University of Ill. Found. v. Blonder-Tongue Lab., Inc.

• Decision Date: 27 September 1971
• Docket Number: No. 66 C 567.,66 C 567.
• Citation: 334 F. Supp. 47
• Parties: The UNIVERSITY OF ILLINOIS FOUNDATION, Plaintiff and Counterclaim Defendant, v. BLONDER-TONGUE LABORATORIES, INC., Defendant and Counter-claimant, v. JFD ELECTRONICS CORPORATION, Counterclaim Defendant.
• Court: U.S. District Court — Northern District of Illinois

334 F. Supp. 47

The UNIVERSITY OF ILLINOIS FOUNDATION, Plaintiff and Counterclaim Defendant, v. BLONDER-TONGUE LABORATORIES, INC., Defendant and Counter-claimant, v. JFD ELECTRONICS CORPORATION, Counterclaim Defendant.

No. 66 C 567.

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

September 27, 1971.

Charles J. Merriam, William A. Marshall, Basil P. Mann, Merriam, Marshall, Shapiro & Klose, Chicago, Ill., for plaintiff and counterclaim defendant.

John Rex Allen, Hofgren, Wegner, Allen, Stellman & McCord, Chicago, Ill., for defendant and counterclaimant.

Myron C. Cass, Silverman & Cass, Chicago, Ill., for counterclaim defendant; Ostrolenk, Faber, Gerb & Soffen, New York City, of counsel.

MEMORANDUM OF DECISION

JULIUS J. HOFFMAN, District Judge.

The action is presently before the Court pursuant to the mandate of the United States Supreme Court, vacating the judgment of the Court of Appeals which had affirmed the judgment here. It is the opinion of this Court that this mandate requires the entry of final judgment for defendant on the plaintiff's claim.

Upon the original trial of this case, this Court concluded that Patent 3,210,767, issued to Isbell and held upon assignment by the plaintiff, The University of Illinois Foundation, was valid and infringed by the defendant, Blonder-Tongue Laboratories, Inc. In sustaining the patent's validity, this Court disagreed with the conclusion reached by the United States District Court for the Southern District of Iowa, in a suit filed later but tried earlier than this action, involving the same plaintiff but a different defendant. University of Illinois Foundation v. Winegard, 271 F.Supp. 412 (S.D. Iowa 1967).

Under then settled law, this Court was bound to make its own independent determination of the issues, on the evidence and argument presented, and the prior adjudication involving a different defendant had no preclusive effect. The controlling precedent, Triplett v. Lowell, 297 U.S. 638, 56 S.Ct. 645, 80 L.Ed. 949 (1936), laid down the requirement of mutuality of estoppel: since the plaintiff could have gained no advantage over this defendant by a victory over the previous defendant, it was thought that fairness required that he should suffer no prejudice from a loss against the previous defendant. This requirement of mutuality was conceded by all parties here, and was uncontested in this Court.

The requirement of mutuality remained unquestioned and unassailed in defendant's appeal to the Court of Appeals for the Seventh Circuit, although in the interim the judgment of the Iowa District Court holding the patent invalid, had been affirmed upon appeal by the Eighth Circuit. University of Illinois Foundation v. Winegard, 402 F.2d 125 (8th Cir. 1968). Free to exercise its own judgment under the mutuality requirement, the Seventh Circuit affirmed this Court's holding that the patent was valid. University of Illinois Foundation v. Blonder-Tongue Laboratories, 422 F. 2d 769 (7th Cir. 1970).

With this conflict among the Circuits, the Supreme Court granted certiorari to review the decision of the Seventh Circuit, but denied the plaintiff's petition for review of the Eighth Circuit's decision. 394 U.S. 917, 89 S.Ct. 1191, 22 L.Ed.2d 452 (1969). In addition to the issues raised by the granted petition, the Supreme Court requested the parties to address themselves to the question whether the doctrine of mutuality of estoppel, as announced in Triplett v. Lowell, supra, should be adhered to. The United States, as amicus curiae, joined the defendant in urging modification or qualification of the mutuality requirement, and the Court ultimately handed down its opinion rejecting the mutuality requirement of Triplett as a condition to any estoppel from prior patent litigation. 402 U.S. 313, 91 S.Ct. 1434, 28 L.Ed.2d 788 (1971). The Court accordingly reversed and remanded the case to allow defendant to interpose a plea of estoppel based on the Eighth Circuit's decision in Winegard. Upon remand, defendant has accepted the invitation by moving to amend its answer to set up this newly authorized defense. Allowance of the amendment is dictated by the Supreme Court mandate, and plaintiff has not indicated any opposition. The motion is accordingly granted.

Conceding this ruling, plaintiff has filed its motion in the nature of a motion for judgment on the pleadings, seeking the re-affirmation of the original judgment on the ground that the plea of estoppel is insufficient in the circumstances of this case. Defendant has countered with its own motion for the entry of judgment in its favor, asserting that the Winegard litigation is a complete defense to this suit. Both parties have disavowed interest in offering evidence on the issue, and no factual issues are presented by the opposing motions. Thus the matter may be appropriately treated as a motion for summary judgment on the defense.

The Supreme Court's ruling breaks new ground. The defense of estoppel, made available by abolition of the mutuality requirement, means that a prior holding that plaintiff's patent is invalid rises above the level of a mere precedent, entitled only to deference within the conventions of stare decisis. On the other hand, the new defense falls short of the vigorous doctrine of res judicata which would raise an absolute bar if the plaintiff were suing the same defendant a second time on the same cause of action. When a new defendant is sued, the plaintiff will be entitled to relitigate the validity of his patent if he can demonstrate that the prior action did not afford him "a full and fair chance" to litigate the issue. 402 U.S. 333, 91 S.Ct. 1434. Among the components of this standard are the convenience of the previous forum, plaintiff's incentive to litigate in the prior action, the identity of the issues raised and decided, and the plaintiff's opportunity to present all crucial evidence and witnesses. 402 U.S. 333, 91 S.Ct. 1434. Plaintiff in this Court has made no showing of any shortcomings in the Winegard proceedings in any of these respects. Procedurally, at least, plaintiff had a fair opportunity to pursue his claim the first time.

In patent litigation, however, the defense of estoppel is not established by procedural fairness alone. There is a substantive element as well. Under the Supreme Court's formulation, when validity depends upon non-obviousness of the development, as in the case at bar, the second court is called upon to inquire whether the first court "purported to employ the standards announced in Graham v. John Deere Co., supra 383 U.S. 1, 86 S.Ct. 684, 15 L.Ed.2d 545 (1966), and whether the opinions filed by the District Court and the reviewing court, if any, indicate that the prior case was one of those relatively rare instances where the courts wholly failed to grasp the technical subject matter and issues in suit. * * *" 402 U.S. 333, 91 S.Ct. 1445.

Plaintiff asserts that the courts of the Eighth Circuit "wholly failed to grasp the technical subject matter" since they disagreed with the courts of this Circuit. It would demand arrogance so to conclude. In opening the defense of estoppel from third-party litigation, the Supreme Court sought to eliminate the expense, waste, and confusion caused...