opinion: B. B. CHEMICAL CO. v. ELLIS et al.
  No. 3626.
  Circuit Court of Appeals, First Circuit.
  Feb. 21, 1941.
  Harrison F. Lyman, of Boston, Mass. (C. E. Hammett, Jr., A. D. Salinger, and Fish, Richardson & Neave, all of Boston, Mass., on the brief), for appellant.
  William Gates, Jr., of Boston, Mass. (James R. Hodder and Roberts, Cushman & Woodberry, all of Boston, Mass., on the brief), for appellees.
  Before MAGRUDER and MAHONEY, Circuit Judges, and HARTIGAN, District Judge.
  MAHONEY, Circuit Judge.
  The appeal in this case is from the final decree of the District Court dismissing the bill of complaint in a suit brought to restrain the defendant from infringing patent No. 1,830,428. The patent was applied for by the defendant, Elmer A. Ellis, November 8, 1929, and the application was assigned to the plaintiff for $8,000. On November 3, 1931, the patent was issued pursuant to the application and is now owned by the plaintiff.
  The defendants are Elmer A. Ellis, the inventor of the patented process and the plaintiff’s assignor, and the Magic Tape Company. The latter is a corporation with outstanding capital stock of twenty-five shares, of which the defendant Ellis and his wife own twenty-four. The defendants are charged with infringing the plaintiff’s patent by selling materials to shoe manufacturers for use in an allegedly infringing process.
  The patent relates to the manufacture of insoles for shoes. The specification describes the usual practices which formerly had been followed by shoe manufacturers in reinforcing the insoles. By the so-called “hot process”, insoles were reinforced by cementing to them a textile fabric such as “gem” duck which had been coated with a thermoplastic material containing gutta percha or gutta siak and cut into strips of approximately the width of the insoles. To insure the proper adhesion of the fabric to the insole, this coat of thermoplastic material had to be heated to a very high temperature just prior to its application to the insole. The disadvantages of this process were that it had to be used while the coating was still hot and pliable and was difficult and dangerous for the operator to use.
  The process known as the “cold process” consisted of the application to a strip of duck of a coating of ordinary fluid rubber cement containing a large proportion of solvent. In order for the coating to become tacky, i. e. sticky, and thus suitable for use, the strips were hung up in the factory to allow the solvent to evaporate. This took up a great deal of factory space and consumed an impracticable amount of time. Attempts to use a permanently tacky coating such as a surgeon’s adhesive plaster were also unsuccessful as the strip, when coated, could not be rolled without sticking.
  It was to overcome the disadvantages of these earlier processes that the defendant Ellis developed the process of the patent in suit. Claim 4 of the patent, the only claim in issue, is set forth in the margin. In this process, a suitable fabric, such as “gem duck” is coated in the web with a cold rubber cement composition containing rubber, a resin and a solvent, and capable of being rendered permanently non-tacky upon evaporation of the solvent and consequent drying of the coating. The web is then heated to evaporate the solvent, thus rendering the coating non-tacky, and the web is cut into strips and wound into rolls which, because the cement is non-tacky, can be easily unwound. Just before the strip is applied to the insole in the reinforcing operation, a second, or top coat of' rubber cement is applied to this pre-coated material. The absorption of this top coat by the pre-coated material and the evaporation of the solvent form a single reinforcing material which immediately adheres to the insole, at room temperature, and forms a satisfactory bond. The main improvement was the elimination of heat as a necessity in the reinforcing of insoles and the use of evaporation of cold, highly volatile rubber solvents of a tack-producing ingredient which permitted immediate use in reinforcing insoles when applied to a pre-coated fabric.
  Claim 4 does not include specific reference to ingredients in its base or top coat. It provides only for a cement “having a substantial rubber content” and a top coat “containing a relatively high amount of rubber” with the proper adhesive qualities at room temperature. However, the specification suggested that a “suitable cement” for the base coat would contain rubber, zinc oxide as a filler, and a resinous material such as Burgundy pitch, the rubber and resin being dissolved in naphtha. The suggested top coat consists essentially of the same materials but in different proportions.
  Between 1929 and 1932, the plaintiff used the above formula. Since 1932 it has used a pre-coat and has supplied to shoe manufacturers a top coat which includes a certain percentage of 60 per cent concentrated latex and other ingredients, the rubber content of the respective coats being about 35 per cent of the whole.
