Research Corp. v. Pfister Associated Growers, Inc., 63 C 597

• Decision Date: 16 June 1969
• Docket Number: No. 63 C 597,68 C 1081.,63 C 597
• Citation: 301 F. Supp. 497
• Parties: RESEARCH CORPORATION, Plaintiff-Counterdefendant, v. PFISTER ASSOCIATED GROWERS, INC., et al., Defendants-Counterplaintiffs. RESEARCH CORPORATION, Plaintiff, v. CARGILL, INC., et al., Defendant.
• Court: U.S. District Court — Northern District of Illinois

301 F. Supp. 497

RESEARCH CORPORATION, Plaintiff-Counterdefendant, v. PFISTER ASSOCIATED GROWERS, INC., et al., Defendants-Counterplaintiffs.

RESEARCH CORPORATION, Plaintiff, v. CARGILL, INC., et al., Defendant.

Nos. 63 C 597, 68 C 1081.

United States District Court N. D. Illinois, E. D.

June 16, 1969.

Clyde F. Willian, James P. Hume and Robert L. Harmon, Hume, Clement, Hume & Lee, Chicago, Ill., for plaintiff Research Corp. and party defendant Paul A. Mangelsdorf.

Erwin C. Heininger and Burton E. Glazov, Mayer, Friedlich, Spiess, Tierney, Brown & Platt, Chicago, Ill., for defendant Cargill, Inc.

George E. Howell, Tenney, Bentley, Guthrie, Askow & Howell, Chicago, Ill., for defendants Moews Seed Co., J. Robert Huey, American Seed Trade Ass'n and William Heckendorn.

Walther E. Wyss and Warren D. McPhee, Mason, Kolehmainen, Rathburn & Wyss, Chicago, Ill., for defendants Pioneer Hi-Bred Corn Co., Pfister Associated Growers, Inc., John P. Case, Lewis Camp, W. R. Grace & Co., Arthur Walter Seed Co., Pioneer Hi-Bred Corn Co., Naperville Seeds, Inc., Hughes Hybrids, Inc., Earl Hughes and Robert Hughes.

H. Blair White, Arthur F. Staubitz and William G. Schaefer, Jr., Sidley & Austin, Chicago, Ill., for defendants DeKalb Ag Research, Inc., and Thomas Roberts.

MEMORANDUM AND ORDER ON CLASS ACTION

ROBSON, District Judge.

The defendants have moved to strike or dismiss the class action allegations in the complaint, as amended. For the reasons set forth below, this court is of the opinion that the motions should be denied and that this case should be maintained as a class action, as limited herein.

In 1963, Research Corporation, the plaintiff, sued Pfister Associated Growers, Inc. for infringement of Patent No. 2,753,663, entitled "Production of Hybrid Seed Corn." In 1964, the plaintiff added several other individual and corporate defendants. A trial was held on the issue of patent validity in 1966, after which a court-appointed expert submitted a report on the scientific aspects of the patent. He was interrrogated on this report and the case was taken under advisement in 1968 for ruling on the issue of validity. In June, 1968, the plaintiff filed a class action against certain defendants not named in the original suit. It was decided, after conference, to vacate the order taking the earlier case under advisement and consolidate both cases for all purposes. Both sides, therefore, would have another opportunity to submit evidence in addition to the record already made in the earlier case on the issue of validity.

This court requested the parties to file briefs on the class action question. This the parties have done. After thorough consideration, in the light of the opinion rendered by Judge William H. Becker in Technograph Printed Circuits, Ltd. v. Methode Electronics, Inc., 285 F. Supp. 714 (N.D.Ill.1968), this court concludes that a class action is proper on both the patent and antitrust phases of this case. The patent issues will be treated first.

PATENT CLASS ACTION

Class actions are governed by Rule 23 of the Federal Rules of Civil Procedure. Section (a) of Rule 23 provides for four criteria by which all class actions are to be judged. These are (1) that the class is so numerous as to make joinder impracticable; (2) that there are common questions of law or fact; (3) that the claims or defenses of the representative parties are typical of the claims or defenses of the class, and (4) that the representative parties will fairly and adequately protect the interests of the class. The defendants agree, as they must, that (1) and (2) are clearly satisfied. The class is at least as large as the over 400 seed corn producers in this country, and it is impractical, if not impossible to make them all representative parties. It is further true that since the defendant class is being charged with infringement, and the validity of the patent is already in issue, there is at least the one major common issue of validity. Infringement admittedly is a more individualized issue, but since most of the named defendants have almost admitted infringement, and the industry has been using the patented process to varying degrees since the patent's issuance in 1956 (and earlier), this is not viewed as a substantial obstacle to maintaining this suit as a class action. In effect, a ruling on the issue of validity will be dispositive of most of the patent issues in this case. Those defendants who would still wish to litigate the issue of infringement will, of course, have this opportunity, but this court is of the opinion that the possibility of such trials will not be sufficient to militate against the class action.

