Katz v. Lear Siegler, Inc.

• Decision Date: 25 July 1990
• Docket Number: No. 89-1730,89-1730
• Citation: 15 USPQ2d 1554,909 F.2d 1459
• Parties: W. Simon KATZ, Plaintiff/Counter-Defendant/Appellant, v. LEAR SIEGLER, INC. and Smith & Wesson Corp., Defendants/Counter-Plaintiffs/Appellees, v. ARMAMENT SYSTEMS AND PROCEDURES, INC., Counter-Defendant.
• Court: U.S. Court of Appeals — Federal Circuit

Page 1459

909 F.2d 1459

15 U.S.P.Q.2d 1554

W. Simon KATZ, Plaintiff/Counter-Defendant/Appellant, v. LEAR SIEGLER, INC. and Smith & Wesson Corp., Defendants/Counter-Plaintiffs/Appellees, v. ARMAMENT SYSTEMS AND PROCEDURES, INC., Counter-Defendant.

No. 89-1730.

United States Court of Appeals Federal Circuit.

July 25, 1990.

W. Simon Katz, Buffalo, N.Y., pro se.

Barry W. Graham, Finnegan, Henderson, Farabow, Garrett & Dunner, Washington, D.C., submitted, for defendants/counter-plaintiffs/appellees. With him on the brief, was Mary Jane Boswell. John J. Dempsey, Chapin, Neal & Dempsey, Springfield, Mass., of counsel.

Before NEWMAN, ARCHER, and ALARCON, ^* Circuit Judges.

PAULINE NEWMAN, Circuit Judge.

W. Simon Katz appeals the order of the United States District Court for the Western District of Massachusetts, whereby Armament Systems and Procedures, Inc. was joined as counter-defendant in the action. Mr. Katz also appeals the district court's grant of a preliminary injunction staying the proceedings in two actions filed by him in the Western District of New York. Katz v. Lear Siegler, Inc., No. 87-0495-F (D.Mass. Aug. 18, 1989). We affirm in part and reverse in part.

Background

In June 1986 Mr. Katz filed suit against Lear Siegler in the Western District of New York, charging infringement of Patent No. 3,758,978 entitled "Grips for Handguns", inventor Mr. Paris Theodore (the '978 patent). On Lear Siegler's motion the case was transferred, on the basis of venue, to the Western District of Massachusetts. The Federal Circuit dismissed Mr. Katz' appeal of the transfer, on the ground that absent certification in accordance with 28 U.S.C. Sec. 1292(b), change of venue is not an appealable action. Katz v. Lear Siegler, Inc., No. 87-1264 (Fed.Cir. May 13, 1987).

At Lear Siegler's request Smith & Wesson Corp., a subsidiary of Lear Siegler, was joined as codefendant and co-counter-plaintiff in the Massachusetts action, on the basis that the asserted infringing activities occurred at the Smith & Wesson plant. By declaratory judgment counterclaim, Lear Siegler brought into the suit Design Patent No. 230,400 entitled "Pistol", inventor Paris Theodore (the '400 patent).

Smith & Wesson then moved to join Armament Systems and Procedures (ASP) as a counter-defendant in the Massachusetts action, alleging that ASP is the sole possessor of the right to sue for infringement of the '978 and '400 patents. Smith & Wesson also moved the Massachusetts court to enjoin Mr. Katz from prosecuting two pending actions in the Western District of New York, one against ASP (the ASP action), and the other against Batavia Marine & Sporting Supplies, Inc. and Gun Center, Inc. (the Batavia action). Over Mr. Katz' objections the Massachusetts court granted both motions. This appeal followed.

I

Mr. Katz states that ASP is neither a necessary nor a proper party to the Massachusetts action, and that the joinder of ASP constitutes reversible error. Lear Siegler argues that the district court did not abuse its discretion in granting joinder of ASP in the Massachusetts action.

An interlocutory order that ordinarily would not be appealable may be given discretionary appellate review when it is ancillary to other matters that are appealable. Intermedics Infusaid, Inc. v. Regents of Univ. of Minn., 804 F.2d 129, 134, 231 USPQ 653, 657 (Fed.Cir.1986). Consideration is given to the extent to which the appealable order involves factors pertinent to the otherwise nonappealable order, such that judicial efficiency and the interest of justice are served by review of the ancillary question. Id.

The issue of joinder of ASP in the Massachusetts action is intertwined with the merits of the injunction against continuation of the ASP action in New York. Since the grant of an injunction against continuing suit in another forum is appealable as of right, 28 U.S.C. Sec. 1292(a), we exercise our discretion in favor of review of the question of joinder.

A

Joinder to a pending action of an additional party is governed by Federal Rule of Civil Procedure 19(a):

19(a). A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in the person's absence complete relief cannot be accorded among those already parties, or (2) the person claims an interest relating to the subject of the action and is so situated that the disposition of the action in the person's absence may (i) as a practical matter impair or impede the person's ability to protect that interest, or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of the claimed interest.

