Universal Athletic Sales Co. v. American Gym

• Decision Date: 27 September 1979
• Docket Number: 71-1113,72-1107 and 75-565.,Civ. A. No. 71-166
• Parties: UNIVERSAL ATHLETIC SALES CO. v. AMERICAN GYM, Recreational & Athletic Equipment Corp., Inc., Grayson Industries Corp., American Super Gym Corp., and Super Athletics Corp., Ronald Arbasek, Larry Salkeld, Donald E. Pinchock and S. David Brodsky d/b/a Super Athletics Corp. UNIVERSAL ATHLETIC SALES CO. v. Larry SALKELD, Donald E. Pinchock, S. David Brodsky, Ind. and d/b/a Super Athletics Corp. and Wes Hudson. SUPER ATHLETICS CORP. v. OLYMPIA SPORTS PRODUCTS, INC. d/b/a Universal Resilite. SUPER ATHLETICS CORP., a bankrupt, J. M. Evans, Trustee in Bankruptcy, v. WHITTAKER CORP. and Olympia Sports Products, Inc.
• Court: U.S. District Court — Eastern District of Pennsylvania

480 F. Supp. 408

UNIVERSAL ATHLETIC SALES CO. v. AMERICAN GYM, Recreational & Athletic Equipment Corp., Inc., Grayson Industries Corp., American Super Gym Corp., and Super Athletics Corp., Ronald Arbasek, Larry Salkeld, Donald E. Pinchock and S. David Brodsky d/b/a Super Athletics Corp.

UNIVERSAL ATHLETIC SALES CO. v. Larry SALKELD, Donald E. Pinchock, S. David Brodsky, Ind. and d/b/a Super Athletics Corp. and Wes Hudson.

SUPER ATHLETICS CORP. v. OLYMPIA SPORTS PRODUCTS, INC. d/b/a Universal Resilite.

SUPER ATHLETICS CORP., a bankrupt, J. M. Evans, Trustee in Bankruptcy, v. WHITTAKER CORP. and Olympia Sports Products, Inc.

Civ. A. Nos. 71-166, 71-1113, 72-1107 and 75-565.

United States District Court, W. D. Pennsylvania.

September 27, 1979.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Robert D. Yeager, Pittsburgh, Pa., Lewis M. Dalgarn, Los Angeles, Cal., for Universal Athletics and Olympia Sports Products.

Stephen P. Laffey, Pittsburgh, Pa., for trustee, John Evans, trustee.

Thomas H. Murray, Pittsburgh, Pa., Hymen Diamond, Monroeville, Pa., Lawrence Zurawsky, Floyd B. Carothers, Robert A. Galanter, Pittsburgh, Pa., for Larry Salkeld, Donald E. Pinchock, S. David Brodsky, individuals, d/b/a Super Athletics Corporation; Wes Hudson, an individual; and Super Athletics Corporation.

William C. Walker, Pittsburgh, Pa., for Whittaker Corp.

OPINION

KNOX, District Judge.

(A) Procedural History.

This complex piece of litigation involving four separate civil actions for various claims of patent and copyright infringement, unfair competition, misuse of patent rights and violation of the antitrust laws has occupied the time of this court and of the court of appeals of this circuit in various matters for more than eight years. The first action No. 71-166 was filed February 12, 1971 against Larry Salkeld, (Salkeld) et al., d/b/a Super Athletics, American Gym, Recreational and Athletic Equipment Corporation, Inc., (American Gym) Ronald Arbasek (Arbasek) and Grayson Industries, Inc. (the action was instituted by Universal Athletics Sales Co. (Universal)). The suit claimed infringement of Zinkin Patent 2,932,509 for a chest press patent for an exercising machine.

Thereafter, American Super Gym, Super Athletics Corp. (Super Athletics), David Brodsky (David) and Donald E. Pinchock (Pinchock) were added as defendants. There were also claims of unfair competition. A settlement was later entered into between Arbasek and Grayson and these defendants have disappeared from the case. The other defendants filed an answer containing a counterclaim which as amended claims misuse of the patent for violation of the antitrust laws.

The case was so proceeded with that non-jury trial was held before the court on October 29, 30, 31 and December 11 and 12, 1974, and after arguments and briefs the court on June 23, 1975, as amended October 29, 1975, held that letters patent No. 2,932,509 for a body exercising apparatus issued to Harold Zinkin on April 12, 1960, (397 F.Supp. 1063, W.D.Pa.1975) were invalid as to claims 3 and 4 for obviousness but that if valid, the patent had been infringed. It was further held that defendant Super Athletics was guilty of unfair competition but that Pinchock and Brodsky were not. The counterclaims raising questions of patent misuse and antitrust violations by the plaintiffs were severed and reserved for later determination. The court also on June 23, 1975, determined there was no just reason for delay, a judgment should be entered in accordance with Rule 54(b) and since there were substantial grounds for difference of opinion it was certified that an immediate appeal from this order might materially advance the "ultimate termination of the litigation".

