Akzona Inc. v. EI Du Pont De Nemours & Co.

• Decision Date: 02 October 1984
• Docket Number: Civ. A. No. 84-10 LON.
• Parties: AKZONA INCORPORATED, a corporation of Delaware, d/b/a American Enka Company, Enka B.V., a corporation of The Netherlands and Aramide Maatschappij VoF., a partnership of the Netherlands, Plaintiffs, v. E. I. DU PONT DE NEMOURS & COMPANY, Defendant, v. AKZO N.V., Defendant on the Counterclaim.
• Court: U.S. District Court — District of Delaware

607 F. Supp. 227

AKZONA INCORPORATED, a corporation of Delaware, d/b/a American Enka Company, Enka B.V., a corporation of The Netherlands and Aramide Maatschappij VoF., a partnership of the Netherlands, Plaintiffs, v. E. I. DU PONT DE NEMOURS & COMPANY, Defendant, v. AKZO N.V., Defendant on the Counterclaim.

Civ. A. No. 84-10 LON.

United States District Court, D. Delaware.

October 2, 1984.

E. Norman Veasey, and R.H. Richards, III, of Richards, Layton & Finger, Wilmington, Del., for plaintiffs; Dennis McInerney, and George Wailand, of Cahill Gordon & Reindel, New York City; Robert H. Faulk, of Hubbard, Thurman, Turner & Tucker, Dallas, Tex.; C. Frederick Leydig and John E. Rosenquist, of Leydig, Voit, Osann, Mayer & Holt, Ltd., Chicago, Ill., of counsel.

Richard L. Sutton, and Jack B. Blumenfeld, of Morris, Nichols, Arsht & Tunnell, Wilmington, Del., for defendants; Joseph M. Fitzpatrick, of Fitzpatrick, Cella, Harper & Scinto, New York City; Robert C. Kline, and Donald A. Hoes, Wilmington, Del., of counsel.

OPINION

LONGOBARDI, District Judge.

Plaintiffs, Akzona Incorporated ("Akzona"), Enka B.V. ("Enka") and Aramide Maatschappij VoF., have brought an action for a declaratory judgment that six patents assigned to E.I. Du Pont De Nemours & Company ("DuPont") relating to aramid fibers are invalid, unenforceable and noninfringed. Aramid fibers are sold by DuPont under the trade name Kevlar and by Enka under the name Enka Aramids. Plaintiffs are also seeking treble damages and injunctive relief for alleged antitrust violations and unfair competition by DuPont. DuPont has counterclaimed against Plaintiffs and Akzo N.V. ("Akzo") for patent infringement. Akzo is the sole owner of Plaintiff Enka and is the indirect owner of Plaintiff Akzona.

An earlier action in this district by Enka seeking a declaratory judgment of patent invalidity was dismissed for lack of jurisdiction. Enka B.V. of Arnhem, Holland v. E.I. Du Pont, Etc., 519 F.Supp. 356 (D.Del.1981) ("Enka I").

Currently before the Court are three motions. DuPont has admitted the Court's jurisdiction over Plaintiffs' claims regarding four of the patents but has moved to dismiss the claims concerning the other two patents. DuPont has also moved the Court to bifurcate the trial of the patent validity and noninfringement issues from the remaining issues in the case. Akzo has moved to dismiss DuPont's counterclaim against it for lack of jurisdiction.

Background

The six patents of which DuPont is assignee are Patent No. 3,817,941 issued to Thomas I. Bair and Paul W. Morgan, Patent No. 3,819,587 issued to Stephanie Louise Kwolek, Patents Nos. 3,869,429 and 3,869,430 issued to Herbert Blades, Patent No. 3,671,542 issued to Stephanie Louise Kwolek and reissued as Re. 30,352 ("the '352 patent") and Patent No. 3,767,756 issued to Herbert Blades ("the '756 patent"). The '352 patent covers an intermediate substance useful in manufacturing aramid fibers. The '756 patent covers a process for manufacturing aramid fibers. It is these latter two patents that are the subject of DuPont's motion to dismiss.

Akzo, a Dutch corporation, is primarily a holding company which also provides various financial and management services to its numerous subsidiaries around the world. Akzo does not transact or solicit any business in Delaware nor has it shipped or supplied any goods or services in Delaware. Akzo does not maintain any Delaware bank accounts, offices, telephone listing or address and is not registered to do business in Delaware. Aalders Affidavit ¶ 5.

Enka, a Dutch corporation, is a wholly-owned subsidiary of Akzo. Enka has manufactured small quantities of aramid fibers at a plant in Holland for the last several years and is now constructing a larger plant. When this plant is completed, Enka intends to sell major quantities of aramid fibers in the United States. Complaint ¶ 11 and 12. DuPont has threatened to file suit against Enka for patent infringement if it proceeds with its plans to market aramid fibers in the United States. Complaint ¶ 15.

