American Chemical Paint Co. v. Dow Chemical Co.

• Decision Date: 26 May 1947
• Docket Number: No. 10375.,10375.
• Citation: 161 F.2d 956
• Parties: AMERICAN CHEMICAL PAINT CO. v. DOW CHEMICAL CO.
• Court: U.S. Court of Appeals — Sixth Circuit

161 F.2d 956 (1947)

AMERICAN CHEMICAL PAINT CO. v. DOW CHEMICAL CO.

No. 10375.

Circuit Court of Appeals, Sixth Circuit.

May 26, 1947.

Charles W. Rivise and Abraham D. Caesar, both of Philadelphia, Pa. (Robert S. Marx and Nichols, Wood, Marx & Ginter, all of Cincinnati, Ohio, Caesar & Rivise, C. W. Rivise and A. D. Caesar, all of Philadelphia, Pa., and Alan N. Brown, of Detroit, Mich., on the brief), for appellant.

Bernard A. Schroeder, of Chicago, Ill. (Bernard A. Schroeder, Charles J. Merriam, and Chritton, Schroeder, Merriam & Hofgren, all of Chicago, Ill., Calvin A. Campbell and Donald L. Conner, both of Midland, Mich., and Harness, Dickey & Pierce, of Detroit, Mich., on the brief), for appellee.

Before HICKS, SIMONS and MILLER, Circuit Judges.

MILLER, Circuit Judge.

This appeal involves the question of venue in a Declaratory judgment suit attacking the validity of a patent owned by the defendant-appellant.

The appellant, defendant below, is a Delaware corporation with its principal office at Ambler, Pennsylvania. It is licensed to do business in the State of Michigan and had appointed a registered agent in the State of Michigan to accept service of process. It has commercialized a chemical weed-killer made in accordance with Jones Patent No. 2,390,941 for Methods and Compositions for Killing Weeds. The appellee, plaintiff below, is a Michigan corporation and is engaged in the manufacture and sale of a weed-killer compound, which appellant claims to be an infringement. Under date of April 26, 1946, appellant's counsel mailed a letter from Philadelphia, Pennsylvania, to the appellee at Midland, Michigan, giving them notice of its ownership of the Jones patent and the appellee's infringement thereof and calling upon the appellee to cease the acts of infringement. Following an exchange of letters, the appellee on May 28, 1946 filed this action against appellant in the United States District Court for the Eastern District of Michigan seeking a declaratory judgment that Patent No. 2,390,941 was invalid, that no valid claim thereof was infringed by appellee or its customers, and that the court enjoin the appellant from annoying or intimidating the appellee or its customers and from bringing suit against the appellee or its customers by reason of said patent. The complaint alleged that an actual controversy existed between the parties concerning the validity of the patent, and that the patent was invalid for several reasons therein stated. It also alleged diversity of citizenship between the parties, that the amount of the controversy exceeded $3,000 and that the appellant was threatening appellee's customers with infringement suits, which were unfounded but which threatened to create irreparable damage to the appellee. The appellant moved to dismiss the action on the ground that the venue was improper. On June 10, 1946, the appellant filed a civil action against the appellee in the U. S. District Court for the Southern District of New York charging infringement by the appellee of the Jones patent and praying for an injunction against further infringement and an accounting for profits and damages. On June 22, 1946, the appellant moved in the present suit that the appellant be enjoined from prosecuting the New York suit and that it file a consent to a stay of proceedings in that case. On July 11, 1946, the District Judge entered an order denying appellant's motion to dismiss the action, and also entered a second order enjoining the appellant from prosecuting the New York action pending final disposition of this case and directing it to sign and forward to New York within two days a consent to a stay of proceedings in that case. The present appeal is from both orders.

The order overruling appellant's motion to dismiss the action for improper venue is interlocutory and not an appealable order if considered alone. But this Court has jurisdiction of the appeal from the interlocutory injunction by virtue of § 227, Title 28 U.S.C.A. On such an appeal the reviewing court has the power to also review the order refusing to dismiss the complaint. Deckert v. Independence Shares Corporation, 311 U.S. 282, 287, 61 S.Ct. 229, 85 L.Ed. 189; General Electric Company v. Marvel Company, 287 U.S. 430, 433, 53 S.Ct. 202, 77 L.Ed. 408; Gatliff Coal Company v. Cox, 6 Cir., 142 F.2d 876, 879.

