Pierce v. International Telephone & Telegraph Corp.

• Decision Date: 09 January 1957
• Docket Number: Civ. A. No. 296-54.
• Citation: 147 F. Supp. 934
• Parties: Helen Russell PIERCE, Executrix of the Last Will and Testament of George Washington Pierce, Deceased, Plaintiff, v. INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, Defendant, Mackay Radio and Telegraph Company, Inc., On Application to Intervene as Defendant
• Court: U.S. District Court — District of New Jersey

147 F. Supp. 934

Helen Russell PIERCE, Executrix of the Last Will and Testament of George Washington Pierce, Deceased, Plaintiff, v. INTERNATIONAL TELEPHONE AND TELEGRAPH CORPORATION, Defendant Mackay Radio and Telegraph Company, Inc On Application to Intervene as Defendant

Civ. A. No. 296-54.

United States District Court D. New Jersey.

January 9, 1957.

Harry B. Rook, Newark, N. J. by David Rines, Robert H. Rines, Boston, Mass., for plaintiff.

McCarter, English & Studer, by Francis E. P. McCarter, Newark, N. J., J. Pierre Kolisch, John M. Calimafde, New

York City, Ralph B. Stewart, Washington, D. C., for defendant.

HARTSHORNE, District Judge.

In this patent infringement suit plaintiff is the executrix of the estate of George Washington Pierce, a Harvard University physicist professor, who claims to have invented the first practical commercial system for the control of the electric oscillations, basic to the use of radio transmission. This is alleged substantially to result from the incorporation in his electrical circuit of a piezo-electric crystal, which he claims definitely controls such oscillations under his system alone, and without which crystals such system would not oscillate at all. The six patents in this regard, Nos. 2,133,642, 2,133,643, 2,133,645, 2,133,646, 2,133,648 and 2,266,070, were applied for by Dr. Pierce in 1924, but were not granted till 1938 or thereabouts, due to many questions raised by the Patent Office, and litigation dealing with the priority of invention, as well as what defendant International Telephone & Telegraph, ("I T & T"), admits in one of its stipulated letters to be the "complexity" of the subject matter. Due to the important bearing of the subject matter on long distance communication, the use of the system, after the issuance of the patents, was greatly affected by the U. S. Government's need therefor during World War II. Thereafter, though not till June 1951, much litigation ensued as to alleged infringements of the patent, this litigation primarily having been instituted in the First Federal Circuit, where Dr. Pierce lived. The first such patent infringement suit was filed in the United States District Court for the District of Massachusetts June 1, 1951 against the American Communications Company, a customer of I T & T. In early 1954 Pierce next sued Hewlett-Packard Co., Pierce v. Hewlett-Packard Co., D.C., 125 F.Supp. 329, raising much the same issues, and shortly thereafter he similarly sued the Mackay Radio & Telegraph Co., ("Mackay"), the latter being a wholly-owned subsidiary of American Cable & Radio Corporation, which in turn is largely, but not wholly, owned by I T & T. However, to none of these suits was I T & T a party, though its wholly-owned subsidiary Federal Telephone & Radio Corporation declined this opportunity in the American Communications suit.

Before starting the Mackay and Hewlett-Packard suits, Pierce had obtained a decision in his favor in the Massachusetts District Court, D.C.Mass. 1953, 111 F.Supp. 181, as to the validity of the so-called basic patent — No. 2,133,642, on his motion for partial summary judgment, this motion having apparently left open for later hearing the issues involving the other patents. This decision was, however, reversed by the Court of Appeals for the First Circuit, on the ground of double patenting, 1 Cir., 1953, 208 F.2d 763, certiorari denied 347 U.S. 944, 970, 74 S.Ct. 639, 775, 98 L.Ed. 1092, 1111, rehearing denied 348 U.S. 851, 75 S.Ct. 18, 99 L.Ed. 671. Thereupon Pierce started the above Mackay and Hewlett-Packard suits, raising apparently the same issues, and presumably on the theory that there was no privity between such defendants and American Communications, so that the decision in favor of the latter defendant was not res judicata as to the others. Both the Mackay suit, and the balance of the issues in the American Communications suit, are still pending in the Federal Courts in the First Circuit, the Hewlett-Packard case, not involving I T & T in any way, having been disposed of, D.C.Mass.1954, 125 F. Supp. 329, affirmed, 1 Cir., 1955, 220 F.2d 531, certiorari denied 350 U.S. 833, 76 S. Ct. 69. Since I T & T was not a party to any of the three above suits in the First Circuit, Pierce on April 19, 1954 then sued I T & T in the present suit. Of course, since the issues in these four suits were substantially the same, if the parties had been the same or in privity, this Court should have proceeded no further with the suit here, under well settled principles of comity. Kerotest Manufacturing Co. v. C-O Two Fire Equipment Co., 3 Cir., 1951, 189 F.2d 31, 35, affirmed 1952, 342 U.S. 180, 72 S.Ct. 219, 96 L.Ed. 200; Crosley Corp. v. Hazeltine Corp., 3 Cir., 1941, 122 F.2d 925, certiorari denied, 1942, 315 U.S. 813, 62 S. Ct. 798, 86 L.Ed. 1211; Emerson Electric Mfg. Co. v. Emerson Radio & P. Corp., D.C.N.J.1956, 140 F.Supp. 588, 590, Id., 141 F.Supp. 645. Indeed, in November 1954, I T & T moved this Court to stay its hand pending further proceedings in the above litigation in the First Circuit, the decision thereon being deferred, by agreement of counsel, pending further proceedings in the First Circuit.

