exceptional case® .

“(5) Denying Plaintiff's Motion under Rule

37(b) (2), FR. Civ. P. '28 U.S.C.A.}. to discipline and

penalize defendants for failure to comply with the

Court's orders with respect to the production of docu-

ments and discoverv under Rule 34.

“(6) Awarding defendants damage under their

counterclaim for antitrust violation when no damage

was proved which was the proximate cause of any

alleged violation.

(7) Making a separate award of attertaye’ fees

to defendants for prosecution of the antitrust phase of.

e case when no damage was proved whith was the

ximate cause of the alleged violation.

a " —

Clapper v. Original Tractor Cab Company. Exhibit B A773.

“(8) Refusing to consider defendant Williams’

breach of the contract made with plaintiff Clapper.

“(9) Awarding Defendants costs in the case.”

Defendants assert that the District Court erred ir fail-

‘ing to include attorneys’ fees, awarded fdr defense of the

patent infringement action, as a part of the compensatory

. damages to be trebled under section 4 of the Clayton Act,

15 US.C.A. § 15. They argue that the patent infringement

action was filed as part of the conspiracy in viqlation o

thé antitrust laws. They contend further that the District

Court erred in failing to include damages for loss, 0

. tential sales and in awarding attorneys’ fees at less than

- & sum proportionate to the skill and time involved. Their

position is that the cause Should be remanded with direc-

tionS. to recompute fees and damages in accordance with

the foregoing.

A brief sefuvence: to the history of this” litigation is

appropriate here. On March 17, 1945, Clapper applied for

Letters Patent, and in May, 1945, gave an exclusive license

to Bearing Distributors (later Comfort Equipment Co..

and hereinafter éalled “Comfort”). In 1948 the U. S. Patent

Office declared two herbie involving applications of

Flora and one Halligan. Je) Pee,

Flora had licensed Cab-Ette Co. ‘hereinafter %called

“Cab-Ette”). and Halligan had licensed the Fort Dodge

Tent and Awning Co.. (igter Burch Manufacturing Co..

hereinafter called “Burch”)

In April. 1948, Clapper. Flora, Halligan and .their

licensees and attorneys met to, settle the interferences.

The result of their efforts was the License Agreement of

August 3-4, 1948, whereby Flora and eta jointly licensed

’ Comfort, Burch and Cab-Ette. = >

A74 Clapper v. Original Tractor Cab Company. ‘Exhibit B

In ‘the summer .of 1948, Original began manufacture

~ of the accused device. On November 24,. 1948. Clapper

sent Original notice of infringement of his patent. In

August, 1949. Clapper’s attorney sent a second notice to

Original and sent notices of infringement to Original’s dis-

tributors threatening suits for patent infringement. This

suit was instituted. April 14\1950, as indicated.

The group license was terminated by agreement Apri!

. 6. 1953, (effective November 15, 1952) during the pendency

* of a civil suit brought. about a year after the initial paten’

infringement ‘suit, by the Department of Justice, in the

Western District of Missouri, against Flora, Clapper and

their licensees. for antitrust violation. That, action was

terminated by consent decree dated October 27. 1953. The

District Court found inter alia:

“59. By the Agreement of. August 3-4, 1948, the

patentees, Clapper and Flora, granted a non-exclusive

and non-transferable license to Comfort. Cabette and

Burch to manufacture and sell tractof covers. ‘The

limitations imposed on the licensees by said Agreement.

that the licensees would manufacture the inventions

. ‘at their respective * * * named atidresses and in no

other’ place or places’; and thai no other license would

be granted ‘without obtaining the written consent

thereto of the remaining parties to: the: Agreement:’

-that if a license so granted was terminated, as provided

in Paragraph 8 thereof Flora or Clapper, respectively.

shall be at liberty to license other licensees: that the

parties would ‘mutually agree upon procedure for

the disposition’ of infringement suits: and that the

parties set up:a ‘litigation fund’ to be used for that

purpose, all are elements of illegality when used for -

an illegal purpose, as they were.’

