Wembley, Inc. v. Superba Cravats, Inc.

• Decision Date: 08 March 1963
• Docket Number: No. 52,Docket 27413.,52
• Citation: 315 F.2d 87
• Parties: WEMBLEY, INC., Appellant, v. SUPERBA CRAVATS, INC., Appellee.
• Court: U.S. Court of Appeals — Second Circuit

315 F.2d 87 (1963)

WEMBLEY, INC., Appellant, v. SUPERBA CRAVATS, INC., Appellee.

No. 52, Docket 27413.

United States Court of Appeals Second Circuit.

Argued January 15, 1963.

Decided March 8, 1963.

Samuel Scrivener, Jr., Washington, D. C. (John H. O. Clarke, Scrivener & Parker, Washington, D. C., George W. Shaw, Edward H. Cumpston, and Cumpston & Shaw, Rochester, N. Y., on the brief), for appellant.

B. Edward Shlesinger, Rochester, N. Y. (Philip K. Fitzsimmons, Sol. M. Linowitz, and Harris, Beach, Keating, Wilcox, Dale & Linowitz, Rochester, N. Y., on the brief), for appellee.

Before MEDINA, WATERMAN and MOORE, Circuit Judges.

MEDINA, Circuit Judge.

The parties here are necktie manufacturers, and plaintiff appeals from a judgment of the United States District Court for the Western District of New York, Harold P. Burke, Judge, dismissing without prejudice its complaint seeking a declaration of the invalidity of defendant's patent on a particular necktie manufactured and sold by defendant, or of the non-infringement of said patent by a "proposed" necktie of plaintiff's. We hold that the complaint was properly dismissed on the ground that it fails to allege a justiciable controversy under the Declaratory Judgment Act, 28 U.S.C. § 2201. Opinion below not reported.

Defendant owns a patent on a necktie consisting of an outer and inner sheet both composed of Dacron polyester fiber, and defendant states that this is a popular product because of its washability due to the sheets having the same coefficient of shrinkage. Plaintiff's complaint alleges: (1) defendant "has represented to the industry, and now continues so to represent, that because of said patent, defendant alone may make, use and sell" such a necktie; (2) plaintiff "has designed a necktie" and plaintiff believes this "proposed" necktie does not infringe defendant's patent, which plaintiff alleges is invalid; (3) plaintiff submitted this single sample to defendant and asked for an acknowledgment that such necktie does not infringe defendant's patent so that it "may freely be manufactured and sold"; (4) defendant answered that "In our opinion this necktie is covered" by the patent, which has been in existence and "respected" for nine years, and that defendant "shall expect" that plaintiff "will respect the patent."

The Supreme Court has stated that the familiar distinction between definite, concrete and substantial controversies, which are justiciable, and hypothetical, abstract or academic ones, which are not, is one of degree, to be explored on a case by case basis. Aetna Life Ins. Co. v. Haworth, 1937, 300 U.S. 227, 239-241, 57 S.Ct. 461, 81 L.Ed. 617; Maryland Casualty Co. v. Pacific Coal & Oil Co., 1941, 312 U.S. 270, 273, 61 S.Ct. 510, 85 L.Ed. 826; Public Service Comm. of Utah v. Wycoff Co., 1952, 344 U.S. 237, 241-244, 73 S.Ct. 236, 97 L.Ed. 291. Turning to the patent field in particular, it may be noted that the availability of declaratory relief has destroyed the "racket" by which patentees gained manifold advantages by the device of threatening alleged infringers or their customers with lawsuits which might never be brought or, if brought, could always be dismissed without prejudice, without the possibility of such persons taking steps to ascertain the validity of the patentee's claims. Borchard, Declaratory Judgments, pp. 803-04 (2d ed. 1941). Because of the public policy in breaking this "racket," and in preventing an invalid patent from remaining in the art "as a scarecrow" (Bresnick v. United States Vitamin Corp., 2 Cir., 1943, 139 F.2d 239, 242), the declaratory remedy should be construed with liberality in the patent field as in general. Dewey & Almy Chemical Co. v. American Anode, Inc., 3 Cir., 1943, 137 F.2d 68, cert. denied, 320 U.S. 761, 64 S.Ct. 70, 88 L.Ed. 454; Treemond Co. v. Schering Corp., 3 Cir., 1941, 122 F.2d 702. All this does not, however, eliminate the requirement that a justiciable controversy be shown in the complaint. Hawley Products Co. v. United States Truck Co., 1 Cir., 1958, 259 F.2d 69, 75-76.

Several elements must be considered in determining whether a justiciable controversy has been shown in a patent case: (1) the position of the declaratory plaintiff; (2) the nature of the threat made against him; (3) the party making the threat and whether his action can be attributed to the patent owner. Borchard, supra, at page 807; Note, Justiciable Controversy Under the Federal Declaratory Judgment Act and the Exercise of Patent Rights, 22 Geo. Wash.L.Rev. 63, 64-65 (1953).

As to the first element, while the early cases required that plaintiff actually be engaged in infringing conduct, this is no longer the law, and it is now sufficient that plaintiff either be engaged in manufacturing, using or selling the invention, or that he has the immediate intention and ability to do so. Technical Tape Corp. v. Minnesota Mining & Mfg. Co., 2 Cir., 1952, 200 F.2d 876, 878; Welch v. Grindle, 9 Cir., 1957, 251 F.2d 671, 678; Crowell v. Baker Oil Tools, 9 Cir., 1944, 143 F.2d 1003, 1004, cert. denied, 323 U.S. 760, 65 S.Ct. 93, 89 L.Ed. 608; United States Industrial Chemicals, Inc. v. Carbide & Carbon Chemicals Corp., S.D.N.Y.1946, 67 F.Supp. 895, 898; General Electric Co. v. Refrigeration Patents Corp., W.D.N.Y. 1946, 65 F.Supp. 75, 78; Borchard, supra at page 807; 22 Geo.Wash.L.Rev., supra at 69-71. The converse is equally true; that where there is no actual manufacture, use or sale, and no immediate intention and ability to practice the invention, there is no justiciable controversy. Dewey & Almy Chemical Co. v. American Anode, Inc., supra, 137 F.2d at 70; Fash v. Clayton, D.N.Mex.1948, 78 F.Supp. 359, 361. The explanation for these principles is that it would be economically wasteful to require a plaintiff to embark on an actual program of manufacture, use or sale which may turn out to be illegal (Crowell v. Baker Oil Tools, supra, 143 F.2d at 1004); on the other hand, a vague and unspecific "desire" to practice an invention if a patent should turn out to be invalid smacks too much of the hypothetical and contingent, and allowing the declaratory remedy in such a situation would unfairly subject the defendant to the burdens of a lawsuit. 22 Geo. Wash.L.Rev., supra at 70-71; Russell, Some Patent Aspects of Declaratory Procedure, 32 J.Pat.Off.Soc'y 504, 525-30 (1950).

In the instant case it is not contended that plaintiff has entered upon an actual manufacture, use or sale of its necktie. Whether it has the immediate intention and ability of doing so is a difficult question. The fact that plaintiff may have made its "proposed" necktie for the purpose of provoking a lawsuit does not itself require that we hold no justiciable controversy exists. Cf. Evers v. Dwyer, 1958, 358 U.S. 202, 79 S.Ct. 178, 3 L.Ed.2d 222. But see United States Industrial Chemicals, Inc. v. Carbide & Carbon Chemicals Corp., supra, 67 F.Supp. at 898. This single act, as defendant points out, is quite insubstantial in comparison with the steps actually taken in certain of the cases supporting jurisdiction (Technical Tape Corp. v. Minnesota Mining &...