Champion Spark Plug Co. v. Champion Ignition Co.

• Decision Date: 22 November 1917
• Docket Number: 14.
• Citation: 247 F. 200
• Parties: CHAMPION SPARK PLUG CO. v. CHAMPION IGNITION CO. et al.
• Court: U.S. District Court — Eastern District of Michigan

247 F. 200

CHAMPION SPARK PLUG CO. v. CHAMPION IGNITION CO. et al.

No. 14.

United States District Court, E.D. Michigan, Northern Division.

November 22, 1917

Owen Owen & Crampton, of Toledo, Ohio, for plaintiff.

Whittemore Hulbert & Whittemore, of Detroit, Mich., for defendants.

TUTTLE District Judge.

This cause is before the court on motion of the plaintiff to dismiss a counterclaim, filed by the defendant, on the ground that this court is without jurisdiction to entertain such counterclaim in this suit.

Plaintiff a Delaware corporation, having its principal office and place of business at Toledo, Ohio, outside of this district, filed its bill against the defendants, residents and inhabitants of this district, alleging that defendants had been guilty of infringement of the trade-mark of the plaintiff, consisting of the word 'Champion' as applied to spark plugs for explosion engines, and had also committed acts of unfair competition in connection therewith; that plaintiff and its predecessors in business had been for 10 years last past continuously engaged in the manufacture and sale of spark plugs under the trade-name and trade-mark 'Champion,' the same having been applied during such period to the spark plugs themselves, to the cartons containing the same, and to circulars and advertising matter relating thereto, and having throughout that time been constantly used by plaintiff and its predecessors, and by jobbers, dealers, and purchasers to distinguish spark plugs made and sold by plaintiff and its predecessors in title and business from those of other origin; that said trade-mark had been conspicuously printed on the cartons and packages in which said spark plugs were packed for shipment, and had also been permanently burned on the porcelain of the spark plugs themselves, and that said spark plugs so marked were being sold and shipped by plaintiff in interstate commerce; that it had always been the practice of plaintiff to manufacture and sell only the highest quality of spark plugs under its said trade-mark, using therein only the best materials and workmanship, and that said 'Champion' spark plugs had throughout enjoyed a high reputation for efficiency and durability among the trade and automobile dealers generally, which reputation, associated with said trade-mark, was of great value to plaintiff and an important asset in its business; that the defendants were manufacturing and selling spark plugs closely imitating those manufactured by plaintiff; that said defendants were using the word 'Champion' to indicate said spark plugs, and were advertising and selling their spark plugs as and for plaintiff's aforesaid Champion spark plugs; that plaintiff's and defendants' spark plugs are so similar in design and appearance as not to be readily distinguishable by the ordinary purchaser, so that said misrepresentation and misuse of plaintiff's trade-mark by defendants are especially injurious in that they enable defendants to confuse the purchasing public and to palm off defendants' for plaintiff's spark plugs; and that defendants' acts of unfair competition and infringement of plaintiff's trade-mark have resulted in great and irreparable damage and injury to the plaintiff and its business and in the reputation of its 'Champion' spark plugs. The bill prayed for an injunction restraining the defendants from manufacturing, selling, or advertising spark plugs as 'Champion' spark plugs, from infringing the said trade-mark, and from using the word 'Champion' as a part of the name of defendant corporation on the cartons containing their spark plugs, or on the circulars or advertisements thereof, unless such name be accompanied by a statement, equally prominent as the word 'Champion' in such name, to the effect that the plug contained in such cartons, or referred to in such circulars or advertisements, is not the 'Champion' spark plug. The bill prayed also for the usual accounting.

The defendants filed an answer denying the allegations of the bill and added a counterclaim by the defendant corporation, Champion Ignition Company, alleging that said corporation was the owner of two certain patents under which it manufactured and sold its spark plugs; that after said defendant corporation had successfully introduced to the trade its said spark plugs, the plaintiff, which had previously been marketing spark plugs of a different character from those of said defendant corporation, wrongfully copied said defendant corporation's said spark plugs in infringement of said patents, and that in manufacturing and selling its spark plugs plaintiff is now infringing said patents; that plaintiff, in order to obtain information concerning the manufacture and construction of such spark plugs, wrongfully hired workmen who were in the employ of said defendant corporation to obtain for plaintiff such information, and that it wrongfully induced workmen and engineers to leave the employ of said defendant corporation and enter the employ of plaintiff for the same purpose; and that plaintiff is wrongfully palming off its spark plugs on the purchasing public as and for defendant's spark plugs, both deceiving the public and injuring defendant corporation. The defendant corporation prayed for an injunction restraining the plaintiff from the acts of unfair competition alleged, and from infringing said patents, and for an accounting.

