Minnesota Min. & Mfg. Co. v. Superior Insulating Tape Co.

• Decision Date: 01 December 1960
• Docket Number: No. 16471.,16471.
• Parties: MINNESOTA MINING AND MANUFACTURING COMPANY, a Corporation, Appellant, v. SUPERIOR INSULATING TAPE COMPANY, a Corporation, Appellee.
• Court: U.S. Court of Appeals — Eighth Circuit

284 F.2d 478 (1960)

MINNESOTA MINING AND MANUFACTURING COMPANY, a Corporation, Appellant, v. SUPERIOR INSULATING TAPE COMPANY, a Corporation, Appellee.

No. 16471.

United States Court of Appeals Eighth Circuit.

December 1, 1960.

Estill E. Ezell, Clayton, Mo., Harold J. Kinney, St. Paul, Minn., Merville K. Hobbs, Winter Park, Fla., and Kingsland, Rogers & Ezell, Clayton, Mo., on the brief, for appellant.

Hector M. Holmes, Boston, Mass., Forrest M. Hemker, St. Louis, Mo., and William W. Rymer, Jr., Boston, Mass., on the brief, for appellee.

Before JOHNSEN, Chief Judge, and VAN OOSTERHOUT and BLACKMUN, Circuit Judges.

VAN OOSTERHOUT, Circuit Judge.

This is an appeal by plaintiff Minnesota Mining and Manufacturing Company from final judgment sustaining defendant Superior Insulating Tape Company's motion for summary judgment and dismissing the complaint charging patent infringement. As part of such judgment the court denied plaintiff's motion for leave to file a supplemental complaint. Jurisdiction, based upon 28 U.S.C.A. § 1338, is established.

The complaint charges the defendant with infringement of Oace Reissue Patent No. 23,843, owned by plaintiff. The patent relates to a pressure sensitive, stretchable and retractable, vinyl plastic insulating tape. Superior Insulating Tape Company is the sole defendant in this case. It is engaged in the distribution and sale of the accused tape which is manufactured by Plymouth Rubber Company, Inc., hereinafter called Plymouth. Plymouth is actively engaged in defending this suit.

Defendant by answer denied infringement of plaintiff's patent and also denied the validity of the patent for various reasons.¹

The complaint was filed on August 4, 1954. Upon plaintiff's motion, filed in 1955, further proceedings in this case were stayed pending the termination of similar litigation pending in the United States District Court for the Middle District of North Carolina, which plaintiff asserted would be controlling. Such litigation consisted of separate suits commenced by the plaintiff against Pine State Electric Supply Company, Inc., (No. 879-G), and Sears Roebuck & Co., (No. 878-G). Said cases were consolidated for trial. The trial court found the patent valid and infringed in each case. See 141 F.Supp. 686. It is undisputed that Plymouth was not a party in case No. 879-G and that it did not participate in the defense of said case. Since no appeal was taken in No. 879-G, the judgment therein became final.

In the case against Sears Roebuck & Co., No. 878-G, hereinafter called the Sears case, Plymouth intervened and became a party defendant and actively controlled the defense. Upon appeal, the judgment in the Sears case was reversed. The tape manufactured by Plymouth and sold by Sears was found not to infringe upon plaintiff's patent. Sears Roebuck & Co. and Plymouth Rubber Co. v. Minnesota Mining & Mfg. Co., 4 Cir., 243 F.2d 136, rehearing denied — additional opinion filed 249 F.2d 66, certiorari denied 355 U.S. 932, 78 S.Ct. 413, 2 L.Ed.2d 415.

On June 9, 1959, defendant filed in the present case a motion for summary judgment pursuant to Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A., showing by affidavits that the accused tape in this case was the same tape as that adjudged non-infringing by the Court of Appeals for the Fourth Circuit in the Sears case; such decision finally and everywhere determined that Plymouth's tape was non-infringing and under the doctrine of Kessler v. Eldred, 206 U.S. 285, 27 S.Ct. 611, 51 L.Ed. 1065, Plymouth has a right that its customers handling its non-infringing tape "be let alone" by plaintiff. Counter-affidavits were filed by plaintiff which will be considered hereinafter.

Thereafter, on August 10, 1959, plaintiff filed motion for leave to file a supplemental complaint, alleging that late in 1957 or early 1958 Plymouth commenced to manufacture a tape called "Slipknot" which was somewhat different in composition than that involved in the prior litigation, and that such tape was infringing.

