Fash v. Clayton
| Decision Date | 18 June 1948 |
| Docket Number | Civ. No. 1303. |
| Parties | FASH v. CLAYTON. |
| Court | U.S. District Court — District of New Mexico |
Gilbert & Gilbert, of Santa Fe, N. M., and Russell H. Clark, and Chas. L. Byron, both of Chicago, Ill., for plaintiff.
A. T. Hannett, of Albuquerque, N. M., and Charles M. Thomas, of Washington, D. C., for defendant.
This is an action instituted by Ralph H. Fash against Benjamin Clayton, trading as Refining, Unincorporated. It is alleged in the complaint that plaintiff is a citizen of Texas; that defendant is a citizen of New Mexico; that in 1937, Letters Patent No. 2,100,274 issued for a process for refining oils; that defendant is the owner of such patent; that in 1944, Letters Patent No. 2,342,042 duly issued for a process for refining liquids; and that plaintiff is the owner of such patent. It is further alleged that in 1938 plaintiff entered into a certain agreement with Anderson, Clayton & Company in which plaintiff agreed to assign and did subsequently assign to such company his application for letters patent pending at that time which eventually issued as Patent No. 2,342,042; that plaintiff received as a consideration for the assignment a substantial interest in the profits to be derived from the exploitation of the patent by Anderson, Clayton & Company, and also received other valuable rights and considerations; that such agreement remained in force and effect and plaintiff continued to enjoy therefrom until 1946, when Anderson, Clayton & Company cancelled and terminated it and reassigned the patent to plaintiff, such company retaining to itself a free nonexclusive license for the practice of the method as disclosed in the patent in the business of the company as applied to the refining of glyceride oils; that the agreement was cancelled as the result of charges by the defendant that the refining of liquids as outlined in the plaintiff's patent infringed the defendant's patent, and of threats that the defendant would sue Anderson, Clayton & Company for such infringement; and that in such manner plaintiff was deprived of valuable rights and interests granted by the agreement. It is further alleged that in 1940, Anderson, Clayton & Company constructed at Abilene, Texas, a pilot plant for the refining of cottonseed oil in accordance with the plaintiff's patent, where the equipment was successfully operated under the supervision of plaintiff; that the plant continued in operation until 1944, at which time the equipment was dismantled and shipped to Torreon, Mexico, where it became a commercial installation and continued as such until 1946. It is further alleged that the defendant charged in the course of correspondence with plaintiff that the method of refining liquids as described in plaintiff's patent constitutes an infringement of defendant's patent; that defendant had threatened to sue plaintiff for infringement should he operate under his patent, and has also threatened to sue any licensee of plaintiff operating in accordance with plaintiff's patent; and that the acts of the defendant have caused and are causing damage to plaintiff since plaintiff has been deprived of worthwhile and lucrative license agreements with certain manufacturers. It is further alleged that plaintiff has denied the charges of infringement; that he has advised defendant that the claims of defendant's patent, when properly interpreted, cannot be asserted against plaintiff as infringed; and that therefore an actual controversy exists between plaintiff and defendant as to the validity of defendant's patent and as to its infringement. And it is further alleged in conventional manner that the patent of defendant is invalid and void. The prayer is for a declaratory judgment adjudicating that the defendant's patent is invalid and void; that the defendant's patent, when properly interpreted, is not infringed by the method of refining liquids described in plaintiff's patent; and that plaintiff has the right to practice the method of his patent and to grant licenses to others to operate in accordance with his patent.
Defendant seasonably filed a motion to dismiss the complaint and for summary judgment on the ground that the complaint fails to allege facts constituting an actual, existing, justiciable controversy appropriate for determination in a proceeding for declaratory judgment.
With an exception having no material bearing here, section 274d of the Judicial Code, 28 U.S.C.A. § 400, provides that in cases of actual controversy the courts of the United States shall have power upon complaint, or other appropriate pleading, to declare rights and other legal relations of any interested party; and that such declaration shall have the force and effect of a final judgment or decree and shall be reviewable as such. The statute did not create any new substantive right. It is procedural in nature, designed to expedite and simplify the ascertainment of uncertain rights; and it should be liberally construed. But it is essential to the exertion of jurisdiction under the statute that there be an actual and bona fide controversy as distinguished from hypothetical or abstract questions. The controversy must be present, real, definite, and substantial. There must be a justiciable question, and it must touch the relations of the parties having adverse legal interests. The requirements for a justiciable controversy are no less exacting in a case brought under the statute than in any other type of suit. A court is not required by the statute to decide abstract questions or to give advisory opinions. Ashwander v. Tennessee Valley Authority, 297 U.S. 288, 56 S.Ct. 466, 80 L.Ed. 688; Aetna Life Insurance Co. v. Haworth, 300 U.S. 227, 57 S.Ct. 461, 81 L.Ed. 617, 108 A.L.R. 1000; Coffman v. Breeze Corporations, Inc., 323 U.S. 316, 65 S.Ct. 298, 89 L.Ed. 264; Alabama State Federation of Labor v. McAdory, 325 U.S. 450, 65 S.Ct. 1384. 89 L.Ed. 1725; Commercial Standard Insurance Co. v. Gilmore, Gardner & Kirk Oil Co., 10 Cir., 157 F.2d 929; Johnson v. Interstate Transit Lines, 10 Cir., 163 F.2d 125.
The motion to dismiss admits all facts well pleaded in the complaint and all facts that...
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