Both in the American Communications suit and in the instant suit the respective defendants raised the defense of laches. But this laches issue in the American Communications suit differed from such issue in the instant suit, because laches is a personal defense, and the basic facts in that regard, provable here by I T & T, were to a large extent different from those provable by American Communications. Thus counsel on both sides asked this Court, despite the pendency and priority of the above suits in the First Circuit, to proceed to hear separately this differing issue of laches as it bore upon the right of Pierce to sue I T & T, as distinguished from his right to sue American Communications, Hewlett-Packard or Mackay. This was accordingly done, and such is the present sole issue, the issue on the merits, as to infringement, not even being ready for trial.

It will be noted from the above that the history of the several patents in question has been a long one, covering some 14 years after the applications were made and before the patents were issued, and some 16 years thereafter, previous to the filing of the complaint herein, this latter period covering both the years of peace immediately before and after World War II, as well as the duration of the war itself. During practically all this time, subject to lengthy intervals, the parties were in touch with each other, and under varying circumstances. In view of the many and varied facts involved, it will therefore be helpful to state the legal principles of laches governing the consideration of such facts.

Basically the doctrine of laches is a principle of equity. The issue for the Court to decide is whether or not it is equitable to permit plaintiff's suit to proceed against defendant. Since the suit involves the rights of two parties, the Court must consider the rights of each — of plaintiff to obtain a remedy for an alleged wrong, of defendant not to be sued now, by one whose previous action, or inaction, has misled it. In other words, the court of equity must, as usual, balance against each other the equities of the adversaries. Accordingly, the action of plaintiff alone, in delaying the start of its suit, is not the sole criterion. Indeed, the Patent Act itself penalizes such delay, in preventing plaintiff from recovering from defendant any damages which plaintiff has suffered at defendant's hands previous to the last six years before suit filed, 35 U.S.C. § 286, 66 Stat. 813 (1952). Thus the longer, and, from the standpoint of time only, the more unreasonable, plaintiff's delay is, the greater will be his punishment under the statute.

But it is not the lapse of time alone that constitutes laches. The further question remains as to what else plaintiff has done, or failed to do, and how his action or inaction in that regard have adversely affected defendant. These factors, normally known as prejudice to defendant, are of equal moment with delay, in determining the existence of equitable laches.

And so run the authorities. "While statements are to be found in some of the cases intimating that unreasonable delay, and mere lapse of time, independently of any statute of limitations, constitute a defense in a court of equity, the generally accepted doctrine appears to be that laches is not like limitation a mere matter of time, but is principally a question of the inequity of permitting a claim to be enforced, this inequity being founded on some change in the condition or relations of the property or the parties." 2 Pomeroy's Equity Jurisprudence, 5th Ed., Sec. 419d, page 177. Indeed, the United States Supreme Court has stated that to constitute laches the defendant must have had good reason to think that plaintiff believes his asserted rights to be worthless or that he has abandoned them. Galliher v. Cadwell, 1892, 145 U.S. 368, 372, 12 S.Ct. 873, 874, 36 L.Ed. 738. In Westco-Chippewa Pump Co. v. Delaware Electric & S. Co., 3 Cir., 1933, 64 F.2d 185, 186, the Court says there "must be a balancing of equities * * * (1) lack of diligence on the part of plaintiff; and (2) injury to defendant due to the inaction of the plaintiff * * *." Accord: Shaffer v. Rector Well Equipment Co., 5 Cir., 1946, 155 F.2d 344; Potash Co. v. International Min. & C. Corp., 10 Cir., 1954, 213 F.2d 153. "Mere lapse of time alone is not sufficient to establish laches." Searchlight Horn Co. v. Victor Talking Mach. Co., D.C.N.J.1919, 261 F. 395, 404; Valvona-Marchiony Company v. Marchiony, D.C.N.J.1913, 207 F. 380, 386.¹ In addition, "`Where the party interposing the defense of laches has contributed to or caused the delay, he cannot take advantage of it.'" Howard v. Howe, 7 Cir., 1932, 61 F.2d 577, 580.

Furthermore, since 1934, the Congress, by creating declaratory...