J. & G. DEVELOPMENT COMPANY v. All-Tronics, Inc.

• Decision Date: 18 October 1961
• Docket Number: Civ. No. 19139.
• Citation: 198 F. Supp. 392
• Parties: J. & G. DEVELOPMENT COMPANY, Inc., and the Filtron Company, Inc., Plaintiffs, v. ALL-TRONICS, INC., Defendant.
• Court: U.S. District Court — Eastern District of New York

198 F. Supp. 392

J. & G. DEVELOPMENT COMPANY, Inc., and the Filtron Company, Inc., Plaintiffs, v. ALL-TRONICS, INC., Defendant.

Civ. No. 19139.

United States District Court E. D. New York.

October 18, 1961.

Kane, Dalsimer and Kane, New York City, for plaintiffs; David S. Kane, Haynes N. Johnson, S. C. Yuter, New York City, of counsel.

Brumbaugh, Free, Graves & Donohue, New York City, for defendant; Walter H. Free, John F. Neary, Jr., New York City, of counsel.

ZAVATT, District Judge.

Plaintiffs J. & G. Development Co., Inc. allege that United States Letters Patent No. 2,835,874 was duly issued under the joint application of Marvin H. First and Leonard Milton on May 20, 1958 for an invention in "Electrical Interference Suppression Filters" and that such patent was duly assigned to plaintiff J. & G. Development Co. Plaintiff Filtron Co. is alleged to be the exclusive licensee of J. & G. Development Co. under this patent. Defendant is accused of infringing the said letters patent by making, selling, and using the electrical interference suppression filter embodied in the said letters patent.

In its answer defendant avers that every device sold by defendant which could possibly be construed to infringe the claims of the patent in suit was sold to a Government contractor for installation in equipment intended for delivery to the United States Government. Accordingly, defendant contends that, under 28 U.S.C. § 1498 plaintiffs' sole remedy is a suit against the United States in the Court of Claims.

To remedy this defect at the trial plaintiff sought leave to serve a supplemental complaint similar to the original in all respects except that, being dated September 26, 1961, its allegations included a sale of eight filter units, apparently of the type alleged to be infringing, made on December 1, 1959 to Southwestern Industrial Electronics, Houston, Texas which is not contended to be a Government contractor or subcontractor in respect to the device in question. The total price of the eight filter units, including transportation was $124.03. Transcript p. 12. Defendant offered no objection to the service of the supplemental complaint and the court accordingly permitted its service at the trial in harmony with the liberal practice of pleading under the Federal Rules of Civil Procedure. See 3 Moore, Federal Practice 857-61 (2d ed. 1948).

At the trial the court heard testimony directed to the validity of the patent comprising some one hundred and five pages of the transcript, after which it appeared doubtful that the court had jurisdiction and the trial was temporarily adjourned so that counsel could submit briefs on the question.

Plaintiffs now contend that 28 U.S.C. § 1498 provides only an affirmative defense and that the existence of even one uncontested non-governmental sale gives this court full power to hear and determine all the issues in an infringement suit. Defendant contends that the burden of proof of jurisdiction rests on the plaintiffs and, were the court to find that, with one exception, all defendant's sales were to the Government, its contractors, and subcontractors the suit should be dismissed since plaintiff's sole remedy would be a suit against the United States in the Court of Claims. Defendant would have the court disregard the one non-governmental sale under the maxim de minimis non curat lex, contending either that because of the trifling nature of the sale the court does not have jurisdiction or, if it does, that in its discretion it should refuse to exercise it.

The governing statute, 28 U.S.C. § 1498 provides in part that:

"Whenever an invention described in and covered by a patent of the United States is used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, the owner's remedy shall be by action against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture."

The legislative history and purpose of § 1498 is discussed in the course of the opinion of Chief Justice Taft in Richmond Screw Anchor Co. v. United States, 1928, 275 U.S. 331, 341-44, 48 S.Ct. 194, 72 L.Ed. 303. The predecessor of the present 28 U.S.C. § 1498 was enacted in 1918 to nullify the decision of the Supreme Court in Cramp & Sons Ship & Engine Building Co. v. International Curtis Marine Turbine Co., 1918, 246 U.S. 28, 42, 45, 38 S.Ct. 271, 62 L.Ed. 560 in which the original version of current § 1498 was held not to protect Government contractors from interference through litigation by the patentee.

"The purpose of the amendment was to relieve the contractor entirely from liability of every kind for the infringement of patents in manufacturing anything for the government, and to limit the owner of the patent and his assigns and all claiming through or under him to suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture. * * * As the Solicitor General says in his brief with respect to the act, it is more than a waiver of immunity and effects an assumption of liability by the government." 275 U.S. at pages 344-45, 48 S.Ct. at page 197.

It is clear that, insofar as sales to Government contractors and subcontractors are established, this court is without power to grant a remedy in this type of suit.

Prior to Richmond Screw Anchor decision, supra, the Supreme Court had occasion to consider the effect of the predecessor of § 1498 on the jurisdiction of the district court where defendant contended its sales were governmental in nature. In Sperry Gyroscope Co. v. Arma Engineering Co., 1926, 271 U.S. 232, 46 S.Ct. 505, 70 L.Ed. 922 the court held that such a contention was to be treated as an affirmative defense, rather than as a jurisdictional bar. The lower courts, faced with the necessity of holding tedious trials only to dismiss actions at the conclusion thereof if this affirmative defense were sustained, have followed the practice of hearing this defense first and then dismissing the action if it is established. Broome v. Hardie Tyne Mfg. Co., 5 Cir., 1937, 92 F.2d 886; Tinnerman Products Co. v. Adel Precision Products Inc., D.C.S.D.W.Va.1945, 62 F. Supp. 348; Hazeltine Corp. v. General Electric Co., D.C.Md.1937, 19 F.Supp. 898. Such initial determination of the defense has been held not to contravene the holding of the Sperry case, supra, which made defenses raised under what is now § 1498 a matter of defense. Broome v. Hardie Tyne Mfg. Co., supra. However, it has been held that, where it is the Government itself which is alleged to have infringed...