It i is apparently conceded that the joint Licefe Agreement -

ee sections ‘1 and 2. of the Sherman Act, 15 U.S.C.A.

$$ 1, ; . —.

pre

C lapper v. Origin: ul Tractor Cab Siena. Exhibit- B ATS

After the consent decree in the Missouri case, a license

was twice offered to Original and_ twice -declined, by

Original, ‘which was . then contest ing the validity of the

patents in this cause, although prior to suit, Original had

Sought a license from plaintiffs. . . CY

The group License. Agreement had provided for a liti- ane

gation fund, of which Clapper was trustee. He directed

the policing of the licensed patents. When the License

Agreement terminated, the litigation’ fund, out of which

costs of this suit had been paid, was divided between Clap-

per and Flora to maintain this action which was then still

pending.’

Clapper moved for admission of exhibits 199-and 200°

as pertinent to the'then pending questions of attorneys’ fees.

‘possible release of Clapper from liability under the counter-

claim for antitrust violation, and Clapper’s assertion that

defendants had not complied fully with the District Court's

order requiring production of documents. Exhibit 199 was

described in the aforesaid motion as.a conformed copy, of

the Agreement dated December 14, 1954, executed by Flora.

Cab-Ette, Comfort and Burch (the three licensees) and

four attorneys for defendants. Exhibit 200 was described

as a conformed copy of waiver and release of attorneys’

lien executed by the same fouy attorneys. Both documents

are set out in plalenift's appendix at pages vem to

435."

, The District Court found that nothing would be gained

from admission of these documents and overruled the

motion. However, the Distri¢t Court plainly indicated ..

that full. consideration had been given to the contents. of

these documents, remarking that the Court stood on its

/prior ‘ruling that Clapper had not been released by the

terms of the settlement and covenant not-to sue the other

alleged joint tort-feasors. The District Court went on

‘

A76 Clapper v. Originat Tractor Cab Company. Exhibit R

‘o say, that the waiver, and release of attorneys’ lien mear

only that the attorneys would not look to Flora, Comfort.

Bureh, and Cab-Ette for payment of fees. The defendants

were not parties to the release and were not thus precluded

from recovering fees and costs as provided by the antitrust

laws. The District.Court also found that defendants had

“made satisfactory production.’ We cannot agree with plain-

tiff that denial of admission of these exhibits constituted

error On the part-of the Trial Court. =.

‘ Clapper concedes that the settlement with Flora and

the three licensees .purported to be a mere covenant not

' to sue and expressly reserved any rights existing against

Clapper. One of the provisions allows the covenant not

to sue to be pleaded as a defense in any action taken

in breach of that covenant. Clapper argues that this

renders the agreement. in effect, a legal release. He cites

Indiana Statutes and cases if support of the principles that ~~

release of a’ plurality of joint tort-feasors releases and dis-

charges all the joint tort-feasors and that'actions for viola-

tion of the Sherman Act sound in tort.

'1| Clapper relies principally on three ‘cases to sup-

port his theory that a “covenant not to sue” is in effect a

“release” if it'may be pleaded as a defense to defeat the

_ action brought by the covenantor. In Haney v. Cheatham.

Supreme Court of Washington, 1941. ‘8 Wash.2d 310. 111

_ P.2d 1003, 1006. the Court Said’ that the consideration

for the covenant not to sue “reasonably compensated the

releasor for the entiré damage, sustained.” In Byrd v.

Crowder, 1933. 166 Tenn. 215, 60 S.W.2d 171, the Court re- °

fers to rulings to the contrary in Massachusetts and Minne-

sota with the comment that in those courts. a mere cove-

nant not to sue may be pleaded in defense of an action

brought in breach of the covenant. (Burns, Indiana Stat-

utes, Vol. 2, Sec. 2-1015 and Rule’12, Federal Rules of Civil

“~~

Clipper v Orwinal Tractor Cab Company..Exhibit B ~ A77.