  The plaintiff’s manner of conducting its business was to supply shoe manufacturers with the pre-coated duck in strips of suitable width; if desired, the manufacturers supplied the duck and the plaintiff pre-coated and slit it. The plaintiff also supplied the adhesive top coat to be applied to the pre-coated fabric at the shoe factory, just prior to the application of the reinforcing material to the insole. The plaintiff further supplied its own patented machines suitable for use in applying the adhesive to the pre-coated duck, such machines being and remaining the property of the plaintiff. The plaintiff instructed the machine operators, serviced the machines, and advised and assisted in the reinforcing operations. As compensation for the foregoing, the plaintiff made a single charge to the shoe manufacturer, at a rate per web yard of duck supplied to the manufacturer; and, if the manufacturer did not furnish the duck, the price of that material was added to the charge. The adhesives used by the plaintiff in pre-coating have all had a large rubber content but were made according to different formulae, with special reference to the purpose for which the material was to be used. The plaintiff did not grant written licenses to shoe manufacturers to use its process, nor was any such license ever requested. Neither by notice nor agreement in any form with its customers did the plaintiff require them to use only the plaintiff’s material. The plaintiff adopted the foregoing method of utilizing the patented process because it deemed it the most practical.
  In 1932, the plaintiff gave to the Pep-perell Manufacturing Company and to the H-B Products Company licenses to use the patented process on machines and materials using a latex or non-solvent top coat, at room temperature. The commercial practice of these licensees is substantially identical with that of the plaintiff.
  In 1938 the defendant Ellis began to develop and promote a process for reinforcing insoles. The course of business adopted by his corporation followed closely that of the plaintiff.
  The price per yard charged by the defendant, however, . was somewhat lower than the plaintiff’s price. In the machines which the defendants furnished their customers, there was a heating unit ostensibly to heat the latex solution which was used as a top coat. The District Judge found that with the 60 watt unit in use prior to the suit, the temperature of the latex solution when applied to the pre-coated fabric was not above room temperature. Since the suit was brought, a larger unit was installed, and higher temperatures were obtained. But at no time did the temperature approach 200 degrees Fahrenheit, necessary in the old hot process. The machines which the defendant loaned to its customers bore a plate stating that the process required the emulsion used to he kept at a heat of about 120 degrees. The trial judge found as a matter of practice, there was no pretense of maintaining this temperature.
  The defendants’ process is essentially like that of the plaintiff. The adhesive applied in pre-coating the duck follows closely the suggested formula in the plaintiff’s specification. The defendants’ top coat contains approximately 60 degrees concentrated latex and certain other ingredients. The defendants contend that their latex adhesives do not respond to the terms of claim 4, if that claim is properly limited, since latex is a colloidal dispersion in water while rubber cement is a colloidal dispersion in rubber solvent. It is agreed that both are adhesives, and the defendants’ expert testified that they were certainly equivalents. It was conceded that both the latex and the rubber cement developed adhesion as the liquid vehicle evaporated. There was evidence to show that rubber in solvent as described in the patent co-acts in some way with the base coat but not exactly the same way as with the latex top coat, though the final result would be quite similar. The adhesive powers of the twice coated fabric in either case are due to evaporation and absorption of the liquid.
  The defendants claim that their process does not infringe that of the plaintiff since their latex formula for the top coat is dissimilar to the rubber cement suggested in the specification and because heat is required in their process. During the trial the parties conducted tests using the defendants’ process. It was found that no substantial benefit was derived from the use of heat and that the defendants’ process worked satisfactorily at room temperature.
  The District Court found that defendants’ process infringed that of the plaintiff because the latex top coat was equivalent to that suggested in the patent and because the terms of claim 4 permit the use of equivalent means. It further held that the defendants were infringers, but that the plaintiff was prevented from recovering because of its method of exploiting its patent. It therefore ordered the complaint dismissed.
  In order to dispose of this case, the court must decide, first, whether the defendants’ process infringes the plaintiff’s process; second, whether, if so, the defendants are infringers, direct or contributory; and third, whether the plaintiff by its method of doing business will be denied relief against the defendants, providing the latter are determined to be infringers. No question of the validity of the plaintiff’s patent is here involved. The defendants admitted its validity, and Mr. Ellis, being the plaintiff’s assignor, would be estopped to deny it. Westinghouse Co. v. Formica Co., 1924, 266 U.S. 342, 45 S.Ct. 117, 69 L.Ed. 316.
