Ostow & Jacobs, Inc. v. Morgan-Jones, Inc.
| Decision Date | 09 February 1960 |
| Citation | 181 F. Supp. 208 |
| Parties | OSTOW & JACOBS, INC., Plaintiff, v. MORGAN-JONES, INC. and Aileen Mills Co., Inc., Defendants. |
| Court | U.S. District Court — Southern District of New York |
Charles Sonnenreich, New York City, for plaintiff.
Burke & Burke, New York City, for defendants, George I. Harris, New York City, of counsel.
This action is one for a declaratory judgment that a patent held by defendant Aileen Mills Co., Inc. is invalid, not infringed and unenforceable and for damages for alleged unfair competition.
Four motions have been made in this court in the above-entitled action:
1. The first motion is made by the defendant Aileen Mills Co., Inc. (hereinafter designated as "Aileen") to extend its time to answer the complaint in this action until 10 days following a decision of the United States District Court for the Northern District of Georgia, Rome Division, in a pending motion in an action entitled "Aileen Mills Co., Inc., and Morgan-Jones, Inc., Plaintiffs, against Ojay Mills, Incorporated and Ostow & Jacobs, Inc., Defendants." The motion referred to and so pending in the United States District Court for the Northern District of Georgia, Rome Division, is a motion by the present plaintiff, Ostow & Jacobs, Inc. (hereinafter designated as "Ostow") (a) to quash service of the summons on said Ostow and dismiss the complaint for lack of jurisdiction and improper venue, or, in the alternative, (b) to transfer the action to the United States District Court for the Southern District of New York. (I am referring to the action in Georgia as the "Georgia action," that in this court as the "New York action," and to the federal court in the Georgia action as the "Georgia court" and to that in this action as the "New York court.")
2. The second motion is made by Ostow for an order to stay the defendants in the above action from all further proceedings brought by the said defendants against the present plaintiff in the Georgia court pending the final determination of the within action in the New York court.
3. The third motion is made by the defendants in the action in this court for an order pursuant to Rule 30 of the Federal Rules of Civil Procedure, 28 U.S.C.A. (a) directing that the depositions of the said defendants should not be taken pursuant to notice served on the 18th day of November, 1959, or, in the alternative, (b) directing that such depositions be taken at a date subsequent to the taking of the deposition of the plaintiff by the said defendants, and (c) to quash the deposition subpoena to testify or produce documents or things, served on defendant Morgan-Jones, Inc. (hereinafter designated as "Morgan") on the 19th day of November, 1959 in conjunction with the aforementioned notice to take the deposition of the defendant Morgan.
4. In the fourth motion, the defendants in this court, to wit, Morgan and Aileen, seek an order enjoining the present plaintiff, Ostow, from taking any further proceedings in this action pending final judgment in an action now pending in the Georgia court, entitled "Aileen Mills Co., Inc., and Morgan-Jones, Inc., Plaintiffs, against Ojay Mills, Incorporated and Ostow & Jacobs, Inc., Defendants," or, in the alternative, until 10 days following service on the attorneys for the defendants in this action of the decision of the said Georgia court of a certain motion now therein pending. (The Georgia motion just referred to is the previously mentioned motion (a) to quash service of the summons on said Ostow and dismiss the complaint for lack of jurisdiction and improper venue, or (b) to transfer the action in Georgia to the Southern District of New York.)
The parties and procedural backgrounds in both the Georgia and New York actions are as follows:
PARTIES
1. Aileen Mills Co., Inc. (referred to as "Aileen") is one of the defendants here and is a plaintiff in the Georgia action. Aileen is a North Carolina corporation engaged in the manufacture of bedspreads and is the owner of United States Design Patent No. 181148 covering the design of a certain type of bedspread.
2. Morgan-Jones, Inc. (referred to as "Morgan") is also one of the defendants in the action in this court and is a plaintiff in the Georgia action. It is a New York corporation engaged in the business of procuring orders for the sale of various textiles, including bedspreads manufactured by Aileen pursuant to the said United States Design Patent No. 181148.
3. Ostow & Jacobs, Inc. (referred to as "Ostow"), the plaintiff in the action in this court and one of the defendants in the Georgia action, is a New York corporation engaged in the manufacture and sale of bedspreads.