The plaintiff accepted the invitation and filed an immediate appeal to the U.S. Court of Appeals for the Third Circuit which on November 19, 1976, as amended December 30, 1976, determined that the patent was valid, vacated the judgment entered by this court and remanded the cause for further proceedings consistent with this opinion. See Universal Athletic Sales Company v. American Gym, etc., 546 F.2d 530 (3d Cir. 1976).

As pointed out in the opinion of June 23, 1975, "The path of this litigation has been filled by detours: a motion to disqualify counsel, a motion for civil contempt and, of course, lengthy discovery with resistance from both sides. Zinkin's body exercising apparatus has given exercise to lawyers and judges in a manner the inventor would never have imagined." What was true in June 1975 has been reproved several times over in the four years that have elapsed since then. Progress has been delayed by attempted interlocutory appeals and by further discovery and arguments with respect to the same. A lengthy trial on the remaining issues and issues in other cases produced hundreds of exhibits. In view of the complexity of the issues, the filing of briefs which are stacked to a considerable height weighing many pounds and oral argument occupied further time. The matter is now before the court for "final" decision. Regardless of what we do here today, we can see that this case will still be in the courts for a long period of time in the future.

As a result of the holding of the Circuit that the patent was valid and the prior holding of this court that if valid, there had been infringement, there is now presented to this court for decision the questions of (1) damages to be awarded for infringement and (2) damages to be awarded for unfair competition, if any. We also have in 71-166 the issues of patent misuse and violation of the antitrust laws.

The issues in companion actions are also for decision. In 72-1107 against William Farrell and Olympia Sports Products, Inc. claim was made by the defendants in 71-166 that Farrell and Olympia were in violation of the antitrust laws and guilty of unfair competition. The action was dismissed as to Farrell for want of venue and involves the same questions of patent misuse and antitrust violations which appear in the counterclaim in 71-166.

Again on May 8, 1975, Civil Action 75-565 was filed by Super Athletics, David and Stanley Brodsky against Whittaker Corporation and Olympia. Whittaker in its answer also included a counterclaim against David, Stanley and Joseph Brodsky, Brodsky & Co. Inc. and the wives of Stanley and David alleging infringement of the chest press patent and unfair competition. It appears that during the course of this litigation Universal Athletic Sales has changed from a subsidiary of Whittaker to a division and Whittaker has since divested itself of the whole operation but reserving the causes of action in which it is plaintiff in these cases. J. M. Evans, Trustee in Bankruptcy of Super Athletics was substituted in 75-565 and filed an amended complaint alleging violation of the antitrust laws and conspiracy to put Super Athletics out of business and misuse and abuse of process. Various attorneys have appeared from time to time in these cases and others have disappeared.

These last claims partly arise out of the fourth action before the court for decision, namely 71-1113. 71-1113 was brought by Universal alleging infringement by the defendants of its copyright on wall charts to be used in connection with exercising apparatus. This court held there was infringement (340 F.Supp. 899, W.D.Pa.1972) and assessed damages including a money judgment for civil contempt. The Court of Appeals reversed and held no infringement in 511 F.2d 904 (3d Cir. 1975). No supersedeas was sought and while the appeals were pending Universal executed on the judgment. Super Athletics claims this caused it to go into voluntary bankruptcy. The court had entered an order staying the proceedings upon filing of a supersedeas bond for a sum less than the amount of the claim but defendants elected not to file such bond and instead went into bankruptcy. As a result of the reversal by the Court of Appeals the defendants have filed the claims now pending for conspiracy to ruin their business and for abuse of process and/or malicious use of process. In addition there is an action upon the injunction bond filed by the plaintiffs in 71-1113 for damages suffered by the defendants as the result of the same prior to the reversal by the circuit.

All of these issues will have to be dealt with separately in this opinion.

(B) Damages for Patent Infringement.

(1) Amount of Damages.

In this court's opinion in 397 F.Supp. 1063 at page 1071 (W.D.Pa.1975) this court said:

"In addition, we find that the defendant's chest press apparatus would infringe the Zinkin Patent if the Zinkin Patent were not void as obvious and lacking in novelty. While the question of infringement is, of course, rendered moot by our determination of patent invalidity, we make that finding at this time in the interest of judicial economy for whatever value it may have in the future of this ongoing litigation. We do not, however, by making this finding foreclose the question of patent misuse."

We have reexamined this question, however, at the present time and find no reason to disturb our previous finding in this respect and the case is therefore in the position of the patent being found valid and infringed. We therefore turn at this time to the determination of the amount of damages resulting from the infringement.

At 35 U.S.C. § 284 it is provided:

"Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.

"When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed.

"The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances. July 19, 1952

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