The third requirement of Rule 23(a), that the claims or defenses of the representative parties are typical of those of the class, is also met. With regard to the patent issues, the defense of invalidity is pervasive, and will be asserted strongly by all the representative parties. The defense of noninfringement is more of a defense tailored to the individual, but, as noted above, this is not seen as affecting substantially the "typical" nature of the named defendants' defenses.

The fourth requirement, that the named parties will fairly and adequately protect the interests of the class, is, notwithstanding the protestations of the defendants, clearly met. A brief glance at the massive record made in the earlier case shows without a doubt that the named parties will prosecute this action with more than "due diligence." The same parties are named as the representative defendants in the class action, along with Cargill, Inc., one of the world's largest agricultural commodities companies. In addition, it is almost undisputed that the entire industry (or at least a substantial part of it) has been involved in one way or another in the defense of this suit through meetings and a common defense fund. This court weighs the defendants' protestations that they do not "desire" to represent the entire class, but this is hardly enough to overcome the overwhelming evidence of their ability and intention to challenge the plaintiff's assertions of validity and infringement. In any event, this factor of "desire," as opposed to ability should not be given more than token weight.

It is thus this court's conclusion that the requisites of Rule 23(a) have been met and present no obstacle to the maintenance of a class action on the patent issues in this suit. The court's inquiry does not end here. It must be decided whether any (or all) the conditions in Rule 23(b) have been satisfied.

Rule 23(b) (1) (A) provides that a class action may be maintained if

"the prosecution of separate actions by or against individual members of the class would create a risk of * * inconsistent or varying adjudications with respect to individual members of the class which would establish incompatible standards of conduct for the party opposing the class * * *."

There is no question that there is a risk of "inconsistent or varying adjudications" for the patent class defendants in this case. A judgment of validity in one case could be matched by another judgment of invalidity. This would impose upon the plaintiff, "the party opposing the class," incompatible standards of conduct. The plaintiff might be prevented from enforcing the patent against some alleged infringers in one circuit while the plaintiff might be permitted enforcement against others in that same circuit. Technograph Printed Circuits, Ltd. v. Methode Electronics, Inc., supra, at 722. The standards of 23(b) (1) (A) have therefore been satisfied.

Rule 23(b) (1) (B) provides that a class action may be maintained if

"the prosecution of separate actions by or against individual members of the class would create a risk of * * adjudications with respect to individual members of the class which would as a practical matter be dispositive of the interests of the other members not parties to the adjudications or substantially impair or impede their ability to protect their interests * * *."

The difficulty of subject matter inherent in most patent cases, and most certainly this one, gives selected adjudications of validity or invalidity more than the usual weight when a court is considering the adoption of another court's opinion or reasoning by means of comity. This practical fact, added to the great expense of defending a patent suit of this type, would tend toward impairing or impeding the nonparty class members' ability to protect their interests. As the court said in Technograph, supra, at 723: "To the extent that such selected adjudications vary or are inconsistent the ability of those who are not parties to this action will be further impaired and impeded." It therefore appears to this court that this class action is maintainable under Rule 23(b) (1) (B).

An action may be maintained under Rule 23(b) (2) if

"the party opposing the class has acted * * * on grounds generally applicable to the class, thereby making appropriate final injunctive relief or corresponding declaratory relief with respect to the class as a whole * * *."

This same situation was confronted by the court in Techograph, supra, at 723. By notifying alleged infringers of the patent, threatening suits for infringement if licenses are not taken, and by bringing these civil actions against them, the plaintiff has acted on grounds generally applicable to the class. In addition, even in the studied absence of counterclaims by the defendants on the issue of validity, final injunctive relief would be proper whether the patent is held valid or invalid. The defendants would certainly require that the plaintiff not sue them further, if the patent were held invalid; and the plaintiff has already requested injunctive relief against any infringers, should the patent be held valid. This court agrees with the Technograph court, supra, that the fact that damages are being requested in these infringement actions does not prevent this suit from...