EW Bliss Co. v. Cold Metal Process Co.
| Decision Date | 08 March 1939 |
| Docket Number | No. 7707.,7707. |
| Citation | 102 F.2d 105 |
| Parties | E. W. BLISS CO. v. COLD METAL PROCESS CO. |
| Court | U.S. Court of Appeals — Sixth Circuit |
Howard J. Churchill and Louis E. Giles, both of New York City (Kwis, Hudson & Kent, of Cleveland, Ohio, and Eugene V. Myers and Howard J. Churchill, both of New York City, on the brief), for appellant.
Howard F. Burns, of Cleveland, Ohio, and Walter J. Blenko, of Pittsburgh, Pa. (Stebbins, Blenko & Parmelee, of Pittsburgh, Pa., and Baker, Hostetler, Sidlo & Patterson, of Cleveland, Ohio), for appellee.
Before HICKS, SIMONS, and ALLEN, Circuit Judges.
To a bill of complaint filed below by the appellant, a manufacturer of rolling mills, praying for a decree under the Federal Declaratory Judgment Act, § 274 (d), Judicial Code, 28 U.S.C.A. § 400, declaring Steckel Patents Nos. 1,744,016, 1,744,017, 1,744,018 and 1,779,195, invalid and not infringed by the plaintiff, the appellee as defendant interposed a motion to dismiss on the ground that the allegations of the bill failed to state a controversy justiciable under the act. The District Court sustained the motion and dismissed the bill. This appeal brings into question not only the decree of dismissal but likewise an interlocutory order striking from the bill allegations that fraud practiced by the defendant in the Patent Office led to procuring the patents here involved.
The bill charges that the plaintiff had for ten years been engaged in the business of manufacturing and selling rolling mills of the type illustrated by its exhibits, had invested large sums of money in its business, and had acquired in connection with its mills valuable good will; that the defendant knew of its manufacture and sale since 1926; that it had publicly represented to purchasers and prospective purchasers and users that the mills of the plaintiff infringed its patents, and that its customers likewise infringed; that it had become difficult for the plaintiff to sell its mills in competition with the defendant because of such representations, and that it repeatedly had been required to guarantee that it would save its customers harmless on account of the alleged infringement; that it had advised the defendant that its patents were invalid and not infringed, but that the defendant had refused or neglected for a period of five years to bring suit against the plaintiff on its patents, and had continued to threaten the plaintiff, its customers and prospective customers, by reason of which the plaintiff had suffered damage. More specifically the bill charged that prior to the issuance of the patents the defendant had on June 20, 1927, entered into an agreement with the United Engineering & Foundry Company as to patent No. 1,779,195, subsequently issued in 1930, and claimed to be the basic patent of the group, under which United claimed an exclusive license; that a suit was brought by United against the plaintiff for infringement, in which the defendant was requested to join as plaintiff but refused and was cited as party defendant and requested to take control of the suit against the plaintiff; that it not only declined to do this but sought to have the suit dismissed, and brought suit against United in the Western District of Pennsylvania, Cold Metal Process Co. v. United Engineering Co., D.C., 9 F.Supp. 994, to enjoin United from prosecuting the suit, and after failure in the District Court secured an injunction from the Court of Appeals for the Third Circuit, 79 F.2d 666, which made it impossible for the present plaintiff to obtain an adjudication of the invalidity of Patent 1,779,195, and the freedom of the plaintiff from infringement thereof. Finally, the bill alleges that the plaintiff's mills do not infringe any valid claim of any of the four patents, that it has a right to manufacture them without interference, either by the defendant or its licensees, that each of the defendant's patents is invalid because of prior publication, prior public uses, and other reasons, and that there is an actual present controversy between the plaintiff and the defendant which is substantial and adversary in character.
Pressed for greater particularity by a motion for a bill of particulars and an order based thereon, the plaintiff alleged inter alia that prior to the issuance of the patents the defendant had advised the steel trade that important claims covering four-high rolling mills would be granted to it on the Steckel applications, and that among those notified were a number of the plaintiff's customers; that because of such notice the plaintiff was obliged to extend its guaranty to cover any patents that might issue to Steckel; that thereafter the plaintiff attempted to make an arrangement with the defendant, to which the defendant replied that Beeghly, its president, proposed a settlement on the basis of $1,000,000 for all infringing mills outstanding, of which the plaintiff's proportion would doubtless be low; that prior to June 14, 1933, the defendant again warned the steel trade, specifically charging many of the plaintiff's customers with infringement; that one such customer was the American Sheet & Tin Plate Company, a subsidiary of the United States Steel Corporation, and that following such warning the defendant in January, 1934, brought suit against the Tin Plate Company on the first three patents here in issue, and at the trial of the suit included certain mills that had been manufactured by the plaintiff which were charged to infringe; that in July, 1934, the defendant brought a second suit against the Tin Plate Company on the last patent, and therein twenty-nine of the plaintiff's mills were charged to infringe; that the plaintiff has lost orders for rolling mills to the amount of several hundred thousand dollars by reason of the defendant's charges of infringement.
The appellee contends that these allegations present no justiciable controversy which is capable of complete and definitive determination. Its principal patent claims, it says, are process claims, and since there is no allegation as to the manner of use of the plaintiff's apparatus by its customers, or as to the manner in which the plaintiff intends them to be used, there is no factual basis upon which infringement of the predominating process claims can be litigated. In respect of the apparatus claims, there are numerous limitations upon which no issue is tendered. Lacking such basis, it says it is impossible to litigate the question of their infringement. It contends further that a present actual controversy does not arise out of advice given by the defendant to its own customers and prospective customers many years before the filing of the bill, nor out of advice by its president in 1931 in response to a request for adjustment of differences, nor out of notices of infringement to or suits against the American Sheet & Tin Plate Company. In any event, it asserts, the District Court is vested with discretion to entertain a suit under the Declaratory Judgment Act, and its decree of dismissal should not be set aside except for an abuse of discretion; that since...
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