General Electric Co v. Marvel Rare Metals Co

• Citation: 53 S.Ct. 202,77 L.Ed. 408,287 U.S. 430
• Decision Date: 12 December 1932
• Docket Number: No. 57,57
• Parties: GENERAL ELECTRIC CO. et al. v. MARVEL RARE METALS CO. et al
• Court: United States Supreme Court

287 U.S. 430

53 S.Ct. 202

77 L.Ed. 408

GENERAL ELECTRIC CO. et al.

v MARVEL RARE METALS CO. et al.

No. 57.

Argued Nov. 17, 1932.

Decided Dec. 12, 1932.

Messrs. Lawrence Bristol and Charles Neave, both of New York City, for petitioners.

Messrs. William C. McCoy and Harold Elno Smith, both of Cleveland, Ohio, for respondents.

Mr. Justice BUTLER delivered the opinion of the Court.

Petitioners, New York corporations having their principal offices in that state, brought this suit in the northern district of Ohio against defendants, two corporations having regular and established places of business in that district and two individuals residing there. The complaint alleges that the defendants infringed plaintiffs' rights under certain patents relating to the manufacture of hard-metal products by making, using, and selling tools and parts thereof embodying such inventions. The answer avers that the patents are invalid and denies infringement alleging that all manufacture by defendants has been under one or more of five patents granted defendant Gebauer. And the answer sets up a counterclaim against plaintiffs for the infringement of one of these patents and prays injunction against such infringement and an accounting. But it does not allege that plaintiffs are inhabitants of the district or that they infringed defendants' patent and have a regular and established place of business there. The plaintiffs moved to dismiss the counterclaim for want of jurisdiction. The District Court granted their motion. Defendants appealed. Plaintiffs moved to dismiss the appeal on the ground that the dismissal of the counterclaim does not amount to the refusal of an injunction under section 129, Judicial Code (28 USCA § 227), and was not appealable under that section. The Circuit Court of Appeals denied the motion and reversed the order appealed from. 56 F.(2d) 823.

Plaintiffs insist that the court erred in refusing to dismiss the appeal. Equity Rule 30 (28 USCA § 723) declares: 'The defendant by his answer shall set out * * * his defense to each claim asserted in the bill. * * * The answer must state in short and simple form and counterclaim arising out of the transaction which is the subject-matter of the suit, and may, without cross-bill, set up any set-off or counterclaim against the plaintiff which might be the subject of an independent suit in equity against him, and such set-off or counterclaim, so set up, shall have the same effect as a cross-suit, so as to enable the court to pronounce a final decree in the same suit on both the original and the cross-claims.' 268 U.S. 709. It is clear that in this suit the court in a single decree may finally determine the merits of the cause of action alleged in the complaint and the counterclaim set up in the answer. The order dismissing the counterclaim is interlocutory. Winters v. Ethell, 132 U.S. 207, 210, 10 S.Ct. 56, 33 L.Ed. 339; In re South & N.A. Railroad Co., 95 U.S. 221, 225, 24 L.Ed. 355; Ayres v. Carver, 17 How. 591, 595, 15 L.Ed. 179. The general rule is that review of interlocutory orders must await appeal from the final decree. But in proceedings for injunctions and receivers exceptions have been made by section 129, Judicial Code:

'Where, upon a hearing in a district court, or by a judge thereof in vacation, an injunction is granted, continued, modified, refused, or dissolved by an interlocutory order or decree, or an application to dissolve or modify an injunction is refused, or an interlocutory order or decree is made appointing a receiver, or refusing an order to wind up a pending receivership or to take the appropriate steps to accomplish the purposes thereof, such as directing a sale or other disposal of property held thereunder, an appeal may be taken from such interlocutory order or decree to the circuit court of appeals. * * * The appeal * * * must be applied for within thirty days from the entry of such order or decree, and shall take precedence in the appellate court; and the proceedings in other respects in the district court shall not be stayed during the pendency of such appeal unless otherwise ordered by the court, or the appellate court, or a judge thereof. * * *' 28 U.S.C. § 227 (28 USCA § 227).

The reasons suggested by plaintiffs in support of the contention that the order is not appealable are that there was no hearing upon any application for an injunction and that the dismissal of the counterclaim was not the refusal of an injunction. But by their motion to dismiss, plaintiffs themselves brought on for hearing the very question that, among others, would have been presented to the court upon formal application for an interlocutory injunction. That is, whether the allegations of the answer are sufficient to constitute a cause of action for injunction. And the court necessarily decided that upon the facts alleged in the counterclaim defendants were not entitled to an injunction. It cannot be said, indeed plaintiffs do not claim, that the dismissal did not deny to defendants the protection of the injunction prayed in their answer. The ruling of the Circuit Court of Appeals that an injunction has been denied by an interlocutory order which is reviewable under section 129 is sustained by reason and supported by the weight of judicial opinion. Emery v. Central Trust & Safe Deposit Co. (C.C.A.) 204 F. 965, 968; Ward Baking Co. v. Weber Bros. (C.C.A.) 230 F. 142. Historical Pub. Co. v. Jones Bros. Pub. Co. (C.C.A.) 231 F. 638, 643. Naivette v. Philad Co. (C.C.A.) 54 F.(2d) 623. Cf. Banco Mercantil v. Taggart Coal Co. (C.C.A.) 276 F. 388, 390.¹ Plaintiffs' motion to dismiss the appeal was rightly denied.

Plaintiffs maintain that the Circuit Court of Appeals erred in sustaining the counterclaim.

They call attention to Equity Rule 30 and cite section 48 of the Judicial Code: 'In suits brought for the infringement of letters patent the district courts * * * shall have jurisdiction, in law or in equity, in the district of which the defendant is an inhabitant, or in any district in which the defendant * * * shall have committed acts of infringement and have a regular and established place of business. * * *' 28 U.S.C. § 109 (28 USCA § 109). They argue that a counterclaim for patent infringement cannot be maintained over plaintiffs' objection if it does not contain allegations...