Solex Laboratories, Inc. v. Butterfield

• Decision Date: 07 September 1961
• Docket Number: Civ. No. 60-107.
• Citation: 202 F. Supp. 461
• Parties: SOLEX LABORATORIES, INC., and Plastic Contact Lens Company, an Illinois corporation, Plaintiffs and Counter-defendants, v. George H. BUTTERFIELD, Sr., and Geo. H. Butterfield & Son, a corporation, Defendants and Counterclaimants.
• Court: U.S. District Court — District of Oregon

202 F. Supp. 461

SOLEX LABORATORIES, INC., and Plastic Contact Lens Company, an Illinois corporation, Plaintiffs and Counter-defendants, v. George H. BUTTERFIELD, Sr., and Geo. H. Butterfield & Son, a corporation, Defendants and Counterclaimants.

Civ. No. 60-107.

United States District Court D. Oregon.

September 7, 1961.

Koerner, Young, McColloch & Dezendorf, James C. Dezendorf, Portland, Or., Bair, Freeman & Molinare, W. M. Van Sciver, Chicago, Ill., for plaintiffs.

Pendergrass, Spackman, Bullivant & Wright, R. R. Bullivant and Patrick Ford, Portland, Or., Mason & Graham, Collins Mason, William Graham, Los Angeles, Cal., for defendants.

KILKENNY, District Judge.

Plaintiffs charge that defendant George H. Butterfield, Sr., has infringed on what is commonly known as the Touhy Patent, dealing with contact lenses for the human eye. The cause is before the Court on said defendants' motion for a temporary injunction restraining plaintiffs from instituting actions in other jurisdictions against licensees of the defendants, in which said licensees are charged with infringement of said patent, and enjoining plaintiffs from notifying members of the trade that corneal contact lenses constructed in accordance with defendants' patent infringe on the patent owned by plaintiffs. In support of the motion the defendants have produced evidence that subsequent to the filing of this cause the plaintiffs commenced two additional actions, one in Virginia and one in Texas, against certain licensees of the defendants, charging infringement of the Touhy Patent. At the hearing the defendants produced substantial evidence of the mailing by plaintiffs to members of the ocular trade of a series of threatening letters and circulars which in effect notified said members that the corneal contact lenses constructed in accordance with defendants' patent infringed on the Touhy Patent. The motion of defendants presents three principal questions:

(1) Should plaintiffs be restrained from circularizing writing, advertising, or in any manner threatening or harassing the members of the ocular trade, or stating or implying to the trade or public that all contact lenses of the corneal variety are an infringement on the Touhy Patent, or

(2) Should plaintiffs be restrained from prosecuting pending actions against licensees of defendants, or

(3) Should plaintiffs be enjoined from prosecuting future actions against licensees of defendants.

1. Solex was the original party plaintiff in this cause. During the early stages of the proceeding it developed that Plastic had purchased all rights of Solex in the Touhy Patent and was joined as a party plaintiff. This transfer is noteworthy when we recognize that the plaintiffs were recently involved in litigation against each other presenting problems which were practically identical with those here presented. Solex Laboratories, Inc. v. Plastic Contact Lens Co., 7 Cir., 1959, 268 F.2d 637. Also of importance is the fact that Plastic was and is a licensee under the Butterfield patent and has been such a licensee for many years. While the material which was circulated in the Solex Laboratories, Inc. v. Plastic Contact Lens Co. case was more all-inclusive than the literature used by plaintiffs in this case, it remains as a fact that plaintiffs continued to carry on activities in circularizing the trade quite similar to those condemned by the Court, at the request of Plastic, in Solex Laboratories, Inc. v. Plastic Contact Lens Co., supra. It seems quite clear that the parties should not be permitted to conduct such activities and possibly impair or destroy rights, the exercise of which is the major point in controversy in this litigation. Defendants are entitled to prevail on the first point of the motion.

2. The second point raises the question of whether the Court should exercise its discretion and enjoin the plaintiffs from further proceeding with the pending actions against licensees of the defendants. Plaintiffs argue that a final judgment in the pending proceedings will have little, if any, effect on those cases now pending before the District Courts of Virginia and Texas. They assert that they have independent causes of action against infringing third parties and that nothing will be accomplished by enjoining these actions. They point to the fact that the parties to the other actions are not the same, nor are they in privity so as to form a basis for the application of the rule of res judicata. On the other hand, defendants urge that the same parties are involved and that privity can be traced through the indemnity agreement with the one defendant licensee and the license agreement with the other.

Shortly after the adoption of the F.R. C.P., the Third Circuit in Crosley Corporation v. Hazeltine Corporation, 1941, 122 F.2d 925, cert. den. 315 U.S. 813, 62 S.Ct. 798, 86 L.Ed. 1211, adopted a rule which seemed to be both rigid and absolute to the effect that the Court first obtaining jurisdiction over an issue and the parties should enjoin, during the pendency of that action, subsequent litigation in other jurisdictions. The decision in Crosley was deflated, if not completely rejected, in Kerotest Mfg. Co. v. C-O-Two-Fire Equipment Co., 342 U.S. 180, 72 S.Ct. 219, 96 L.Ed. 200, in which the Supreme Court held that wise judicial administration required that the issuance of a restraining order, under such circumstances, should be lodged in the sound discretion of the trial court.

A number of cases, including Joseph Bancroft & Sons Co. v. Spunize Co. of America, 2 Cir., 1959, 268 F.2d 522; Minnesota Mining & Mfg. Co. v. Polychrome Corp., 7 Cir., 1959, 267 F.2d 772, recognized the discretionary rule as...