Procedure, permit pleading all affirmative defenses, legal

and equitable.) The Court noted many conflicting decisions .

collected in notes in 50 A.L.R. 1081 and 66 A.L.R. 212.

but concluded: it is “unprofitable to do more than refer

to those authorities. Our own cases clearly direct our

course on the question before us.” The Court also said

of the covenant before it that a covenant not to sue is not

a satisfaction of the claim ‘for damages. and hence may

be pleaded in the Tennessee Court only “by way of set-off

’ ‘or recoupment.” - Thus the Court in the Byrd case found

an inconsistency in the provision:that the covenant “may

be pleaded as a defense to any ‘action. * * *”. In Pellett,

v. Sonotone Corp., 1945. 26 Cal.2d 705. 160 P.2d 783, 787.

California Supreme Court the Court. in construing an agree-

ment not to be a release. said:

“The theory on which a release is held to bar a

recovery is that, plaintiff has accepted payment in satis-

faction or in compromise of his right of action, and has

released and abandoned his right of action in consid-

eration of the payment received. In the present case

there is nothing in the agreement, or in the record, to

indicate that. the payments ** * * were intended to or

“did.constitute any payment in satisfaction. * * * or in

compromise, of the right of action.” ewe

These three cases are thus not inconsistent with the In-

diana cases cited by defendants. The controlling factor

is the intention of the parties. A pertinent question is:

~) has full satisfaction been obtained by the injured party?

In Cleveland, C.. C. & St. L. R. Co. v. Hilligoss. 1908.

171 Ind’ 417, 86 N.E. 485, the Court stressed thé fact that ~

for a single injury there could be but one recompense

and that one cannot have more than one satisfaction. . The

Court then said 171 Ind. at pages 423-424, 86 N.E. at page

488:

A78 Clapper v. Original Tracto: Cab Company. Exhibit B

- “* * * 4 contract which purports to be a satisfa:

tion and release of a wrongdoer jointly liable with

others. * * * must clearly show that the injured party

for a consideration, has surrendered * * * all claim for

recompense for and on account of the trespass cam-

plained of. If it does so appear, there can be-no further

’ proceeding. for the right of action for the wrong is

forever gone. (Citing Cases |“ ; '

The Indiana court then went on to say that, in that case,

the fact that plaintiff accepted the consideration in satis-

faction was incontrovertible. es 3

In Parry Mfg. Co. + Crull. 1913. 56 Ind.App. 77. 101

N.E 756 ‘case 2) the Court found from the terms of the

agreement that plaintiff had not intended to accept it

as full satisfaction of his claim for damages, aiid held that-

the amount paid was only a partial satisfaction pro. tanto

to the others jointly liable who were not relieved as to

the residue of the damages.

In Brown v. Kemp. 1919. 71 Ind.App. 281. 124 NE

777. 778. the agreement stated that the consideration had

been “received to my full satisfaction.” |

In Bedwell veDeBolt. 1943, 221 Ind. 600, 50 N.E.2d 875.

the Court held that Joint tort-feasors are discharged by the -

unqualified release of one and that full Satisfaction of one

operates to discharge all. The Court went on to note that

# covenant not to sue one tort-feasor did not bar action °

against the others. but operated only as a satisfaction of

damages pro fant as to benefits received. |

The District Court, in the case before us. found that *

. the agreements were mere covenants not to sue. which ex-

pressly set out that the amount received was not received

in full satisfaction and that the claim against Clapper was

expressly not -released .

peo Ovvonal Tractor Cab Company. Exhibit Bo AT79

2 Clapper also contends that making these cove -

nants binding on successors, assigns, heirs, administrators,

and executors, indicates that they were in reality releases

because such words have no place’’in.a personal covenant

hot ‘to. stfe. He cites Jenkins v. Southern Pac. Co., D.C.

‘U39. 17 F.Supp... 820, 827 In support of his contention.

In that case the Court did say.that such words had no place

a personal covenant not to sue, but did not rely on that

e factor alone. The Court observed that the form use !

