Akron Presform Mold Company v. McNeil Corporation

• Decision Date: 11 April 1974
• Docket Number: No. 73-1555 to 73-1557.,73-1555 to 73-1557.
• Citation: 496 F.2d 230
• Parties: The AKRON PRESFORM MOLD COMPANY, Plaintiff-Appellant, v. McNEIL CORPORATION and Sun Corporation, Defendants-Appellees. The AKRON PRESFORM MOLD COMPANY, Plaintiff-Appellant, v. The B. F. GOODRICH COMPANY and Sun Corporation, Defendants-Appellees. The AKRON PRESFORM MOLD COMPANY, Plaintiff-Appellant, v. The B. F. GOODRICH COMPANY et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Sixth Circuit

496 F.2d 230 (1974)

The AKRON PRESFORM MOLD COMPANY, Plaintiff-Appellant, v. McNEIL CORPORATION and Sun Corporation, Defendants-Appellees.

The AKRON PRESFORM MOLD COMPANY, Plaintiff-Appellant, v. The B. F. GOODRICH COMPANY and Sun Corporation, Defendants-Appellees.

The AKRON PRESFORM MOLD COMPANY, Plaintiff-Appellant, v. The B. F. GOODRICH COMPANY et al., Defendants-Appellees.

Nos. 73-1555 to 73-1557.

United States Court of Appeals, Sixth Circuit.

Submitted on Brief without Oral Argument January 31, 1974.

Decided April 11, 1974.

Albert L. Ely, Jr., Ely, Golrick & Flynn, Cleveland, Ohio, on brief, for plaintiff-appellant.

Phillip L. Kenner, Hamilton, Renner & Kenner, and Richard E. Guster, Roetzel & Andress, Akron, Ohio, on brief, for McNeil Corp.

James C. Davis, Squire, Sanders & Dempsey, Cleveland, Ohio, on brief, for The B. F. Goodrich Co.

Everett R. Hamilton, Edward G. Greive, Hamilton, Renner & Kenner, Akron, Ohio, on brief, for Sun Corp.

Before PHILLIPS, Chief Judge, MILLER, Circuit Judge, and McALLISTER, Senior Circuit Judge.

PHILLIPS, Chief Judge.

The Akron Presform Mold Company (Presform) appeals from orders of District Judge Thomas D. Lambros granting summary judgment against it in its three actions for damages and injunctive relief under the antitrust laws. We affirm.

Presform, formerly a manufacturer of rotational casting machinery, filed complaints on July 3, 1968, alleging three different and unlawful conspiracies in restraint of trade and monopolization of the relevant market for rotationally casting plastics. Before presenting the factual allegations in each action, it is necessary to detail certain historical background in this extended controversy among the litigants.

Historical Background

This court in National Latex Products Co. v. Sun Rubber Co., 274 F.2d 224 (6th Cir. 1959), rehearing denied, 274 F.2d 224 (6th Cir. 1960), motion to reconsider in banc and second petition for rehearing denied, 276 F.2d 167 (6th Cir. 1960), cert denied, 362 U.S. 989, 80 S.Ct. 1078, 4 L.Ed.2d 21 (1960),¹ held inter alia, that Presform had not infringed the Martin machine patent, U.S. Patent No. 2,629,131, owned by Sun Rubber Co. (Sun).²

This court further held that Presform had contributorily infringed Sun's Molitor process patent, U.S. Patent No. 2,629,134, for rotationally casting vinyl plastisols. 274 F.2d at 244-245. Thereafter, in 1960, we issued an injunction restraining Presform from "manufacturing and selling machinery intended or adapted to be used in practicing the method as claimed in said Molitor patent." That case was dismissed later as a result of a settlement reached between the parties.

Subsequently, in a separate action, Barr Rubber Products Co. v. Sun Rubber Co., 277 F.Supp. 484 (1967), the Southern District Court of New York held, inter alia, that the Molitor patent was invalid. The primary reason stated by the District Court for so holding was that the record in that case, as well as in National Latex Products heard by our court, was blighted by Sun's "extensive pattern of fraud," "perjury in significant respects," and "deliberately organized fabrication" with respect to the procurement and maintenance of the Molitor patent. 277 F.Supp. at 498-503. The Court of Appeals for the Second Circuit later reversed the findings of the New York District Court relating to "fraud" and "perjury" as clearly erroneous and reversed the holding of invalidity of the Molitor patent. The case was remanded to the District Court for new trial solely on the issue of patentability. Barr Rubber Products Co. v. Sun Rubber Co., 425 F.2d 1114, cert. denied, 400 U.S. 878, 91 S.Ct. 118, 27 L.Ed.2d 115 (1970).

Subsequent to the decision of the United States District Court for the Southern District of New York but prior to the Second Circuit's reversal of the District Court's findings of fraud and perjury in the procurement and maintenance of the Molitor patent, Presform instituted the present actions and filed a motion with this court seeking to reopen our disposition in National Latex Products, supra, decided some nine years earlier. Due to the pendency of the appeal in Barr Rubber Products, supra, to the Second Circuit, we stayed proceedings on the motion. After the Second Circuit announced its decision, we denied Presform's motion on the ground of res judicata. Presform's subsequent petition for rehearing on its motion was also denied.

