Continental Coatings Corp. v. Metco, Inc.

325 F. Supp. 165, 168 U.S.P.Q. (BNA) 685, 1971 U.S. Dist. LEXIS 14931
CourtDistrict Court, N.D. Illinois
DecidedJanuary 22, 1971
DocketCiv. A. No. 68 C 1320
StatusPublished
Cited by3 cases

This text of 325 F. Supp. 165 (Continental Coatings Corp. v. Metco, Inc.) 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
Continental Coatings Corp. v. Metco, Inc., 325 F. Supp. 165, 168 U.S.P.Q. (BNA) 685, 1971 U.S. Dist. LEXIS 14931 (N.D. Ill. 1971).

Opinion

MAROVITZ, District Judge.

MEMORANDUM OPINION

Defendants’ Motions For Summary Judgment

This is a patent infringement brought by Continental Coatings Corporation (Continental), an Illinois corporation, against Metco, Inc. (Metco), a New Jersey corporation, and two of Metco’s customers, F. H. Ayer Mfg. Co. (Ayer) and U. S. Metallizing & Welding Corp. (MW), both of which are Illinois corporations. The patent in the suit, U. S. Letters Patent No. 2,904,449 (Bradstreet Patent) is entitled “Method and Compositions for Flame Spraying” and allegedly directed to a method for applying a coating of crystalline refractory oxide by a flame spray process. This patent was issued on September 15, 1959 to the Armour Research Foundation of Illinois Institute of Technology, Chicago, Illinois, now known as the IIT Research Institute (IIT). Originally, Continental was an exclusive licensee under the patent. Subsequently, IIT assigned the Bradstreet Patent to Continental.

Defendant has filed two motions for summary judgment. The first seeks dismissal of the Complaint following declaration that patent claims 1, 2, 6 and 8, the only claims allegedy infringed, are invalid. The second motion seeks dismissal following a determination that the patent is unenforceable by reason of laches in that the delay in bringing the present action was unreasonable and unexplainable.

Essentially, summary judgment is appropriate where there is no substantial factual controversy requiring a trial and one party is entitled to prevail as a matter of law. Chicago Joint Board, Amalgamated Clothing Workers of America, A.F.L.-C.I.O. v. Chicago Tribune, 307 F.Supp. 422, 424 (N.D.Ill.1969). Although perhaps invoked less often than in other areas, John Wood Co. v. Metal Coating Corp., 144 U.S.P.Q. 402, 403 (N.D.Ill.1965), summary judgment is applicable in appropriate patent [166]*166cases. See, e. g., Morton Salt v. G. S. Suppiger Co., 314 U.S. 488, 62 S.Ct. 402, 86 L.Ed. 363 (1942); A R Inc. v. Electro-Voice, Inc., 311 F.2d 508 (7th Cir. 1962); Central Specialties v. Schaefer, 165 U.S.P.Q. 15 (N.D.Ill.1970).

On the laches issue, at least, the essential facts in this cause are not in dispute. The Bradstreet Patent was issued on September 15, 1959. Although, as exclusive licensee, it was in a legal position to bring suit against Metco, which never conceded the patent’s validity and had declined for over three years to become a licensee, Continental delayed such action because of uncertainty regarding who was infringing and because it “wanted to wait to have some commercial success with the invention before proceeding against infringers.” (Deft.’s Laches Memorandum Ex. II, at 3-4). However, shortly thereafter, on November 17, 1960, IIT sent notices of infringement to Daman Industries {Id. Ex. 4) and Eldorado Manufacturing Co. {Id. Ex. V), both of which replied with an indication that the matter had been referred to Metco. Subsequently, Metco expressed its strong feeling that the patent was invalid and told IIT that Metco would hold harmless any of its purchasers as to any possible infringement of the Bradstreet Patent. {Id. Ex. VIII). Daman and Eldorado were held harmless by Metco. {Id. Exs. IX, X).

