General Tire & Rubber Co. v. Jefferson Chemical Co.

46 F.R.D. 607, 162 U.S.P.Q. (BNA) 58, 1969 U.S. Dist. LEXIS 9750
CourtDistrict Court, S.D. New York
DecidedMarch 20, 1969
DocketNo. 68 Civ. 1227
StatusPublished
Cited by4 cases

This text of 46 F.R.D. 607 (General Tire & Rubber Co. v. Jefferson Chemical Co.) is published on Counsel Stack Legal Research, covering District Court, S.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
General Tire & Rubber Co. v. Jefferson Chemical Co., 46 F.R.D. 607, 162 U.S.P.Q. (BNA) 58, 1969 U.S. Dist. LEXIS 9750 (S.D.N.Y. 1969).

Opinion

OPINION

TYLER, District Judge.

In a memorandum filed October 14, 1968, I deferred until trial determination of plaintiff’s (“General Tire’s”) motion in this case to dismiss, or in the alternative to strike, defendant’s (“Jefferson’s”) counterclaim for a declaration of invalidity of patent No. 3,072,582, General Tire’s so-called “Frost patent”. General Tire now moves under Rule 9 (m) of the General Rules of this court for reargument.

The parties at last having made available to me the depositions and exhibits on which their positions on the motion to dismiss are based and which were not produced prior to October 14, the motion to reargue should be and is granted. For reasons to be discussed, however, I essentially adhere to the ultimate conclusion reached in the earlier memorandum.

General Tire commenced this declaratory judgment action in this court on March 26, 1968 seeking to hold Jefferson’s so-called “Heiss patent” invalid and not infringed. In its answer to the complaint, Jefferson asserted a general denial, several affirmative defenses and two counterclaims, one for infringement of its Heiss patent and the second seeking a declaratory judgment of invalidity [609]*609of the aforementioned Frost patent belonging to General Tire. Thereafter, General Tire brought this motion without any supporting affidavits or papers. Apparently by agreement between themselves, counsel set out to take depositions and engage in discovery. As suggested hereinabove, the parties first came before the undersigned for argument on September 17, 1968. Through inadvertence, counsel never made available until this motion for reargument to the court any depositions or documents which relate to General Tire’s contention that there is no justiciable controversy with respect to the second counterclaim alleged by Jefferson.1 For this reason, among others, I denied General Tire’s original motion for summary dismissal of that counterclaim.

The Frost patent, which is the object of Jefferson’s second counterclaim, is directed to a system or process for making urethane foam which has a number of characteristics, including those which make it desirable for insulation in walls of structures and containers. For present purposes, it is not necessary to fully describe the process or system as indicated by the Frost patent. It is useful here to note, however, that one of the several components that goes into the urethane reaction as identified by the patent is an “essentially hydroxyl terminated polyether polyol”.

Jefferson, a wholly-owned subsidiary of American Cyanamid Company and Texaco, Inc., is engaged in the business of manufacturing and selling various chemicals, one type of which may be generally described as a polyether polyol. Jefferson in recent years has had a number of customers which are capable of reacting the polyols purchased from Jefferson with other components not sold by Jefferson to produce a polyurethane foam. Consequently, General Tire has communicated with a number of Jefferson customers to indicate that their systems of producing polyurethane foams infringe on the Frost patent. General Tire, not surprisingly, has also sought to have these customers execute nonexclusive licenses under the Frost patent and to pay royalties as provided therein. There have also been communications between General Tire and Jefferson about the possible execution by Jefferson of a nonexclusive license under this particular patent.

In simple terms, then, Jefferson is maintaining in its second counterclaim that General Tire has threatened it with infringement of the Frost patent and that thus there is a justiciable controversy ripe for resolution by this court in the same litigation involving Jefferson’s Heiss patent. Conversely, General Tire asserts that it has never threatened Jefferson with infringement of the Frost patent and that its dealings with some of Jefferson’s customers are of no legal consequence sufficient to support a declaratory judgment claim by Jefferson.

Due to the parties’ reliance on depositions, affidavits, and exhibits obtained during discovery, the motion despite the labels used by counsel, must be treated as one for summary judgment under Rules 12(b) and 56, F.R.Civ.P. As such, General Tire, the movant, must show a state of uncontradicted facts which establish the nonexistence of a justiciable controversy. Jefferson, on the other hand, need show no facts which support its counterclaim at this stage, unless General Tire’s evidence, if uneontradicted or unexplained, would entitle it to judgment. Westinghouse Electric Corp. v. Aqua-Chem, Inc., 278 F.Supp. 975 (E.D.Pa.1967). Consequently, on [610]*610this motion, I must determine whether such a state of uncontradieted facts exists, and if so, whether Jefferson has sufficiently contradicted or explained the evidence as to defeat the motion.

It has been stated that several elements must be considered in determining whether a justiciable controversy has been presented in a patent ease: (1) the position of the declaratory plaintiff; (2) the nature of the threat made against him; (3) the party making the threat and whether his action can be attributed to the patent owner. See Wembley, Inc. v. Superba Cravats Inc., 315 F.2d 87, 89 (2d Cir. 1963); Borchard, Declaratory Judgments, pp, 803-804 (2d ed. 1941). Although not all the cases are clear in this regard, it can be said that these three elements usually boil down to two requirements which must be met in the conjunctive: a showing of (a) actual manufacture, use or sale by the petitioner, and (b) charges of infringement by the patentee or his successor in interest. More recent cases have adopted the position espoused by Professor Borchard that the two requirements can also be met if the declaratory plaintiff “is about to infringe or take some action which is prejudicial to the interests of the patentee, and * * * he is then charged or put on notice that his action is attacked as an infringement, present or prospective.” Borchard, supra, at p. 807. This seeming liberalization of the requirements, however, does not appear to have eliminated the necessity for presenting proof of the concurrence of some form of present or potential infringement of the subject patent and some indication that the patentee has asserted a claim of infringement. Thus, a justiciable controversy has been held to exist in an action to declare a patent invalid where the patentee threatened suit and the plaintiff only conducted a trial run of the infringing product, Technical Tape Corp. v. Minnesota Mining & Mfg. Co., 200 F.2d 876 (2d Cir. 1952); conversely, it has been held not to exist where the patentee declared plaintiff’s product to be covered by the patent and the plaintiff merely “designed” a “proposed” necktie (Wembley, Inc. v. Superba Cravats, Inc., 315 F.2d 87 (2d Cir. 1963)). Similarly, in Hartford National Bank & Trust Co. v. Crowley & Co., 219 F.2d 568 (3d Cir. 1955) where the fact that the plaintiff was presently producing the allegedly infringing product was established but the question of whether the patentee had directly or indirectly charged the plaintiff with infringement was not, the court noted that:

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46 F.R.D. 607, 162 U.S.P.Q. (BNA) 58, 1969 U.S. Dist. LEXIS 9750, Counsel Stack Legal Research, https://law.counselstack.com/opinion/general-tire-rubber-co-v-jefferson-chemical-co-nysd-1969.