The parties agree that a suit for declaratory judgment involving the validity and infringement of a patent is one arising under the patent laws, thus conferring jurisdiction on the District Court under § 24(7) of the judicial Code. § 41(7), Title 28 U.S.C.A. The rule appears well settled. E. W. Bliss Co. v. Cold Metal Process Company, 6 Cir., 102 F.2d 105; Edelman & Company v. Triple-A Specialty Company, 7 Cir., 88 F.2d 852, certiorari denied 300 U.S. 680, 57 S.Ct. 673, 81 L.Ed. 884; E. I. Du Pont de Nemours v. Byrnes, 2 Cir., 101 F.2d 14; Crosley Corporation v. Westinghouse Electric & Mfg. Company, 3 Cir., 130 F.2d 474. Proper venue is the question in issue.

The Federal Declaratory judgment Act, § 400, Title 28 U.S.C.A., is merely a procedural statute which provides an additional remedy for use in those controversies of which the district courts already have jurisdiction. Venue, as well as jurisdiction, must be found in some other statute. Appellant claims that venue in the present case is controlled by § 48 of the Judicial Code, § 109, Title 28 U.S.C.A., which provides: "In suits brought for the infringement of letters patent the district courts of the United States shall have jurisdiction, in law or in equity, in the district of which the defendant is an inhabitant, or in any district in which the defendant * * * shall have committed acts of infringement and have a regular and established place of business."

Section 48 is the exclusive provision controlling venue in patent infringement suits. Stonite Products Company v. Melvin Lloyd Company, 315 U.S. 561, 62 S.Ct. 780, 86 L.Ed. 1026. Since the defendant-appellant, as the owner of the patent, did not commit any act of infringement, this section, if applicable, would limit the bringing of the action to the district of which the appellant was an inhabitant. The appellant, a Delaware corporation, is not an inhabitant of the Eastern District of Michigan. If the present action is a patent infringement suit, the venue is improper unless it has been waived by the appellant. Although appellant appointed a registered agent in the State of Michigan to accept service of process, this would not constitute a waiver of venue in a suit brought under Section 48. The rule in Neirbo Company v. Bethlehem Ship Building Corporation, 308 U.S. 165, 60 S.Ct. 153, 84 L.Ed. 167, 128 A.L.R. 1437, in which it was held that the designation by a foreign corporation of an agent for service of process was a waiver of the venue provisions applicable in that case, applies to suits based on diversity of citizenship, and is not applicable to a suit brought for the infringement of a patent, where venue is controlled by Section 48. Blaw-Knox Company v. Lederle, 6 Cir., 151 F.2d 973. See also Phillips v. Baker, 9 Cir., 121 F.2d 752, certiorari denied 314 U.S. 688, 62 S.Ct. 301, 86 L.Ed. 551; Bulldog Electric Products Co. v. Cole Electric Products Co., 2 Cir., 134 F.2d 545, 547; Carbide & Carbon C. Corporation v. United States I. Chemicals, 4 Cir., 140 F.2d 47, 50.

However, we agree with the appellee that the present action is not a suit "brought for the infringement of letters patent" as provided by Section 48. Although the validity of a patent is involved, the action is not one brought by the owner of the patent, nor one brought for the infringement of the patent. On the contrary, the action is a declaratory judgment suit, specifically provided for by a separate statutory provision, and was brought to have the patent declared invalid instead of seeking damages for any infringement. The plain wording of the statute does not bring the present action within its scope. Its purpose was to protect an alleged infringer from being brought into a foreign court. General Electric Company v. Marvel Company, supra, 287 U.S. 430 at page 435, 53 S.Ct. 202, 77 L.Ed. 408; see also Stonite Products Company v. Melvin Lloyd Company, supra. Since Section 48 is not applicable, it follows that the venue is controlled by Section 51 of the Judicial Code, § 112, Title 28...