"Agreement made and entered into this 3d day of October, 1917, between Marconi Wireless Telegraph Company of America (hereinafter called the Company), a corporation organized and existing under and by virtue of the laws of the state of New Jersey, and Roy Alexander Weagant (hereinafter called Weagant), a citizen of the United States residing in the town of Roselle, in the state of New Jersey: "Whereas, the said Weagant has invented certain new and useful improvements in method of and apparatus for preventing static interference, for which he has applied for United States letters patent, filed March 27, 1917, serial No. 157,594, and also certain improvements in process of and apparatus for receiving radio signals, as described in application for United States letters patent, serial No. 181,458, filed July 19, 1917; and "Whereas, the said Weagant has already assigned, transferred, and set over the whole right, title, and interest in and to the said applications for letters patent by instruments in writing dating, respectively, April 3, 1917, and July 17, 1917, to the company; and "Whereas, the said company is desirous of acquiring from the said Weagant the whole right, title, and interest in and to the said inventions for all countries foreign to the United States, and in and to all inventions which the said Weagant has made (or may hereafter make as improvements upon the same) in all countries foreign to the United States: "Now, therefore, this indenture witnesseth that, for and in consideration of one dollar ($1.00) paid by the said company to the said Weagant, the receipt of which is hereby acknowledged, and other good and valuable considerations, the said Weagant hereby sells, assigns, transfers, and sets over to the said company the whole right, title, and interest in the said inventions, and in and to all improvements which he has now made or which he may hereafter make on the same, and in and to all letters patent in all countries foreign to the United States for said inventions or any improvements thereon. "The said Weagant covenants and agrees that he will, without further compensation, sign all papers, take all rightful oaths, and do all necessary acts to apply for said letters patent in all countries foreign to the United States, to cover said inventions and any and all improvements thereon, which the company may select; it being understood and agreed that all the fees and necessary expenses incident to the filing of any applications for foreign letters patent shall be borne and paid for by the company. "The company agrees that it will pay to the said Weagant one-third (33% per cent.) of the net receipts or profits which the company may hereafter obtain from the sale of any patents or application for patents or patents granted in countries foreign to the United States for said inventions or any improvements thereon made by the said Weagant; it being understood and agreed that the company is not obligated to make any payments to the said Weagant in the event the said inventions or any improvements thereon are put into use at stations in countries foreign to the United States, but communicating with stations in the United States, owned, controlled, or operated by the company. "In witness whereof, the parties have hereunto set their hands and affixed their seals the day and year first above written. Marconi Wireless Telegraph Co. of America, "by [Signed] Edward J. Nally, Vice President. [Signed] Roy Alexander Weagant. [L. S.]" The defendant moved upon the pleadings and the bill of particulars to dismiss the complaint, on the ground that it failed to state a cause of action, and the District Court granted the motion. Adrian C. Humphreys and Marion W. Ripy, both of New York City, and Robert N. Anderson, of Washington, D. C., for plaintiff in error. Charles H. Tuttle, U. S. Atty., of New York City (Frank Chambers, Asst. U. S. Atty., of New York City, of counsel), for defendant in error. Before MANTON, L. HAND, and AUGUSTUS N. HAND, Circuit Judges. AUGUSTUS N. HAND, Circuit Judge (after stating the facts as above). In spite of the allegations of the complaint that the payments to the plaintiff were bestowed and accepted as gifts, there is a reference in the pleading to the instrument of October 3, 1917, and it is distinctly alleged that by that instrument the Marconi Company "promised to give to the plaintiff one-third of the net receipts or profits which it might thereafter obtain from the sale of any patents or applications for patents granted in foreign countries on said inventions or discoveries." [1] The writing of October 3, 1917, is, therefore, apparently a basis for the payments, and when examined is found to contain on the part of the plaintiff an assignment, not 24 F.