Kemart Corporation v. Printing Arts Research Lab., Inc.
| Decision Date | 17 June 1959 |
| Docket Number | No. 15638.,15638. |
| Citation | 269 F.2d 375 |
| Parties | KEMART CORPORATION, a Corporation, Appellant, v. PRINTING ARTS RESEARCH LABORATORIES, INC., a Corporation, Appellee. |
| Court | U.S. Court of Appeals — Ninth Circuit |
COPYRIGHT MATERIAL OMITTED
Carl Hoppe, Henry Gifford Hardy, San Francisco, Cal., for appellant.
Lyon & Lyon, Leonard S. Lyon, Leonard S. Lyon, Jr., Roland N. Smoot, Los Angeles, Cal., Julien F. Goux, Santa Barbara, Cal., for appellee.
Before STEPHENS, Circuit Judge, and HEALY and BONE, Senior Judges.
This long-drawn-out litigation1 was launched by the filing of an action in the lower court on November 23, 1948, by Kemart Corporation, a California corporation (hereafter referred to as appellant or Kemart). Its action was in form a petition in which it prayed (1) for a declaratory judgment or decree declaring that it had the right to continue to manufacture, use, sell and license a (so-called) "Kemart Process" (which "process" it controlled under a license from the original patentees thereof whose (two) patents had been granted in 1946) without any threats of infringement or any interference whatever by or from appellee Printing Arts Research Laboratories, Inc., a Delaware corporation (hereafter referred to as appellee or Printing Arts), or its successors; (2) a declaratory judgment adjudging that both of the Printing Arts patents2 are invalid and void at law, and that neither of them nor any claim thereof, has been infringed by the "Kemart Process" or any of the devices, materials, equipment or supplies used to practice the "Kemart Process" which are now or were heretofore made, sold or licensed, and offered for license or sale by Kemart; (3) for judgment for Kemart's attorney fees and costs; (4) for a preliminary restraining order and permanent injunction enjoining Printing Arts, its attorneys, agents and those in active concert or participating with it, from in any way threatening suits for infringement against any of Kemart's licensees or potential licensees, and from in any way asserting that the Kemart Process is an infringement of the two Printing Arts patents in suit; (5) for damages resulting from Printing Arts "wrongful acts and doings" which are pleaded in Kemart's petition3.
In its list of general charges brought against Printing Arts, the Kemart petition also sets forth, inter alia, a series of averments wherein it charges (1) that both Printing Arts patents are invalid and void because the patentee thereof was not the original and first inventor or discoverer of any material or substantial part of the things patented therein; that they are also void and invalid because they were anticipated by more than two years by seven prior inventions under (listed) United States and British patents, and were "surreptitiously or unjustly obtained" by Printing Arts, (2) that both Printing Arts patents were the invention of another and claimed more than Printing Arts was entitled to; that its patent No. 2,191,939 is substantially different from any invention indicated, suggested or described in the original application therefor.
The Kemart petition further averred that Kemart's process does not in any way infringe any of the Printing Arts patents or any claims thereof; that Kemart and its licensees have not done any act or thing, nor do they propose to do anything, in violation of the rights of Printing Arts under its said patents; that Printing Arts has (also) done the things and performed the (wrongful) acts (which we have noted in footnote 3 of this opinion).
In an answer and counterclaim to Kemart's petition, Printing Arts averred, inter alia, that it was the owner of all rights, title and interest under its two (so-called) "Marx patents" mentioned in the Kemart petition; that with respect to Marx patent No. 2,191,939,2 admitted that it had charged Kemart with contributory infringement of this particular patent but not as to the other Marx patent; that it had never threatened to sue any of Kemart's licensees for infringement of either of the two Marx patents, and that the second Marx patent (No. 2,304,838) should be stricken (as it later was) from the action.2
In a later and amended and supplemental counterclaim filed by Printing Arts, it averred, inter alia, that Kemart had been directly infringing ten out of the twelve claims of the "Marx patent" No. 2,191,939, and contributorily infringing this particular patent by selling or otherwise vending to infringers of this Marx patent Kemart equipment and supplies and instructions with the purpose and intent that such Kemart matter shall be used by the purchasers in practicing without right or license the method or process covered by Marx patent No. 2,191,939. In this pleading Printing Arts demanded (1) a preliminary and final injunction against further contributory infringement by Kemart and those it controlled, and (2) an accounting for profits and damages, and an assessment of costs against Kemart.
