139 F.2d 895 (2nd Cir. 1943), 94, Zalkind v. Scheinman
|Citation:||139 F.2d 895, 60 U.S.P.Q. 32|
|Party Name:||ZALKIND v. SCHEINMAN et al. (SCHEINMAN et al., Third Party Plaintiffs; GUIDE SYSTEM & SUPPLY CO., Inc., Third Party Defendant).|
|Case Date:||December 10, 1943|
|Court:||United States Courts of Appeals, Court of Appeals for the Second Circuit|
Samuel Ostrolenk, of New York City (Morris Hirsch and Sidney G. Faber, both of New York City, of counsel), for appellant.
Lackenbach & Hirschman, of New York City (Joseph Hirschman and Armand E. Lackenbach, both of New York City, of counsel), for appellees.
Plaintiff filed a complaint stating two causes of action, the first being for infringement of patents and the second for damages to plaintiff occurring before the issuance of the patents due to alleged wrongful acts of the defendants, which delayed the issuance of the patents. There was no allegation of diversity of citizenship.
On motion of the defendants, Judge Bondy, in the district court, entered an order, on January 5, 1943, dismissing the second cause of action with leave to amend. Plaintiff subsequently filed an amended complaint, consisting of one count which, however, contained in substance what had been alleged in the first and second causes of action of his original complaint. Again there was no allegation of diversity of citizenship. On motion of the defendants, Judge Caffey, in the district court, on March 12, 1943, entered an order striking out from the amended complaint all but the claim for infringement of the patents, 1 stating in an opinion that the district court lacked jurisdiction to consider the claim set forth in the stricken portions of the complaint. Plaintiff appeals from the order of January 5, 1943 and also from the order of March 12, 1943.
Before L. HAND, CLARK, and FRANK, Circuit Judges.
FRANK, Circuit Judge.
1. Judge Bondy's order was interlocutory and not appealable since it permitted plaintiff to amend. By amending, plaintiff did not lose his right to an appeal (if such right otherwise exists) from Judge Caffey's subsequent order, of March 12, 1943, striking out a portion of the amended complaint. In considering that latter order, we shall deal with the amended complaint just as if it had been the original complaint. With respect to the appeal from that order, we face two questions which (as will appear from our discussion) are intertwined: a question of the jurisdiction of the federal courts with respect to such a claim, and a question as to whether the order striking out that portion of the amended complaint is final and appealable until there has been a final judgment on the remaining claim.
2. The amended complaint alleges infringement of plaintiff's patents. It also (in that portion thereof which Judge Caffey's order struck out) sets forth a second claim, viz., one for damages due to defendants' alleged misconduct in the Patent Office before the issuance of the patents. Plaintiff suggests two theories as to the nature of this latter claim: The first theory is that the second claim is for a common law tort; the second theory is that this claim is based upon the provisions of the Patent Law. We shall consider these theories in turn.
