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American Gage & Manufacturing Co. v. Maasdam

June 6, 1957

THE AMERICAN GAGE & MANUFACTURING COMPANY AND ALFRED A. ANGLEMYER, APPELLANTS,
v.
FELBER MAASDAM, D.B.A. MAASDAM POW'R PULL, APPELLEE.



Author: Stewart

Before SIMONS, Chief Judge, and ALLEN and STEWART, Circuit Judges.

STEWART, Circuit Judge.

This is an appeal from that part of a district court judgment which held The American Gage & Manufacturing Company (hereinafter "American") liable to Felber Maasdam (hereinafter "Maasdam") for unjust enrichment. As the case reaches us, the issues are considerably less complicated than they were in the district court.

In 1945 Maasdam's father filed a patent application disclosing and claiming an alleged invention relating to a wire stretching tool for use in building fences. The rights under this patent application were subsequently assigned to Maasdam. In the Spring of 1946 Maasdam initiated negotiations with American's president, Alfred Anglemyer, looking toward a license agreement under which American would manufacture the wire stretchers covered by the patent application. Numerous meetings were held between the parties at American's plant in Dayton, Ohio. During these meetings a model of the device in question was disclosed to Anglemyer, and he was told of the patent application.

These negotiations resulted in an agreement dated July 1, 1946, which gave American an exclusive territorial license to manufacture and sell the Maasdam wire stretcher for one year. The agreement required American to pay a minimum license fee or royalty of $10,600. Both parties fully performed their obligations under this agreement. Shortly after the agreement was consummated Anglemyer, at the behest of Maasdam, wrote several letters to prospective purchasers of the wire stretcher, soliciting their trade. These letters contained photographs of the wire stretcher, which, along with the description and technical data included in the letters, made a complete disclosure of the device.

During the term of this agreement the patent application was rejected by the Patent Office, for the reason that the alleged invention was already in the public domain, having been completely anticipated by patents which had expired before the Maasdam application was filed. No further steps were taken to prosecute the claim, and it therefore became abandoned as a matter of law. 35 U.S.C. ยง 133. Maasdam did not inform Anglemyer or American of the rejection and abandonment of the patent application.

In 1947 a second agreement was made between the parties, predicated on the patent application, although the application by this time had already been abandoned without the knowledge of American or its president Anglemyer. The second contract was like the first, except that it broadened the territory within which American was licensed to manufacture and sell the wire stretchers to include the entire continental United States. ...


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