(2d) 365 only of existing inventions, but of all improvements made "or which he may hereafter make on the same," and on the part of the Marconi Company a promise to pay Weagant one-third of its net receipts from certain of his patents. Can it be said that the two writings of February 5, 1914, and October 3, 1917, the first of which is referred to in the complaint as the contract under which plaintiff worked, and the second of which is referred to as the basis of the payment to him of profits derived by the Marconi Company from his inventions, do not embody the agreement of the parties? If they do, there was no gift, but there were taxable earnings. The plaintiff has relied on the instrument of October 3, 1917, in stating his causes of action. Since the bill of particulars was filed, the complaint must be read with the bill of particulars and treated as including the latter. Richardson v. Gregory, 219 App. Div. 211, 219 N. Y. S. 397, affirmed in 245 N. Y. 540, 157 N. E. 849. In such a situation the plaintiff must avoid the instrument of October 3, 1917, as a binding contract. He might in his complaint have showed that the instrument was not the final memorial of the understanding of the parties, as, for example, that it was thereafter modified or rescinded or legally superseded. To do this he should have set out the particular facts. The instrument of February 5, 1914, contains no statement of any term of employment and embodies no mutual promises, yet the pleading which denominates it a contract speaks of it as terminated on January 1, 1920. Was there some other contract which fixed the term of employment until January 1, 1920? If there was, there would be no consideration for the instrument of October 3, 1917, unless the promise therein to assign improvements which plaintiff "may hereafter make" covered those made after cessation of the term of employment, for the plaintiff would already be bound by the writing of February 5, 1914, to turn over to the Marconi Company all inventions while he was employed by the latter. [2] The complaint, when read with the bill of particulars, becomes at best self-contradictory. At worst, its general allegations that the payments to plaintiff were gifts is explained away by the more specific terms of the writing of October 3, 1917, and the sums which were paid are thereby shown to have been turned over as compensation for services, and as such to have been lawfully taxed. Thus the complaint fails to state a cause of action, either because it is self-contradictory and inconclusive, or because it shows that the sums paid represented taxable income. Yet, in view of the allegations that the payments were bestowed and accepted as gifts, and that both parties to the transactions intended them as such, we think the plaintiff should have another chance to reframe his pleading. He may accordingly allege and prove, if he properly can, that the instrument of October 3, 1917, did not embody the final agreement of the parties under which the payments in question were made. Furthermore, if he alleges that the employment ending January 1, 1920, was had under an agreement that he should work for that term, he may also allege and prove that in the assignment, in the writing of October 3, 1917, of all "improvements" which the plaintiff might "hereafter make," the word "hereafter" (the meaning of which may not be clear in all circumstances) related only to improvements made prior to the termination of his employment. For, if such were the fact, there would apparently be no consideration for the writing of October 3, 1917, and a reasonable ground would exist for the contention that the payments were gifts. The judgment is reversed, but the order for judgment is affirmed as to the portion dismissing the amended complaint, but modified, so as to permit the plaintiff to file a further amended complaint in conformity with the views set forth in this opinion. AMERICAN FABRICS CO. v. RICHMOND 1. LACE WORKS et al. Circuit Court of Appeals, Second Circuit. No. 152. Patents 28-Reassembling or regrouping of familiar forms and decorations, to make design of originality and beauty, may be patentable. Reassembling or regrouping of familiar forms and decorations may constitute a patentable design, if the result be a design of originality and beauty. 2. Patents 252-Infringement of design depends on whether two designs have substantially same effect on eye of ordinary observer, giving usual attention of purchasers. The test of infringement of a design is whether the two designs have substantially the same effect on the eye of the ordinary observer, giving such attention to the matter as purchasers usually give. 3. Patents 252-Changes in design after desisting from producing exact copy of patented design, and while demand for latter was greatest invites close sorutiny. That defendant in patent infringement suit made changes in its design, after desisting from 6. Patents 252-Changes producing substantially different effect on eye than patented design will avoid infringement. If alleged infringer's changes result in producing a substantially different effect on the eye than patented design, so that two patterns are reasonably distinguishable, infringement will be avoided. 7. Patents 180-Patented design, combining old lines and conventionalized figures into novel pattern, as for lace, should receive no broad range of equivalents. Design gaining patentability from combining old lines and conventionalized figures into novel pattern for such an article as lace, new patterns of which are constantly brought out, and may consist of almost infinite variations on given pattern, should receive no broad range of equivalents. 8. Patents 328-Design patent No. 59,923, for lace pattern with large central 16-rayed figure and open meshed center held not infringed by 8-rayed figure with petals of scimlter shape and small, closely woven center. Design patent, No. 59,923, for lace pattern, featured by large central figure with 16 rays or petals and open meshed center or hub, and referred to by trade as "sunflower" pattern, held not infringed by 8-rayed figure, with petals of scimiter shape and small and closely woven center, in absence of disinterested testimony that ordinary buyers have mistaken, or are like ly to mistake, one for the other. 