In May, 1963, IIT considered numerous companies, including defendant MW as potential infringers and began to learn about their processes.

Although IIT’s attorney believed that “a law suit would be a meaningless expense,” in March, 1964, IIT agreed to bring “at least one but not more than one infringement suit.” {Id. Ex. II, at 7). Soon afterwards, IIT reconsidered suing Metco as a contributory infringer, {Id. Ex. VIII), and renewed its attempt to license Metco {Id. Ex. XIV), which effort was rejected by Metco on the grounds that the patent was invalid {Id. Ex. XV).

Defendant MW was among sixteen companies listed by IIT in July, 1964, as ones which may be infringing the Bradstreet Patent (Id. Ex. XVI). Later that year, offers to license and notices of infringement were sent out to at least 412 companies, none of which accepted a licensing agreement and some of which indicated that Metco held them harmless. {Id. Ex. II, at 7-8). Plaintiff, subsequent to this abortive licensing campaign, continued to urge IIT to sue for infringement of the Bradstreet Patent. {Id. Exs. XVII, XVIII, XIX).

By February, 1966, plaintiff believed that IIT was not interested in patent litigation, but that IIT wanted to arrange a settlement with it. {Id. Ex. XX). Two years later, IIT paid plaintiff $75,000, assigned the Bradstreet Patent to plaintiff and cancelled their prior agreement.

Plaintiff claims its last contact with Metco was in July, 1965, and its last contact with Metco’s customers was in March, 1966. This law suit was first filed by plaintiff in July, 1968. Thus, the facts clearly show that this action was not commenced until over seven years after Metco’s customers received infringement notices and were held harmless and over three and one-half years after the mass notices of infringement were mailed. During all this time, even if the claim-of infringement was not being abandoned, at no time, except for the aforementioned notices, was Metco or any of its customers notified that the claim was being pressed. Baker Mfg. Co. v. Whitewater Manufacturing Co., 430 F.2d 1008, 1013 (7th Cir. 1970). As in Baker, we know of no demand for compensation which followed any notice of infringement. Id. at 1014. There is some evidence of sporadic talk, but no evidence of diligent action. Even accepting plaintiff’s timetable, the initial program of notice and lack of perseverance was followed by a period of two or three years of total silence until the suit was filed.

Whatever conflicts may have existed respecting the doctrine of laches in this district, the latest and most complete statement of subject may be found in Baker. In that case, a patentee was bar[167]*167red by laches from claiming infringement where it had waited more than nine years after first giving defendant notice of its claimed patent infringement before bringing suit and where plaintiff had some correspondence concerning cross licensing during the early part of that period but remained silent for the final seven years. The Seventh Circuit held that where there is unreasonable delay in bringing a patent infringement action, “the burden is on the patentee to excuse” such a delay and “under such circumstances there is a presumption that an alleged infringer has been damaged.” Id. at 1009.

The instant action, in certain important areas, is quite similar to the Baker case. First, it appears that Continental and IIT were both aware of Metco’s sales of refractory oxide flame spray powders to its customers, of Metco’s refusal to obtain a license under the Bradstreet Patent because of invalidity, and of Metco’s policy of holding its customers harmless from patent action regarding the Bradstreet suit. In spite of this awareness, however, Continental and IIT failed to attempt to establish their rights in the proper forum until almost nine years after the patent had issued, and Metco, at least, engaged in allegedly infringing activities.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Technitrol, Inc. v. Memorex Corporation
376 F. Supp. 828 (N.D. Illinois, 1974)
Continental Coatings Corporation v. Metco, Inc.
464 F.2d 1375 (Seventh Circuit, 1972)

Cite This Page — Counsel Stack

Bluebook (online)
325 F. Supp. 165, 168 U.S.P.Q. (BNA) 685, 1971 U.S. Dist. LEXIS 14931, Counsel Stack Legal Research, https://law.counselstack.com/opinion/continental-coatings-corp-v-metco-inc-ilnd-1971.