4. Ojay Mills, Incorporated (referred to as "Ojay"), one of the defendants in the Georgia action, is a Georgia corporation engaged in the business of manufacturing bedspreads. The officers, directors and stockholders of Ojay are substantially the same as those of Ostow and it was held in the case of Carolyn Chenilles, Inc. v. Ostow & Jacobs, Inc., D.C.S.D.N.Y. 1958, 168 F.Supp. 894 that Ostow & Jacobs "are part of a single business enterprise." At page 897.
The actions in the two United States District Courts are as follows:
I. The Georgia Action
On or about April 15, 1959, Aileen and Morgan instituted an action in the United States District Court for the Northern District of Georgia, Rome Division, against Ojay for infringement of the aforesaid United States Design Patent No. 181148 and for unfair competition. Subsequently, and on or about June 25, 1959, plaintiffs in the Georgia action —that is, Aileen and Morgan—moved to amend their action to include Ostow as a formal party defendant and such amendment was permitted by the Georgia court. Thus, at the present time both Ojay and Ostow are party defendants in the Georgia action, subject, of course, to the motion in the Georgia court, hereinbefore mentioned.
II. The New York Action
On or about May 5, 1959, Ostow instituted the above action in the United States District Court for the Southern District of New York against Aileen and Morgan seeking a judgment to declare that the said United States Design Patent No. 181148 was invalid, not infringed and unenforceable. In the same action there is also a claim against the said defendants for unfair competition.
(a) On or about May 25, 1959, Aileen moved to dismiss the action as to it in this court on the grounds that it was not subject to service of process within the Southern District of New York. After various adjournments the motion was argued on August 4, 1959 before Judge Bryan, and on November 6, 1959 Judge Bryan denied the motion of this defendant Aileen. Ostow & Jacobs, Inc. v. Morgan-Jones, Inc., D.C.S.D.N.Y.1959, 178 F.Supp. 150. The answer by Aileen apparently became due on or about November 19, 1959, and for the reasons asserted in the motion papers in the first motion above mentioned this defendant seeks an order extending its time to answer. The order to show cause issued on November 19, 1959 extended the time of the said defendant to answer until the determination of this motion.
(b) On or about August 6, 1959, Morgan, one of the above-named defendants in this action, moved to dismiss the action as against it upon the ground of lack of jurisdiction. This motion was argued before Judge Dimock on September 1, 1959. On December 16, 1959, Judge Dimock denied this motion. D.C., 180 F.Supp. 38.
On or about August 26, 1959, Ostow, the defendant which had been joined by order of the Georgia court in the action there, moved to quash the service of the summons and amended complaint on it and to dismiss the action as to it for lack of jurisdiction and improper venue, or, in the alternative, to transfer the existing action there from Georgia to New York. Such motions are said to be still pending and undecided by the Georgia court.
In the Georgia action the plaintiffs Aileen and Morgan sued the defendants Ojay and Ostow for infringement and unfair competition. The infringement is based upon United States Design Patent No. 181148 issued to plaintiff Aileen on October 3, 1957. Plaintiff Aileen is alleged to be the owner, and plaintiff Morgan is alleged to be the exclusive sales agent for Aileen. The defendant in the original complaint, Ojay, is alleged to have infringed this patent by manufacturing and selling or causing to be sold textile fabrics made in accordance with and embodying the ornamental design disclosed and claimed in the said United States Design Patent No. 181148. The defendant is alleged to have made and marketed bedspreads without identification names or symbols to indicate that such spreads came from a source other than the plaintiffs with the effect, it is stated, of creating confusion, etc., with the resulting unfair competition. The prayer for relief seeks a preliminary and final injunction restraining defendant, etc. from making or causing to be made any textile fabric embodying the said ornamental design and enjoining the defendant, etc. from committing further acts of unfair competition, for an accounting for profits, award of treble damages, costs, attorneys' fees, etc.
The amended complaint makes the same allegations and prays for the same relief against the defendant Ostow.
The New York action, instituted by Ostow alone against Morgan and Aileen, asserts that Morgan is the exclusive selling agent of products manufactured by Aileen and that Aileen manufactures bedspreads exclusively for Morgan and that the officers of Morgan are officers and controlling stockholders of Aileen. The New York complaint further alleges that the defendants here are carrying on illegal, monopolistic and unfair competitive activities affecting the plaintiff. This is...
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