Sims v. Mack Trucks, Inc.
| Decision Date | 19 February 1976 |
| Docket Number | Civ. A. No. 75-985. |
| Citation | 407 F. Supp. 742 |
| Parties | R. W. SIMS, Trustee and R. W. Sims Trust v. MACK TRUCKS, INC. |
| Court | U.S. District Court — Eastern District of Pennsylvania |
John A. Young, Fort Wayne, Ind., for plaintiffs.
Jon A. Baughman, Pepper, Hamilton & Scheetz, Philadelphia, Pa., for defendant.
Defendant has moved to dismiss this patent infringement action for lack of an indispensable party pursuant to Fed.Rule Civ.Pro. 19(b). In its motion, defendant alleges that plaintiffs are not the legal titleholders of the patent in question, having sold it to Beta Corporation. Defendant argues that under 35 U.S.C. § 281,1 only the legal titleholder may bring a suit for infringement of the patent and that, therefore, we must dismiss this action. We agree.
In their complaint, plaintiffs allege that they are the owners of United States Patent No. 2,859,949. Defendant, however has submitted a copy of a contract entered into between plaintiff R. W. Sims as trustee of the R. W. Sims trust and Beta Corporation.2 The contract is titled "Contract for Sale and Assignment of U. S. Patent No. 2,859,949."
Preliminarily, we note that this contract has been the subject of litigation in two other courts. In the first, Moran Tank Co., Inc. v. Beta Corporation, Civil No. 217850 (Dist.Ct.Utah 1975), a Utah state district court determined that royalty payments for the patent at issue were due Beta and not Sims. In the second Sims v. Beta Corporation, Civil No. C 75-163 (D.Utah 1976), a Utah federal district court determined that Beta had breached the contract of sale between it and Sims and that Sims was still the legal titleholder of the patent. We asked the parties to the present action to brief the issue of the applicability of res judicata or collateral estoppel. We are satisfied that neither principle applies to this case.
Res judicata may be asserted to bar relitigation of an issue already decided in another case based on the same cause of action, between the same parties or other parties in privity with the same parties, and resulting in a final judgment. 1B J. Moore, Federal Practice ¶ 0.401. It is clear that the doctrine cannot be asserted here since neither of the previous cases involved the same parties (Sims and Mack Trucks) or the same cause of action (patent infringement) present here.
The doctrine of collateral estoppel has a broader scope. In this circuit, there are three requirements for its application: (1) the issue decided in the previous case must be the same as the issue in the present action; (2) the previous litigation must have concluded with a final judgment on the merits; and (3) the party against whom the estoppel is asserted must have been a party, or in privity with a party, to the earlier case. Scooper Dooper, Inc. v. Kraftco Corp., 494 F.2d 840 (C.A. 3, 1974).
It is apparent that the Utah federal district court judgment that Sims is the legal titleholder of the patent may not collaterally estop Mack Trucks here since Mack was not a party to that action and, therefore, had no opportunity to litigate the issue of legal title. In addition, we note that the court's conclusion that Sims is the legal titleholder was unnecessary for its determination that Beta had breached the contract. Indeed, it is illogical to conclude, as did the Utah federal court, both that Beta is liable to Sims for the purchase price and that Sims still retains the legal title. Thus, that court allows Sims both to retain title and receive payment.
As to the Utah state court judgment, we are not satisfied that that court made any determination as to legal title. Rather, the court merely concluded that under the contract the royalty payments were due Beta and not Sims. The court made no explicit finding on the issue of legal title.
Therefore, we do not apply either the doctrine of res judicata or collateral estoppel to this case. We must determine the issue of legal title ourselves, bearing in mind that Beta's alleged breach is not before us. We are concerned only with the terms of the contract entitled "Contract for the Sale and Assignment of U. S. Patent No. 2,859,949" entered into between Sims and Beta, to which we now turn.
Paragraph 2 of the contract states that:
This language is as plain as language can be; plaintiffs have sold the patent at issue here.
Plaintiffs argue, however, that paragraph 6 of the contract indicates that this contract is merely an agreement to assign the patent and does not constitute an actual transfer of title. Paragraph 6 states:
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