Appeal from the District Court of the United States for the District of Delaware; John P. Nields, Judge.
Before BUFFINGTON, WOOLLEY, and THOMPSON, Circuit Judges.
BUFFINGTON, Circuit Judge.
In the court below a decree was entered dismissing a bill filed by the Cinema Patents Company, Inc., charging infringement by the Craft Film Laboratories, Inc., of patents No. 1,117,697, granted April 4, 1916, to Leon Gaumont, and No. 1,209,696, granted December 26, 1916, also to Leon Gaumont, assignor to Societe Etablissements Gaumont, of Paris, France. From such decree plaintiff took this appeal.
By reference to Cinema Patents Co. v. Warner Bros. Pictures (D.C.) 55 F.2d 948, and Cinema Patents Co. v. Duplex Motion Picture Industries (D.C.) 60 F.2d 1013, which involved these same patents, and by further reference to the opinion of the judge below, we avoid a needless repetition of the subject-matter of these patents, which cover the development of photographic negatives for use in moving pictures. Moreover, the opinion of the trial judge so comprehensively covers all phases of the case and so fully vindicates the conclusion reached that an effort by this court to file a lengthy opinion could not be but needless repetition. We therefore confine ourselves, in affirming its decree, to a brief statement of the underlying question of the plaintiff's lack of merit in the way of equitable relief.
Gaumont and Societe held the patents until October 22, 1926, when they assigned them to the predecessor in title of the plaintiff company, which latter became the owner April 11, 1930. In such assignment by Gaumont and Societe to plaintiff's predecessor, the latter agreed "that it will not sue or in any way interfere with * * * the use or sale of any machines heretofore sold in the United States by said Societe or its representatives * * * nor said fourteen (14) machines, or any of them which are to be sold in the United States by said Societe." Now, as the machines herein alleged to infringe are therein referred to, we seek in the proofs an account of the acts and dealings of the parties in reference thereto. Gaumont's machines were built up from some two thousand parts, and their permanent and extensive character will be seen from the fact that, as testified by one of the witnesses, the building in which they were housed was, as he expressed it, "built around the machines and for the purpose of operating these machines, and that the buildings were practically valueless for any other purpose." In that regard the finding of the trial court was as follows:
"Gaumont machines are approximately thirty feet long and six feet high. The physical structure of the machine is important. The tank machines are composed of a succession of baths or tanks containing in order of use developing solution, fixing or hypo sulphide solution, and clear water for washing. The developing tank ordinarily consists of one compartment; the hypo tank of two compartments; and the washing tank of four compartments. An overhead casting rests on the upper edge of each compartment carrying a driving shaft with toothed sprockets, one for guiding the film in and one for guiding it out, and also an iron frame consisting of two verticle rods and two horizontal shafts, one near the top and the other near the bottom of each compartment. The horizontal shafts carry a series of freely mounted hard rubber spools. At one end of the driving shaft is a beveled gear by which the shaft is driven. This structure is duplicated in each compartment. Between the developing tank and the hypo tank is a rinsing compartment with fresh water.
"The film is introduced over an initial sprocket into the compartment and is trained up and down over the upper and lower series of freely rotating spools, describing a general spiral course from one side of the compartment to the other. It is brought up out of the compartment over the second sprocket and is propelled towards the next liquid receptacle. After leaving the developing bath the film is rinsed in a tube and then enters the hypo section. The movement of the film within the compartments of the tanks is repeated until it has passed entirely through the wet end.
"In the tube machines, tubes are substituted for tanks. At the upper end of each tube is a free roller and a driven sprocket. The film passes into the tube over the free roller and forms a loop around a weighted free spool within the tube and passes up out of the tube over the driven sprocket into the next tube. The treatment of the film is the same as in the tank machines.
"The developing fluid is maintained in a central reservoir. Within this reservoir is a coil through which cold brine is circulated for the purpose of cooling, or steam for the purpose of warming, thus enabling the temperature of the developing fluid to be regulated and maintained at will
"To every tank and tube machine there is annexed a cabinet or drying device. After the film has been treated in the liquid baths, it is conducted through the cabinet in which conditioned air is circulated to dry the film preparatory to winding it upon a reel. A series of spools on upper horizontal shafts and a parallel series of spools on lower horizontal shafts provide means whereby the film may be carried up and down a plurality of times in order to be thoroughly dried. In addition to the spools on the upper shafts, there are two sprockets keyed to the upper shafts to propel the film through the dryer."
Such being the character of the machines and the buildings in which they were permanently located on the ground, we turn to the acts and conduct of the parties. In that regard the court below found, and we agree therewith, as follows:
"Gaumont caused to be organized Gaumont Company and Gaumont Realty Company, New York corporations. Through them a laboratory was established at Flushing, Long Island, for developing motion picture films. In 1909 three tank machines were there installed and in 1911 three other tank machines were added. Thereafter they have been used more or less continuously. These machines were made in the workshops of Gaumont's French company. There was installed in the Flushing plant a machine shop fully equipped to repair and replace any parts of the developing machines that might become worn or broken. The laboratory at Flushing was operated by Gaumont through his two New York corporations from about 1909 to 1920. In the latter year Gaumont, the patentee, through his New York companies, sold the laboratory and equipment to Associated Screen News, Inc., for $100,000. Later in 1920, Gaumont and his French company agreed to sell to Patrick A. Powers twenty motion picture developing machines of the tube type with dryers for $82,500. Of this sum $30,000 was for the machines and $52,500 gross royalties. Powers assigned this agreement to Associated Screen News, Inc. The machines were installed in 1922 and the full price was paid by the purchaser. However, only six of these machines were operated until 1929.
"In 1929 Associated Screen News, Inc., leased the property and plant to the defendant Stephen J. DeVoe, with an option to purchase. This lease was assigned to the defendant Craft Film Laboratories, Inc., who exercised the ...