  We think it plain that the defendants’ process infringes that of the plaintiff, as set forth in claim 4. The claim is very-broad, and the granting of the patent allows the plaintiff the exclusive right to use, or license others to use, the process of reinforcing insoles by applying at room temperature to a strip of dry reinforcing material previously coated with a rubber cement, a coating of rubber adhesive which will cause quick adhesion of the reinforcing material and the insole, and applying, at room temperature, the insole to the strip of reinforcement material so coated. Claim 4 is in no way restricted as to the formulae for making the two coatings. The claim is the measure of the grant. Smith v. Snow, 1935, 294 U.S. 1, 55 S.Ct. 279, 79 L.Ed. 721. The patent sets forth the specification for “suitable” mixtures just as many patents suggest preferred methods or machines. But a patentee is in no sense limited to these illustrative specifications. If the contrary were true, a patent, particularly of a process, would be of little value. Continental Paper Bag Co. v. Eastern Paper Bag Co., 1908, 210 U.S. 405, 28 S.Ct. 748, 52 L.Ed. 1122; Tilghman v. Proctor, 1880, 102 U.S. 707, 728, 26 L.Ed. 279; Moore Filter Co. v. Tonopah-Belmont Development Co., 3 Cir., 1912, 201 F. 532, 541. The defendants’ pre-coat and top coat fall precisely within the broad scope- of claim 4. The pre-coat follows closely the preferred formula of the specification. The defendants claim that the use of latex instead of rubber dispersed in a volatile solvent for the top coat differentiates their process from that of the plaintiff. We do not agree. Latex is a rubber substance, and it is a substantial equivalent for the preferred formula in the patent. The process of evaporation and absorption at room temperature is the same for each though the chemical reactions may not be identical. The terms of claim 4 are broad and cover the use of equivalent means to sepure the desired reaction. Since the patentee is not limited to the “suitable” mixture suggested, the defendants’ use of the latex formula does not avoid infringement. Continental Paper Bag Co. v. Eastern Paper Bag Co., supra; Mowry v. Whitney, 1871, 14 Wall. 620, 648, 20 L.Ed. 860; Nachman Spring-Filled Corp. v. Spring Products Corp., 2 Cir., 1934, 68 F.2d 829; Moore Filter Co. v. Tonopah-Belmont Development Co., supra.
  The other factor upon which the defendants rely as showing that their process does not infringe that of the plaintiff is the provision that the latex solution should be heated. However, the evidence and the inter partes test made conclusively showed that heat was not necessary to the defendants’ process. The process could be and frequently was performed without heat. The same results were reached when the latex was at room temperature. The introduction of heat was not necessary to a satisfactory bond or quick adhesion. Even if it had been shown that heat somewhat improved the process, the charge of infringement would not be escaped. Tilgh-man v. Proctor, supra. The defendants use the principle and appropriate the substance of the claim in issue, and the fact that they avoided the letter of the claim by the addition of the unnecessary element of heat does not prevent infringement. Boyden Power-Brake Co. v. Westinghouse, 1898, 170 U.S. 537, 568, 18 S.Ct. 707, 42 L.Ed. 1136; Vortex Mfg. Co. v. Ply-Rite Contracting Co., D.C., D.Md.1929, 33 F.2d 302. The defendants’ process is within claim 4 and infringes it.
  It is, therefore, necessary to decide whether the defendants are infringers of the plaintiff’s claim, and if so, whether they are direct or contributory infringers. To be direct infringers, the defendants must have used the plaintiff’s process. Moore-Filter Co. v. Tonopah-Belmont Development Co., supra. There is no evidence that they have done so or are doing so. They sell rolls of duck cut in strips pre-coated with a dry rubber cement, and they sell the liquid to be used as a top coat. The plaintiff has no patent on either of these things. It simply has a patent on their use in a particular way for a particular purpose. In pre-coating the duck and procuring the top coat from others, the defendants are completely within their rights. They are in no way using the plaintiff’s process. The defendants also supply to their customers a machine which applies the adhesive top coat to the pre-coated duck. The use of this machine, without a license from the plaintiff, in carrying out the plaintiff’s process (or the infringing process of the defendants) would be a direct infringement of the plaintiff’s claim. But the defendants do not use the machine. They merely supply it for use by shoe manufacturers. The manufacture of the machine by the defendants is not an infringement of the plaintiff’s process patent. The plaintiff has a machine patent on the machine which it supplies to its customers for using its process. It may be that the defendants’ machine infringes this patent, and the plaintiff may test its rights by suit for ordinary infringement of that patent. Philad Co. v. Lechler Laboratories, 2 Cir., 1939, 107 F.2d 747. But even such infringement would not constitute the defendants direct infringers in this case. “So distinctively [sic] and separate in the patent law are process and apparatus for utilizing such process that where, after a patent for a process by one inventor, a second inventor might patent a novel apparatus for utilizing the process, the situation would arise that the inventor of the process could not employ his process in such machine without license from the machine patentee, and the latter could not use the process in his machine without license from the process patentee. It will therefore be evident that the test of process infringement is not the similarity of apparatus, but rather whether the apparatus, no matter what its form, utilizes the process.” Moore Filter Co. v. Tonopah-Belmont Development Co., supra, 201 F. at 541, 542. The defendants are clearly not direct infringers of the plaintiff’s process patent.
