Cyclo Floor Machine Corp. v. National Housewares, Inc., C 155-66.

• Decision Date: 20 September 1968
• Docket Number: No. C 155-66.,C 155-66.
• Parties: CYCLO FLOOR MACHINE CORPORATION, Jerome D. Rosenberg and Tim C. Christian, Jr., Plaintiffs, v. NATIONAL HOUSEWARES, INC., Emdeko Distributing, Inc., and Easy Pipella, Mike Pipella, Dave Bigler and Keith Bigler, all partners of Orbiter, Ltd., Defendants.
• Court: U.S. District Court — District of Utah

296 F. Supp. 665

CYCLO FLOOR MACHINE CORPORATION, Jerome D. Rosenberg and Tim C. Christian, Jr., Plaintiffs, v. NATIONAL HOUSEWARES, INC., Emdeko Distributing, Inc., and Easy Pipella, Mike Pipella, Dave Bigler and Keith Bigler, all partners of Orbiter, Ltd., Defendants.

No. C 155-66.

United States District Court D. Utah, Central Division.

September 20, 1968.

Richard W. Giauque, Grant H. Bagley, Salt Lake City, Utah, Stanton T. Lawrence, Jr., Charles E. McKenney, New York City, for plaintiffs Cyclo Floor Machine Corp. and Jerome D. Rosenberg.

Lynn G. Foster, Salt Lake City, Utah, Jack E. Dominik, Chicago, Ill., for plaintiff Tim Christian, Jr.

Richard S. Fox, Salt Lake City, Utah, William Poms and Guy Porter Smith, Los Angeles, Cal., for defendant National Housewares, Inc.

FINDINGS OF FACT AND CONCLUSIONS OF LAW

CHRISTENSEN, District Judge.

This case having been tried to the court, argued, briefed and submitted for decision, the court now makes and enters the following

FINDINGS OF FACT GENERAL

1. Plaintiff, Cyclo Floor Machine Corporation is a New Jersey corporation having offices at 226 Springfield Avenue, Newark, New Jersey and limited assets. Plaintiff, Jerome D. Rosenberg, is a citizen of the State of New Jersey, residing at 3 Shadow Lawn Drive, Livingston, New Jersey.

2. Plaintiff, Tim C. Christian, Jr., is a citizen of the State of Illinois, residing at 2530 East Bonnybrook Lane, Waukegan, Illinois.

3. Defendants, National Housewares, Inc. and Emdeko Distributing, Inc., are Utah corporations having their principal places of business at 1260 East Vine Street, Salt Lake City, Utah. Defendants, Easy Pipella, Mike Pipella, Dave Bigler and Keith Bigler, are citizens of the State of Utah and are partners in the partnership Orbiter, Ltd. which has its place of business at 1260 East Vine Street, Salt Lake City, Utah.

4. Plaintiffs Cyclo Floor Machine Corporation and Jerome D. Rosenberg brought this action by a Complaint against Defendant, National Housewares, Inc., filed August 15, 1966, based upon alleged breach of written agreements and infringement of United States Letters Patent No. 2,967,315, Jerome D. Rosenberg being owner of the legal title of said Letters Patent at the time of filing of this action. Plaintiffs asserted that the written agreements created a duty in Defendant "not to deal in floor machines which compete with the `Cyclo' floor machine" and that Defendant had breached such duty by selling a floor machine "similar to plaintiffs' patented `Cyclo' floor machine * * * in competition with the `Cyclo' floor machines." Plaintiffs made a joint demand for a final injunction against further breach of the agreements by Defendant and against further alleged infringement of the Letters Patent.

5. Subsequently, Plaintiffs amended their pleadings to eliminate their claim that Defendants could not deal in floor machines which compete with the "Cyclo" floor machine. After the trial began, Plaintiffs stipulated that Defendants had the right to deal, manufacture or sell a floor polishing machine which competed with the "Cyclo" floor machine subject to Plaintiffs' patent rights under the patent in suit.

6. Defendant, National Housewares, Inc., filed its "Answer to Amended Complaint and Counterclaim" on or prior to January 1, 1967, denying breach of the Exh. 1 "Cyclo Agreement" and the Exh. 2 "Key Distributor Agreement, denying infringement of United States Letters Patent No. 2,967,315, alleged affirmatively by way of defense that said Letters Patent No. 2,967,315 is invalid on various grounds and by way of counterclaim requested a declaratory judgment of patent invalidity and non-infringement of Patent No. 2,967,315 under the provisions of the Declaratory Relief Act 28 U.S.C. § 2201 and the Patent Laws of the United States, Title 35 U.S.C., for damages incurred because of Plaintiffs' misuse of Letters Patent No. 2,967,315 in an attempt to unlawfully extend the scope of said patent by joining it with the contract action in an effort to restrain Defendants from dealing in competing floor machines, for damages due to Plaintiffs' alleged breach of implied and express warranties as to the merchantability of floor machines sold by Plaintiffs to Defendants and for other alleged breaches of said agreements by Plaintiffs and for damages claimed to be due to Plaintiffs' attempts to enforce said agreements in a manner in violation of the antitrust laws of the United States. Plaintiffs replied to Defendants' Answer and Counterclaim denying the allegations of Defendants' counterclaims on or about February 25, 1967. During the trial Defendants abandoned their antitrust and patent misuse claims and defenses.

