Components, Inc. v. Western Electric Co.

52 F.R.D. 379, 15 Fed. R. Serv. 2d 398, 169 U.S.P.Q. (BNA) 23, 1971 U.S. Dist. LEXIS 14627
CourtDistrict Court, D. Maine
DecidedFebruary 12, 1971
DocketCiv. No. 11-79
StatusPublished
Cited by1 cases

This text of 52 F.R.D. 379 (Components, Inc. v. Western Electric Co.) is published on Counsel Stack Legal Research, covering District Court, D. Maine primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Components, Inc. v. Western Electric Co., 52 F.R.D. 379, 15 Fed. R. Serv. 2d 398, 169 U.S.P.Q. (BNA) 23, 1971 U.S. Dist. LEXIS 14627 (D. Me. 1971).

Opinion

MEMORANDUM AND ORDER

GIGNOUX, District Judge.

There are three motions before the Court for determination at this time:

(1) Plaintiff’s motion, filed December 17, 1970, for leave to file a Second Amended Complaint;
(2) Plaintiff’s motion, filed December 17, 1970, to amend Count One of the Second Amended Complaint;
(3) Plaintiff’s motion under Rule 37(a), filed December 28, 1970, to compel production of documents in Categories 1(c) and 1(g) of plaintiff’s request for production of documents dated November 5, 1970.

The Court has considered the written and oral arguments of counsel at a hearing held on January 21, 1971, and now rules upon these motions as follows:

I. Plaintiff’s Motion for Leave to File a Second Amended Complaint.

Plaintiff’s motion for leave to file a Second Amended Complaint is granted.

The parties have agreed that Counts One and Two of the proposed Second Amended Complaint may be allowed without objection. Proposed Count Three seeks a declaratory judgment under the Federal Declaratory Judgments Act, 28 U.S.C. § 2201 (1964), that six of defendant’s patents relating to semiconductive apparatus are invalid, have not been infringed by plaintiff, and are unenforceable because of misuse in violation of the antitrust laws.1 The parties have agreed that Count Three may be allowed, without objection, unless the Court determines, upon the basis of a stipulated record, that there is no “actual controversy” between the parties as to the infringement, validity and enforceability of these patents sufficient to sustain the jurisdiction of this Court under the Declaratory Judgments Act.

The relevant background and applicable legal principles are set forth in this Court’s Opinion and Order of October 23, 1970, 318 F.Supp. 959, and will not be repeated here. For present purposes, it is sufficient to note that the stipulated record before the Court on the present motion discloses that since at least 1965 Components and Western have been endeavoring to negotiate a li[381]*381cense agreement covering semiconductive apparatus manufactured by Components, Western’s position throughout these negotiations being that the semi-conductive apparatus produced by Components was covered by Western’s patents and that Components should accept a license agreement and pay royalties to Western. Defendant contends that the mere offering of a license and negotiations in connection therewith may not constitute a charge of infringement and, hence, cannot establish an “actual controversy” within the meaning of the Declaratory Judgments Act. Compare American Needle & Novelty Co. v. Schuessler Knitting Mills, Inc., 379 F.2d 376, 378 (7th Cir. 1967) and Walker Process Equipment, Inc. v. FMC Corp., 356 F.2d 449 (7th Cir.), cert. denied, 385 U.S. 824, 87 S.Ct. 56, 17 L.Ed.2d 61 (1966), with Sticker Industrial Supply Corp. v. Blaw-Knox Co., 367 F.2d 744 (7th Cir. 1966). Plaintiff’s answer to defendant’s Interrogatory 4(d), however, specifies five telephone conversations and meetings subsequent to December 1965 during which defendant’s representatives charged “that * * * semiconductive apparatus manufactured and sold by plaintiff infringed defendant’s patents and, therefore, that plaintiff should accept a royalty bearing license under such patents.” Nothing in the stipulated record before the Court at this time controverts these statements, which for purposes of the present motion the Court must accept as true. Cf. F.R.Civ.P. 56(e). Applying the principles summarized by this Court in its October 23, 1970 opinion, it is evident that, on the present record, the Court cannot say that a case of “actual controversy” within the meaning of the Declaratory Judgments Act does not exist in respect of defendant’s semiconductive apparatus patents. As the Court observed in its October 23, 1970 opinion, if plaintiff’s assertions are established at trial,

Plaintiff is now in the position where it must either cease production of its [semiconductive apparatus] or face the risk of being liable to defendant for substantial damages whenever defendant may see fit to bring an infringement suit against it. * * * To deny that an “actual controversy” exists in this case is to “ignore the realities of business life.” * * *

II. Plaintiff’s Motion to Amend Count One of the Second Amended Complaint.

Plaintiff’s motion to amend Count One of the Second Amended Complaint is granted, except insofar as it seeks to amend paragraph (c) of the “Prayer as to Count One.”

Count One of the Second Amended Complaint seeks treble damages under Section 4 of the Clayton Act, 15 U.S.C. § 15 (1964), for alleged violations of the antitrust laws arising from defendant’s patent licensing practices. The proposed amendment would add to its substantive averments the allegation that some or all of the patents allegedly being misused by defendant are invalid. It also seeks to add to the relief sought a prayer for a declaration of invalidity of the patents involved.

In Foman v. Davis, 371 U.S. 178, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962), the Supreme Court reaffirmed the mandate of F.R.Civ.P. 15(a) that, absent bad faith, undue delay, dilatory motive, or undue prejudice to the opposing party, amendments to pleadings “shall be freely given when justice so requires.” 371 U.S. at 182, 83 S.Ct. at 230. F.R.Civ.P. 15(a). See also Middle Atlantic Utilities Co. v. S. M. W. Development Corp., 392 F.2d 380, 384 (2d Cir. 1968); Forster Mfg. Co. v. F. T. C., 335 F.2d 47, 50 (1st Cir. 1964); 3 Moore’s Federal Practice ¶15.08 (2d ed. 1968). Since this Court’s order of October 23, 1970 stayed discovery and trial of the antitrust and patent misuse issues presented by this action pending trial of the patent infringement and validity issues, allow[382]*382anee of the proposed amendment at this stage of the proceeding will not result in “undue delay” or “undue prejudice” to defendant. Nor does the record disclose “bad faith” or “dilatory motive” on the part of plaintiff. Insofar, therefore, as the proposed amendment seeks to add to the allegations of Count One the averment that some or all of the patents allegedly being misused by defendant are invalid, the liberal philosophy of Rule 15(a) requires that leave to amend be granted.

The proposed amendment to the prayer to Count One, by which plaintiff asks for a declaration of invalidity of defendant's patents, must be denied.

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52 F.R.D. 379, 15 Fed. R. Serv. 2d 398, 169 U.S.P.Q. (BNA) 23, 1971 U.S. Dist. LEXIS 14627, Counsel Stack Legal Research, https://law.counselstack.com/opinion/components-inc-v-western-electric-co-med-1971.