Marchus

Marchus appeals from a judgment of the District Court in a suit brought under the Federal Declaratory Judgment Act ( 28 U.S.C.A. § 400 ), in which a counterclaim for infringement by plaintiffs of certain patents was filed.

Plaintiffs, Otto and Dan Druge, in 1927 operated a gasoline station in Oakland, California. At that time they agreed to test a combined tire gauge and filling valve designed by Amos Marchus. The Druges became interested in the device, sold their gasoline station, and launched the new enterprise of selling the Marchus air gauge. Marchus was to do the manufacturing. In 1928 he and the Druges entered into an agreement, whereby for a consideration the Druges were given exclusive selling rights for the gauge in designated districts. The Druges then became anxious to assume the responsibilities of manufacturing the gauge. However, in 1929, before any gauges were produced by them, they desired to retire from the new business and to resume the conduct of their service station which in the meantime had been returned to them.

Later in 1929, the Druges again sold their service station, and independent of Marchus, began to manufacture an air gauge and filling valve, under…