Oetiker v. Jurid Werke, G.m.b.H.

• Decision Date: 04 March 1977
• Docket Number: No. 75-1897,75-1897
• Citation: 181 U.S.App.D.C. 124,556 F.2d 1
• Parties: , 193 U.S.P.Q. 321, 1977-1 Trade Cases 61,308 Hans OETIKER, Appellant, v. JURID WERKE, G. m. b. H.
• Court: U.S. Court of Appeals — District of Columbia Circuit

Page 1

556 F.2d 1

181 U.S.App.D.C. 124, 193 U.S.P.Q. 321,

1977-1 Trade Cases 61,308

Hans OETIKER, Appellant, v. JURID WERKE, G. m. b. H.

No. 75-1897.

United States Court of Appeals, District of Columbia Circuit.

Argued May 26, 1976.

Decided March 4, 1977.

Paul M. Craig, Jr., Washington, D. C., with whom James F. McKeown, Washington, D. C., was on the brief for appellant.

Martin Fleit, Washington, D. C., with whom Simor L. Moskowitz, Washington, D. C., was on the brief for appellee.

Before TAMM, LEVENTHAL and MacKINNON, Circuit Judges.

Opinion for the Court filed by LEVENTHAL, Circuit Judge.

LEVENTHAL, Circuit Judge:

This case involves a patentee's potential liability for fraudulent procurement and enforcement of a patent. A Swiss inventor claims that a German manufacturing company

sought a United States patent on certain secrets in violation of an agreement between them, obtained the patent by fraud on the Patent Office, and used it to exclude the inventor from selling a similar good in certain markets. After the complaint was filed, the company disclaimed the patent, and the district court dismissed the action on the grounds that the disclaimer had mooted all federal claims. We reverse on the ground that plaintiff also presented an antitrust claim, which remains for analysis.

I. FACTS

We take plaintiff's allegations as true. See Conley v. Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957).

Plaintiff Hans Oetiker is a resident and citizen of Switzerland. He manufactures various clamps and couplings at facilities located in Switzerland and other countries, including the United States.

Defendant Jurid Werke, G. m. b. H. ("Jurid") is a West German manufacturing company. Plaintiff does not allege that Jurid does business in the United States.

In 1957, Oetiker entered into an agreement with Jurid, pursuant to which he granted Jurid an exclusive license to manufacture and sell certain types of clamps and couplings in West Germany. Oetiker also obligated himself to provide Jurid with technical information, including drawings, concerning his inventions. In return, Jurid promised that improvements made by Jurid on Oetiker's inventions could be patented by Oetiker. If Oetiker did not seek a patent within eight weeks of notification by Jurid, then Jurid was entitled to apply for patent protection. Finally, if the agreement was terminated, and the termination was not solely the fault of Oetiker, Oetiker would become the owner of all patent rights acquired by Jurid on any "improvement" on Oetiker's earlier inventions.

In succeeding years, Oetiker alleges he supplied Jurid with the relevant technical information, gave Jurid's officers and employees free access to Oetiker's facilities in Switzerland, and provided prototypes of new inventions. Although additional agreements were signed in 1962 and 1968, the basic nature of the improvements provision in the 1957 agreement was not altered.

Notwithstanding the agreement, Jurid secretly filed for a German patent on February 1, 1965, ¹ and for a United States patent on March 31, 1965, ² with respect to a clamp falling within the terms of the agreement. The German Patent Office refused to grant the patent on the grounds of lack of invention over certain prior art and this refusal was affirmed by the appropriate German Appellate Tribunal. Oetiker asserts that despite this course of events, Jurid failed to inform the U. S. Patent Office of the prior art on which the German Office relied. The U. S. application matured into the U. S Patent in suit, No. 3,321,811 (" '811 patent"), on May 30, 1967.

In 1969, the exclusive licensing agreement between the parties was terminated. ³ Oetiker built a facility in West Germany which manufactured and sold certain axle sleeve clamps for use in automobiles. Oetiker asserts that in 1974, after his German facility had begun selling these clamps to the German automobile manufacturer Volkswagen Werken A. G., Jurid charged Volkswagen with infringing Jurid's '811 patent by purchasing the clamps from Oetiker. Oetiker further alleges that although this charge was without merit, it caused great concern among Volkswagen officials, who could not be sure which of their cars would be exported to the United States. Oetiker claims that because of these fears, he was ultimately forced to give to Volkswagen certain assurances which were against his interest. ⁴ On November 15, 1974, Oetiker filed the complaint which initiated this lawsuit. The complaint alleged personal jurisdiction under 35 U.S.C. § 293 (1970), ⁵ and set forth three counts. Under the first, entitled "Declaratory Judgment," Oetiker asked that the court declare the '811 patent invalid and noninfringed, that he be declared its legal or equitable owner, and that Jurid's employees be enjoined from claiming infringement. Under Count II, entitled "Fraud," Oetiker charged that the patent had been procured by fraud and asked for damages as well as injunctive relief. Under Count III, labelled "Misuse," Oetiker charged that Jurid was making its claims of infringement in order to deprive Oetiker of certain markets, including the U. S. market, for axle sleeve clamps. This, Oetiker asserted, constituted patent misuse "under U. S. laws and practices" and unfair competition. Oetiker requested as relief treble damages. The whole of this critical count is set forth in the footnote below. ⁶