: followed the exact terminology used in California in the

preparation of releases except that an effort had been made

not to use the word “release.” The-facts of the case

explain the holding and distinguish Jenkins from the

case before us. Jenkins was a passenger conductor of the

Southern Pacific Company, who was fatally injured while

ejecting a drunken. violent passenger, Kash. Jenkins’

widow, for herself.as executrix and for her minor son,

brought action against Kash,.the Southern Pacific Railroad,

the Pullman Company. Hatch ‘the Pullman conductor who

had called on Jenkins for help with the disorderly pas-

“senger:, Myers ‘a*tporter) and Dolsen ‘(a gateman), all of

om allegedly had allowed the assault to be committed -bs

’ their acts or by their failure to act. ‘Two causes of action

were pleaded: one against all defendants and one against

Kash alone. After issue was joined and the case set for

trial. the cause was dismissed as to the Southern Pacific

and Dolsen.” T' e remaining defendants filed suppleniental

answers alleging release of ali claims arising out of the

matters set forth in the Complaint. The “coveriant not to

sue” had been confirmed by the California probate, court

in the Matter of the Estate of Robert L. Jenkins and an

order had been entered permitting Jenkins’ widow... as”

executrix. to dismiss the action as to Southern Pacific Co.

The Court held that although the theory of liability dif-

fered. the same cause of action was alleged against all

- wording used:

A80 Clapper v. Original Tracto: Cab Company. Fxhibit B

defendants. The Court stated the principle that to release’

all others, the release to some tort-feasors must be made |

with the understanding that it is given in full satisfaction.

The Court cited cases to the effect that a mere covenant not

to. sue, which does not contain words amounting. to a

release of the cause of action, or which negatives: such .

release, is not effective for the purpose of releasing other

joint tort-feasors. The California Court further said that

mere dismissal of some defendants would not ordinarily

release the others. “The line of demarcation,” the Court ..

continued, “is ‘sometimes very thin.” and proceeded to

analyze not only the “covenant not to sue,”” but the pro-

‘ceedings in the probate court, in great detail, in the light

of the attendant circumstances, The Court concluded that

when an instrument states specifically that it isa covenant

not to sue, the Court cannot read into it words of release;

that if the instrument shows on its face that it is a release.

the word “release” is not essential. We agree with the

District Court that the covenants not to sue in the case

before us do not show themselves to be releases.

Clapper also argues that words of reservation. are. re-

pugnant to the release. and will be given no effect, citing

“enkins vy. Southern Pac. Co. supra; The Adour, D.C,

“1 F.2d 858, and McBride v. Scott, 132 Mich. 176. 93 NW.

243, 61 L.R.A. 445. ,

In Jenkins. the Court found the reservation to be

ineffective in the circumstances of ‘that case. The very -

. : ; *

“* * * do-not in any manner or respect waive

or relinquish any claim or claims against any other

person, persons, firms.: °°" *" {17 F.Supn. 823. !

reinforced the Court's opinion that the clear intent of the

instrument was to give a waiver and release as to persons

Clapper v eiaiial ——— Cab Company. Exhibit, B Agi

named in it. No such language appears in the covenants

not to sue before us.

In The Adour, D.C.Md.1927, 21 F.2d 858, the Court

found that a release had been executed in New York, and

that the law of New *York governed. The Court stated

that if there had not in fact been complete satisfaction

through the transaction covered by the release, further. re-

covery was allowed under New York decisions. The Court

found sufficient evidence in the record to indicate that

full award for the injury sustained had been received.

that it was apparent from the paper that the intention::

was to discharge the liability of one of the joint wrong-

«doers, that the entire liability was thereby extinguished,

and that any clause by which the parties sought to re-

st si a right of action against the cther «wrong-doer wes

“pugnant to the release and void.

In McBride Vv. Stott, 1903, 132 Mich. 176, 93-N.W. 243,

61 L.R.A. 445 plaintiff brought suit against a number. of

defendants who demurred. Judgment for defendants was

appealed, reversed and remanded. Two defendants paid

viaintiff a sum in excess of $1,500 and’ were given a release

which expressly stated thut these defendants were “re-

leased." The document stated that “no rights whatever —

_are released as against the other defendants, * * *.” The

Court i disregarding the reservation as inconsistent found

that the document was actually a release of some of the

defendants. ' There was no question raised as to its being

a mere covenant not to sue.

