Indium Corp. of America v. Semi-Alloys, Inc.

• Decision Date: 15 February 1985
• Docket Number: No. 82-CV-482.,82-CV-482.
• Citation: 611 F. Supp. 379
• Parties: INDIUM CORPORATION OF AMERICA, Plaintiff, v. SEMI-ALLOYS, INC., Defendant.
• Court: U.S. District Court — Northern District of New York

611 F. Supp. 379

INDIUM CORPORATION OF AMERICA, Plaintiff, v. SEMI-ALLOYS, INC., Defendant.

No. 82-CV-482.

United States District Court, N.D. New York.

February 15, 1985.

Parkhurst & Oliff, Alexandria, Va., Bruns & Jenney, Syracuse, N.Y., Abelove Siegel Hester & Stephens, Utica, N.Y., for plaintiff; Roger W. Parkhurst, Alexandria, Va., Thomas J. Wall, Syracuse, N.Y., Michael H. Stephens, Utica, N.Y., of counsel.

Paul Weiss Rifkind Wharton & Garrison, Gottlieb Rackman & Reisman, New York City, Mead Begley & Quinlan, Schenectady, N.Y., for defendant; Jay Greenfield, Moses Silverman, William P. Farley, Thomas Fleming, Michael I. Rackman, New York City, William J. Quinlan, Schenectady, N.Y., of counsel.

MEMORANDUM-DECISION AND ORDER

McCURN, District Judge.

Plaintiff Indium Corporation of America "Indium" brings this action seeking a declaration of patent invalidity, treble damages for alleged violations of the antitrust laws, and damages based on a pendant state law claim for unfair competition. Presently before the court is defendant Semi-Alloys' motion for summary judgment. Fed.R.Civ.P. 56. For the reasons set forth below, defendant's motion is granted.

The facts of this case are fully set forth in this court's two previous decisions, Indium v. Semi-Alloys, 566 F.Supp. 1344 (N.D. N.Y.1983) "Indium I" and Indium v. Semi-Alloys, 591 F.Supp. 608 (N.D.N.Y. 1984) "Indium II", familiarity with which is assumed. Briefly stated, Indium challenges the validity and enforceability of defendant's patents for "tack-welded frame lids" or "combination covers"¹ and contends that Semi-Alloys' attempted enforcement of the allegedly fraudulent patents constitutes an unlawful restraint of trade in violation of the antitrust laws.

Semi-Alloys asserts that this court does not have subject matter jurisdiction over the declaratory judgment action and that Indium lacks standing to bring the antitrust action. These threshold issues were previously addressed in Indium I and Indium II.

In Indium I, the court granted Semi-Alloys' motion to dismiss the complaint, holding that Indium's allegations failed to establish a case or controversy concerning the patents sufficient to invoke the court's subject matter jurisdiction and failed to establish Indium's standing to assert antitrust claims. The claims were dismissed without prejudice and Indium was afforded an opportunity to file an amended complaint.

In Indium II the court held that Indium alleged sufficient additional facts in the amended complaint which, if true, would establish jurisdiction and standing. Accordingly, the court denied Semi-Alloys' motion to dismiss the amended complaint.

The court then limited initial discovery to the questions of jurisdiction and standing in anticipation of summary judgment motions on these threshold issues. That discovery has now been completed.² Semi-Alloys contends that the facts uncovered in discovery do not support the allegations contained in Indium's amended complaint and therefore summary judgment in favor of Semi-Alloys must be granted. Indium contends that there are disputed issues of material fact which make summary judgment inappropriate.

It is well established that the party moving for summary judgment must demonstrate the absence of genuine issues of material fact. Fed.R.Civ.P. 56(c); Project Release v. Prevost, 722 F.2d 960, 968 (2d Cir.1983); Cooper v. Ford Motor Co., 748 F.2d 677, 679 (Fed.Cir.1984); F.H. Cobb Co. v. New York State Teamsters Conference and Retirement Fund, 584 F.Supp. 1181, 1184 (N.D.N.Y.1984). Although it is clear that the burden of demonstrating the absence of material fact is on the moving party, the non-moving party "may not rest upon mere conclusory allegations or denials." Quinn v. Syracuse Model Neighborhood Corp., 613 F.2d 438, 445 (2d Cir.1980) (quoting SEC v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir.1978)). The party opposing summary judgment must come forward with "concrete particulars" demonstrating that there are genuine issue of disputed fact for trial. Project Release v. Prevost, 722 F.2d at 969, (quoting SEC v. Research Automation Corp., 585 F.2d 31, 33 (2d Cir.1978)). See also F.H. Cobb Co. v. New York State Teamsters Conference Pension and Retirement Fund, 584 F.Supp. at 1184; Tirolerland, Inc. v. Lake Placid 1980 Olympic Games, Inc., 592 F.Supp. 304, 310 (N.D.N.Y.1984).

