Raylite Electric Corp. v. Noma Electric Corp., 45
| Decision Date | 29 November 1948 |
| Docket Number | Docket 21067.,No. 45,45 |
| Parties | RAYLITE ELECTRIC CORPORATION v. NOMA ELECTRIC CORPORATION (OTIS, Intervener). |
| Court | U.S. Court of Appeals — Second Circuit |
Pennie, Edmonds, Morton & Barrows, of New York City (Lewis Barnett and Daniel V. Mahoney, both of New York City, of counsel), for appellant.
Byerly, Townsend & Watson, of New York City (Ralph M. Watson, of New York City, of counsel), for appellee.
Before L. HAND, Chief Judge, and SWAN and CHASE, Circuit Judges.
This action for a declaratory judgment was brought by the plaintiff (Raylite) against the defendant (Noma) because of a controversy between them with respect to three patents of which Noma was an exclusive licensee.1 Raylite was manufacturing and offering for sale "ornamental illuminated bubbling devices" which Noma had claimed by letters to Raylite and its customers to be infringements of each of the three Otis patents. Raylite disputed infringement and asserted that the patents were invalid. By its amended complaint it sought judicial declarations to this effect and an injunction to restrain Noma from claiming infringement. Noma filed an answer and a counterclaim. They are not included in the record on appeal but the parties are in agreement in stating that Noma's answer failed to deny the allegations of invalidity and non-infringement with respect to two of the patents and that its counterclaim charged infringement of only the third patent No. 2,383,941. Raylite moved for summary judgment with respect to the other two patents but its motion was denied on June 19, 1947. From this order Raylite took an appeal. Thereafter Raylite and Noma entered into a stipulation withdrawing the appeal, permitting Noma to amend its answer to deny invalidity, but not non-infringement, and consenting to entry of a judgment that the two patents were not infringed by Raylite's device and to an injunction restraining Noma from asserting the contrary.2
Meanwhile, on July 25, 1947, the patent owner, Otis, was allowed to intervene "without prejudice to the proceedings which have previously been had herein," and to file an answer and counterclaim. His answer denied the plaintiff's allegations of invalidity and non-infringement but his counterclaim asserted infringement by the plaintiff's device of only patent No. 2,383,941. Upon the pleadings and the consent judgment against Noma, the plaintiff moved for a summary judgment against the intervener with respect to the two patents other than 2,383,941 and for an injunction restraining him from asserting that the plaintiff is infringing them. This motion was denied by an order entered May 5, 1948, from which the plaintiff has appealed.
The order on appeal, although interlocutory, is within our appellate jurisdiction because it denied the plaintiff an injunction. 28 U.S.C.A. § 227 now § 1292.
It seems obvious that the plaintiff's case as against the intervener cannot be aided by the consent judgment obtained against the original defendant. In Kneeland v. Luce, 141 U.S. 437, 12 S.Ct. 39, 35 L.Ed. 808, it was held that a stipulation between the original parties to the action could not bind interveners who did not sign it and came into the case afterwards. A fortiori a stipulation signed after an intervener has entered cannot affect his rights, for an intervener comes into the case in the condition in which it stands at the time of intervention. A consent judgment binds only the parties consenting to it. Botz v. Helvering, 8 Cir., 134 F.2d 538, 545; ...
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