217 F.2d 810 (6th Cir. 1954), 12155, Urbain v. Knapp Bros. Mfg. Co.

Docket Nº:12155.
Citation:217 F.2d 810, 103 U.S.P.Q. 337
Party Name:Leon F. URBAIN and Loxit Systems, Inc., Appellants, v. KNAPP BROTHERS MANUFACTURING COMPANY, AL Levinson, Charles Levinson, and Robert Levinson, Appellees.
Case Date:December 01, 1954
Court:United States Courts of Appeals, Court of Appeals for the Sixth Circuit
 
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Page 810

217 F.2d 810 (6th Cir. 1954)

103 U.S.P.Q. 337

Leon F. URBAIN and Loxit Systems, Inc., Appellants,

v.

KNAPP BROTHERS MANUFACTURING COMPANY, AL Levinson, Charles Levinson, and Robert Levinson, Appellees.

No. 12155.

United States Court of Appeals, Sixth Circuit.

December 1, 1954

Curtis F. Prangley, Chicago, Ill. (Clarence B. Des Jardins, Of Des Jardins, Robinson & Keiser, Cincinnati, Ohio, Curtis F. Prangley, Mark H. Clayton, Chicago, Ill., on the brief), for appellants.

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Truman A. Herron, Cincinnati, Ohio (Truman A. Herron, Wood, Herron & Evans, Cincinnati, Ohio, on the brief), for appellees.

Before MARTIN, McALLISTER and MILLER, Circuit Judges.

MARTIN, Circuit Judge.

The appellants-- Leon F. Urbain, an individual residing in Chicago, and Loxit Systems, Inc., an Illinois corporation-- filed on February 2, 1953, a complaint in the United States District Court for Southern Ohio against appellees-- Knapp Brothers Manufacturing Company, an Ohio corporation, and Al Levinson and his two sons, Charles and Robert, as controlling stockholders of the corporation. Urbain, as sole owner, and Loxit Systems, Inc., as exclusive licensee of Letters Patent 2, 319, 278 and 2, 338, 146, sought to enjoin appellees from infringing such patents and from manufacturing, using, selling, advertising, distributing, or displaying board constructions and chalk troughs in infringement or threatened infringement of the patents.

Appellees filed an answer and a counterclaim for declaratory judgment attacking the validity of the patent claims and seeking against appellants a permanent injunction from asserting that the display board constructions and chalk troughs manufactured by appellees infringed appellants' patents, or that the Letters Patent covered validly the constructions manufactured or sold by appellees; and from filing or threatening to file suit against any of their suppliers, customers, or prospective customers. Appellees prayed further for declaratory judgment that each of the Letters Patent is invalid and not infringed by the manufactured products of appellees.

Appellants traversed the material allegations of appellees' counterclaim for declaratory judgment.

On January 15, 1954, the appellee corporation filed under oath of its vice-president a motion for an order restraining the plaintiffs-appellants from prosecuting a companion action in the United States District Court for the Northern District of Illinois. This sworn motion averred that, on February 3, 1953 (one day after the present action was filed in the Southern District of Ohio), the appellants brought a second suit in the Northern District of Illinois naming as defendants therein the Claridge Equipment Company, and individuals Preble, Jecman, and Jecman, Junior; that the Illinois suit charged infringement of patents identical with those charged in the instant action to be infringed; that the Claridge Equipment Company is a distributor of the challenged products of appellees; that the three named individual defendants are officers of the Claridge Equipment Company; and that the appellee company (Knapp Brothers Manufacturing Company) is advised and believes that the products which are charged to infringe plaintiffs' patents in the suit in the Northern District of Illinois were manufactured by this defendant and are identical in nature with those charged to infringe in this action; that accordingly the issues in the two cases are identical; and that this defendant, by an instrument in writing, has assumed the defense of the Chicago suit and has agreed to indemnify the defendants therein from all loss and damage.

The motion averred further that the case had been formally set for trial on March 22, 1954, in the United States District Court for the Southern District of Ohio; but that, despite this fact, appellants have threatened to have the action pending in the Northern District of Illinois set for trial prior to March 22, and have threatened to try that case, notwithstanding the fact that the instant action is entitled to precedence both by reason of its earlier filing and by reason of the fact that it is directed against the manufacturer of the alleged infringing products. The motion then prayed for a court order enjoining appellants and all in privity with them 'from proceeding with the trial of said action in the Northern District of Illinois prior to the trial of this action and prior to the decision of the court herein.'

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There appears in the appendix to appellees' brief a copy of the indemnity agreement in the language set out in the margin. 1

The appendix to appellants' brief includes an affidavit of one of the attorneys for appellants, as set forth in the margin. 2 We deem this affidavit of no guildance

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toward correct determination of the decisive issue.

After a hearing on the motion of appellants for injunction, as aforesaid, the district court entered an order declaring that the motion was well taken and should be granted. Appellants were enjoined and restrained from proceeding with the trial of the action in the Northern District of Illinois prior to the trial of the instant action and prior to the decision of the United States District Court for Southern Ohio. Unfortunately, the United States District Judge wrote no opinion and did not file any findings of fact or conclusions of law.

1. Appellants say first that the United States District Court for the Southern District of Ohio had no right to enjoin appellants, as ordered, from prosecuting their civil action against the Claridge Equipment Company, et al., in the United States District Court for the Northern District of Illinois. They point out that while the plaintiffs in both actions are identical, the defendants are not; that infringement by different parties is charged in the two suits; and that it has not been established that the defendants in the Illinois case are distributors of the products of the appellees, or that appellees have undertaken the defense of the proceeding in the Northern District of Illinois. The opinion in Triangle Conduit & Cable Co. v. National Electric Products Corporation, 3 Cir., 138 F.2d 46, 48, is presented as authority for the proposition that a United States District Court should not enjoin the prosecution of a later proceeding instituted in another United States District Court, unless the controversy in each court involves the same issues and the same parties. The Court of Appeals stated: 'It is well settled that a patent owner has a cause of action, separate and independent from that against an infringing manufacturer, to recover profits and damages and to restrain one who resells a product which he purchased from an infringing manufacturer.'

Appellants contend that the decision of the United States Supreme Court in Kerotest Manufacturing Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 72 S.Ct. 219, 96 L.Ed. 200, does not modify or impair the authority of the Triangle case just cited or of the earlier Triangle case reported in Triangle Conduit & Cable Co. v. National Elec. P. Corp., 3 Cir., 125 F.2d 1008, to which reference is made in a footnote 342 U.S. 184, 72 S.Ct. 221. The writer of the opinion in the Kerotest case (342 U.S. 180, 72 S.Ct. 221) pointed out that wise judicial administration in the 'conservation of judicial resources and comprehensive disposition of litigation, does not counsel rigid mechanical solution' of complicated problems resulting from the initiation of litigation by different...

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