Factual Allegations in the Three Actions

In Civil Action C68-487 (Appeal No. 73-1555), Presform alleged that McNeil corporation (McNeil), using Sun Corporation (Sun) as its front, unlawfully effected a substantial lessening of competition and tended to create a monopoly in the rotational casting of thermoplastic material market. Presform asserted that McNeil and Sun engaged in three monopolistic activities injurious to Presform: 1) enforcing the injunction fraudulently obtained from our court in 1960 in regard to the Molitor patent, 2) enforcing the injunction while knowing, but not disclosing to our court, that a substantial non-infringing use existed for Presform's machine, and 3) imposing unlawful conditions to the obtaining of a license under the Molitor patent and to the purchase of their rotational casting machinery.

In Civil Action C68-488 (Appeal No. 73-1556), Presform alleged that Sun and B. F. Goodrich (Goodrich) violated the antitrust laws by entering into reciprocal dealing and rebate agreements in 1953 with respect to the licensing of Sun's Molitor and Martin patents. In particular, Presform alleged that Goodrich took a license under these patents knowing that they were of doubtful validity. Under the license agreement, Goodrich agreed to make annual lump sum payments in lieu of royalties. The primary motive for this contract allegedly was the agreement of Sun to purchase its requirements of plastic resins from Goodrich and to promote Goodrich as a source of supply for its licenses. The purported effect of this license agreement was to create a false inference that the Sun patents had attained general commercial acceptance. It was charged that this erroneous inference, along with other alleged acts of deception, contributed to the erroneous decision of this court in 1959 in affirming the District Court's upholding of the validity of the Molitor patent in National Latex Products, supra.

In Civil Action C68-489 (Appeal No. 73-1557), Presform alleged that Sun, McNeil and Goodrich conspired to restrain trade and tend to create a monoply in the use of rotational casting techniques, materials and equipment. Two separate activities of these purported conspirators are alleged to have injured Presform's business. First, a leading company in the doll industry purportedly was coerced into taking a license in 1961 under the Molitor patent although it believed that the patent was invalid. Second, the appellee corporations allegedly issued a large number of letters to the doll industry in 1961 threatening patent infringement suits under the Molitor patent, and this purportedly lessened the market for Presform's machines and accelerated the destruction of Presform's business.

The appellees, without acknowledging the accuracy of these factual allegations, moved to dismiss the actions on the grounds that they were barred by res judicata or collateral estoppel or by the statute of limitations. The District Court treated the motions as for summary judgment, Rule 12(b), Fed.R.Civ.P., and dismissed all three actions on the ground that they were barred by the applicable statute of limitations. In the alternative in Civil Action C68-488 (Appeal No. 73-1556), the District Court entered judgment in favor of Sun on the basis that Presform's action was barred by collateral estoppel.

Statute of Limitations

Presform's basic contention on appeal in all three actions is that the District Court erred in concluding that the actions were barred by the applicable statute of limitations for anti-trust claims, 15 U.S.C. § 15b. 15 U.S.C. § 15b, in relevant part, provides: "Any action to enforce any cause of action under sections 15 or 15a of this title shall be forever barred unless commenced within four years after the cause of action accrued."

As the Supreme Court stated in Order of Railroad Telegraphers v. Railway Express Agency, 321 U.S. 342, 348-349, 64 S.Ct. 582, 586, 88 L.Ed. 788 (1944), statutory limitation periods are:

"... designed to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared. The theory is that even if one has a just claim it is unjust not to put the adversary on notice to defend within the period of limitation and that the right to be free of stale claims in time comes to prevail over the right to prosecute them."

This statute of limitations commences to run from the commission of the last overt act causing injury or damage. Zenith Radio Corp. v. Hazeltine Research, Inc., 401 U.S. 321, 338, 91 S.Ct. 795, 28 L.Ed.2d 77 (1971); Garelick v. Goerlich's Inc., 323 F.2d 854, 855 (6th Cir. 1963). Generally, there are two means by which one can avoid the operation of the statute of limitations. One, the rule enunciated in Zenith Radio Corp., supra, 401 U.S. at 338-342, 91 S.Ct. 795 provides that a plaintiff may recover damages occurring within the period of the statute of limitations that are the result of conduct occurring prior to that period, if at the time of the conduct, those damages were speculative, uncertain or otherwise incapable of proof. Second, in cases in which the plaintiff has refrained from commencing suit during the period of limitation because of inducement by the defendant, Glus v. Brooklyn Eastern Terminal, 359 U.S. 231, 79 S.Ct. 760, 3 L.Ed. 2d 770 (1959), or because of fraudulent concealment, Holmberg v. Armbrecht, 327 U.S. 392, 66 S.Ct. 582, 90 L.Ed. 743 (1946), the Supreme Court has held the statutory period to...