Plaintiff has moved for a dismissal of this counterclaim on the ground that it is not an inhabitant of this district and has no regularly established place of business in such district, and that, therefore, this court has no jurisdiction to entertain such counterclaim.

Section 24 of the Judicial Code provides that:

'The District Courts shall have original jurisdiction * * * of all suits at law or in equity arising under the patent, the copyright and the trade-mark laws. ' Act March 3, 1911, c. 231, 36 Stat. 1092 (Comp. St. 1916, Sec. 991).

Section 48 of the Judicial Code provides that:

'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, whether a person, partnership or corporation, shall have committed acts of infringement and have a regular and established place of business. ' Comp. St. 1916, Sec. 1030.

Section 51 of the Judicial Code provides that:

'Except as provided in the six succeeding sections (none of which applies to patent suits) no civil suit shall be brought in any District Court against any person by any original process or proceeding in any other district than that whereof he is an inhabitant. ' Comp. St. 1916, Sec. 1033.

Rule 30 of the federal General Equity Rules (198 F. xxvii, 115 C.C.A. xxvii) prescribes the requisites of an answer and concludes as follows:

'The answer must state in short and simple form any counterclaim arising out of the transaction which is the subject-matter of the suit, and may, without cross-bill, set out any set-off or counterclaim against the plaintiff which might be the subject of an independent suit in equity against him, and such set-off or counterclaim, so set up, shall have the same effect as a cross-suit, so as to enable the court to pronounce a final judgment in the same suit both on the original and cross claims.'

It is, of course, clear that suit for the infringement alleged in the counterclaim could not have been maintained against the plaintiff company on a bill filed against it in this district, as such company is not an inhabitant of, and has no regular place of business in, this district. The question presented is whether, in view of the language of rule 30, just quoted, the plaintiff by filing its bill in this district so subjected itself to the jurisdiction of this court in this suit that such counterclaim may be maintained against it.

Rule 30 is a new rule, and the question here presented has not yet been determined by the Supreme Court. The District Courts are in conflict in their construction of the language of such rule here involved. I have found only one decision by a court of appeals in point-- that of the Circuit Court of Appeals for the Seventh Circuit in the case of United States Expansion Bolt Co. v. H. G. kroncke Hardware Co., 234 F. 868, 148 C.C.A. 466, to which I shall hereinafter refer.

It seems to be well settled that, as stated by the court in General Electric Co. v. Wagner Electric Manufacturing Co. (C.C.) 123 F. 101:

'The limitation as to the district of residence of defendant, or of place of business and acts of infringement, relates merely to the place of suit, and may be waived. ' General Electric Co. v. Wagner Electric Manufacturing Co., supra; United States Consolidated Seeded Raisin Co. v. Phoenix Raisin Seeding & Packing Co. (C.C.) 124 F. 234; Thomson-Houston Electric Co. v. Electrose Manufacturing Co. (C.C.) 155 F. 543; United States Expansion Bolt Co. v. H. G. Kroncke Hardware Co., 234 F. 868, 148 C.C.A. 466.

As was said by the United States Supreme Court, in referring to certain statutory provisions prescribing the venue of a certain kind of action, in the case of Interior Construction & Improvement Co. v. Gibney, 160 U.S. 217, 16 Sup.Ct. 272, 40 L.Ed. 401:

'The provision as to the particular district in which the action shall be brought does not touch the general jurisdiction of the court over such a cause between such parties, but affects only the proceedings taken to bring the defendant within such jurisdiction, and is a matter of personal privilege, which the defendant may insist upon, or may waive, at his election.'

Plaintiff concedes that:

'There would be some reason for contending that a plaintiff waives...