Kellogg Switchboard & Supply Co. v. Michigan Bell Telephone Co.

71 F. Supp. 365, 74 U.S.P.Q. (BNA) 53, 1947 U.S. Dist. LEXIS 2726
CourtDistrict Court, E.D. Michigan
DecidedMay 1, 1947
DocketNo. 4459
StatusPublished
Cited by3 cases

This text of 71 F. Supp. 365 (Kellogg Switchboard & Supply Co. v. Michigan Bell Telephone Co.) is published on Counsel Stack Legal Research, covering District Court, E.D. Michigan primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Kellogg Switchboard & Supply Co. v. Michigan Bell Telephone Co., 71 F. Supp. 365, 74 U.S.P.Q. (BNA) 53, 1947 U.S. Dist. LEXIS 2726 (E.D. Mich. 1947).

Opinion

LEVIN, District Judge.

This case is before the Court upon a motion filed by defendants on December 30, 1946, for an order vacating a paragraph of the decree providing that the plaintiff recover from the defendants the damages which the plaintiff has suffered, and the profits which the defendants have made by reason of defendants’ infringement of a patent owned by plaintiff, and providing for a reference of the cause to a Special Master to take and report an account of such damages and profits. The grounds for the motion appear hereafter.

The complaint in this case was filed on September 30, 1930. On November 23, 1933, the opinion which is reported in D. C., 5 F.Supp. 118, was filed and the decree entered. No'appeal was taken by defendants from the decree of infringement in this case; however, plaintiff appealed from the decree insofar as it held one of the patents in question invalid and not infringed. Pending the disposition of the appeal, the plaintiff did not proceed with the reference, although no order staying proceedings under the decree was made by this Court. The United States Circuit Court of Appeals for this Circuit affirmed the decree, and on October 24, 1939, approximately six years after the decision, the mandate of the Appellate Court was filed ¡with this Court.

By this time, the Special Master originally appointed to conduct the accounting had died, but no application for the appointment of a substitute Master was made for nearly three years after the filing of the mandate. It appears that during this period some negotiations were entered into between the parties looking toward a settlement of the case. On October 15, 1942, an order was entered by the Court appointing Donald L. Quaife as successor Special Master under the decree of November 23, 1933. A master’s summons prepared by counsel for plaintiff, directing defendants to file a statement of account, was issued by the successor Master on October 20, 1942;

Shortly thereafter, on December 3, 1942, defendants filed a motion directed to the same objectives as the present motion. The ground asserted was the unreasonable delay on the part of plaintiff in proceeding with the accounting. At the hearing on such motion, defendants also urged as an additional ground that the only possible recovery would be so small as not to justify the expense of an accounting. The motion was denied and an order to such effect was entered on January 4, 1943.

When the Court announced its decision denying the motion, counsel for the defendants stated their intention of asking for a postponement of the accounting for the duration of the war. However, for a number of months thereafter settlement negotiations were conducted between the attorneys for the parties, and appropriate extensions of time for compliance by the defendants with the Master’s summons were obtained.

The settlement negotiations having apparently failed, on March 30, 1944, the defendants filed a motion to suspend the accounting proceedings for the duration of the war, on the ground that the time of numerous engineers and other skilled employees would necessarily be diverted from the war effort if required to be devoted to the preparation and assembly of the extensive data called for by the Master’s summons. During the course of hearings on this motion, plaintiff agreed to modification of the summons so as to eliminate any claim for profits based upon savings in manufacturing costs of the infringing device and to confine its claim to savings based upon use. This modification was calculated greatly to reduce the volume of data required to be furnished by defendants, and the Court therefore directed defendants to file their statement of account in response to the summons on or before January 8, 1945. The proceeding by the defendants to delay the accounting, followed by the filing of their statement with the Master on January 8, 1945, were the proceedings last taken by either of the parties prior to the pending motion, in implementation of paragraph 7 of the decree. The motion of [367]*367the defendants and the filing of the statement were consistent only with an unqualified recognition by the defendants of the full force of the decree for the recovery by the plaintiff of such damages and profits as would be determined by the accounting.

It appears that subsequently, on two occasions, the Master addressed letters to counsel for the parties, inquiring whether further proceedings were intended to be taken and stating that he assumed the next step was the responsibility of the plaintiff. Defendants’ counsel acknowledged receipt of these letters, but plaintiff’s counsel did not reply to them. Early in 1946, plaintiff’s counsel wrote to defendants’ counsel stating that testimony would be necessary before the Master and suggesting a conference between the attorneys, which, however, was never held.

In December, 1944, the judge who conducted the case died, and in the early part of 1946 the judge who thereafter assumed charge of the proceedings resigned. On December 12, 1946, this Court addressed a letter to all counsel of record, reciting the facts which appeared from the record and inquiring whether further proceedings in pursuance of the decree were contemplated by the parties. To this letter, plaintiff’s counsel replied that plaintiff was prepared to bring on the reference within a reasonably short time and at a time convenient to the defendants and to the Master. Defendants thereupon filed the pending motion.

The motion of defendants is based upon two grounds — first, and primarily, the unreasonable delay of plaintiff in prosecuting the accounting; and second, that in any event the only possible result of carrying through the accounting would be an award of nominal, or at most, insignificant damages to plaintiff, thus rendering the proceeding a futile one. With respect to the claim of delay, defendants contend that plaintiff was free to prosecute the accounting during the period of- the appellate proceeding; that plaintiff was dilatory in prosecuting the appeal and in applying for the appointment of a successor master after the mandate of the Court of Appeals affirming the decree had been handed down; and, finally, that plaintiff has been guilty of inexcusable delay of two years duration in prosecuting the accounting after defendants filed their statement of account. While defendants claim that a showing of actual prejudice to them resulting from the delay is unnecessary under the law to justify the relief sought on the motion, they contend that such prejudice has been shown to exist here by reason of the death of the member of the law firm representing defendants who acted as counsel on the.trial and on the appeal, the death of the Special Master originally appointed, the death of the trial Judge who was familiar with the facts, and by reason of the retirement of their general patent counsel, who was active throughout the case; they assert as well as a ground of prejudice the loss of various -employees of defendants, whose duties related to the matters involved in the accounting. These circumstances, the defendants say, would make it extremely difficult if not impossible for justice to be done on the accounting and would greatly increase the expense of the proceedings. Finally, the defendants claim that plaintiff is not entitled to any further indulgence, inasmuch as dilatoriness in patent litigation has been a habit with plaintiff, citing the case of Kellogg Switchboard & Supply Company v. Dean Electric Co. et al., D. C., 231 F. 194, and the case of the same title in D. C., 231 F. 197, where delay on the part of the plaintiff was commented upon by the Court.

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Bluebook (online)
71 F. Supp. 365, 74 U.S.P.Q. (BNA) 53, 1947 U.S. Dist. LEXIS 2726, Counsel Stack Legal Research, https://law.counselstack.com/opinion/kellogg-switchboard-supply-co-v-michigan-bell-telephone-co-mied-1947.