7. In November, 1966, during the pendency of this litigation, Plaintiff, Jerome D. Rosenberg, assigned all of his rights in the patent in suit, including the right to recover for past infringement, to Tim Christian, Jr. On or about November, 1966, Plaintiff, Cyclo Floor Machine Corporation, discontinued operating its floor machine business. Plaintiffs then filed a "Second Amended Complaint" withdrawing their demands for an injunction against further breach of said agreements. Defendants filed their Answer to the Second Amended Complaint and Counterclaims in March, 1967, to which Plaintiffs replied in April, 1967. On Plaintiffs' motion that Tim Christian, Jr. be joined as a plaintiff, heard March 9, 1967, and it appearing to the Court upon representation of Plaintiffs that Patent No. 2,967,315 was assigned to said Tim Christian, Jr. by Plaintiff Jerome D. Rosenberg subsequent to commencement of this action, this Court ordered that Tim Christian, Jr. be joined as a party plaintiff by its Order entered May 16, 1967 and that the action be continued without prejudice to any proceedings already had herein.

8. On April 27, 1967, Plaintiff Tim Christian, Jr. and Cyclo Designs, Inc. of Waukegan and Chicago, Illinois, commenced an action in the United States District Court for the District of Iowa, Davenport Division, against Terry J. Ferguson and Judel Enterprises, Inc., Civil Action File No. 3-379-D, alleging infringement of the Letters Patent in suit No. 2,967,315 due to the sale of floor polishing machines by Ferguson and Judel Enterprises. Said action in the District Court of Iowa has been stayed by order of that court pending the outcome of the within action. Ferguson and Judel Enterprises, Inc. submitted themselves to the personal jurisdiction of this Court by an affidavit appearance filed on or about May 28, 1967.

9. Tim Christian, Jr. subsequently requested this Court to rescind its prior Order of May 15, 1967 joining him as an additional party plaintiff by a motion before this Court heard on July 10, 1967. In view of said hearing, it was ordered, adjudged and decreed by this Court's Order of July 17, 1967: that Tim Christian remained joined as a party plaintiff pursuant to Rule 25(c) of the F.R.Civ.P.; that the issues of validity and infringement of Patent No. 2,967,315 in suit were to be determined by this Court in this action and that the parties hereto and their assignees or successors in interest, including Christian, will be bound by such determination; and that Christian was to be served with a Copy of the Order, various pleadings and was given an opportunity to enter and actively participate in this action during a 20 day period of time after service of the Order during which all discovery and other proceedings in the action were continued. Christian responded by filing a petition for writ of prohibition in the United States Court of Appeals for the Tenth Circuit which was subsequently denied.

10. Christian later filed a "Cross-Complaint" against Jerome D. Rosenberg and/or Cyclo Floor Machine Corporation for rescission of his agreement to purchase the Letters Patent in suit from Plaintiff, Rosenberg, for return of monies paid for alleged damages due to fraudulent acts of Plaintiff, Rosenberg and/or Cyclo Floor Machine Corporation, for an injunction against Plaintiff Rosenberg's continued attachment of the inventory of Christian or Cyclo Designs in Littlestown, Pennsylvania and requiring Plaintiff, Rosenberg and/or Cyclo Floor Machine Corporation to forbear from interfering with Christian's and/or Cyclo Designs' business activities pursuant to a contract of November 23, 1966 appended as Exh. A to the Cross-Complaint. The issues of Plaintiff Christian's Cross-Complaint against Plaintiffs Rosenberg and Cyclo Floor Machine Corporation have been severed from the issues of the patent and contract actions asserted by Plaintiffs against Defendants for separate trial thereon.

THE PATENT ACTION

11. The Helbig et al. patent No. 2,967,315 in suit relates to polishing or abrading machines and in particular to a handpropelled floor polishing machine with a single eccentrically driven surface treating head. Machines of this class, including the machine disclosed in the '315 patent in suit and as heretofore sold by Plaintiffs, can be used for polishing, sanding, abrading, scrubbing and surface treating operations. The relevant prior art in light of which the patent in suit must be considered includes a variety of surface treating machines adaptable for polishing, scrubbing, sanding or abrading, depending upon the particular surface treating head utilized with the machine. The prior art surface treating machines of Defendants' Exhs. A and B teach one skilled in the art to interchangeably use the different polishing, scrubbing, abrading and sanding heads with the various types of drive mechanisms disclosed in said patents, depending upon the surface treating operation for which the machine is to be used.

12. The Patent No. 2,967,315 in suit is directed to a design of eccentrically driven surface treating machine in which both internally and externally applied unbalancing forces which tend to cause vibration in the machine are balanced by a counterweight system. The internal forces acting upon the machine...