Waco-Porter Corporation v. Tubular Structures Corp.

• Decision Date: 31 July 1963
• Docket Number: No. 62-1658.,62-1658.
• Court: U.S. District Court — Southern District of California
• Parties: WACO-PORTER CORPORATION, a Minnesota corporation, Plaintiff, v. TUBULAR STRUCTURES CORPORATION OF AMERICA, a California corporation, Shoring, Inc., a California Corporation, Mayco Equipment Co., a California corporation, McFadden-Shayne, Inc., a California corporation, and Marvin M. May, Defendants.

220 F. Supp. 724

WACO-PORTER CORPORATION, a Minnesota corporation, Plaintiff, v. TUBULAR STRUCTURES CORPORATION OF AMERICA, a California corporation, Shoring, Inc., a California Corporation, Mayco Equipment Co., a California corporation, McFadden-Shayne, Inc., a California corporation, and Marvin M. May, Defendants.

No. 62-1658.

United States District Court S. D. California, Central Division.

July 31, 1963.

Irwin O. Spiegel, Beverly Hills, Cal., John Joseph Hall, Los Angeles, Cal., for plaintiff.

Roland E. Ginsburg, Beverly Hills, Cal., Herzig & Walsh and Albert M. Herzig, Los Angeles, Cal., Gerald H. Gottlieb, Beverly Hills, Cal., for defendants.

BYRNE, District Judge.

The first amended complaint in this action sets forth seven causes of action, one for an injunction and accounting of profits for patent infringement, one for damages for patent infringement, one for an injunction and accounting of profits for trademark infringement, one for damages for trademark infringement, one for breach of contract and license agreement, one for an injunction and accounting of profits for unfair competition, and one for damages for unfair competition.

By motion filed June 14, 1963, the plaintiff has moved this Court for a preliminary injunction enjoining the defendants and those participating with them: (1) from further acts of infringement of the plaintiff's patent No. 2,635,717, better known as "Speedlock," and plaintiff's patent No. 2,777,660, better known as "Speedset"; (2) from further acts of infringement of plaintiff's registered trade-marks "Waco" and "Speedlock"; and (3) from further acts of unfair competition by use of the same model numbers that identify and describe plaintiff's scaffolding and shoring equipment and product lines.

By motion filed June 3, 1963, the defendants have moved this Court for a preliminary injunction restraining the plaintiff from distributing and disseminating a certain notice regarding this action or any similar notice. The defendants' motion will be dealt with first.

The court in which a patent infringement action is brought has the power to enjoin a party to the action from falsely advising the trade with respect to the litigation and the steps taken or decisions made therein, all upon a motion made by another party in the same action. See Adjusta Co. v. Alma Mfg. Co., 36 F.2d 105 (S.D.N.Y.1929). See also Asbestos Shingle, Slate & Sheathing Co. v. H. W. Johns-Manville Co., 189 F. 611 (S.D.N.Y.1911).

Under the correct interpretation of the notice in question, the plaintiff does not really charge infringement in this notice, but plaintiff merely states that plaintiff has commenced this action for infringement of patents, trade-marks, breach of contract, and unfair competition, in which the complaint charges defendants with the infringement of the five named patents and other civil wrongs. With the exception of certain technical inaccuracies, the statements made in the notice are true statements, and anyone has the right to inform the trade truthfully about a court action he has brought against another and to state that in his complaint in the action he has charged the other with infringement. This is like reporting events; it amounts to a true statement of fact whether or not the plaintiff prevails in the case and the allegations of the complaint are proved.

The first technical inaccuracy in the notice is the statement that plaintiff charges infringement of patent No. 2,635,714 in this action. In truth, plaintiff charges infringement of 2,635,717, and there is no reference to a patent No. 2,635,714 in the complaint. This technical inaccuracy is apparently the result of a clerical mistake.

The other technical inaccuracy in the notice is the statement that Waco-Porter charges the defendants with infringement of its registered trade-mark, "Speedset." In fact, the plaintiff's first amended complaint contains no cause of action for infringement of the mark "Speedset" nor any reference to a trademark, "Speedset." However, the court chooses to regard these technical inaccuracies as de minimis in view of the fact that the notice taken as a whole, is substantially accurate and counsel for plaintiff has assured the Court these inaccuracies will not be repeated.

The defendants' motion is denied.

With respect to the propriety of granting a preliminary injunction against patent infringement, the Ninth Circuit Court of Appeals has said: "Generally speaking, no preliminary injunction will be granted unless the patent is valid and infringed beyond question and the record conclusively proves the defense is a sham. * * * If validity has been adjudicated or there is shown to be acquiescence therein by the public and irreparable injury is proved the matter is generally in the discretion of the trial court. * * * But disputed questions of fact should be left for final hearing." Pacific Cage & Screen Co. v. Continental Cage Corp., 259 F.2d 87, 9th Cir. 1958).

In view of the presumption of validity and the fact that validity has not been disputed, the Court finds that patent No. 2,635,717 is valid.

The patent license agreement was terminated on July 1, 1962. Plaintiff has conceded that it does not seek to enjoin the sale or use by defendants of items purchased from the plaintiff. Plaintiff has also conceded that it does not seek to enjoin the sale or use by defendants of devices embodying the plaintiff's patent which were completely manufactured prior to July 1, 1962.

The license agreement provides that it is governed by Minnesota law. Minnesota has a substantial interest in providing the rules governing this agreement. Minnesota law controls this agreement. The extent to which the agreement of license provides a defense to an infringement action is a question of interpretation of that agreement.

In Poirier v. Bradford, 119 Minn. 475, 138 N.W. 687, 43 L.R.A.,N.S., 142 (1912); the court held that defendant could sell patented devices manufactured before withdrawal of a license and left on hand at the time of withdrawal of the license. Included in this category were disc drills which could be made of unassembled parts, which parts were manufactured before withdrawal of the license and left on hand at the time of withdrawal of the license. That Minnesota case is distinguishable from the instant case. In the Minnesota case, the license to use the invention was to last only as long as a certain state of affairs continued to exist. Such a provision limiting the duration of a license to use the invention is ambiguous in comparison with the definite and specific termination clause found in the license before this Court. The agreement in the instant action provides for termination of the agreement and the rights thereunder. Included in these rights were the rights to make, use and vend the patented devices. Therefore, the intention of the parties...