9. Patents 328-Design patent, No. 59,923, for lace pattern, held not shown infringed by fact that defendants' lace pattern cut into plaintiff's trade. That lace pattern of defendants in infringement suit cut into plaintiff's trade held not to show infringement of design patent No. 59,923; being as well explainable on theory that defendant offered different and more pleasing article at cheaper price. Appeal from the District Court of the United States for the Southern District of New York. Suit by the American Fabrics Company against the Richmond Lace Works and another. From a decree of dismissal, on the merits, and adjudging costs to defendants, plaintiff appeals. Affirmed. Design patent No. 59,923, for a pattern for lace, was issued December 6, 1921, to plaintiff, as assignee of the inventor, H. S. Philips. The bill of complaint in three counts charged defendants with infringement of the patent, with breach of a contract not to infringe the same, and with unfair competition, and prayed for injunction and accounting. Frederick S. Duncan, of New York City, for appellant. Berry, Bucknam & Lovejoy, of Boston, Mass., and Henry Warren Beebe, of New York City, for appellees. Before MANTON, SWAN, and AUGUSTUS N. HAND, Circuit Judges. The District Judge assumed the validity of the patent, but found that the defendants' lace did not infringe the plaintiff's design, and that neither the count on the contract nor the count charging unfair competition was established. A photostatic copy of a sample of plaintiff's lace, exemplifying its patented design, is shown at the end of this opinion. It is known as an all-over pattern, and is suitable SWAN, Circuit Judge. for bedspreads, tablecloths, bureau covers, scarves, etc. This design was brought out in the summer of 1921 and immediately met with large commercial success. For the last five months of 1921, plaintiff's sales of this pattern were 63 webs; for 1922, 667 webs; for 1923, 904 webs-the average price being about $100 a web. In 1923 the sales of this design were nearly three times the total sales of all other all-over patterns of the plaintiff. The tribute of imitation was paid by two competitors, including the defendant Richmond Lace Works, which late in 1922 or early in 1923 brought out an exact copy of plaintiff's design in a slightly coarser grade of lace. In March, 1923, however, as a result of protests by the plaintiff, the defendants ceased to market goods resembling the plaintiff's. So, also, did the other infringing competitor. A few months later the defendant brought out a modified pattern, which is the infringement complained of in the present suit. Defendant obtained a patent on its design March 11, 1924. A photostatic copy of a sample of the alleged infringing lace is also appended to this opinion. Defendants sold 48 webs of it in the last three months of 1923, 198 webs in 1924, and 62 webs in 1925. The plaintiff's sales shrank to 227 webs in 1924, and to 23 webs for the first four months of 1925. The significance of these figures is the 24 F.(2d) 365 more apparent when it is noted that defendants' webs contain 221 square yards each, while plaintiff's webs contain only 120 square yards each. Plaintiff proved, further, that certain of its customers, who had previously bought lace of its patented design, bought no more after defendants' similar article came out, but thereafter carried defendants' lace on their shelves. Defendants' lace was of a somewhat coarser grade and was cheaper in price. [1] Plaintiff's design has a large square containing the elements of a circular hub and open mesh circle surrounding the hub, a rayed flowered figure of sixteen rays, a scalloped border surrounding the rayed figure and within a closely woven frame, outlining the square and separated from the similar frame of an adjacent square by a narrow line of open mesh, and a closely woven triangular piece at each corner of the square. When four of these large squares are adjacent to each other, a smaller square is formed by sections of the scalloped border, which surrounds the rayed figures. The triangular pieces of the four adjacent corners form a crude four-pointed star, the thin straight lines of open mesh dividing each of the four rays of the star, and an open meshed circle appearing at its center. All of these individual elements are no doubt old, but they have been combined in a way to form an artistic and unitary pattern, which was obviously very attractive to the purchasing public. The reassembling or regrouping of familiar forms and decorations, if the result be a design of originality and beauty, may constitute a patentable design. Protex Signal Co. v. Feniger (C. C. A.) 11 F.(2d) 43, 46; Graff v. Webster, 195 F. 522 (C. C. A. 2); Steffens v. Steiner, 232 F. 862, 864 (C. C. A. 2). It was apparently novel, for nothing was introduced in the way of prior art which anticipated it. We are disposed to think that to devise so pleasing a design requires sufficient artistic originality to amount to patentable invention; but it is unnecessary to pass finally upon the issue of validity, unless infringement is found. [2-6] The test of infringement is whether the two designs have substantially the same effect upon the eye-not the eye of an expert, but the eye of the ordinary observer, giving such attention to the matter as purchasers usually give. Gorham Co. v. White, 14 Wall. 511, 20 L. Ed. 731; Borgfeldt v. Weiss, 265 F. 268 (C. C. A. 2). The defendant's patent concededly has all the elements of the plaintiff's design, and in identical arrangement, except that it has reduced the petals of the central rayed figure from sixteen to eight, |