American Securit Co. v. Shatterproof Glass Corp., Civ. A. No. 1691.

• Decision Date: 18 September 1957
• Docket Number: Civ. A. No. 1691.
• Citation: 154 F. Supp. 890
• Parties: The AMERICAN SECURIT COMPANY, Plaintiff, v. SHATTERPROOF GLASS CORPORATION, Defendant.
• Court: U.S. District Court — District of Delaware

154 F. Supp. 890

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

Civ. A. No. 1691.

United States District Court D. Delaware.

July 19, 1957.

Rehearing Denied September 18, 1957.

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.

LEAHY, Chief Judge.

Plaintiff sues for infringements of certain patents concerning the tempering of glass. Defendant moved for summary judgment under Fed.Rules Civ.Proc. rule 56, 28 U.S.C. There is no genuine issue as to the material facts. The question before the court is one of law. A brief sketch of the historical background of this litigation is necessary.

1. On October 30, 1948, a final judgment in the form of a consent decree was filed in the District Court of the United States for the Northern District of Ohio, Western Division, by Judge Kloeb. The government had charged violation of the anti-trust statutes. The parties consenting were the United States of America, as plaintiff, and Libbey-Owens-Ford Glass Company, Pittsburgh Plate Glass Company, American Window Glass Company, Fourco Glass Company, Franklin Glass Company, National Glass Distributors Association, Rolland Glass Company, American Securit Company, and Blue Ridge Glass Corporation, as defendants.

In part, the decree provided the American Securit Company, one of the corporate defendants, was enjoined from adhering to any agreement providing for a license under any patent relating to the manufacture of flat glass, upon the condition the other party had to accept a license under any other patent owned by any of the defendants in that action. Also, the defendants were to grant to each applicant a non-exclusive license under their patents and were enjoined from including any restriction or condition in any license granted by such defendants, with certain exceptions. Upon receipt of a written request for a license, a defendant was to advise the applicant in writing of the royalty which it deemed reasonable for the patent or patents to which the request pertained. If the parties could not agree upon a reasonable royalty within sixty days from the date the request for the license was received by a defendant, the applicant could apply forthwith to the Ohio Court for the determination of a reasonable royalty. The burden of proof would rest on the owner of the patent to establish the reasonableness of the royalty demanded and the court determination would apply to the applicant and all other licensees under those patents. Pending the completion of negotiations, or any such proceeding, the applicant would have to make use of the patents to which its application pertained without payment of royalty or other compensation, subject to the right of such defendant, or the applicant himself, to apply to the court to fix an interim royalty rate from the date of the filing of the application.

2. Correspondence between the present parties in the suit at bar, which has been stipulated of record, indicates a series of negotiations took place between plaintiff and defendant here with respect to defendant's licensing of plaintiff's patents. The negotiations were opened by defendant on March 20, 1951. On March 7, 1955, almost four years later, plaintiff brought suit in this court against defendant for alleged patent infringement and unfair competition. Defendant's answer denied all counts of infringement, challenged the validity of plaintiff's patents, asserted as a first defense misuse of patents, and, as a second defense, royalty free license under the Ohio decree. Defendant here also counterclaimed for a declaratory judgment.¹

On July 25, 1955, an application was filed by defendant in the Ohio Court for the determination of royalty fees pursuant to that Court's final judgment entered October 30, 1948. Then, on October 6, 1955, the Attorney-General of the United States petitioned the Ohio Court for orders for the construction and enforcement of the Ohio decree and judgment. Hearing on these matters was had on October 19, 1955. On December 13 the Court refused to take jurisdiction in view of the proceedings here, and ordered a dismissal of both the application and the petition of the Attorney-General. As of the present date, the paper record shows defendant is not working under any license of plaintiff corporation.

3. Counts I through IV of the Complaint relate to defendant's alleged infringements of plaintiff's patents, Mosmieri, et al., No. 2,131,406, Despret No. 2,167,294, Eckert No. 2,093,040, and Long No. 2,303,749. Counts V and VI relate to the allegations of unfair competition and fraud on the part of defendant. The motion for summary judgment seeks merely dismissal of Counts I through IV.

