Bereslavsky v. Standard Oil Co. of New Jersey, Civil Action No. 2300.

• Decision Date: 01 February 1949
• Docket Number: Civil Action No. 2300.
• Citation: 82 F. Supp. 939
• Parties: BERESLAVSKY v. STANDARD OIL CO. OF NEW JERSEY.
• Court: U.S. District Court — District of Maryland

82 F. Supp. 939

BERESLAVSKY v. STANDARD OIL CO. OF NEW JERSEY.

Civil Action No. 2300.

United States District Court D. Maryland.

February 1, 1949.

Daniel B. Leonard, of Baltimore, Md., and Pennie, Edmonds, Morton, & Barrows and W. Brown Morton, Jr., all of New York City, for plaintiff.

William L. Marbury and Franklin G. Allen, both of Baltimore, Md., and Theodore S. Kenyon and Malvin R. Mandelbaum, both of New York City, for defendant.

COLEMAN, Chief Judge.

This is a suit under R.S. 4919, 35 U.S. C.A. § 67, to recover damages for the alleged infringement of patent No. 1,713,589, issued to plaintiff for an invention in fuels for internal combustion engines. Defendant has moved under Rule 56 of the Federal Rules of Civil Procedure, 28 U.S.C.A., for a summary judgment as to an important part of the plaintiff's claim. The question presented by this motion is the only question now before the Court. For the purposes of the motion the material facts have been stipulated by the parties and the question for decision is solely one of law.

The defendant's motor fuel charged to infringe plaintiff's patent consisted of two types: (1) A motor fuel for use in aircraft engines known as "100 octane gasoline", and (2) motor fuels for non-aviation uses known as "motor gasoline." Defendant claims that plaintiff's remedy insofar as it relates to all of defendant's "100 octane gasoline" and also to so much of defendant's "motor gasoline" as was sold to the United States Government lies exclusively in the jurisdiction of the Court of Claims by reason of the provisions of Section 1498 of the new Judicial Code, 28 U.S.C.A. § 1498, and that, therefore, defendant is entitled to a dismissal to that extent of the complaint in the present proceeding.

Plaintiff opposes the motion for summary judgment on two grounds: First, that there is no evidence that the alleged infringement of plaintiff's patent was necessitated either expressly or by implication by the terms of the contract under which the aviation fuels were purchased by the Defense Supplies Corporation; and second, that such purchase was not sufficient to transform the manufacture of the fuels into a "manufacture * * * for the United States" within the meaning of the provisions of 35 U.S.C.A. § 68, which was repealed and reenacted as Section 1498 of the new Judicial Code, with certain changes hereinafter referred to.

The material facts as stipulated by the parties are as follows: The motor fuels as to which infringement is charged are those, and only those, which contained hydrocarbon fractions produced by catalytic cracking and commercially fractionated to include hydrocarbons boiling between 320° F. and 335° F. Prior to the date of expiration of the patent in suit, that is, May 21, 1946, defendant manufactured or initially sold in the District of Maryland only two types of motor fuel containing such fraction, namely, (a) a motor fuel intended for use in aircraft engines and technically known as "100 octane gasoline"; and (b) motor fuels intended for non-aviation use.

On January 13, 1942, the defendant entered into an agreement with Defense Supplies Corporation, an instrumentality of the United States Government, having among its functions the purchase of supplies, including aviation gasoline required for national defense and the prosecution of the War. Pursuant to this agreement, the defendant transferred title to, and billed Defense Supplies Corporation for all of its 100 octane gasoline.

The Petroleum Administration for War (in which term is included its predecessor agencies, Office of Petroleum Coordinator for National Defense and Office of Petroleum Coordinator for War), a duly constituted agency of the United States Government, had among its functions the coordination of the activities of other Governmental agencies pertaining to specifications and manufacture of petroleum products for defense and war purposes, and served as liaison between other agencies of the Government and the various branches of the petroleum industry, including the petroleum refining industry. The duly authorized employees of this Governmental agency had full knowledge of the precise character of the defendant's 100 octane aviation gasoline as well as its gasoline manufactured for non-aviation uses, and it authorized, recommended, and encouraged the inclusion of the particular fraction above referred to in defendant's 100 octane gasoline, and it likewise authorized, recommended, and encouraged the inclusion of various petroleum fractions in the ordinary commercial products of defendant.