  However, the defendants manufacture and sell materials for use in an infringing operation with knowledge that they will be so used. They induce their customers to use such infringing processes and indirectly receive their profit from such infringing use. There can be no doubt that they are contributory infringers. Individual Drinking Cup Co. v. Errett, 2 Cir., 1924, 297 F. 733. Though there is some confusion on the point, we understand the District Judge to have reached the same conclusion. His second conclusion of law is that both defendants are guilty of infringement of claim 4. It is to be noted that he does not say “direct” infringement. The third conclusion of law states that the plaintiff is not entitled to maintain this suit “for contributory infringement”. [32 F.Supp. 690, 696.] We believe the District Judge was correct. The defendants are contributory infringers, and the plaintiff’s argument that they are direct infringers cannot prevail.
  Since the defendants are contributory infringers only, it is obvious that in the light of the decided cases the plaintiff is not entitled to recover. The plaintiff’s course of business is precisely that of the patentee in Leitch Mfg. Co. v. Barber Co., 1938, 302 U.S. 458, 58 S.Ct. 288, 82 L.Ed. 371. The defendants are in a situation similar to the vendor of the emulsion in that case. The plaintiff by granting implied licenses only to those who buy unpatented materials from it has brought itself squarely within the language of the Leitch case and Carbice Corporation v. American Patents Development Corp., 1931, 283 U.S. 27, 51 S.Ct. 334, 75 L.Ed. 819. In the former case [302 U.S. 458, 58 S.Ct. 290, 82 L.Ed. 371], the court declared the rule to be that a patentee doing business in the manner of the plaintiff would be denied relief against such contributory infringers as the defendants “on the broad ground that the owner of the patent monopoly, ignoring the limitation ‘inherent in the patent grant,’ sought by its method of doing business to extend the monopoly to unpatented material used in practicing the invention. By the rule there declared every use of a patent as a means of obtaining a limited monopoly of unpatented material is prohibited. It applies whether the patent be for a machine, a product, or a process”. Clearly, this must conclude the case. Autographic Register Co. v. Sturgis Register Co., 6 Cir., 1940, 110 F.2d 883; Philad Co. v. Lechler Laboratories, supra; J. C. Ferguson Mfg. Works v. American Lecithin Co., 1 Cir., 1938, 94 F.2d 729. See Note, (1938) 52 Harv.L.Rev. 308, 313.
  The’ plaintiff seeks to prevent the application of this rule to this case by limiting the doctrine to those situations in which the alleged contributory infringer supplies staple articles of commerce. It insists that where the articles supplied are specially manufactured for use in this particular process, relief is not to be denied' the patentee no matter what his course of business. It points to dry ice, bituminous emulsion, and lecithin as such staple articles. It relies upon our decision in J. C. Ferguson Mfg. Works v. American Lecithin Co., supra, and that of the Ninth Circuit in Johnson Co. v. Philad Co., 1938, 96 F.2d 442, in support of this proposition. In the Ferguson case [94 F.2d 731], we said that a process patent could not be extended “to monopolize the 'sale of unpatented staple material, used in such product, process, or composition.” We do not consider that to have been intended as a limitation upon the doctrine of the Leitch and Carbice cases. The language of those cases is extremely comprehensive and is by no means restricted to staple articles. Lecithin being a staple material there was no necessity for this court to have passed on whether the doctrine applied to other than staple materials, and' we do not believe it did so. There is every indication that the Carbice and Leitch cases apply to specially designed non-patented articles. See International Business Machines Corp. v. United States, 1936, 298 U.S. 131, 56 S.Ct. 701, 80 L.Ed. 1085; Autographic Register Co. v. Sturgis Register Co., supra; Oxford Varnish Co. v. Ault & Wiborg Corp., 6 Cir., 1936, 83 F.2d 764; Alemite Corp. v. Lubrair Corp., 1 Cir., 1933, 62 F.2d 899. We agree with the opinion of the Second Circuit in Philad Co. v. Lechler Laboratories, supra, that the emphasis is on the fact that the articles sold by the alleged contributory infringers were not covered by the 'plaintiff’s patent although it conducted its business as though they were. For this reason we cannot agree with the limitation expressed in Johnson Co. v. Philad Co., supra.