'3| We agree with the District Court that the cov-

enants not to sue did not discharge Clapper’s liability

The Clapper patent is directed toward utilizing the

heat of a tractor engine to warm the operator and facilitate

- use of the tractor in cold weather. Clapper describes it

s ”

SASS $ Glopver ve Orreinal Tractor Tab Company Exhibit B

;, ra

as including the tractor, its frame. the engine and. the

fan which creates a current Of air over the engine. a flex:Me

cover surrounding the engine compartment) forming «

cowling between the hood and stéel bow mounted in front

of the operator to constitute a passageway for the heated

mto the operator,

4 5!. Clapper did not invent a new tractor. Ans

Cony entional! tractor could be used. The cowl andabow are’

‘found in early patents for automobiles. These inclride

wl Sumber of patents not cited by the Patent Examiner

thus weakening the presumption of validity which. attache

‘oa patent by virtue of aScissuance Johnson Laboratoriés. °

‘Trie, v. Meissner Mfg? Co. 7 Cir.. 1938. 98 F.2d 937. 942.

Channelling -heat hack to the operator is also found in

early automobile patents, notably Standish. Similar comb:

nations are found in earlier: patents such as Winet and

Weiland. Clapper emploved ‘old elements known to prio:

we! \ available to skilled artisans. to perform the:

We cannot say that the finding of invalidity |

ifarly errencods. On the contrary it was well sup

parted &y the record and the law. Great Atlantic & Pacif

Tea Co. v rmarket Corp. 1950. 340 U.S. 147, 159-153

TI S.Ct. 127, 95 L.Ed. 162: General Time Corp. v. Hanse:

Ife Co. 7 Cir. 1952. 199 E2d 259, 265. In view of the

District Court's careft anaivsis, of the prior art. it) is

Court's findings ‘

"he pop is | tf toes A iyedine defer ae!

attorneys’ fees for prosecution of the’ patent defense. The

. District * Court ‘found the patent infringement suit) was

abit ov Clapper and Flora as a part of the conspiract

in Violation of the antitrust laws. If that was the vround

for considering the patent action “exceptioual’, Clapper

believes that “purging of such stigma” removed the case

Mapper v Onreinal Tractor Cab Company. Exhibit Bo A&B?

a :

from that category. Clapper considers the “stigma. to

have’ ended when, following settlement of the antitrust |

v — on December 5. 1954. he proceeded indiv idually

ind in his own right. Without support or influence of Flora

or three _li licensees. He argues thatshe was under no

disability to collect damages for patent infringement .fo!

‘ving céSgation of the antitrust violation. As defendants

point out, However, as late as 1955. Clapper was still seeking

injunction and damages for the re 6-vear period.

if. a Clapper: cited patent cases in which awards of -

uttorneys’ fees by District Courts have been reversed. . In

these cases the Court of Appeals found that characteriza-

tion of the cases as “exceptional” was erronéous as a con-

clusion of law and unsupported py the record as a finding

of fact. In the case before us the District Court's finding

of fact Nov 71 states this to be an “exceptional™ case, and

directs award of attorneys’ fees for that’ reason. Defend-

ents argue that the award is iradequate., They liken the

situation here to that in Kobe: Inc. v. Dempsey Pump Co..

.C. Ok1.1951, 97 F.Supp. 342. affirmed 10 Cir., 1952, 198

~ F.2d 416, certiorari denied 344 U.S. 887, 73 S.Ct. 46. 97

' Ed. 651. There attarnevs’ fees y.curred in defense of a *

patent infringement suit were held to be recoverable as

lamaves sustained through antitrust violations. Here the

istriet Court. deelined tc. mel fe che atternevs’ fees

curred inthe patent infringement defense astan element

of damages in the antitrust action ‘(to be increased three-

fold:. The District Court stated that attorneys’ fees were

awarded because of the exceptional circumstances. Finding

"ry “ll veadc:

vf ifs eads .