The Petroleum Administration for War was immediately notified by the plaintiff when the present suit was filed, and took no steps thereafter to disapprove the inclusion of the particular fraction in defendant's 100 octane gasoline, although the Petroleum Administration for War was advised that the alleged infringement was based on the presence in this type of gasoline of a fraction produced by catalytic cracking and containing mesitylene. It also knew that so much of this fraction as was not used by defendant for blending into 100 octane gasoline was added to defendant's motor gasoline, which was principally used as a fuel for motor vehicles, and some of which was sold to various agencies of the Government.

Some eight million gallons of the approximately two hundred and ten million gallons of 100 octane aviation gasoline containing the particular fraction, initially sold by the Defendant to Defense Supplies Corporation in the District of Maryland, were resold by Defense Supplies Corporation to defendant without physical delivery or appropriation. This gasoline was thereafter sold by defendant for its own account to private customers having allocations for such gasoline approved by the Aviation Petroleum Products Allocation Committee. The price per gallon paid by defendant to Defense Supplies Corporation, on re-purchase, was higher than the price paid originally by Defense Supplies Corporation to the defendant. Approximately five hundred and twenty-one thousand gallons of this 100 octane gasoline initially sold by the defendant to Defense Supplies Corporation in the District of Maryland was resold by Defense Supplies Corporation itself to private purchasers having allocations for such gasoline approved by the Aviation Petroleum Products Allocation Committee, and was delivered to such purchasers from defendant's possession without physical delivery or appropriation prior to the physical delivery or appropriation to or for their account.

The remainder, or about 96% of defendant's 100 octane gasoline containing the particular fraction which was sold to Defense Supplies Corporation and not disposed of in either manner just indicated, went to our armed forces, either directly from Defense Supplies Corporation, or from defendant after repurchase from the latter.

The object of defendant's motion for summary judgment is to eliminate from the present proceeding the question (1) whether the "100 octane gasoline" was an infringing product, and (2) the matter of damages respecting all sales of defendant's motor fuel to the Government. That it is proper to raise and determine such questions by a motion for summary judgment is well established. See Sperry Gyroscope Co. v. Arma Engineering Co., 271 U.S. 232, 46 S.Ct. 505, 70 L.Ed. 922; Broome v. Hardie-Tynes Mfg. Co., 5 Cir., 92 F.2d 886; Tinnerman Products v. Adel Precision Products, D. C., 62 F.Supp. 348; Hazeltine Corporation v. General Electric Co., D. C., 19 F.Supp. 898. In the latter case this Court heard separately, prior to the full trial on the merits, the question whether any acts of patent infringement had been committed within the District of Maryland, and being satisfied that defendant's sales in this District were to the Government, dismissed the complaint, relying upon the Act here involved as it stood before codification. The pertinent part of this Act is substantially the same as that contained in the Act's codification, effective September 1, 1948, 28 U.S.C.A. § 1498, upon which defendant relies, and which is as follows: "The Court of Claims shall have jurisdiction to render judgment upon any claim against the United States for the recovery of the reasonable and entire compensation for the use or manufacture of an invention covered by a patent of the United States which has been used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same."

In a repealer section of the new codification there is a proviso that any rights or liabilities, existing under any section at the time of its repeal, are not affected. However, even though plaintiff is entitled to have his rights determined by the Act as it stood before codification, and even though this codification changes somewhat the Act's phraseology, there is really no change in meaning. It is essentially a question merely of verbal rearrangement. Before codification, the Act read, 35 U.S. C.A. § 68: "Whenever an invention described in and covered by a patent of the United States shall be used or manufactured by or for the United States without license of the owner thereof or lawful right to use or manufacture the same, such owner's remedy shall be by suit against the United States in the Court of Claims for the recovery of his reasonable and entire compensation for such use and manufacture: * * * Provided further, That in any such suit the United States may avail itself of any and all defenses, general or special, that might be pleaded by a defendant in an action for infringement, as set forth in this chapter, or otherwise." This was the Act of July 1, 1918, c. 114, 40 Stat. 705, which amended the Act of June 25, 1910, c. 423, 36 Stat. 851. Thus, both before and after the codification, the Act clearly indicates that use or manufacture "by or for the United States" of an article covered by a patent is sufficient to limit the patentee's...