American Securit Co. v. Shatterproof Glass Corp.

• Decision Date: 22 September 1958
• Docket Number: Civ. A. No. 1691.
• Citation: 166 F. Supp. 813
• Parties: The AMERICAN SECURIT COMPANY, Plaintiff, v. SHATTERPROOF GLASS CORPORATION, Defendant.
• Court: U.S. District Court — District of Delaware

166 F. Supp. 813

The AMERICAN SECURIT COMPANY, Plaintiff, v. SHATTERPROOF GLASS CORPORATION, Defendant.

Civ. A. No. 1691.

United States District Court D. Delaware.

September 15, 1958.

On Motions to Dismiss and to Amend September 22, 1958.

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H. Eugene Savery, Wilmington, Del., John L. Seymour (of Bauer & Seymour), New York City, and Joseph W. Burns (of Fulton, Walter & Halley), New York City, for plaintiff.

Caleb S. Layton (of Richards, Layton & Finger), Wilmington, Del., and William C. McCoy and William C. McCoy, Jr. (of McCoy, Greene & TeGrotenhuis), Cleveland, Ohio, for defendant.

STEEL, District Judge.

The Court has today signed an injunctive order¹ to which reference is made for a statement of the facts which gave rise to its issuance. The entry of the order was based upon the legal conclusions that the Court possessed the power to grant injunctive relief and that in the exercise of its discretion it should do so. The considerations upon which these legal conclusions were based are stated herein.

In Crosley Corporation v. Hazeltine Corporation, 3 Cir., 1941, 122 F.2d 925 it was held that the District Court in which a declaratory judgment action had been brought to adjudicate the invalidity and non-infringement of a defendant's patents had the power to, and in the exercise of its discretion should, enjoin the defendant from prosecuting an action begun 17 days later in another District Court for infringement of certain of the patents involved in the first suit, the parties being the same in both actions. This decision was based upon the view that it is important to litigants to have a single determination of their controversy, that a party who first brings an issue into a court of competent jurisdiction should be free from the vexation of subsequent litigation over the same subject matter, and that the issuance of an injunction would prevent the economic waste involved in duplicating litigation which would necessarily adversely affect the prompt and efficient administration of justice. Upon parallel facts the same conclusion was arrived at in Crosley Corporation v. Westinghouse Electric & Manufacturing Co., 3 Cir., 1942, 130 F.2d 474, certiorari denied 1942, 317 U.S. 681, 63 S.Ct. 202, 87 L.Ed. 546 even though the second action was brought only one day after the first suit had been begun.

Here, unlike in the Crosley cases, it is not the plaintiff (Securit) who seeks to protect at an early stage of the case the jurisdiction which it has invoked. It is the defendant (Shatterproof) who seeks to have the plaintiff (Securit) prohibited from running away from the court of its choice long after a judicial pronouncement has been rendered upon a controlling aspect of the litigation. The principles of the Crosley cases therefore have a fortiori application to the situation at bar, and substantiate the power of the Court to grant injunctive relief and the wisdom of its doing so as a matter of discretion.

Securit argues that the Crosley cases are without application unless the same parties and issues are involved in both actions; and it points out that neither the United States nor the Hamilton Glass Corporation are parties to the Delaware litigation although both are parties in the Ohio proceeding. Furthermore, Securit asserts that the issues involved in Ohio are broader than those dealt with by Judge Leahy. These distinctions are not important. The injunction which has been issued is limited to the prevention of the relitigation between Securit and Shatterproof of the matters dealt with adversely to Securit by Judge Leahy. It does not foreclose Securit from litigating against the United States, Hamilton Glass Company, or anyone else any issues which it pleases. Nor does it foreclose Securit from litigating in Ohio against Shatterproof any matters other than those dealt with adversely to Securit by Judge Leahy in his opinion. Triangle Conduit & Cable Co. v. National Electric Products Corporation, 3 Cir., 1943, 138 F.2d 46 relied upon by Securit does not require the Court to deny injunctive relief of the limited scope which is indicated. Indeed, that decision, when read in the light of Triangle Conduit & Cable Co. v. National Electric Products Corporation, 3 Cir., 1942, 125 F.2d 1008, certiorari denied 1942, 316 U.S. 676, 62 S.Ct. 1046, 86 L.Ed. 1750 supports the propriety of the injunctive order which has been entered.