“* * * Sard sum, however. is not to be included as

an element of damages in the antitrust action to be

‘aereased ‘ihreefold, as defendants would have the

--ourt do. It is to be awarcéd counsel for the defendants”

by reason of their representing the successful parties

‘

awe

_ AS4 ‘Clapper v. Original Trattor Cab Company. Exhibit Bb.

in the Daten} infringement action, and by reason of

the exceptional circumstances involved in the case con-

cerming the validity of the patent and its use by the °

patentee and Fis licensees. all as found in these find-

ings of fact.” {965 F. Supp. 578. |

ae Howey r. the District Court made no specific finding tha .

e agterse party had been ‘guilty: of bad faith. inequitable.

or unconscionable conduct “in the case concerning the

validity of the patent.” These are the usual -bases for

awarding attorneys’ fees in patent éases. ‘Continental Art

Co. v. Bertolozzi. 7 Cir.. 1956, .252.F 2d 131. 134: Wilson v

Seng Co., 7 Cir.. ‘1952, 194 F.2d 399, 404: Apex Electrica!

th Mfg. Co. v. Altorfer Bros Co.. 7 Cir., 1956, 238 F.2d 867: 874.

On the other hand, the District Court's reference to use

~«! the patent br the patentee and his ! seensees can have

reference only to the anti-trust violations. The vecord of

_ this eight-vear long litigation fully supports such a finding.

~ and defendants are entitled to have their reasonable attor-

“-neys’ fees and expenses included as an element of damages

in the antitrust action.

18] Clapper charges the Trial Judge with error in

Cenyirg motion under Rule 37\b)«2). Federal Rules of

Ciwil Procedure. to discipline and penalive defendants f:

; alleged failure to comply -with the District Céurt’s orders

respecting production of documents and discovery under

Rule 34. The District Judge gave careful. complete and

repeated considerstion to this question and, after hearing

evidence. found, that full dis ov ery had beeri made.

Ti listing the contested issues, Clapper includes, the

following:

“9 Did defendants’ misrepresentations concern

ing the loss of records by fire and their. refusal and

failure to comply with pla ntiff’s request for discovery

aw and with the Trial Court's order for the production of

Clapper v. Original Tractor Cab Company. Exhibit B A85

documents impose undue, unwarranted’ and unlawful

hardship and expense upon plaintiff .in making his

* proofs .

“(a) respecting damage allegedly suffered by de-

fendants as charged in their counterclaim;

“(b) respecting the character. purpose and dura-

tion of the Original Tractor Cab- Cab-Ette working ar-

rangement in the fall of 1949;

“(¢) respecting: the breach by defendant Williams

of the Clapper Williarhs contract entered into at the

Chicago meeting of September 12. 1949."

- However, the issue is not argued in the brief. Defend- '

ants, noting that fact in their brief, presume the issue to

have been abandoned. The reply brief d not indicate

otherwise. Review of the record before’.us shows the

finding ‘of the Trial Judge to be- fully supported.

"/9] It is Clapper’s position ‘that defendants actually

proved no damage of which the antitrust violation ‘was

.a proximate cause. The District. Court in this regard

found:

“68. - The evidence shows direct loss was suffered

by the defendant. Original, in salaries, wages and

oars expenses of shutdown from August 22 to ie tem.-

ber 23. 1949. in.the total amount of 82 m16.°**

“69. The evidence shows that the Ditiiitens.

Original. had . negotiated - for financing for continued

operation which had te be dropped entirely by the

shutdown following the notices sent by the plaintiff in

concert with others, in August. 1949, the cost of which

‘to the defendant.. Original. was $317.20. which it is

entitled to recover. . ; —

“70. The evidence Shows that the defendant.

Original, had expended for advertising the sum of

$4.563.70, w hich was rendered vous by the forced

ASE Clapper v. Original Tracto: Cab Compariy. Exhibit B

shutdown in August, 1949, as a result of said noticos

of infringement sent to the defendant and to its dis-

, eaters, *** *--. . ;

“72./ The evidence shows that there has been «

direct ‘loss of sales by defendant, Original. to Farm

Equipment Sales Co. and Stover-Winsted Co. as a con-

sequence of the notices of infringement sent pursuant

_ to the conspiracy created by the License Agreement of °

“August 3-4, 1948. = *% * | :

“Following the time Stover-Winsted Co. and Farm

Equipment Salés Co. stopped doing business with the

defendant, Original, the evidence shows that during the |

years 1949 throughsthe first eleven months of 1956.

