Kerotest Mfg. Co. v. CO-Two Fire Equipment Co.

• Decision Date: 18 August 1950
• Docket Number: Civ. A. No. 1300.
• Citation: 92 F. Supp. 943
• Parties: KEROTEST MFG. CO. v. C-O-TWO FIRE EQUIPMENT CO.
• Court: U.S. District Court — District of Delaware

92 F. Supp. 943

KEROTEST MFG. CO. v. C-O-TWO FIRE EQUIPMENT CO.

Civ. A. No. 1300.

United States District Court D. Delaware.

August 18, 1950.

Richards, Layton & Finger, of Wilmington, Del., Smith, Buchanan & Ingersoll, and Blenko, Hoopes, Leonard & Glenn, all of Pittsburgh, Pa., for plaintiff.

Arthur G. Connolly, of Wilmington, Del., and R. Morton Adams (of Pennie, Edmonds, Morton & Barrows), of New York City, for defendant.

RODNEY, District Judge.

This case comes before the court upon two contemporaneous motions: (1) a motion of the plaintiff, Kerotest, for a preliminary injunction restraining the defendant, C-O-Two, from proceeding against Kerotest in a civil action in the United States District Court for the Northern District of Illinois, which action will hereafter, for reasons of brevity, be called the Chicago action; and (2) a motion of C-O-Two praying for an order staying further proceedings in the present action until ten days after final determination of the Chicago action.

The pertinent facts are these. On January 17, 1950, C-O-Two commenced the Chicago action against Acme Equipment Company, charging it with the infringement of certain patents. Acme is a customer of Kerotest. The Chicago suit was set down for trial on June 9, 1950. Kerotest did not offer to defend Acme nor did it intervene in the Chicago action. Subsequent to the institution of the Chicago action and on March 9, 1950, Kerotest instituted the present suit for a declaratory judgment with respect to the same patents as those involved in the Chicago action. On March 22, 1950, C-O-Two filed in the Chicago action an amendment to its complaint for the purpose of joining Kerotest as a co-defendant with Acme. On April 21, 1950, the District Court for the Northern District of Illinois denied a motion of Acme for a stay of the Chicago action. On April 28, 1950, this Court entered an order denying a motion of Kerotest for a preliminary injunction to enjoin C-O-Two from prosecuting the Chicago suit and granting a motion of C-O-Two for a stay of the present proceeding for a period of ninety days, the disposition of each motion being without prejudice to the right of either party to renew their motions at the expiration of that period.

On May 29, 1950, the court in Chicago entered an order denying Kerotest's motion for the quashing of the service upon it, and adjudging Kerotest to be a party to the Chicago suit. This order was to take effect as of March 24, 1950. Kerotest thereafter entered its appearance in the Chicago court and filed its answer, joining issue therein, on June 19, 1950.

In the meantime, an appeal was taken from the order of this court dated April 28, 1950. The Court of Appeals for this Circuit on June 16, 1950, affirmed this court's judgment. 182 F.2d 773.

The basic issue now before this court seems to be whether, as regards Kerotest, this present action or the Chicago action has priority in respect of time of commencement. It has been authoritatively held that it is ordinarily the duty of the Federal District Court first obtaining jurisdiction of the parties and issues in a patent cause to proceed to adjudicate the controversy and to restrain the parties from seeking to duplicate the adjudication in a later suit in another district court.¹

The first case in which this principle was established in this Circuit was that of Crosley Corporation v. Hazeltine Corporation, 3 Cir., 122 F.2d 925, 930, certiorari denied 315 U.S. 813, 62 S.Ct. 798, 86 L.Ed. 1211; Id., 315 U.S. 831, 62 S.Ct. 913, 86 L.Ed. 1224. Crosley Corporation brought a declaratory judgment action in the District of Delaware against Hazeltine Corporation, seeking a declaration of non-infringement of some twenty patents owned by Hazeltine. Thereafter Hazeltine instituted nine suits against Crosley in the Southern District of Ohio, charging Crosley with infringing fifteen of the twenty patents involved in the Delaware action. The Court of Appeals held that the Delaware District Court had abused its discretion in not exercising its power to enjoin Hazeltine from prosecuting the Ohio actions, since it first had jurisdiction of the parties and of the issues. Judge Maris, speaking for the Court, outlined the public policy underlying this decision in the following terms: "* * * The party who first brings a controversy into a court of competent jurisdiction for adjudication should, so far as our dual system permits, be free from the vexation of subsequent litigation over the same subject matter. The economic waste involved in duplicating litigation is obvious. Equally important is its adverse effect upon the prompt and efficient administration of justice, * * * Courts already heavily burdened with litigation with which they must of necessity deal should therefore not be called upon to duplicate each other's work in cases involving the same issues and the same parties."

This decision was followed in Crosley Corp. v. Westinghouse Electric & Mfg. Co., 3 Cir., 130 F.2d 474, 475, certiorari denied 317 U.S. 681, 63 S.Ct. 202, 87 L.Ed. 546, in which the facts were very similar to those in the Crosley v. Hazeltine case. The fact that only one day intervened between the institution of the first and second suit was held in the Westinghouse case to make no difference. The argument principally relied upon by the defendant in the Westinghouse case in resisting an injunction restraining the prosecution of the later suit seems to have been that as the first action was one seeking declaratory relief, the court had discretion to decline to take jurisdiction. The District Court had held that the taking of jurisdiction of the declaratory judgment action was a matter of discretion and that it would in effect decline to take such jurisdiction because it was of the opinion that the natural place for the trial of the patent suit was in the Southern District of Ohio, where the second action had been brought, and because the plaintiff in the declaratory action had shown unseemly haste in filing that action after receiving notice that the other party proposed to bring a patent infringement suit against it immediately. The Court of Appeals reversed, holding that the discretion with respect to the exercise of jurisdiction in a declaratory judgment action is a legal discretion to be exercised in accordance with fixed principles of law, and saying: "* * * In patent cases, therefore, the district courts may decline jurisdiction of a suit brought in good faith to obtain declaratory relief only if it appears that the same parties and issues are involved in another suit previously begun or that in another suit subsequently begun involving the same parties and issues the questions in controversy between the parties can be better settled and the relief sought by them more expeditiously and effectively afforded than in the declaratory proceeding."

A variation in the factual situation was presented in Triangle Conduit & Cable Co., Inc. v. National Electric Products Corporation, 3 Cir., 125 F.2d 1008, 1009, certiorari denied 316 U.S. 676, 62 S.Ct. 1046, 86 L.Ed. 1750, which was decided before the Crosley v. Westinghouse case. There the declaratory judgment suit was brought by Triangle against National in the District of Delaware seeking a declaration of non-infringement with respect to eleven patents owned by National. Subsequently National filed suit in the Eastern District of Michigan against Triangle and Sears, Roebuck & Company, charging infringement by Triangle of the patents involved in the declaratory judgment action and by Sears, Roebuck & Company of six of the same patents. Triangle moved in the Delaware District Court for an injunction to restrain National from proceeding with the infringement...