In Kerotest Mfg. Co. v. C-O-Two Fire Equipment Co., 3 Cir., 1951, 189 F.2d 31, affirmed 1952, 342 U.S. 180, 72 S.Ct. 219, 96 L.Ed. 200 it was held error for this Court to enjoin litigation in the Illinois District Court between a patentee and an alleged infringing manufacturer who were parties in Delaware and a customer of the alleged infringer which was not a party to the Delaware action. A mere reading of the opinion will disclose its several points of distinction from the case at bar. But if the test of determining precedence of judicial action stated in Kerotest is applied—viz., expedition in affording relief, it is clear that Securit should not be permitted to proceed against Shatterproof in Ohio to relitigate anew the issues upon which Judge Leahy has already spoken.

Securit resists the issuance of an injunction upon the asserted ground that Ohio has primary jurisdiction with which this Court should not interfere. But the jurisdiction which Ohio acquired by the initiation of the anti-trust action which eventuated in the Toledo decree in 1948 gave it no jurisdiction over Shatterproof. Even under Securit's theory the earliest time when the Ohio Court acquired jurisdiction over Shatterproof was in July, 1955 when Shatterproof filed its application with the Ohio Court seeking a determination of a reasonable royalty for the patents in suit. While it may be assumed that some of the issues which the Ohio Court might have decided in connection with that application¹ were identical with those with which Judge Leahy dealt, still the submission of these issues to the Ohio Court was subsequent to the institution of the suit in Delaware and, in any event, the Ohio Court dismissed the application. In the order of dismissal jurisdiction was neither reserved over Shatterproof nor over the subject matter of Shatterproof's application. Securit's contention that the Ohio Court had primary jurisdiction of such kind as to foreclose the granting of injunctive relief by this Court is therefore untenable.

Securit attempts to make capital of the fact that no order has been entered upon Judge Leahy's opinion. This is of no moment. The opinion is not relied upon as a basis of res judicata or a collateral estoppel. Its significance is to show the advance point to which the patent misuse and Toledo decree violation issues have been litigated in Delaware. This is a consideration of obvious importance in determining whether an injunction should issue.

The power of the Court to grant injunctive relief is not negatived by United States Gypsum Co. v. National Gypsum Co., 1957, 352 U.S. 457, 77 S.Ct. 490, 1 L.Ed.2d 465. There it was held that the Court rendering an anti-trust decree had jurisdiction in the anti-trust action to construe the decree as between the parties to it, to enjoin litigation in other courts between such parties which involved a construction of the decree, and following a construction which would bar the other actions, to direct the plaintiffs therein to dismiss the same with prejudice. The Court did not hold directly or by implication that a court other than that rendering an anti-trust decree is without power to construe the decree, or in the exercise of its discretion should refrain from doing so, when it has litigation before it between a party to the decree and a non-party thereto in connection with which the interpretation of the decree is pertinent and no interpretive relief antedating the suit has been sought from the anti-trust court. That is the situation which confronts this Court. Under comparable circumstances it was held in American Securit Company v. Hamilton Glass Company, 7 Cir., 1958, 254 F.2d 889, 895 that jurisdiction to construe the Toledo decree did not rest exclusively with the Ohio Court but that the Indiana District Court was empowered to do so. This conclusion, it held, was not inconsistent with the Gypsum decision.

The Ohio Court, having rendered the Toledo decree, is of course peculiarly competent to construe it and to determine whether the activities of Securit have been in derogation of its terms. But this is only one factor to be considered in determining whether in the exercise of its discretion the Court should direct the issuance of an injunction. This factor is substantially outweighed in the case at bar by the duplication of judicial effort and the inconvenience and expense to the parties which will necessarily be occasioned if Securit, which has chosen this Court as the forum for litigating its rights, should be permitted to proceed against Shatterproof in Ohio for a determination thereof long after Judge Leahy's opinion has been rendered upon an issue critical to the patent infringement aspect of the litigation in this Court.

Undoubtedly, a timely application for the construction of an anti-trust decree made to the Court rendering the decree will, in some instances, as illustrated by the circumstances of the Gypsum case, avoid multiple litigation and conflict of decisions. This consideration is scarcely relevant to the pending motion in view of the current status of the Delaware litigation and the long delay by Securit in soliciting the aid of the Ohio Court after previously invoking this Court's jurisdiction.

The restraint which has been granted is narrower than that sought by Shatterproof's motion. The relief prayed for in the motion, counsel for Shatterproof concede, was unduly broad. The scope of the relief which has been granted corresponds to that which counsel for Shatterproof requested at the...