DuPont's Motion to Dismiss

DuPont's patent '352 covers an intermediate substance, a dope, used in the manufacture of aramid fibers and patent '756 covers a manufacturing process for these fibers. While DuPont is using those patents in the manufacture of aramid fibers in its facilities in the United States, Plaintiffs are using a similar process and substance for manufacturing aramid fibers in Holland. Plaintiffs, however, recognize the importance of the United States market and consequently are desirous of exporting their aramid fibers to the United States. It is clear from the record that Plaintiffs do not intend to use the process or the dope items covered by patents '756 and '352 in any manufacture of aramid fibers in the United States.

In moving to dismiss Plaintiffs' allegations covering these two patents, DuPont suggests that in a declaratory judgment case like this one, it is customary to test the jurisdictional basis of the claim by observing the obverse of the allegations of the complaint. In other words, if the Plaintiffs seek a declaration that Defendant's patent is invalid, the viability of the claim for jurisdictional purposes depends on whether Defendant could jurisdictionally maintain a suit against the Plaintiffs for the infringement and enforcement of its patents. Applying such logic, the question in this case is whether a district court would have jurisdiction of a lawsuit by DuPont for infringement and enforcement of its '352 and '756 patents based on Plaintiffs' manufacture of aramid fibers in Holland.

A United States patent gives the owner of the patent a monopoly of its use within the territorial limits of the United States. Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 527, 92 S.Ct. 1700, 1706, 32 L.Ed.2d 273 (1972). See also Enka B.V. of Arnhem, Holland v. E.I. DuPont, Etc., 519 F.Supp. at 362, 369, and cases cited therein. In Deepsouth, supra, the Supreme Court said, "The statute makes it clear that it is not an infringement to make or use a patented product outside the United States." Id. at 527, 92 S.Ct. at 1706. As early as Brown v. Duchesne, 19 How. 183, 195, 15 L.Ed. 595 (1857), the Supreme Court determined the territorial limits of United States patents by saying:

But these acts of Congress do not and were not intended to operate beyond the limits of the United States, and as the patentee's right of property and exclusive use is derived from them, they cannot extend beyond the limits to which the law itself is confined. And the use of it outside of the jurisdiction of the United States is not an infringement of his rights, and he has no claim to any compensation for the profit or advantage the party may derive from it.

It is eminently clear that under the circumstances of this case DuPont could not seek an enforcement of its patents against Enka's manufacturing activities in Europe. Consequently, the Court sees no jurisdictional basis for Plaintiffs' declaratory judgment suit which seeks resolution of the very same issues.

Alternatively, the Plaintiffs contend that this Court has pendent and/or ancillary jurisdiction over the allegations of the complaint relative to patents '352 and '756. They contend that all of the allegations against DuPont and the DuPont patents are so inextricably intertwined that they are, in effect, one cause of action.

The doctrine of pendent jurisdiction has developed through the seminal cases of Osborn v. Bank of the United States, 9 Wheat. 738, 6 L.Ed. 204 (1824); Siler v. Louisville & Nashville R.R. Co., 213 U.S. 175, 29 S.Ct. 451, 53 L.Ed. 753 (1909); Moore v. N.Y. Cotton Exchange, 270 U.S. 593, 46 S.Ct. 367, 70 L.Ed. 750 (1926); and Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148 (1933). It is applicable:

... whenever there is a claim "arising under the Constitution, the Laws of the United States, and Treaties made, or which shall be made, under their Authority ...," U.S. Const., Art. III, § 2, and the relationship between that claim and the state claim permits the conclusion that the entire action before the court comprises but one constitutional "case." The federal claim must have substance sufficient to confer subject matter jurisdiction on the court.... The State and federal claims must derive from a common nucleus of operative fact. But if, considered without regard to their federal or state character, a plaintiff's claims are such that he would ordinarily be expected to try them all in one judicial proceeding, then, assuming substantiality of the federal issues, there is power in federal courts to hear the whole.

Mine Workers v. Gibbs, 383 U.S. 715, 725, 86 S.Ct. 1130, 1138, 16 L.Ed.2d 218 (1966).

Even when the power to entertain pendent jurisdiction exists, whether to exercise that power is a discretionary decision to be made by the Court based on "considerations of judicial economy, convenience and fairness to litigants." Id. at 726, 86 S.Ct. at 1139.

On the other hand, the doctrine of ancillary jurisdiction developed in situations in which the federal court had jurisdiction over a fund or property and third party interests, which would otherwise not be protected and who otherwise would not be amenable to federal jurisdiction were allowed to intervene to protect their interests. Freeman v. Howe, 24 How. 450, 16 L.Ed. 749 (1861); Stewart v. Dunham, 115 U.S. 61, 5 S.Ct. 1163, 29 L.Ed. 329 (1885); Fulton Bank v. Hozier, 267 U.S. 276, 45 S.Ct. 261, 69 L.Ed. 609 (1925).

In Aldinger v. Howard, 427 U.S. 1, 96 S.Ct. 2413, 49 L.Ed.2d 276 (1976), Justice Rhenquist, speaking for the Supreme Court, refused to decide "whether there are any `principled' differences between pendent and ancillary jurisdiction." Id. at 13, 96 S.Ct. at 2420. The Court, however, did recognize that a difference existed between adding causes of action in which the parties were already in federal court, when those claims arise out of a common nucleus of operative...