Carter Products v. COLGATE-PALMOLIVE COMPANY, Civ. No. 6924.

• Decision Date: 09 May 1957
• Docket Number: Civ. No. 6924.
• Citation: 151 F. Supp. 427
• Court: U.S. District Court — District of Maryland
• Parties: CARTER PRODUCTS, Inc., Joseph G. Spitzer, and Marvin Small, Plaintiffs, v. COLGATE-PALMOLIVE COMPANY, Stalfort Pressure-Pak Corporation, John C. Stalfort & Sons, Inc., and Read Drug & Chemical Company, Inc., Defendants.

151 F. Supp. 427

CARTER PRODUCTS, Inc., Joseph G. Spitzer, and Marvin Small, Plaintiffs, v. COLGATE-PALMOLIVE COMPANY, Stalfort Pressure-Pak Corporation, John C. Stalfort & Sons, Inc., and Read Drug & Chemical Company, Inc., Defendants.

Civ. No. 6924.

United States District Court D. Maryland, Civil Division.

May 9, 1957.

George B. Finnegan, Jr., New York City, and John W. Avirett, 2d, Baltimore, Md. (Morgan, Finnegan, Durham & Pine, Morris Kirschstein, Jerome G. Lee and William D. Denson, Washington, D. C., and Piper & Marbury, Baltimore, Md., on the brief), for Carter Products, Inc.

Mathias F. Correa, New York City, and H. Vernon Eney, Baltimore, Md. (Thomas C. Mason and William T. Lifland, New York City, on the brief), for Colgate-Palmolive Co.

THOMSEN, Chief Judge.

Defendant Colgate has moved to "clarify and amplify" the decree entered herein by Judge Coleman and affirmed by the Court of Appeals, 4 Cir., 230 F.2d 855, by changing the accounting period for damages and profits which was specified in paragraph 14 of the decree and in the opinion and mandate of the Court of Appeals. For Judge Coleman's opinion see D.C., 130 F.Supp. 557.

The complaint charged patent infringement and appropriation of trade secrets relating to a pressurized shaving cream. After a long trial, Judge Coleman held the patent valid, enjoined infringement thereof, enjoined the use of trade secrets wrongfully appropriated by Colgate, ordered Colgate to assign to plaintiffs certain rights under patent applications, and referred the case to a special master to determine and report on the damages resulting from infringement and the damages and profits for which Colgate should be required to account because of its misappropriation of plaintiffs' trade secrets. The question whether increased damages should be awarded was reserved for future determination.

Paragraph 14 of the decree provided that plaintiffs have and recover from Colgate any damages which plaintiffs have suffered and any profits which Colgate has made by reason of Colgate's misappropriation of plaintiffs' trade secrets; "that the accounting period begin on the date when Colgate first went on the market with its product `Rapid-Shave' up to and including the date of the last sale of any of its pressurized shaving lather products embodying the trade secret specified in paragraph No. 12(c) above; as to those products embracing only the trade secrets specified in paragraphs No. 12(a) and No. 12(b) above, the accounting period shall terminate as of the date of issuance of said patent, and the accounting will embrace all pressurized shaving lather products produced by Colgate during said period embracing any one or all of said trade secrets * * *."

Three principal questions were presented by the appeal to the Fourth Circuit: "(1) Is the patent valid? (2) Should the findings of the trial court as to misappropriation of trade secrets be sustained? And (3) Is the decree proper?". 230 F.2d at page 857.

The Fourth Circuit affirmed the decree in an opinion by Chief Judge Parker, in which he said, inter alia: "Decree was properly entered enjoining infringement of the patent and awarding damages because of infringement, and, as to Colgate, awarding damages from the time that this defendant began using the trade secrets which it had obtained by the employment of Fine." 230 F.2d at page 865. Paragraph 14 of Judge Coleman's decree was incorporated verbatim in the mandate of the Court of Appeals.

Despite the clarity of these rulings, Colgate seeks an order: (1) specifying that the calculation of profits and/or damages with respect to the matter of trade secret appropriation proceed in accordance with the law of New Jersey; (2) specifying that plaintiffs may not recover profits and damages prior to the receipt of actual notice on the part of Colgate that it was in fact using a trade secret thereafter found to be the property of plaintiffs; (3) determining that no such notice was received by Colgate prior to the initiation of this action; and (4) referring to the special master the determination of when, after the commencement of the action, Colgate received such notice.

The first problem is whether this court has any power to consider the questions raised by the motion, in view of the mandate and opinion of the Court of Appeals. The general rule is that where a question involved in a case has been determined by an appellate court, its decision becomes the law of the case and controls the lower court in any subsequent trial thereof. Baltimore & O. R. Co. v. Deneen, 4 Cir., 167 F.2d 799. "Every question of law or fact which was before the Circuit Court of Appeals and decided by their opinions was thereby conclusively settled for this court upon the subsequent proceedings. The matters not decided on those appeals are open for consideration here; but, so far as questions of fact or law were specifically decided, this court is not at liberty to re-examine any such decided matters, but must proceed in conformity to the mandate as interpreted by the opinions of the reviewing court." William Wrigley, Jr., Co. v. L. P. Larson, Jr., Co., D.C. W.D.Ill., 5 F.2d 731, 735, affirmed 7 Cir., 20 F.2d 830, reversed on another point, 277 U.S. 97, 48 S.Ct. 449, 72 L.Ed. 800.

Colgate argues that Judge Coleman's decree was interlocutory so far as the trade secret issue was concerned; that 28 U.S.C. § 1292 makes no provision for interlocutory appeals in actions for trade secret appropriation; that the sole bases of appellate jurisdiction were (1) that this is a patent case, and (2) that the court had ordered the issuance of an injunction with respect to trade secret appropriation; and that "there was no statutory basis whatsoever for any consideration on the part of the Court of Appeals as to the extent of defendant Colgate's liability for damages". Colgate relies on Loew's Drive-in Theatres v. Park-In Theatres, 1 Cir., 174 F.2d 547, and A. D. Howe Mach. Co. v. Dayton, 4 Cir., 210 F. 801. Those cases, however, are distinguishable from the case at bar. In Loew's, an action for unpaid royalties was joined in the same complaint with an action for patent infringement. The separate opinions of Judge Woodbury and Judge Magruder both recognized that the two causes of action were separate and distinct; the one was not in any proper sense ancillary to the other. In the instant case, the claim based on the misappropriation of trade secrets was joined with...