4. Preliminarily, there is plaintiff's motion to strike the affidavits of Mr. William C. McCoy, Jr., and Mr. William C. McCoy, attorneys for defendant, supporting defendant's motion for summary judgment. F.R. 56(e) tests the sufficiency of evidentiary affidavits on a summary judgment motion for form and content. It requires affidavits to be made on personal knowledge, to set forth such facts as would be admissible in evidence, and to show affirmatively the affiant is competent to testify to the matters stated therein.

The affidavit of Mr. William C. McCoy, Jr., describes a conference between the affiant and Mr. Vernon M. Dorsey, a lawyer and then Secretary of the plaintiff, The American Securit Company, held for the purpose of negotiating for a patent license from plaintiff to defendant, Shatterproof Glass Corporation. Part of that affidavit alleges the good faith of the position taken by defendant during the course of negotiations. The affidavit of Mr. William C. McCoy traces the steps of defendant's legal stand, including Shatterproof's negotiations with another defendant (under the Ohio judgment) from whom licenses for several patents, including those relating to the tempering of glass, were granted on an individual basis.

I conclude the supporting affidavit of William C. McCoy and part of the supporting affidavit of William C. McCoy, Jr., are not material to the issues raised by defendant in its motion for summary judgment.² They will be disregarded. As to the remainder of the supporting affidavit of William C. McCoy, Jr., plaintiff's motion to strike is denied.

Plaintiff does not attack part of this affidavit on the ground of affiant's lack of personal knowledge. Furthermore, plaintiff concedes the facts set forth are material to the issue of its licensing policy and would be admissible in evidence. What is challenged is affiant's competency to testify to those facts by reason of his position as attorney for defendant on whose behalf the affidavit was offered, and the circumstance that the other member of the conference, Vernon M. Dorsey, is now deceased. F.R. 43(a) directs the competency of a witness to be determined in like manner with the admissibility of evidence; in other words, the statute or rule which favors the reception of the evidence governs.³ Absent any existing federal competency statute and no distinctive equity rule having previously evolved, this court must look to the law of the State of Delaware as its guide.

Under statutory provision (and most states handle this problem by statute), there can be no disputing an attorney's right to testify, hence to submit his own affidavit.⁴ I refer to § 4302 of Title 10 of the 1953 Delaware Code, which, in effect, refutes the common law rule under which Pritchard v. Henderson,⁵ relied upon by plaintiff, was decided, and which provides, in part: "No person shall be incompetent to testify in any civil action or proceeding whether at law or in equity, because he is a party to the record or interested in the event of the suit or matter to be determined." Further objection is made by plaintiff that William C. McCoy, Jr., attorney for defendant, seeks to testify to matters contained in a conversation with an officer, Vernon M. Dorsey (then Secretary), now deceased, of plaintiff. Plaintiff thus alludes to the concluding sentence of § 4302, which is commonly referred to as the "Dead Man Statute". It states: "In actions or proceedings by or against executors, administrators or guardians in which judgment may be rendered for or against them, neither party shall be allowed to testify against the other as to any transaction with or statement by the testator, intestate or ward, unless called to testify thereto by the opposite party."

As a qualification of the statutory abrogation of the common law rule that parties or interested persons are incompetent to testify, this blind concession to the past should be strictly construed. The Delaware legislature expressly states that before the Dead Man Statute can register a "party" incompetent, the action must be one "by or against executors, administrators or guardians in which judgment may be rendered for or against them". This limitation was woven into the decision of Lake Shore National Bank v. Bellanca Aircraft Corporation by Judge Rodney of this court.⁶ In that case Lake Shore National Bank was executor under a will and brought an action against a corporate defendant. At the trial the Treasurer and Secretary of defendant corporation were asked certain questions involving transactions with the testator in his lifetime. Judge Rodney, following what was considered to be the rule established by the Delaware state courts, although admittedly outside the great weight of authority, held that where a corporation is party to a suit by or against an executor or administrator the officers of such corporate party are incompetent to testify as to transactions with the testator or intestate. Thus, although the term "pa...