New Discoveries v. Wisconsin Alumni R. Foundation

• Decision Date: 28 January 1936
• Docket Number: No. 71.,71.
• Citation: 13 F. Supp. 596
• Parties: NEW DISCOVERIES, Inc., v. WISCONSIN ALUMNI RESEARCH FOUNDATION.
• Court: U.S. District Court — Western District of Wisconsin

13 F. Supp. 596

NEW DISCOVERIES, Inc., v. WISCONSIN ALUMNI RESEARCH FOUNDATION.

No. 71.

District Court, W. D. Wisconsin.

January 28, 1936.

Wilhartz, Hirsch & Schanfarber, of Chicago, Ill., and Geo. Ettenheim and Leslie G. Keller, both of Milwaukee, Wis., for plaintiff.

George I. Haight and Ward Ross, both of Chicago, Ill., for defendant.

STONE, District Judge.

This is a suit in equity brought by New Discoveries, Inc., against the Wisconsin Alumni Research Foundation. The complaint, after the formal allegations as to the residence and incorporation of the parties, alleges that the plaintiff and the defendant are the owners of patents relating to the process of producing Vitamin D; that the plaintiff is now engaged in the business of selling and merchandising licenses for the manufacture and use of its process for the production of Vitamin D under its patents, and that the defendant has contended, and does now contend that the use of the processes as defined in plaintiff's patents constitutes an infringement upon the rights of the defendant by reason of its ownership in its two patents; that the defendant has continually stated, and does now state to the plaintiff and other persons that if any of the processes described in plaintiff's patents were used by plaintiff or its licensees, they would infringe upon defendant's patents; that the defendant has stated, orally and by letter, to various persons who had become licensees of the plaintiff, that in the event that such persons used the processes claimed and described in plaintiff's patents, they would be liable for damages to defendant for infringement of its patents; and that proceedings would be taken against them. The complaint alleges on information and belief that defendant has not at any time intended and does not now intend to prosecute any proceedings involving the validity of its patents involved herein on the questions of infringement, to final decree and adjudication. It is alleged that as a result of the acts of the defendant, plaintiff has suffered irreparable damage in that it has been unable to obtain profits which would accrue to it if it were able to sell or merchandise licenses under its patents; that the benefits of Vitamin D are now widely known, and that many persons throughout the entire country have told plaintiff that they desire to purchase licenses from plaintiff, but that they will not do so because of threats of suit for infringement made by defendant; and that unless plaintiff will be free to sell and merchandise its licenses, unhindered by defendant's threats, it will suffer great and irreparable damages.

The complaint alleges the general invalidity of defendant's patents: First, because the processes set forth were neither new nor original; secondly, because the disclosures made in the patent were incomplete and not definite; and, third, because the patents involved principles that were purely scientific and not the proper subject-matter for a patent.

The prayer of the complaint is that the court declare the rights of the plaintiff and the defendant herein, and their legal relations in connection with the subject-matter of the controversy as between plaintiff and defendant; that defendant's two patents be declared invalid by the court; and that the defendant be restrained from in any way interfering with the plaintiff's right to sell and merchandise licenses for the manufacture and use of the process of producing Vitamin D by sunlight or ultra-violet rays, from publishing, informing, or claiming that the plaintiff, by selling and merchandising licenses for the use of said processes, is in any way infringing on defendant's patents, and from interfering with any proposed licensees of the plaintiff.

Defendant's motion to dismiss the bill states in detail the grounds for dismissal. Generally speaking, these grounds group themselves into the following classifications:

(1) Insufficiency and want of equity as a result of numerous defects appearing on the face of the complaint, and failure of the complaint to state a cause of action in equity, disregarding the federal declaratory judgment statute.

(2) Failure of the bill of complaint to state a cause of action within the federal declaratory judgment statute.

(3) Unconstitutionality of the federal declaratory judgment statute if it creates a cause of action upon the facts stated in the bill of complaint.

The bill of complaint fails to allege any infringement of plaintiff's patents by the defendant. It does not state a cause of action of unfair competition. There is no allegation that the parties are in competition in business, or that the patents are being used by either of the parties. Inasmuch as the parties are not competing with one another, there can be no unfair competition.

The allegation of the complaint is insufficient to charge the defendant with malice or bad faith in the alleged threats made to commence prosecution for infringement of its patents.

Does the bill of complaint state a cause of action within the federal declaratory judgment statute? The statute provides, in part:

"(1) In case of actual controversy the courts of the United States shall have power, upon petition, declaration, complaint, or other appropriate...