Since joinder is an issue not unique to patent law, we apply the discernable law of the regional circuit, here the First Circuit. See Xeta, Inc. v. Atex, Inc., 852 F.2d 1280, 1282, 7 USPQ2d 1471, 1473 (Fed.Cir.1988). The First Circuit has not decided whether Rule 19(a) determinations by a district court are reviewed for abuse of discretion or de novo:

Although we reversed the district court's Rule 19(a) determination without making an abuse of discretion finding in Pujol v. Shearson American Express, Inc., 877 F.2d 132 (1st Cir.1989), this Circuit has never explicitly decided whether Rule 19(a) determinations by the district court are reviewable de novo or only for abuse of discretion. We see no need to decide the issue here, because we find we can affirm the district court's decision even under the de novo review standard that is more favorable to the appellants.

Traveler's Indemnity Co. v. Dingwell, 884 F.2d 629, 634 n. 10 (1st Cir.1989) (citation omitted).

As in Traveler's Indemnity, in the case at bar the de novo standard of review is more favorable to the appellant, and we have applied it.

B

ASP first consented to joinder, and then withdrew its consent. A decision on involuntary joinder, or joinder that is opposed by a party, is "guided by pragmatic considerations, which turn on the particular facts of [the] case," Lopez v. Arraras, 606 F.2d 347, 353 (1st Cir.1979). The particular facts here concern the question of whether ASP has a sufficient interest in the patents in suit as could either defeat Mr. Katz' capacity to sue for infringement, or subject Lear Siegler/Smith & Wesson to multiple liability.

In brief summary, Mr. Katz contends that the '978 patent and the '400 patent were both assigned to him by the inventor, Mr. Paris Theodore, by assignment dated April 30, 1985, effective nunc pro tunc as of the patent issuance dates in 1973 and 1974, respectively. Lear Siegler contends that ASP possesses "the entire right, title and interest in and to any causes of action" arising from these patents, pursuant to a licensing agreement entered into in 1978 between ASP and Theodore. Mr. Katz states, inter alia, that Theodore assigned his entire interest in this agreement to Katz, that the issues as to this agreement were being resolved in the pending action between Katz and ASP in New York, and that the issue of infringement by Lear Siegler/Smith & Wesson is independent of any dispute between Katz and ASP.

The district court determined that ASP was subject to service of process in Massachusetts, and that the joinder would not defeat the jurisdiction of the Massachusetts court over the subject matter of the action. The district court also determined that ASP had an interest in the subject matter of the Massachusetts action, and that joinder of ASP was appropriate to avoid possible injury to ASP, as well as to Lear Siegler and Smith & Wesson. The court stated its intention to determine "exactly who owns the beneficial interests in the disputed letters patent", an issue predicate to Katz' capacity to bring suit for patent infringement. We agree with the district court that such determination is facilitated by joinder of ASP in the Massachusetts action. See generally United Mine Workers of America v. Gibbs, 383 U.S. 715, 724, 86 S.Ct. 1130, 1137, 16 L.Ed.2d 218 (1966) ("joinder of claims, parties and remedies is strongly encouraged.")

The ruling joining ASP as a party is affirmed.

II

The court enjoined Mr. Katz from prosecuting both the ASP action and the Batavia action, then pending in the Western District of New York.

Applying the law of the First Circuit, the grant of an injunction is reviewed on the standard of abuse of judicial discretion. Massachusetts Ass'n of Older Americans v. Sharp, 700 F.2d 749, 751 (1st Cir.1983); Planned Parenthood League of Massachusetts v. Bellotti, 641 F.2d 1006, 1009 (1st Cir.1981). Such review includes consideration of whether the district court applied incorrect law, or misapplied the law to the facts. Hyde Park Partners, L.P. v. Connolly, 839 F.2d 837, 842 (1st Cir.1988). An injunction staying concurrent litigation is reviewed on the same standard.

Mr. Katz states that the enjoinder of concurrent litigation must meet the traditional four-part test for entitlement to a preliminary injunction, as illustrated in Planned Parenthood League, 641 F.2d at 1009:

In the First Circuit, a plaintiff must satisfy four criteria in order to be entitled to a preliminary injunction. The Court must find: (1) that plaintiff will suffer irreparable injury if the injunction is not granted; (2) that such injury outweighs any harm which granting injunctive relief would inflict on the defendant; (3) that plaintiff has exhibited a likelihood of success on the merits; and (4) that the public interest will not be adversely affected by the granting of the injunction.

See also Kalman v. Berlyn Corp., 614 F.Supp. 1327, 226 USPQ 255 (D.Mass.1985) (declining to enjoin concurrent suit). However, we agree with the district court that this standard, which was developed to test the grant of the requested remedy before the case has been tried on the merits, does not apply to the different...