Kemart filed an answer to this amended and supplemental counterclaim in which it admitted that Printing Arts owned patent No. 2,191,939; again averred (as it had in its petition) that Marx patent No. 2,191,939, here pertinent, was invalid and void and that this was true because the applicant named in its Letters Patent was not the original and first inventor of what was claimed in this Marx patent (citing eight claimed prior art United States and British patents), and that the said Letters Patent is also void and invalid because it does not disclose a patentable invention; that the material and substantial parts of the said Printing Arts patent were known and used by others in this country prior to the (Marx) alleged patent here noted, and were patented and described in printed publications here and abroad before the said Marx patent, or more than two years before application for this Marx patent; that the constructions, devices, supplies and methods identical with those alleged (by Printing Arts) to be contributorily infringed, and the "Kemart Process", which is also claimed to infringe Marx Patent No. 2,191,939, were freely manufactured, used, sold and licensed in the United States by Kemart's predecessors long prior to said Printing Arts counterclaim, all of which was fully known to Printing Arts; that Printing Arts, as early as May 4, 1943, sent a "Notice of Infringement" of the said Marx patent to Kemart's predecessors because of such infringement, and threatening suit against them, and that such a suit was never filed by Printing Arts against Kemart and/or its said predecessors prior to Printing Arts' answer and counterclaim first filed in the instant action; that Kemart, because of this long delay and apparent acquiescence by Printing Arts and in reliance thereon, entered upon the present commercialization of the Kemart Process in which effort it incurred great expense and undertook fundamental obligations which it would not have incurred or undertaken had Printing Arts not acquiesced in such manufacture, use, sale, and licensing operation by Kemart, all of which estops Printing Arts from enforcing any rights against Kemart.
In this answer to Printing Arts' amended counterclaim, Kemart prayed that the Printing Arts' amended counterclaim be dismissed with prejudice and with costs and reasonable attorney's fees.
The written pleadings as outlined above were not further amended in any subsequent stage of this litigation. On the issues thus raised the case went to trial in the lower court and on January 31, 1951, that court adjudged that Kemart was guilty of infringing all of the claims of Printing Arts patent No. 2,191,939 except 5 and 7 thereof. On appeal from this judgment this court found that the Kemart Process did not infringe the said Printing Arts patent. We reversed the lower court with instructions to dismiss the counterclaim of Printing Arts. See our opinion in 201 F.2d 624 noted just below.
During the course of this litigation this Court has rendered two opinions. They are reported as Kemart Corporation v. Printing Arts Research Laboratories, Inc., 9 Cir., 1953, 201 F.2d 624, and Kemart Corporation v. Printing Arts Research Laboratories, Inc., 9 Cir., 1956, 232 F.2d 897, 57 A.L.R.2d 1234.
The lower court has rendered one opinion reported as Kemart Corporation v. Printing Arts Research Laboratories, Inc., 1956, 146 F.Supp. 21.
Since the two noted opinions of this Court set out in sufficient detail the particular (and isolated) issues of fact and law before this court at the times of their rendition, a repetition of our holdings therein would unduly burden this opinion. It is sufficient to say that these two opinions resulted in a disposition of only certain of the issues posed in Kemart's petition and left remaining for later adjudication by the lower court only two issues, to wit, appellant's claim for damages and for attorney's fees. In dealing with the merits of these terminal issues (upon which the parties agree) the lower court rendered its above noted opinion in 146 F.Supp. 21. The instant appeal is from the final judgment rendered by that court in disposing of these two issues.
The Findings and Conclusions entered by the trial court show that upon the evidence and testimony adduced in this final trial it was of the view that appellee Printing Arts reasonably and in good faith believed, upon advice given it by its own counsel, that its charge that Kemart had infringed its patent No. 2,191,939 was true; that in making such a charge appellee was not prompted by malice but acted solely in defense of this patent and that such conduct was a complete defense to appellant Kemart's claim for damages.
The lower court made and entered (later noted) formal findings of fact, conclusions of law and a judgment adversely disposing of Kemart's claims for damages and for an award of attorney's fees. It therein directed that each party should bear its own costs in that court.
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