Alfred Hofmann, Inc. v. Knitting Machines Corporation, 7695.

• Decision Date: 04 November 1941
• Docket Number: No. 7695.,7695.
• Citation: 123 F.2d 458
• Parties: ALFRED HOFMANN, Inc., v. KNITTING MACHINES CORPORATION et al.
• Court: U.S. Court of Appeals — Third Circuit

123 F.2d 458 (1941)

ALFRED HOFMANN, Inc., v. KNITTING MACHINES CORPORATION et al.

No. 7695.

Circuit Court of Appeals, Third Circuit.

Decided November 4, 1941.

Samuel E. Darby, Jr., of New York City (E. Ennalls Berl, of Wilmington, Del., and Louis D. Fletcher, of New York City, on the brief), for plaintiff-appellant.

Hugh M. Morris, of Wilmington, Del., (Alexander L. Nichols, of Wilmington, Del., and Alfred H. Hildreth, Maxwell Fish, and Fish, Hildreth, Cary & Jenney, all of Boston, Mass., on the brief), for defendant-appellee.

Before BIGGS, MARIS, and CLARK, Circuit Judges.

BIGGS, Circuit Judge.

The plaintiff Alfred Hofmann, Inc., brought a suit for a declaratory judgment pursuant to the provisions of Section 274d of the Judicial Code, 28 U.S.C.A. § 400, in the court below predicating jurisdiction upon the patent statutes of the United States. The complaint alleges that the plaintiff is engaged in the distribution and sale in the United States of Schubert and Salzer knitting machines and their parts; that the defendant Max C. Miller is the owner of Patent No. 1,995,643 for a weltturning mechanism for knitting machines and of Patent No. 1,995,644 for a knitting machine; that the defendant Kalio, Inc., is the owner of Patent No. 2,140,366, issued on the application of Karl Richard Lieberknecht for a knitting machine; that the defendant, Knitting Machines Corporation, is the owner of Patents No. 2,217,520 and 2,217,521 for knitting machines issued on October 8, 1940, on applications filed by the defendant Miller.

The complaint states that the defendant, Knitting Machines Corporation, has represented to the plaintiff that it "controls" the five patents and has the right to sue for their infringement.

Paragraph 9 of the complaint is as follows: "That an actual controversy exists between plaintiff and defendants, in that defendants, Knitting Machines Corporation and Max C. Miller, have charged that the Schubert and Salzer machines and relevant parts thereof distributed and sold by plaintiff infringe each of said Letters Patent and have threatened to sue customers of plaintiff for alleged infringement of each of said Letters Patent by reason of their acquisition from plaintiff and use of plaintiffs Schubert and Salzer machines and relevant parts thereof."

The complaint goes on to allege that both Miller and Knitting Machines Corporation had been advised by the plaintiff that it believes that the patents are invalid and are not infringed by the Schubert and Salzer machines sold by the plaintiff and that the plaintiff has urged the defendants to bring an infringement suit against it to settle the controversy; that no suit has been instituted though the defendants continue to threaten to sue the plaintiff's customers. The plaintiff then states six grounds why the patents should be adjudged invalid, and alleges that the Schubert and Salzer machines and their parts sold by it do not infringe any of the patents.

The complaint prays for a declaratory judgment adjudging the patents invalid and not infringed by the machines and parts sold by the plaintiff, and for an injunction to restrain Knitting Machines Corporation and Miller from stating or writing in the press, trade journals or elsewhere that the Schubert and Salzer machines and parts sold by the plaintiff infringe the patents or that these patents or any of them cover the Schubert and Salzer machines or parts, and from suing or threatening to sue plaintiff's customers.

Alfred Hofmann, Inc., is a Delaware corporation. Knitting Machines Corporation is also a Delaware corporation. Kalio, Inc., is a New York corporation. Miller is a resident of Rhode Island. Service was made upon Knitting Machines Corporation, but no service has been made upon Kalio, Inc., or Miller and neither of them has appeared voluntarily.

Knitting Machines Corporation moved to dismiss the action as to Kalio, Inc., on the grounds that that defendant is a corporation of New York and was not served with process; to dismiss as to Miller because he is a resident of Rhode Island and was not served and because Miller is not the owner of Patents No. 1,995,643 and No. 1,995,644, his rights having been assigned to Knitting Machines Corporation; to dismiss as to Lieberknecht Patent No. 2,140, 366 because the defendant, Kalio, Inc., is the owner of that patent and is therefore an indispensable party to the suit; and to dismiss as to Miller Patents No. 2,217,520 and No. 2,217,521 because there is no "actual controversy" between the parties within the meaning of Section 274d of the Judicial Code, the plaintiff having committed no act of infringement since the issuance of the Miller patents on October 8, 1940, and there being no threat of future infringement since the plaintiff cannot import machines or parts of machines to sell in the United States because of the war. Finally, Knitting Machines Corporation moved to dismiss the action in its entirety, or (in the alternative) moved that the proceedings be stayed pending the final decision in a suit brought by Knitting Machines Corporation and Kalio, Inc., in the District of Massachusetts against Propper-McCallum Hosiery Co., Inc., a customer of the plaintiff, charging infringement of the five patents here in suit by the use both prior and subsequent to October 8, 1940 (the date of issuance of the two later Miller Patents No. 2,217,520 and No. 2,217,521), of machines embodying the inventions claimed in all five patents. The motion ends with the statement that in the infringement suit in the District of Massachusetts full and complete determination may be had of all questions and issues with respect to all the patents, a result alleged to be impossible in the declaratory judgment suit at bar.

The complaint filed in the District Court of the United States for the District of Massachusetts is part of the record before us, as are certain affidavits and correspondence between the plaintiff and the defendants in the suit at bar.

The court below granted the motion to dismiss as to the Lieberknecht Patent No. 2,140,366 on the ground that since the suit seeks to have that patent declared invalid, and Kalio, Inc., the record owner has not been served with process or appeared, the court has no jurisdiction to adjudicate rights in the patent. It granted the motion to dismiss as to the two last issued Miller patents (October 8, 1940) because the complaint does not allege importation or sale of any machines or parts after the issuance of these patents and does not allege "... that Knitting Machines Corporation represented that plaintiff had ever infringed any of the claims of either of these two Miller patents." The learned District Judge then states, "How could there have been an actual controversy between plaintiff and Knitting Machines Corporation respecting those patents. Defendant's letter of October 11, 1940, to plaintiff does not charge that plaintiff was infringing these patents but that users of machines previously sold were guilty of infringement. Plaintiff's reply dated October 15, 1940, did not say that any machines had been sold after October 8. The last affidavit filed by defendant says: `To the best of my knowledge, information and belief, no actual infringement has ever been committed by the plaintiff since the issuance of these two patents on October 8, 1940'. It is apparent there is no justiciable controversy respecting these two Miller patents." 37 F.Supp. 578, 579.

As to the two earlier Miller patents, Nos. 1,995,643 and 1,995,644, the court finds that they were assigned to Knitting Machines Corporation on September 30, 1935, and are therefore properly before the court for determination of the controversy created because Knitting Machines Corporation threatened suit for their alleged infringement. The court points out that the motion of Knitting Machines Corporation to...