Activated Sludge, Inc. v. Sanitary Dist.

33 F. Supp. 692, 46 U.S.P.Q. (BNA) 255, 1940 U.S. Dist. LEXIS 2905
CourtDistrict Court, N.D. Illinois
DecidedJuly 5, 1940
DocketNo. 4280
StatusPublished
Cited by6 cases

This text of 33 F. Supp. 692 (Activated Sludge, Inc. v. Sanitary Dist.) is published on Counsel Stack Legal Research, covering District Court, N.D. Illinois primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Activated Sludge, Inc. v. Sanitary Dist., 33 F. Supp. 692, 46 U.S.P.Q. (BNA) 255, 1940 U.S. Dist. LEXIS 2905 (N.D. Ill. 1940).

Opinion

LINDLEY, District Judge.

The court heard oral arguments on March 2, 1940, upon defendant’s motion for leave to file a petition to reopen the decree of infringement entered herein February 8, 1935, submit allegedly newly discovered evidence, vacate the decree and dismiss the suit. Since that time, under permission of the court, voluminous briefs have been filed, the final and concluding memorandum having been received on June 25. The court has had complete access and recourse to the documentary and parol testimony contained in the voluminous record of the cause.

The issue presented is the same as if the petition had been filed and its sufficiency were attacked by motion to strike or dismiss. Defendant grounds its motion upon two premises: First, that the suit should be dismissed for the reason that it was inspired, filed and prosecuted through the action of one Dilling, formerly chief engineer of defendant, who, it is alleged, learned the facts concerning the vulnerability of defendant to patent litigation under the patents here involved while employed by defendant. The legal proposition relied upon is that one who, during the course of his employment, learns of vulnerability of his employer to litigation cannot, after his employment ceases, instigate prosecution of such litigation, whether his knowledge concerning the vulnerability be confidential or otherwise. The second contention is that Activated Sludge, Inc., plaintiff, who succeeded in the litigation culminating ip the decree of infringement, did not have title to the patents in suit when it became party plaintiff or when the decree was entered and, being without title, if the facts had been presented, could not properly have succeeded.

In support of these two bases for relief, defendant avers that the facts supporting each were concealed by plaintiff and its counsel and came to the notice and knowledge of defendant only long after the entry of the decree and shortly prior to the filing of its motion. Consequently, defendant asserts it is not chargeable with negligence in failing to make earlier discovery and presentation of the evidence.

Plaintiff insists that defendant has not brought itself within the limitations imposed upon persons seeking vacation of a decree, rehearing or leave to file a bill of review, in that the allegedly newly discovered evidence was known to defendant or procurable by it at the time of trial and was not presented at the earliest practical moment after discovery and that at all events the evidence is immaterial and irrelevant to the issues and not of such character as to justify any action other than the decree entered. It disputes the correctness of the proposition concerning the lack of right of a former employee to take advantage of the vulnerability of his former employer, avers that the facts do not justify the conclusion that Dilling owed any duty to defendant at the time of his alleged breach of fiduciary obligation and that, even if the facts alleged concerning Dilling’s acts were true, they are not such as to justify any rehearing. Each party submits subordinate propositions which will be noted in the course of this memorandum. The pertinent facts will be discussed in like course.

The petition tendered and leave to file which is asked is like in its legal connotation to the ordinary petition for rehearing, motion for new trial or bill of review and the rules governing each are the same. Any such application must disclose the new testimony, the names of the witnesses, if known, and if not, the means by which the evidence is to be procured, the character of the documentary evidence relied upon and the fact that the evidence has come to light since the hearing and was unknown and could not reasonably have been ascertained for use at the hearing. The evidence may not be merely cumulative. It must be such as would have been competent, relevant, material and of such character as would probably have changed the result reached. If it is apparent that the new facts were known in time for presentation at the hearing or reasonably ascertainable by the exercise of due diligence, the applicant cannot succeed. McLeod et al. v. City of New Albany, 7 Cir., 66 F. 378; Obear-Nester [694]*694Glass Co. v. Hartford-Empire Co., 8 Cir., 61 F.2d 31; National Brake & Electric Co. v. Christensen, 7 Cir., 278 F. 490; 21 C.J. 718, 719; J. B. Inderrieden Co. v. Gill, 373 Ill. 180, 25 N.E.2d 796.

Defendant’s contention that plaintiff was without title rests largely upon the premise that plaintiff took its title as assignee of Activated Sludge, Limited, subject to an outstanding license previously granted Guthard. Defendant insists in this respect that the agreement with Guthard was in legal effect an assignment of title and that its subsequent cancellation and termination by Guthard did not thereby revest in Activated Sludge, Limited, the owner of the patents, any title which it could thereafter assign to plaintiff.

Bearing upon these contentions, it is necessary to observe that a suit similar to this, for infringement, in favor of the same plaintiff against the City of Milwaukee, was pending at all, times after institution of this cause, the trial occurring in 1929, four years prior to that of the instant suit. Counsel for defendant in this trial participated actively in that trial also. There plaintiff proved its title, first by assignments by the original patentee to Activated Sludge, Limited, and then by assignment by the latter company to Activated Sludge, Inc., plaintiff. At that time the court received in evidence the license or assignment from Activated Sludge, Limited, to Guthard, and a modification thereof, both of which were later received in evidence by this court at the trial of this cause. This was the agreement which plaintiff contends was later terminated by Guthard’s cancellation. That Guthard had made an express cancellation was known to all counsel, as ‘ formal cancellation appeared on the instrument. Furthermore the document bears a memorandum in the handwriting of counsel for defendant, raising a question as to whether such cancellation was sufficient to reconvey the title to Activated Sludge, Limited. The same exhibits were in evidence in this case. Consequently it was known long prior to the decree that plaintiff’s title depended upon an assignment by Activated Sludge, Limited, made after cancellation of a prior limited assignment or license to Guthard. If there were any reason in law why such a cancellation did not revest in Activated Sludge,' Limited, full title to the patents, that question - arose immediately upon'acquisition of knowledge of the fact. If plaintiff’s title was defective because of an ineffectual attempt by Guthard to revest the title in his grantor, then plaintiff had no title and could not maintain the suit. But this knowledge was acquired as ' early as 1929, and certainly known to all parties in interest at least as early as the trial of this cause in 1934. The defense might have been properly presented at the trial and, if defendant was correct in its contention, the suit would then have been dismissed.' It is too late now for this court to entertain any application to reopen the decree and hear additional testimony upon this question, existing at the time of the trial. The authorities cited are conclusive in that respect. But, in addition,, defendant had the opportunity to examine the officers and beneficiaries of Activated Sludge, Limited, of Activated Sludge, Inc., and of Activated Sludge Processes of America in the course of the trial.

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Bluebook (online)
33 F. Supp. 692, 46 U.S.P.Q. (BNA) 255, 1940 U.S. Dist. LEXIS 2905, Counsel Stack Legal Research, https://law.counselstack.com/opinion/activated-sludge-inc-v-sanitary-dist-ilnd-1940.