  The plaintiff further argues that its present method of doing business is the only practicable way to exploit its patent and that it should not be penalized for its necessary effect. " The trial judge expressed himself as unimpressed by this contention, and we agree with his conclusion. It is no doubt true that the shoe manufacturers prefer to procure the pre-coated duck, the material for the top coat, and the machines for using the plaintiff’s process from a central source. It is also likely that they wish to perform the process as required in their own factories. It would be perfectly practicable for the plaintiff to grant licenses for the use of its process at a yearly fee, or a royalty based on the number of yards of pre-coated duck or the number of gallons of top coat used, or any other suitable measure. In that way the plaintiff can exploit the patent monopoly, and only the patent monopoly, while leaving the manufacturer free to buy the unpatented materials wherever it is to his best advantage to do so. Such an arrangement would cause little variation in the plaintiff’s method of doing business while effectively preventing the extension of a limited monopoly to unpatented materials.
  The plaintiff’s difficulty appears to be that it misconceives its patent rights under claim 4. It has no right to prevent anyone from pre-coating a reinforcing fabric for insoles with a cold rubber cement, slitting it and rolling it into rolls. It has no right to prevent anyone preparing and selling an adhesive top coat with a substantial rubber content which will adhere at room temperature to the insole and the reinforcing material. It has no right, under claim 4 of the patent here in suit, to prevent anyone from making machines to utilize its process. Mowry v. Whitney, supra, 14 Wall, at 652, 20 L.Ed. 860; Moore Filter Co. v. Tonopah-Belmont Development Co., supra. All that the plaintiff is entitled to do is to prevent any unlicensed person from combining these materials in the patented process or in aiding indirectly in such infringement. Because of its course of business, the plaintiff is denied relief even against such contributory infringement as the furnishing of unpatented articles with the knowledge that they will be utilized in an infringing process.
  It has been suggested that the practice of the plaintiff in granting limited licenses to the Pepperell Mfg. Co. and the H-B Products Co. to make, use and sell pre-coated reinforcing fabric for latex or non-solvent top coating shows that it is properly exploiting its patent. The business practice of the licensees is the same as the plaintiffs. By purchasing their pre-coated material the manufacturers get an implied license to use the plaintiff’s process. We do not believe that the introduction of a middleman licensed by the patentee and practicing the business methods condemned by the Leitch case, through which the plaintiff directly benefits from royalties, can save the plaintiff from the application of the doctrine. An examination of the facts in several of the cases shows that similar arrangements were of no avail. See Leitch Mfg. Co. v. Barber Co., supra, 302 U.S. at 460, note 2, 58 S.Ct. 288, 82 L.Ed. 371; Barber Asphalt Corp. v. La Fera Grecco Contracting Co., 3 Cir., Sept. 20, 1940, 116 F.2d 211, reversing, D.C., D.N.J.1939, 30 F.Supp. 497.
  The defendants’ process infringes the plaintiff’s patent, but the plaintiff is denied relief against the defendants as contributory infringers because it exploits its patent primarily as a means of suppressing competition in unpatented materials used in connection with it. The District Judge was correct in dismissing the complaint.
  The decree of the District Court is affirmed with costs to the appellees.
  “4. That improvement in methods of reinforcing insoles which comprises applying, at room temperature, to a strip of reinforcing material provided with a dry coating of a cement having a substantial rubber content, a coating of adhesive containing a relatively large amount of rubber and of such a character that it will be effective even when freshly applied to cause quick adhesion of the reinforcing material and the material of the insole, and applying to each other, still at room temperature, a portion of the coated strip and the insole to be reinforced.”