I. Declaratory Judgment Jurisdiction

The parties do not dispute the law applicable to the issue of declaratory judgment jurisdiction. In order to establish subject matter jurisdiction on its declaratory judgment claims, Indium must show that when it filed this lawsuit, it believed it would be sued for patent infringement by Semi-Alloys. As this court stated in Indium I:

The plaintiff must show "a well-grounded fear that should he continue or commence the activity in question, he or one or more of his customers face an infringement suit." Williams Gold Refining Co., Inc. v. Semi-Alloys, Inc., 434 F.Supp. 453, 456 (W.D.N.Y.1977), or stated differently, "a reasonable apprehension of an infringement suit or threat of one to itself and its customers if plaintiff continues the activity in question." Nippon Elec. Glass Co., Ltd. v. Sheldon, 489 F.Supp. 119, 122 (S.D.N.Y.1980).

Indium I at 1346. See also Indium II at 611. The test is an objective one; a purely subjective apprehension, without objective reasons for fearing suit, is insufficient to invoke jurisdiction. See e.g. Indium I at 1346; Tubeco, Inc. v. Crippen Pipe Fabrication, Corp., 402 F.Supp. 838, 844-45 (E.D.N.Y.1975) aff'd mem., 538 F.2d 314 (2d Cir.1976).

In its original complaint Indium alleged that it feared suit because Semi-Alloys had asserted its patent rights against competitors in previous lawsuits and because Semi-Alloys sent Indium a letter offering to license Indium. Additionally, Indium presented documentation that Semi-Alloys commenced suit against Indium and Semi-Alloys' former employee Jack Paschall for theft of trade secrets and breach of an employment contract in connection with Indium's hiring of Paschall "Paschall action".

In Indium I this court held that, assuming the truth of these allegations, Semi-Alloys' conduct was not sufficiently threatening to induce reasonable apprehension of an infringement suit in Indium. Specifically, in discussing the allegations concerning prior patent litigation the court stated:

The patentee's record of commencing two suits on the patents in 1975 could hardly have been a source of great intimidation when this complaint was filed in 1982. At most, the record "indicates that under certain circumstances Semi-Alloys will pursue patent infringement litigation to defend what it perceives as an infringement of its patents." International Harvester Co. v. Deere & Co., 623 F.2d 1207, 1212 (7th Cir.1980). It does not, itself, create a controversy between these parties.

Indium I at 1347-47.

The court further held that the letter from Semi-Alloys offering to license Indium could not create a fear of suit:

Nor does Semi-Alloys' letter to Indium impart any threat, explicit or implicit, of legal action on the patents. Indeed, the letter does not even mention the planned production of the product by Indium. As in Tubeco, Inc. v. Crippen Pipe Fabrication Corp., 402 F.Supp. 838, 845 (E.D.N. Y.1975), aff'd mem. 538 F.2d 314 (2d Cir.1976), the communication "was at most the offer of a patent license, not an invitation to a patent contest which would warrant declaratory relief."

Id. at 1348.

Similarly, the Paschall action, which made no mention of the patents, even though Semi-Alloys recognized that Indium was attempting to produce a product similar to Semi-Alloys' patented one, was held to be an insufficient basis for fearing litigation on the patents:

Finally, the prosecution of a suit by Semi-Alloys against Indium, in which the complaint refers to the similarity of their products, is not an indication that an infringement action is forthcoming. Semi-Alloys did go to court, but it limited itself to asserting its competition rights under state law, and did not place the patent infringement question in controversy.

Id.

Thus, as previously noted, these asserted grounds for fearing suit were found insufficient to create a justiciable case or controversy.

In Indium II this court found that Indium had corrected the deficiencies in the original complaint by alleging facts which demonstrated that the actions of Semi-Alloys created an ominous business context. Indium II at 612. Semi-Alloys contends that it has shown that Indium's allegations regarding this ominous business context are totally unsupportable and that Indium has failed to come forward with any evidence that creates a question of fact on the issue.

Although this court considered the "totality of the circumstances" in reaching its conclusion that the amended complaint adequately alleged declaratory judgment jurisdiction, Id. at 612 (quoting C.R. Bard, Inc. v. Schwartz, 716 F.2d 874, 880 (Fed.Cir. 1983) ), three allegations in particular militated in favor of finding the business contest ominous. First, Indium alleged that Semi-Alloys had sued or threatened every other supplier of combination covers, driving all such suppliers from the market except Williams Gold Refining Company "Williams Gold", an alleged co-conspirator. Id. at 611. Second, Indium claimed that because of Semi-Alloys' patents, companies manufacturing separate frames experienced decreased sales and that Alpha Metals, one of these companies, actually withdrew from the relevant market. Id. Third, Indium claimed that when it entered the market in February, 1982, it was the only supplier of combination covers that had not yet been sued or threatened with suit by Semi-Alloys. Id. at 611-12.

Semi-Alloys contends that discovery has shown that there is no support for Indium's new allegation that, by suit or threat, Semi-Alloys drove every competitor from the combination cover market other than...