The claim, on the first theory, is nonfederal in character. 2 Federal jurisdiction is therefore wanting, since there is no diversity of citizenship, unless this case comes within the doctrine of Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148. An important source of confusion in the discussion of that doctrine stems from this paradoxical aspect of the rule as to 'final, ' appealable orders. 3 Theoretically, under the statutes governing appeals, we lack appellate jurisdiction to decide whether the trial court's order correctly or erroneously denied federal jurisdiction of the nonfederal claim unless and until we first decide that the trial court's order was 'final' and therefore appealable. However, if the two claims are sufficiently distinct to oust federal jurisdiction of the nonfederal claim, then they are also so distinct as to render final and appealable an order the trial court dismissing the nonfederal claim while the other claim still remains on the trial calendar. [3a] It is usually convenient, therefore, to telescope the two
questions, since, should we hold that federal jurisdiction of the nonfederal claim is absent, we will be answering both questions at once. [3b] We turn, then, directly to the question whether the trial court, in the instant case, had jurisdiction of the nonfederal claim, under the doctrine of Hurn v. Oursler, supra
In that case, the plaintiffs, in a suit lacking diversity of citizenship, sought relief on three claims: (1) A claim under the federal copyright statute for conduct infringing plaintiffs' copyright to a play; (2) a nonfederal claim based upon the very same conduct, which, even if it did not constitute infringement of the copyright, was alleged, as a matter of law, to constitute common law unfair competition consisting of the unauthorized use of that same play; (3) a nonfederal claim for unfair competition in the unauthorized use of a revised version of that play, written after the date of the copyright, the revised version not having been copyrighted. The trial court, after a trial, finding no violation of the copyright, held there was no federal jurisdiction of the second and third claims, and dismissed the bill. The Supreme Court held that, since the first or federal claim was 'substantial, ' [3c] federal jurisdiction existed as to the second claim but held that the federal jurisdiction as to the third claim had been properly denied. Because that case has recently been much discussed, 4 we quote from it at length:
'The unfair competition in respect of the copyrighted play, according to the allegations, results from the same acts which constitute the infringement and is inseparable therefrom. * * * In Stark Bros. Co. v. Stark, 255 U.S. 50, 41 S.Ct. 221, 65 L.Ed. 496, suit was brought for infringement of a trade-mark and unfair competition. The Circuit Court of Appeals limited damages to the date when notice was given of the registered mark, and refused to allow damages for earlier injuries. This court pointed out that the suit was for infringement of a registered trade-mark, not simply of a trade-mark, and that this was the scope of the federal jurisdiction. Agreeing with the lower court that the cause of action for the earlier damages lay outside the federal jurisdiction, this court assumed, though without deciding, that plaintiff 'could recover for unfair competition that was inseparable from the statutory wrong, but it could not reach back and recover for earlier injuries to rights derived from a different source.' In that view, so far as the unfair competition alleged was thus inseparable from the statutory wrong, it would seem that a failure to establish the infringement would not have deprived the federal court of jurisdiction of the claim of unfair competition, but would have left that matter to
be disposed of upon the merits. * * * The bill alleges the violation of a single right; namely, the right to protection of the copyrighted play. And it is this violation which constitutes the cause of action. Indeed, the claims of infringement and unfair competition so precisely rest upon identical facts as to be little more than the equivalent of different epithets to characterize the same group of circumstances. The primary relief sought is an injunction to put an end to an essentially single wrong, however differently characterized, not to enjoin distinct wrongs constituting the basis for independent causes of action. ' 5
The court's statements (that the first and second claims rested 'upon identical facts', 'characterize the same group of circumstances, ' resulted 'from the same acts, ' and must be regarded as 'inseparable') are, we think not to be taken too literally. Yet that they were intended to be highly restrictive appears from the court's concluding remarks concerning the second claim: 'It is entirely plain that the holding of the trial court disposing of the claim of infringement on the merits also disposed of the claim of unfair competition in respect of the copyrighted play, since both depended upon the same allegations of wrongful appropriation of certain parts of, and conceptions embodied in, petitioners' play. The finding of the court is comprehensive-- 'That no version of the defendants' play 'The Spider' infringed in any way, either with respect to plot, material, arrangement or sequence of events, or incidents, or otherwise, the plaintiffs' copyrighted play.' This finding-- not challenged here-- contains every essential element necessary to justify the conclusion that there was likewise no unfair competition in respect of the copyrights play, since it negatives the allegations of the bill made for the purpose of establishing by the same facts an infringement of the copyrighted play and unfair competition in relation thereto. Upon this finding the court was right in dismissing the bill in so far as it set up a claim of unfair business practices and unfair competition; but was wrong in dismissing it for the want of jurisdiction. It should have been dismissed, as was the infringement claim, upon the merits.' [5a]
It thus appears that plaintiffs, to sustain their second claim, had offered no evidence not relevant to and needed to support their first (federal) claim. But in order to support the third claim plaintiffs were obliged to offer not only the evidence needed to support the first claim-- i.e., the defendant's production of a play said to invade plaintiffs' rights-- but additional evidence not relevant to the first claim, i.e., proof of the additional matter in the revised uncopyrighted version not contained in the copyrighted version. There was a...
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