Derman v. Gersten

• Decision Date: 09 March 1938
• Docket Number: No. 8446.,8446.
• Citation: 22 F. Supp. 877
• Parties: DERMAN et al. v. GERSTEN et al.
• Court: U.S. District Court — Eastern District of New York

22 F. Supp. 877

DERMAN et al. v. GERSTEN et al.

No. 8446.

District Court, E. D. New York.

March 9, 1938.

Bernard G. Nemeroff, of New York City (Briesen & Schrenk, of New York City, of counsel), for plaintiffs.

M. Daniel Nissenbaum, of New York City, for defendants Gersten.

Harold Pomerantz, of New York City, for defendant Salmanson & Co., Inc.

MOSCOWITZ, District Judge.

These are two motions, one made by the defendants Gersten and the other by the remaining defendant Salmanson & Co., Inc., to dismiss the complaint. The action is brought under section 274d of the Judicial Code, as amended, 28 U.S.C.A. § 400, for a declaratory judgment.

The complaint alleges that the action is based upon an actual controversy between the plaintiffs and the defendants as to the alleged infringement by the plaintiffs of patent No. 2,104,321, to the title, interest, and property of which the defendants have an exclusive license.

Both the plaintiffs and the defendants are residents of the State of New York. There is therefore no diversity of citizenship.

The complaint further alleges that the plaintiff corporation is engaged in the business of manufacturing and selling closets and containers in this district; that the defendants Gersten are engaged in the business of manufacturing and selling closets and containers in the State of New York; and that the defendant Salmanson & Co. Inc., is a distributing agent and representative for said Gersten Bros.

The complaint further alleges that the plaintiff Decorative Cabinet Corporation manufactured and sold and intends to manufacture and sell certain types of closets and containers of a collapsible nature with a flexible sliding door and that these closets and containers, manufactured and sold by the Decorative Cabinet Corporation were and are made in conformity with an invention solely conceived and originally devised by the plaintiff Harry Derman, upon which patents No. 1,933,099 and No. 2,009,482 had been issued by the United States Patent Office to the said Derman and that a further application for a patent has been made and is now pending.

Plaintiff seeks a declaratory judgment that said closets and containers manufactured and sold and intended to be manufactured and sold by the plaintiff corporation do not violate or infringe upon patent No. 2,104,321.

The complaint further alleges that the closets and containers to which reference has been made have been manufactured by the plaintiff corporation in large and constantly increasing quantities; that vast sums have been expended on raw materials and equipment necessary for the manufacture of these closets and containers, and preparations have been made for a vast nation-wide advertising campaign incidental to the marketing of these closets and containers.

The complaint further alleges:

"Thirteenth: That prior to the granting of said patent number 2104321 and subsequent thereto, the defendant licensee Gersten Bros. and the defendant, Salmanson & Co., Inc., acting as agents and representatives of said Gersten Bros., have asserted and claimed that the aforesaid closets and containers made by plaintiff are an infringement of said Letters Patent number 2104321.

"Fourteenth: That at all the times mentioned in the complaint, the defendants knew the valid claims to said patent were specifically limited and in no way embodied the designs or inventions contained in the aforementioned closets and containers manufactured and sold, as aforesaid, by the plaintiff and invented as aforesaid by plaintiff, Harry Derman.

"Fifteenth: That the defendants, knowing that said Letters Patent were specifically limited as aforesaid, and with intent to deceive and defraud the public and to injure the plaintiff corporation, its business, good will and reputation, maliciously and falsely, by letter and other means, advised plaintiff's customers and the general trade that the closets and containers manufactured as aforesaid by the plaintiff, Decorative Cabinet Corporation, had infringed and were infringing said Letters Patent number 2104321.

"Sixteenth: That the defendants, Gersten Bros. and Salmanson & Co. Inc., are engaged competitively with the plaintiff in marketing and selling said closets and containers made in accordance with said Letters Patent number 2104321.

"Seventeenth: That as a result of the statements and publications made as aforesaid to the plaintiff's customers and the general trade, the defendants, Gersten Bros. and Salmanson & Co. Inc., have caused the plaintiffs great and irreparable damage, and harm; that the defendants are threatening to continue and increase such representations, statements and publications; that by said wrongful representations, statements and publications, defendants aforesaid have wrongfully converted to themselves trade and profit which the plaintiffs would otherwise have received and enjoyed, as to the amount of which plaintiffs are uninformed and pray discovery; that the defendants by said acts have caused and induced cancellations of orders, advertising arrangements and other agreements between plaintiff, Decorative Cabinet Corporation, and its customers and the defendants are and will, if they are allowed to continue such representations, statements and publications, further irreparably damage and injure the plaintiffs, depreciate and destroy the business and trade of plaintiff Decorative Cabinet Corporation and the profits and royalties of plaintiff Harry Derman.

"Eighteenth: That the plaintiffs are informed and believe and therefore aver, that the said defendants are prepared and ready to continue the aforesaid unlawful conduct and have declared their intention of so doing; and unless they are restrained from so doing, plaintiffs will suffer irreparable damage and injury from such unlawful acts, for the loss of which there is no adequate remedy at law."

These quoted portions of the complaint in effect allege that prior to and subsequent to the granting of the patent No. 2,104,321 the defendants have asserted that the closets and containers made by the plaintiff infringe the patent No. 2,104,321 and that these claims were asserted by the defendants with knowledge that the plaintiff's closets and containers did not infringe this patent, and that with intent to deceive and defraud the public and to injure the plaintiff corporation, its business, good will, and reputation, the defendants maliciously and falsely by letter and other means, advised plaintiff's customers and the trade generally that plaintiff corporation's closets and containers had infringed and were infringing this patent; that the statements and publications made by the defendants have damaged the plaintiffs and that the defendants are threatening to continue and increase such representations, statements and publications; and that by reason of the wrongful representations defendants have converted trade and profit which belong to the plaintiff and that by their acts and conduct the defendants have caused and induced cancellations of orders, agreements, and advertising arrangements between plaintiff corporation and its customers and that irreparable damage will follow if defendants are allowed to continue these representations; that the defendants are prepared and ready to continue...