International Nickel Co. v. Ford Motor Co.

• Decision Date: 08 December 1952
• Parties: INTERNATIONAL NICKEL CO., Inc. v. FORD MOTOR CO. et al. (two cases).
• Court: U.S. District Court — Southern District of New York

108 F. Supp. 833

INTERNATIONAL NICKEL CO., Inc. v. FORD MOTOR CO. et al. (two cases).

United States District Court S. D. New York.

December 8, 1952.

Cooper, Byrne, Dunham, Keith & Dearborn, New York City, Sullivan & Cromwell and Anthony William Deller, New York City, of counsel, for plaintiff.

Kenyon & Kenyon, New York City, Theodore S. Kenyon, Ralph L. Chappell, John A. Reilly and Robert G. Harris, New York City, of counsel, for defendants.

Carter, Ledyard & Milburn, New York City, William L. Marbury and J. Martin McDonough, Baltimore, Md., of counsel, for applicant for intervention.

IRVING R. KAUFMAN, District Judge.

The International Nickel Company, Inc., on August 14, 1952 initiated an action in this court against the Ford Motor Company and Caswell Motor Company, Inc., a dealer in Ford products, charging that the defendants "* * * are now manufacturing, using and/or selling articles * *" which infringe plaintiff's patent Number 2,485,760. (Paragraph 7 of the complaint.) The prayer asks for judgment holding said letters patent valid, enjoining defendants from using or causing to be used articles embodying the inventions covered by this patent and for an accounting and award to plaintiff of its damages.

On October 2, 1952, plaintiff amended paragraph 7 of its complaint to read "* * defendants are now manufacturing, using and/or selling Ford automobiles which contain shafts which are made according to and embody the inventions of said Letters Patent 2,485,760 * * *."

On October 6, 1952 plaintiff filed a complaint in the United States District Court of Maryland against Martin J. Barry, Inc., alleging that Barry "* * * did unlawfully use and sell Lincoln automobiles which contain shafts which are made according to and embody the inventions of said Letters Patent 2,485,760 * * *", seeking a declaration of the patent's validity, an injunction, and an accounting.

The Ford Motor Company manufactures Lincoln automobiles but is not a party to this later action nor is it subject to suit in Maryland. The complaint is the sole pleading in the Maryland action.

In the New York action, on October 14, 1952, defendants Ford Motor Company and Caswell Motor Company, Inc., by joint answer denied the validity of the patent, denied infringement, and alleged invalidating anticipations. By way of counterclaim these defendants seek a declaratory judgment that the patent in suit is invalid. On November 5, 1952, plaintiff replied, challenging the sufficiency of the counterclaim and denying that there is any actual controversy between the parties except that made by the complaint and the denials thereto.

Urging that the issues presented in the New York litigation are the same as those involved in the subsequent action in Maryland, the defendant Martin J. Barry, Inc., here moves to intervene so that all the parties to the Maryland action will be before this court, and further moves to enjoin prosecution of the Maryland action on the grounds that New York is the more convenient forum for the trial of such issues. Crosley Corp. v. Hazeltine Corp., 3 Cir., 1941, 122 F.2d 925; Ronson Art Metal Works v. Brown & Bigelow, D.C.S.D.N.Y., 105 F.Supp. 169, affirmed 2 Cir., 1952, 199 F.2d 760.

The paramount obstacle which, at the outset, the defendant must overcome before such a motion should be granted is that raised by the statute, 28 U.S.C. § 1400 (b), which provides:

"Any civil action for patent infringement may be brought in the judicial district where the defendant resides, or where the defendant has committed acts of infringement and has a regular and established place of business."

Moreover, it is well settled that prior to a determination of a patent's invalidity¹ the patentee has a cause of action, separate and independent from that against an infringing manufacturer, to recover profits and damages and to restrain one who resells a product which he purchased from an infringing manufacturer. Birdsell v. Shaliol, 1884, 112 U.S. 485, 5 S.Ct. 244, 28 L.Ed. 768. Thus if this is nothing more than a single suit against a manufacturer and one customer in one district court and another suit against a second customer in another district court, the patentee would merely be following a course of conduct permitted by the statute and to enjoin prosecution of the subsequent customer litigation would deny effect to the provisions of the venue statute.

The Court of Appeals for the Second Circuit has recognized that it is not unusual for the patentee to litigate in more than one court and has said:

"Generally speaking, a simple case pending in diverse courts may be allowed to go forward simultaneously in each tribunal * * * and prior judicial control or direction is unnecessary if not undesirable." Helene Curtis Industries, Inc., v. Sales Affiliates, Inc., 2 Cir., 1952, 199 F.2d 732.

I must consider then whether the facts before me present such compelling circumstances as to warrant, in the interest of "wise, judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation"² exercise of judicial discretion to enjoin prosecution of an action otherwise allowable. Remington Products Corp. v. American Aerovap, Inc., 2 Cir., 1951, 192 F.2d 872; Helene Curtis Industries, Inc., v. Sales Affiliates, Inc., 2 Cir., 1952, 199 F.2d 732.

Plaintiff asserts that the present action was instituted against Caswell and Ford in New York because Caswell was the source of infringing crankshafts purchased at plaintiff's instance and Ford was amenable to suit in New York and that Barry was sued in the Maryland action because it was the source of infringing Lincoln shafts purchased at the instance of the plaintiff in Baltimore where Ford is not amenable to suit.

The defendant, Martin J. Barry, Inc., states that the Ford Motor Company has agreed to indemnify it for all costs sustained in defending the Maryland action, although Barry is to retain control of that action. The claim is advanced that Ford is the real party in interest and that the parties in the Maryland action should, therefore, be considered the same as those in the New York action. But an even stronger argument for holding nominally different parties to be identical was advanced and rejected in Cresta Blanca Wine Co. v. Eastern Wine Corp., 2 Cir., 1944, 143 F.2d 1012, where a parent corporation was not allowed to intervene in an action involving a wholly owned subsidiary.

Plaintiff contends that not only are the parties to the Maryland action different but the issues presented by that action also differ since the crankshafts used in the Lincoln cars differ structurally and chemically from those used in Ford cars. Defendant denies this physical difference and further contends that the amended complaint in New York which deals in terms of Ford automobiles does not exclude Lincoln cars since they too are "Ford automobiles". A determination on this point...