Great Lakes Rubber Corporation v. Herbert Cooper Co.
| Decision Date | 08 February 1961 |
| Docket Number | No. 13309.,13309. |
| Citation | 286 F.2d 631 |
| Parties | GREAT LAKES RUBBER CORPORATION, Appellant, v. HERBERT COOPER CO., Inc. |
| Court | U.S. Court of Appeals — Third Circuit |
William H. Pattison, Jr., Washington, D. C. (Virgil E. Woodcock, Woodcock, Phelan & Washburn, Philadelphia, Pa., George N. Robillard, Robillard & Pattison, Washington, D. C., on the brief), for plaintiff-appellant.
Morton Amster, New York City (Frank A. Sinon, Rhoads, Sinon & Reader, Harrisburg, Pa., Jesse Rothstein, Amster & Levy, New York City, on the brief), for defendant-appellee.
Before BIGGS, Chief Judge, and GOODRICH and FORMAN, Circuit Judges.
This is an appeal from an order of the court below dismissing a counterclaim of Great Lakes Rubber Corporation (Great Lakes), made against Herbert Cooper Co., Inc. (Cooper), on the ground that the court lacked jurisdiction of the subject matter of the counterclaim. Because the question presented on appeal is whether Great Lakes' counterclaim arises out of the transaction or occurrence that is the subject matter of a claim asserted by Cooper a detailed analysis of the pleadings is necessary.
On May 12, 1959, Great Lakes filed an amended complaint naming Cooper as defendant. Jurisdiction was allegedly based on diversity. The allegations fall roughly into three groups. First, it was alleged that Howard Cooper and Joseph Herbert had been employed by Great Lakes for periods of approximately four and two years, as foreman and supervisor, respectively and that they left Great Lakes' employ taking with them certain information relating to the flexible rubber tubing manufactured by Great Lakes, and lists disclosing Great Lakes' customers; that shortly thereafter they, with others, founded Cooper; that Cooper competed for and obtained customers that were, until then, customers of Great Lakes; and, that Cooper's "offering to sell, and manufacturing and selling flexible tubing made and offered for sale with utilization of knowledge and information acquired by Howard Cooper and Joseph Herbert while these men were in a fiduciary relationship with plaintiff" constituted "acts of unfair competition and unfair business practices".
Second, it was alleged that Great Lakes manufactures flexible tubing covered by patents held by Fred T. and Robert E. Roberts; that Great Lakes is a licensee of the Roberts; that Cooper, after failing to obtain a similar license, submitted bids to the United States Army and Air Force, customers of Great Lakes, offering to manufacture and sell flexible rubber tubing of a type, the manufacture and sale of which would constitute Cooper an "infringer" of the Roberts' patents; that Cooper, as low bidder, was awarded several contracts by the Government; that Cooper was enabled to underbid Great Lakes because unlike Great Lakes it was not paying royalties as a licensee under the Roberts' patents; and, that by reason of Cooper's operation as an "unlicensed infringer" it "is and has been in an unfair competitive position" relative to Great Lakes.
Third, it was alleged that Cooper implied to customers of Great Lakes that the quality of the tubing manufactured by Great Lakes was inferior; that Cooper represented to the United States Air Force that no validly patented ideas, processes or inventions held by others would be utilized in fulfilling its contracts for flexible tubing, that their representations were false; and, that these acts have damaged and imminently threaten Great Lakes' business operations.
Great Lakes referred to various contracts with the United States Army and Air Force which it alleged it had failed to obtain but which Cooper did obtain, and further specified an Air Force contract on which it was then being underbid by Cooper and which it would not obtain if Cooper's acts of "unfair competition" were not enjoined. Great Lakes asked for relief in the form of an injunction, an accounting for profits and an award of damages.
On June 23, 1959, Cooper filed an answer to the amended complaint and a counterclaim which asserted that Great Lakes, Fred T. and Robert E. Roberts, the R. E. Darling Company, which like Great Lakes is a licensee of the Roberts, and various unnamed companies and individuals "have been and still are * * conspiring together and attempting both individually and in concert to restrain and monopolize interstate commerce" in violation of Sections 1 and 2 of the Sherman Act, 15 U.S.C.A. §§ 1 and 2. The conspiracy was alleged to include, without limitation, the making of false representations to certain of Cooper's material suppliers that they were guilty of contributory infringement when the conspirators knew that the supplied items were staple articles of commerce and could not be the basis of such liability.
The counterclaim also alleged, and this is of prime importance in the instant case, "the bringing of a series of unjustified lawsuits by the conspirators in bad faith and without color of right with the sole object of harassing and preventing defendant Cooper from competing in the manufacture and sale of flexible hose and thus eliminating defendant as a competitor, including this action i. e., the action brought by the filing of the amended complaint by Great Lakes * * * to prevent defendant from seeking the patronage of its principal customer, the United States, and an action brought in another court against the United States Secretary of Defense by Fred T. and Robert E. Roberts to prevent the Secretary from buying defendant's hose, and a patent infringement suit brought against defendant in * * * the court below by Fred T. and Robert E. Roberts to prevent defendant from manufacturing flexible hose and a temporary restraining order obtained therein, both the action and the restraining order * * * being in violation of 28 U.S.C.A. § 1498 which forbids infringement actions and injunctive restraints against government contractors * *." The counterclaim asked treble damages, costs and attorneys' fees.
On July 2, 1959, Cooper moved to dismiss Great Lakes' amended complaint on the ground that there was...
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