Milwaukee Gas Specialty Co. v. Mercoid Corporation

• Decision Date: 08 June 1939
• Docket Number: No. 6823.,6823.
• Parties: MILWAUKEE GAS SPECIALTY CO. v. MERCOID CORPORATION.
• Court: U.S. Court of Appeals — Seventh Circuit

104 F.2d 589 (1939)

MILWAUKEE GAS SPECIALTY CO. v. MERCOID CORPORATION.

No. 6823.

Circuit Court of Appeals, Seventh Circuit.

April 28, 1939.

Rehearing Denied June 8, 1939.

Langdon Moore, of Chicago, Ill., for appellant.

Charles V. Hildebrecht and Edward C. Grelle, both of Chicago, Ill., for appellee.

Before MAJOR, TREANOR, and KERNER, Circuit Judges.

KERNER, Circuit Judge.

Defendant appeals from an order denying its motion for a temporary restraining order.

On June 29, 1938 plaintiff sued the Mercoid Corporation for infringement of patent No. 1,958,482 issued May 15, 1934. On July 20, 1938 the defendant filed its answer, denying validity and infringement. On August 4, 1938 it filed its motion for a temporary injunction restraining plaintiff from prosecuting this suit pending the final determination of defendant's petition for a declaratory decree under the Federal Declaratory Judgment Act, Sec. 274d, Judicial Code, 28 U.S.C.A. § 400, pending in the Eastern District of Wisconsin, entitled The Mercoid Corporation v. Milwaukee Gas Specialty Company.

It appears that on June 13, 1938 the Mercoid Corporation filed in the Eastern District of Wisconsin its petition for declaratory decree, alleging that the Milwaukee Gas Specialty Company had wrongfully charged the Mercoid Corporation with infringement of the patent involved in the instant case and prayed the court to decide whether the patent was valid, and, if so, whether it was infringed by the Mercoid Corporation.

It further appears that the defendant's predecessors in business began the use of "Mercoid" as a trade-mark for thermostatic circuit controlling devices on September 20, 1921 and that on January 1, 1932 the defendant published a bulletin entitled "Announcing Mercoid Sensatherm"; that prior to July 28, 1932 over 1200 Mercoid Sensatherms had been made and sold by defendant; that up to July 21, 1938 over 140,000 had been manufactured and sold, and on July 21, 1938 defendant had orders for 15,000 Sensatherms; that an application for the patent in controversy in the instant case was filed on July 28, 1932; that between February 12, 1932 and March 23, 1934, plaintiff was placed on the mailing list of defendant; that in February, March and May of 1934, Mercoid Installation Instructions, illustrating Mercoid Sensatherm, were published by defendant, and in 1936 and 1937 catalogues illustrating Mercoid Sensatherm had also been published.

It further appears that on March 16, 1938 plaintiff wrote defendant that defendant's catalogue sheet of August 1935 showed a Mercoid Sensatherm, which was an infringement of plaintiff's patent No. 1,958,482 and that unless it discontinued its manufacture, suit would be commenced, and on June 11, 1938 plaintiff notified defendant that unless defendant accepted a license, suit would be brought within ten days.

On August 5, 1938 plaintiff filed its answer in the cause pending in the Eastern District of Wisconsin, including a counterclaim, alleging infringement and praying for an injunction and an accounting.

It also appears that the Wisconsin court has restrained plaintiff from prosecuting the instant case pending the determination of the petition for a declaratory decree.

The issues in the declaratory judgment proceedings and the instant infringement suit are the same, except as to the claim for damages claimed by plaintiff, and the question that presents itself is whether the petition filed under the Declaratory Judgment Act in the Eastern District of Wisconsin takes precedence over the suit for infringement in the instant case.

It is clear that plaintiff claims that defendant's Mercoid Sensatherms infringe a patent which it owns and which it claims is valid. The defendant denies the validity of the patent and that its product infringes and by its petition in the declaratory judgment proceedings so notified the plaintiff. Under such circumstances they stand opposed to each other in respect to legal rights and obligations and a case is presented that is appropriate for judicial determination. Aetna Life Insurance v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000, and E. W. Bliss Co. v. Cold Metal Process Co., 6 Cir., 102 F.2d 105. But that controversy, says the plaintiff, must be determined in the instant case, otherwise it would be deprived of its statutory right to prosecute infringers. With this contention, under the facts in this case, we cannot agree.

In Aetna Life Insurance Co. v. Haworth, supra, 300 U.S. at page 240, 57 S.Ct. at page 463, 81 L.Ed. 617, 108 A.L.R. 1000, it was said:

"In providing remedies and defining procedure in relation to cases and controversies in the constitutional sense the Congress is acting within its delegated power over the jurisdiction of the federal courts which the Congress is authorized to establish. * * * Exercising this control of practice and procedure the Congress is not confined to traditional forms or traditional remedies. * * * In dealing with methods within its sphere of remedial action the Congress may create and improve as well...