On February 6, 1975, Jurid filed a disclaimer of the '811 patent in the U. S. Patent Office, thereby forever dedicating it to the public. Several weeks later, Jurid filed a motion to dismiss or for summary In response to Jurid's disclaimer and motion, Oetiker amended his complaint to add a fourth count entitled "Conversion," in which Oetiker argued that Jurid's attempt to disclaim the patent was invalid because Oetiker was the lawful owner.

judgment. Jurid asked that Counts I and II be dismissed as moot, and that Count III be dismissed on the ground that "the Court as a matter of judicial discretion should abstain from exercising jurisdiction over this Count in view of the absence of any federal question jurisdiction on which to predicate pendent jurisdiction." Jurid also asserted that the court lacked personal jurisdiction over it.

The district court granted Jurid's motion to dismiss. ⁷ It held that Jurid's disclaimer had mooted all federal claims, ⁸ and exercised its discretion so as to decline jurisdiction with respect to the remaining claims in Oetiker's complaint. Its memorandum opinion explained:

In the case at bar, plaintiff's misuse and conversion claims depend in large part on the licensing agreements between the parties. The agreements are governed by European law and key witnesses and tangible evidence are located in Europe. Further, the instant case has not yet progressed to trial. When all federal counts are dismissed before trial begins, pendent claims should almost certainly be dismissed as well. (citing United Mine Workers v. Gibbs, 383 U.S. 715, 725-26, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966).)

Oetiker's principal argument before this court is that the district court mistakenly viewed its claim of patent misuse as a state claim, when in fact that Count had stated a viable claim under federal law. Before considering that contention, we note briefly the problem of personal jurisdiction created by this litigation.

II. PERSONAL JURISDICTION

Although an objection to personal jurisdiction was raised in Jurid's motion to dismiss, it was not pressed before the district court, nor argued at all in this court. Lack of personal jurisdiction can be waived, but it is appropriate to discuss the issues briefly because to some extent they interrelate with the issues of subject matter jurisdiction before us.

Section 293 ⁹ enabled plaintiff to obtain personal jurisdiction over the foreign defendant with respect to his claims of patent invalidity and noninfringement. See Neidhart v. Neidhart S.A., 166 U.S.App.D.C. 380, 510 F.2d 760 (1975).

In our view, this enabled plaintiff to obtain personal jurisdiction over the defendant with respect to any of his claims that arose out of the same core of operative fact as those claims which clearly fell within the scope of § 293. Cf. United Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 16 L.Ed.2d 218 (1966) (upholding pendent subject matter jurisdiction over non-federal claims). Precedents upholding the exercise of pendent personal jurisdiction are After plaintiff's claims of invalidity and noninfringement were mooted by defendant's disclaimer, it might have been argued that the district court should have exercised his discretion so as to dismiss the remaining claims for lack of personal jurisdiction. On the other hand, there was basis to contend that the Gibbs criterion of fairness would not permit defendant to use its disclaimer to evade its alleged responsibility for misuse of the federal patent. ¹¹ Under this rationale it would be relevant that the appended claim is a federal rather than a state one. ¹²

gathered in the footnote. ¹⁰ Of course, the district court may have discretion to dismiss the pendent claims where "considerations of judicial economy, convenience and fairness to litigants" so dictate. Cf. United Mine Workers v. Gibbs, supra at 726, 86 S.Ct. at 1139. Yet the concept of pendent personal jurisdiction may be helpful in achieving the purposes of § 293 to give American manufacturers relief against harassment by nonresident patentees. See Neidhart v. Neidhart S.A., supra, 166 U.S.App.D.C. at 382, 510 F.2d at 762.

Since no such propositions were ventilated before the court, we confine ourselves at this time to a ruling that leaves intact the trial court's implied ruling that personal jurisdiction existed with respect to the nonmooted claims. ¹³

III. SUBJECT MATTER JURISDICTION

We cannot, however, accept the district court's course in dismissing for lack of subject-matter jurisdiction, because the reason given that there remained...