In re Lehman Equipment Company Patent Infringement Litigation

360 F. Supp. 1402, 179 U.S.P.Q. (BNA) 681, 1973 U.S. Dist. LEXIS 12738

• Court: United States Judicial Panel on Multidistrict Litigation
• Decided: July 12, 1973
• Docket: No. 141
• Status: Published

Opinion

OPINION AND ORDER

PER CURIAM.

This patent litigation consists of six actions in three different districts concerning the validity and enforceability of the Lehman patent on rotary cultivators for cultivating crops. The patentees assigned the patent to Lehman Equipment Company, which in turn granted the Lilliston Corporation an exclusive license to manufacture and distribute the product. Lehman and Lilliston move the Panel for an order transferring all actions to the Southern District of Texas for coordinated or consolidated pretrial proceedings. All other parties oppose transfer. We find no basis for transfer under Section 1407 and accordingly deny the motion.

In 1972, Lilliston and Lehman instituted three infringement actions in the Southern District of Texas against International Harvester Co., John Deere Co. and Kelley Manufacturing Co. In all three cases the Texas distributor of each manufacturer was also named as a defendant. Plaintiffs’ claims against International Harvester and John Deere, however, have been severed by the Texas court and transferred under 28 U.S.C. § 1404(a) to the Northern District of Illinois, where pursuant to the local rules of that court, they have been consolidated both for pretrial proceedings and trial. Plaintiffs’ claims against Kelley Manufacturing were dismissed by the Texas court for lack of venue. Subsequent to the dismissal, Kelley Manufacturing brought a declaratory judgment action against Lilliston in the Eastern District of North Carolina seeking a declaration of invalidity and non-enforceability of the Lehman patent as well as a declaration of non-infringement.¹ As a result, the only actions remaining in the Southern District of Texas are the three actions against the local distributors. And the defendant manufacturers have apparently agreed to indemnify the distributors against any recovery which plaintiffs might eventually obtain against them. In light of these developments, the Texas court has ordered a stay of proceedings in the distributor actions pending a final determination of the litigation involving the manufacturers.

Lehman and Lilliston contend that transfer of all actions to a single district is necessary in order to avoid duplication of discovery on the common issue of patent validity. It appears, however, that there are only two active cases involving the Lehman patent, the action by Kelley Manufacturing in North Carolina and the consolidated action against International Harvester and John Deere in Illinois. In the North Carolina action, Kelley Manufacturing has completed extensive discovery on the patent validity issue and has filed a motion for summary judgment on the ground that the patent is void, invalid and unenforceable. Since we are advised that that motion is ripe for decision, we are not convinced that transfer of these actions for coordinated or consolidated pretrial prceedings at this time will serve the convenience of the parties and witnesses or promote the just and efficient conduct of the litigation. Furthermore, if the North Carolina court grants the motion for summary judgment, holding the Lehman patent invalid, the application of the estoppel rule of Blonder-Tongue Laboratories, Inc. v. University of Illinois Foundation, 402 U.S. 313 (1971), could eliminate any need for further discovery or trial concerning the validity of the Lehman patent.

It is therefore ordered that the motion for transfer of the actions listed on the attached Schedule A be, and the same hereby is, denied.

SCHEDULE A

Southern District of Texas

Lilliston Corp. and Lehman Equipment Co. v. Allen Bruñe Co. Civil Action No. 72-B-85

Lilliston Corp. and Lehman Equipment Co. v. Weaks Martin Implement Co., Inc. Civil Action No. 72-B-84

Lilliston Corp. and Lehman Equipment Co. v. Kelley Mfg. Co., et al. Civil Action No. 72-B-113

Northern District of Illinois

Lilliston Corp. and Lehman Equipment Co. v. International Harvester Co. Civil Action No. 73C686

Lilliston Corp. and Lehman Equipment Co. v. John Deere Co. Civil Action No. 73C638

Eastern District of North Carolina

Kelley Mfg. Co. v. Lilliston Corp. Civil Action No. 1295

1 I. Kelley has also asserted allegation of unfair competition and antitrust violations relating to the Lehman patent and has charged Lilliston with infringement of a Kelley patent on peanut harvesting equipment.