The record discloses that Plymouth in 1958 filed a declaratory judgment suit in the United States District Court for Massachusetts against Minnesota Mining and Manufacturing Company asking the court to adjudge "Slipknot" tape to be non-infringing. Minnesota counter-claimed, alleging infringement. The Massachusetts case is at issue and has been set for trial on February 20, 1961. The court sustained the motion for summary judgment, denied plaintiff leave to file supplemental complaint, and entered final judgment dismissing the complaint. Plaintiff asserts that it is entitled to reversal for the following reasons:

"1. The District Court abused its discretion and was in error as to the law and procedure in overruling plaintiff\'s motion for leave to file a supplemental complaint.

"2. Defendant has not sustained its burden as required by the doctrine of Kessler v. Eldred.

"3. The doctrine of Kessler v. Eldred is not applicable under the circumstances here."

We shall first consider plaintiff's contention that the court abused its discretion in denying it leave to file a supplemental complaint. Plaintiff sought such leave for the purpose of asserting a claim that "Slipknot" tape which Plymouth commenced to produce, advertise and sell not earlier than 1957, was a different tape from that adjudged non-infringing in the Sears case, and that "Slipknot" infringed plaintiff's tape.

The trial court, in denying plaintiff leave to file the supplemental complaint, states in part:

"This Court further concludes that the same issues proposed to be raised in the plaintiff\'s Supplemental Complaint were first presented by the commencement of the action by Plymouth Rubber Company, Inc., in the United States District Court of Massachusetts. The plaintiff here has joined issue in that case and thus the litigation will involve the patent in question here as between the patent-holder and the manufacturer of the product about which there is questionable infringement. The parties in Massachusetts are the real parties in interest and that suit was filed before this Supplemental Complaint was proposed.

"It is this Court\'s further conclusion that under these circumstances plaintiff should not be allowed to file its Supplemental Complaint, as it has a cause of action now pending, involving the same alleged matters of infringement, of the same patent, and it is between the principal parties in interest."

The filing of supplemental pleadings is governed by Rule 15(d) of the Federal Rules of Civil Procedure, which reads:

"Upon motion of a party the court may, upon reasonable notice and upon such terms as are just, permit him to serve a supplemental pleading setting forth transactions or occurrences or events which have happened since the date of the pleading sought to be supplemented. If the court deems it advisable that the adverse party plead thereto, it shall so order, specifying the time therefor." (Emphasis added.)

The parties are in agreement that this rule gives the trial court, in the exercise of its sound discretion, the right to determine whether or not leave should be granted to file a supplemental pleading. This court has so held. Missouri-Kansas-Texas R. Co. v. Randolph, 8 Cir., 182 F.2d 996, 999.

In Arp v. United States, 10 Cir., 244 F.2d 571, 574, the court says: "The granting of such leave is discretionary and will not be disturbed on appeal unless grossly abused."

In a case involving the same infringement and supplemental complaint issue here raised, the District Court for the Middle District of North Carolina, in the exercise of its discretion, denied the motion for leave to file supplemental complaint. Minnesota Mining & Mfg. Co. v. United States Rubber Co., M.D.N.C., 178 F.Supp. 385, 387, modified and affirmed 4 Cir., 279 F.2d 409.² See Minnesota Mining & Mfg. Co. v. Plymouth Rubber Co., N.D.Ill., 178 F.Supp. 591.

Plaintiff urges that the denial of its motion is in effect a stay of the present proceedings. We do not agree. The court exercised its discretion and refused to grant the requested leave. The supplemental complaint thus never became a part of the pleadings. After the dismissal, there was nothing to stay.

However, even in a stay situation the question of which of several actions dealing with the same subject matter and parties should have priority is to a large extent controlled by the exercise of the trial court's sound discretion. In speaking of such a situation, the Supreme Court in Kerotest Manufacturing Co. v. C-O-Two Fire Equipment Co., 342 U.S. 180, 183 and 184, 72 S.Ct. 219, 221, 96 L.Ed. 200, states:

"The Federal Declaratory Judgments Act, facilitating as it does the initiation of litigation by different parties to many-sided transactions, has created complicated problems for coordinate courts. Wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation, does not counsel rigid mechanical solution of such problems. The factors relevant to wise administration here are equitable in nature. Necessarily, an ample degree of discretion, appropriate for disciplined and experienced judges, must be left to the lower courts. The conclusion which we are asked to upset derives from an extended and careful study of the circumstances of this litigation. Such an estimate has led the Court of Appeals twice to conclude that all interests will be best served by prosecution of the single suit in Illinois. Even if we had more doubts than we do about the analysis made by the Court of Appeals, we would not feel justified in displacing its judgment with ours."

In footnote 3 at page 184 of 342 U.S., at page 221 of 72 S.Ct. the court collects a number of cases to illustrate that no rigid or inflexible rule prevails as to priority of trial of concurrent controversies.

Many factors enter into the consideration of what constitutes "wise judicial administration", "conservation of...