315 F.2d 475 (2nd Cir. 1963), 76, Deering Milliken Research Corp. v. Leesona Corp.

Docket Nº:76, 27628.
Citation:315 F.2d 475, 137 U.S.P.Q. 173
Party Name:DEERING MILLIKEN RESEARCH CORPORATION, Plaintiff-Appellant, Warren A. Seem, Nicholas J. Stoddard, Frederick Tecce and Harold P. Berger, copartners trading as The Permatwist Company, Intervenor, v. LEESONA CORPORATION, Defendant-Appellee.
Case Date:March 29, 1963
Court:United States Courts of Appeals, Court of Appeals for the Second Circuit
 
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Page 475

315 F.2d 475 (2nd Cir. 1963)

137 U.S.P.Q. 173

DEERING MILLIKEN RESEARCH CORPORATION, Plaintiff-Appellant, Warren A. Seem, Nicholas J. Stoddard, Frederick Tecce and Harold P. Berger, copartners trading as The Permatwist Company, Intervenor,

v.

LEESONA CORPORATION, Defendant-Appellee.

No. 76, 27628.

United States Court of Appeals, Second Circuit.

March 29, 1963

Argued Oct. 30, 1962.

Granville M. Brumbaugh, New York City (Brumbaugh, Free, Graves & Donohue, New York City, on the brief; Stuart N. Updike, James N. Buckner, and Lee W. Meyer, New York City, of counsel), for plaintiff-appellant.

Robert F. Conrad, Washington, D.C. (Watson, Cole, Grindle & Watson, Washington, D.C., on the brief), (Debevoise, Plimpton, Lyons & Gates, New York City, of counsel), for defendant-appellee.

William J. Fuchs, Obermayer, Rebman, Maxwell & Hippel, Philadelphia, Pa., for intervenor Permatwist Co.

Before CLARK, FRIENDLY and MARSHALL, Circuit Judges.

MARSHALL, Circuit Judge.

This is an appeal by Deering Milliken Research Corporation, plaintiff below, from an order of the United States District Court for the Eastern District of New York, Byers, J., which dismissed plaintiff's amended complaint and entered judgment on the merits for the defendant, Leesona Corporation. The court retained jurisdiction without ruling upon the merits of a complaint filed by the intervenor, The Permatwist Company. The opinion is reported at 201 F.Supp. 776 (E.D.N.Y.1962).

Deering Milliken Research Corporation, which in 1955 succeeded to the business and assets of Deering Milliken Research Trust, is a Delaware corporation having its principal office and place of business in Spartanburg, South Carolina. It is engaged in research and development, rather than manufacturing, in the field of textiles, particularly the area of thermo-plastic synthetic yarns used in the production of hosiery and of fabrics for wearing apparel. Its income is obtained from royalties paid by its licensees for the use of its patents and inventions. Leesona Corporation, which in 1959 changed its name from Universal Winding Company, is a Massachusetts corporation which has its principal place of business in Cranston, Rhode Island, and maintains a research laboratory in Jamaica, Queens County, within the Eastern District of New York. Leesona is engaged in the manufacture and sale of

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textile machinery and equipment used by mills in the fabrication of hosiery and wearing apparel in which thermo-plastic yarns are used; appellant's brief describes Leesona as 'dominant in that segment of the industry which is concerned with the subject matter of this appeal-- machinery to produce crimped nylon yarn.' Permatwist, a partnership consisting of four men, each of whom is a citizen of Pennsylvania, is a competitor of the plaintiff in the design and licensing of mechanical equipment for use in textile manufacturing. For convenience, each of the parties will be referred to by its present name.

On November 23, 1954, Deering Milliken and Leesona entered into a licensing agreement. By the terms of the agreement, Deering Milliken granted to Leesona a royalty-free license to manufacture and sell to Deering Milliken's use licensees apparatus designed by Deering Milliken for use in the manufacture of elasticized yarn and embodying its technical information and inventions. Deering Milliken also agreed not to license other machinery manufacturers in the United States during the term of the agreement. In a grant-back clause that was to become central to the litigation that resulted, the parties provided:

'3. Any improvements made on the apparatus or process which is the subject matter of this agreement by or through the...

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