Farm Equipment Sale&_Co. purchased from Comfort

Equipment Company 9.084, covers. oe

‘Woes

a :

“74. The losses. hereivfOre stated resulted in

damage to the business and property of the defendant.

Original.“as a consequence of the illegal conspiracy of

the plaintiff Clapper. and Flora and their licensees act-

ing in concert. For such damage. defendant. Original.

is entitled to recover the ‘following amounts of com-

pensatory damages: |

“\ 1) Costs ‘resulting from ‘forced stoppage’

of production, from August 22, 194% .

through September 23. 1949. $ 2,561.45

. -

“12. Expenses incurred in finance negotia- “

tions, . : , ¢ 397.20

“(3) Advertising costs rendered useless by .

reason .of forced work stoppage.: ° 4,563.70. —e -

“(4) Loss of potential sales to Farm Equip- . ;

ment Sales Co. for, the vears 1949 - °

through the first eleven months of

1956 12,263.40

“(5) Loss of potential sales to Stover-Win-

- sted Co. for the vears 1949 through

. Clapper v. Original Tractor Cab Con pany, Exhibit B As?

the first five months of 1952. 7,905.60

“Total: $97,611.35"

Review of the record shows. ample support for these

findings which cannat he held to have beén clearly erro-

_ nequs, ,

The total figure of $27,611.35 was trebled under sec-

tion 4 of the Clayton Act, wnich ‘brought it, to $82,834.05.

against which the District Court credited the $110,000 pay-

ment made by Flora and the three licensees. leaving a

balance in. Clap ‘s favor, which in turn was. credited

against attorneys’ fees_of $28,244.31 awarded for defense ¢f

the patent infringement suit as an “exceptional” case.

‘As indicated above, in-our opinion, this latter.sum should

‘have been included’ in the compensatory damages _ sus-

tained by defendants as a result of the antitrust. violation.

; Clapper protests the separate award of attorneys’ fees .

to defendants for prosecution of the antitrust phase of .

the case, again, on the ground that defendants failed to

prove any damage which was the proximate result of the

alleged antitrust: violation. As indicated above, this Court

concurs in th2 District Gourt® s findings to the contrary.

Clapper also takes issue with the amount of $25,900

attorneys’ fees’ allowed, as grossly disproportionate to the

amount of compensatory damages proved—S27.611.35. The

District Court arrived at this figure after disallowing the

defendants’ claim for $141 035.00 as not having a realistic

relation to the amount of compensatory damages awarded.

The District Court, in this aspect of the case, relied on

Milwaukee Towne Corp. \ . Loew's, Inc.. 7 Cir. 195k 19

F.2d 561, where this Court reduced attorneys’ fees allowed ~

by the Trial Court from about 50°) to about 17% of the -

damages awarded. ,

a : Defendants argue that this Court

‘ %

; q ‘ _ -. 7

e. Foe ee . . ao

Voc @tlupper yo Originak Trac to Cab Company. Exhibit B

- The District Court also-referred to Twentieth Century.

Fox Film Corp. v. Brookside Theatre Corp., 8 Cir.. 1952. 194

F.2d 846. In that Case the Court of Appeals consider:

fee of 40°. of the d: amages to be such as to (194 F.2d at

page 859) “shock the conscience.”. The Court reducec

fee awarded in the sum + of $1509.009 to $100. ooh. including

fees én. appeal. which was. considered to be reasonable after

“study of the entire record and briefs.

The District Court in the. case before us’ noted that

*25,000 was only a-little less than the eompensatory damages

found to have been sustained by defendants. and ventured

to say that except for the difficulty of proof, the actual

damage suffered as a.direct result: of the antitrust viola-

tion would have been found to be far greater. oe oe

een

Set down no

Rance requir ements in the Milwaukee ‘Sows case; that

“we computed fees for experienced trial lawyers in Chicago

at S200 per. dav ($40 per hour,

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