Rice Adams Corporation v. Lathrop

• Decision Date: 18 February 1929
• Docket Number: No. 155,155
• Parties: RICE & ADAMS CORPORATION v. LATHROP
• Court: U.S. Supreme Court

278 U.S. 509

49 S.Ct. 220

73 L.Ed. 480

RICE & ADAMS CORPORATION

v LATHROP.

No. 155.

Argued and Submitted Jan. 11, 1929.

Decided Feb. 18, 1929.

Messrs. Charles J. Staples,, Frederick G. Mitchell, William Doran Cushman, and Wm. P. Conley, all of Buffalo, N. Y., for petitioner.

Messrs. Joshua R. H. Potts, and Eugene Vincent Clarke, both of Chicago, Ill., for respondent.

Mr. Justice SUTHERLAND delivered the opinion of the Court.

The question here to be determined arose in a suit in equity by respondent against petitioner, brought in the federal District Court for the Western District of New York, for infringement of a patent. The bill alleged repeated and continuing infringement of the patent by petitioner, preparation and readiness to continue such infringement, and that, unless petitioner was restrained, respondent would suffer great and irreparable damage, etc. It was further alleged that, in a prior suit for infringement, brought by respondent against the Bowman Dairy Company, the patent had been sustained as valid and infringed; that the defense to that suit was openly conducted by petitioner, who paid all expenses, as well as the judgment rendered by the final decree; that such decree, therefore, became res judicata as against petitioner. The prayer was for an interlocutory as well as a perpetual injunction, and for an account to be taken of profits realized by petitioner and damages sustained by respondent.

At the time suit was brought, only 41 or 42 days remained before the expiration of the patent. Two days after beginnig suit, respondent moved for a preliminary injunction. After a hearing upon affidavits, the motion was denied. The court thought no injury would result to respondent by a refusal to grant the injunction at that time, that infringement had ceased, that the responsibility of petitioner was unquestioned, and that the recovery of damages would be a sufficient protection for past infringement. Subsequently a motion by petitioner to transfer the case to the law side of the court was made and denied. The grounds for the denial were stated in an opinion by the District Judge (6 F.(2d) 91), in the course of which he said:

'In the circumstances, plaintiff had a right, at the time this action was instituted, to commence in equity and to assert that right to an injunction existed * * * I must therefore hold that the relief sought in the bill was grantable, and it was only denied by the court in the exercise of its discretion. * * *'

The case was then proceeded with as a suit in equity. Before the trial was entered upon, the patent in the meantime having expired, petitioner renewed its motion to transfer to the law docket, which was again denied. The trial resulted in a decree for respondent, holding the patent to be valid and infringed (21 F.(2d) 124), and this decree was affirmed by the court below on appeal without opinion (24 F.(2d) 1021).

The sole question for our consideration is whether, after refusing the preliminary injunction, the District Court was justified in retaining jurisdiction of the case as a suit in equity. We allowed the writ and brought the case here because of an alleged conflict in respect of that matter among the decisions of the Circuit Courts of Appeals.

The question is very nearly set at rest by Clark v. Wooster, 119 U. S. 322, 7 S. Ct. 217, 30 L. Ed. 392. There suit was brought to restrain a patent infringement and to recover profits and damages. The patent involved expired 15 days after the bill was filed. It did not appear whether an application for an interlocutory injunction was made, but under the rules of the court there was time before the expiration of the patent within which it could have been made. The final decree established the patent and its infringement, and a reference was made to a master to take and state an account. The jurisdiction of the trial court sitting as a court of equity was challenged. This court sustained the jurisdiction and held that it was within the discretion of the trial court under the circumstances to retain the bill as it did. The opinion then proceeds (page 325 of 119 U. S. (7 S. Ct. 218)):

'It might have dismissed the bill, if it had deemed it inexpedient to grant an injunction; but that was a matter in its own sound discretion, and with that discretion it is not our province to interfere, unless it was exercised in a manner clearly illegal. We see no illegality in the manner of its exercise in this case. The jurisdiction had attached, and although, after it attached, the principal ground for issuing an injunction may have ceased to exist by the expiration of the patent, yet there might be other grounds for the writ arising from the possession by the defendants of folding guides illegally made or procured whilst the patent was in force. The general allegations of the bill were sufficiently comprehensive to meet such a case. But even without that, if the case was one for equitable relief when the suit was instituted, the mere fact that the ground for such relief expired by the expiration of the patent, would not take away the jurisdiction, and preclude the court from proceeding to grant the incidental relief which belongs to cases of that sort. This has often been done in patent causes, and a large number of cases may be cited to that effect; and there is nothing in the decision in Root v. Railway Co., 105 U. S. 189 (26 L. Ed. 975), to the contrary. Cotton Tie Co. v. Simmons, 106 U. S. 89 (1 S. Ct. 52, 27 L. Ed. 79); Lake Shore, etc., Railway v. Car-Brake Co., 110 U. S. 229 (4 S. Ct. 33, 28 L. Ed. 129); Consolidated Valve Co. v. Crosby Valve Co., 113 U. S. 157 (5 S. Ct. 513, 28 L. Ed. 939); Thomson v. Wooster, 114 U. S. 104 (5 S. Ct. 788, 29 L. Ed. 105).'

And see Beedle v....