American Machine & Metals v. De Bothezat Impeller Co.

• Decision Date: 12 August 1947
• Citation: 75 F. Supp. 421
• Parties: AMERICAN MACHINE & METALS, Inc., v. DE BOTHEZAT IMPELLER CO., Inc.
• Court: U.S. District Court — Southern District of New York

75 F. Supp. 421

AMERICAN MACHINE & METALS, Inc., v. DE BOTHEZAT IMPELLER CO., Inc.

District Court, S. D. New York.

August 12, 1947.

Alphonse Kenison, of New York City, for plaintiff.

Royal E. Mygatt, of New York City (Watson Washburn, of New York City, of counsel), for defendant.

BRIGHT, District Judge.

Defendant moves pursuant to Rule 12(b), Federal Rules of Civil Procedure, 28 U. S.C.A. following section 723c, to dismiss on the ground that the complaint fails to state a claim upon which relief can be granted, that the court lacks jurisdiction because there is no matter in controversy between the parties, nor any which is justiciable or which exceeds $3,000 in amount exclusive of interest and costs; or, in the alternative, to strike out a portion of paragraph 9 of the complaint, for a more definite statement with respect to portions of that paragraph, and for a bill of particulars of paragraph 8.

The action is brought pursuant to the Federal Declaratory Judgment Act of June 14, 1934, 28 U.S.C.A. § 400. On April 3, 1934, the parties entered into a written agreement attached to the complaint, under which defendant conveyed to plaintiff letters patent and applications therefor, relating to fans and other products, all of its plant and equipment except certain leased equipment for use in the manufacture of the products, and leased the excepted equipment until January 1, 1940, in consideration in part of certain payments to be made. That agreement contained the following clause which is the only portion thereof which is now involved:

"Tenth: One year after the date hereof or at any time thereafter, Metals Corporation may give the De Bothezat Company notice, in the manner hereinafter provided, of its intention to terminate this agreement and six (6) months after the notice shall have been so given, this agreement and the lease of the Leased Equipment described in Schedule B shall thereupon terminate and Metals Corporation shall not be liable for any payment under the provisions of Paragraph Eighth hereof accruing after the period ending upon such termination. Upon such termination of this agreement, Metals Corporation shall reassign, reconvey and retransfer to the De Bothezat Company the Letters Patent described in Schedule A and such other Letters Patent which the De Bothezat Company may have assigned, conveyed and transferred to Metals Corporation. * * *" The complaint further alleges that for some time prior to February 11, 1946, when one of the patents expired, plaintiff manufactured only one type of a product which it could not have manufactured without said patents, and since that date, plaintiff has neither manufactured nor sold any products for which the possession of any such patents is essential. Paragraph 5. Beginning on said date, plaintiff commenced negotiations with defendant to effect a termination of said agreement in the course of which plaintiff took the position that it could terminate the agreement, and after having reassigned and reconvened all of the Letters Patent, plant and equipment, and after having ceased to use the name De Bothezat for any purpose, it would be free to continue to manufacture and sell fans, ventilating equipment and any and all other products not covered by defendant's patents, without any payment of any further sums. Paragraph 7. Defendant since said date has made claims and assertions that upon termination of the agreement, plaintiff will no longer have the right to continue the manufacture and sale of fans and ventilating equipment, and defendant "has led plaintiff to believe that upon termination of said agreement defendant will sue plaintiff if it does not cease the manufacture and sale of fans and ventilating equipment." Paragraph 8. "Plaintiff seeks a declaration of the rights of the parties hereto to avoid the possible accrual of avoidable damages. If plaintiff is under no further obligation to defendant after full performance of its obligations as specified in the agreement upon termination, then defendant's threats of suit and its claims that plaintiff cannot continue the business of manufacturing and selling fans and ventilating equipment are wrongful. If plaintiff is not so privileged to continue to manufacture and sell fans and ventilating equipment, plaintiff does not desire to deprive defendant of such rights to which it may be properly entitled." Paragraph 9.

Plaintiff prays judgment that the court declare the rights and legal relations of the parties, particularly with respect to the proper interpretation and effect of the agreement, that the court declare it is the right of plaintiff to manufacture and sell products not infringing upon patents held by defendant after the termination of the agreement, without payment of further sums to defendant and without threat or interference with plaintiff or its customers by defendant and without any obligation to it.

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