Naxon Telesign Corp. v. GTE Information Systems, Inc.

89 F.R.D. 333, 213 U.S.P.Q. (BNA) 40
CourtDistrict Court, N.D. Illinois
DecidedDecember 22, 1980
DocketNo. 79 C 3949
StatusPublished
Cited by17 cases

This text of 89 F.R.D. 333 (Naxon Telesign Corp. v. GTE Information Systems, 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
Naxon Telesign Corp. v. GTE Information Systems, Inc., 89 F.R.D. 333, 213 U.S.P.Q. (BNA) 40 (N.D. Ill. 1980).

Opinion

MEMORANDUM OPINION AND ORDER

SHADUR, District Judge.

Naxon Telesign Corporation (“Naxon”) filed this action against GTE Information Systems, Inc. (“GTE”), alleging that GTE had infringed Naxon-owned Patent No. 3,281,824 (the “Patent”) by its manufacture, leasing and sale of moving stock ticker displays. This memorandum opinion and order deals with four pretrial motions filed by the parties:

1. Naxon’s motion to treat the filing date of this action as retroactive to the filing date of the complaint in Naxon v. GTE Sylvania, Inc., et al., 79 C 1289 (“Sylvania ” or the “Sylvania action”), is denied.

2. Naxon’s motion to add Bolling’s, Inc. as a party defendant is granted.

3. Naxon’s motion for an order approving use of Ronald E. Larson as its patent and technical expert is granted.

[336]*3364. GTE’s motion for separate trials on the issues of liability and damages is granted. Its motion to vacate Magistrate Jurco’s discovery order on the damage issue is denied.

Naxon’s Motion To Treat the Filing Date of This Action as Retroactive to the Filing Date of the Complaint in Naxon v. GTE Sylvania, Inc., et al.

On April 2, 1979 Naxon sued GTE Sylvania, Inc. (“Sylvania”) and Ultronic Systems Corp. (“Ultronic”) in the Sylvania action for the same alleged patent infringements that now form the basis of this action. Because of answers to interrogatories supplied by Sylvania and Ultronic, Naxon discovered that it had sued the wrong parties, for neither defendant had ever used, leased or sold the traveling message systems that Naxon claimed infringed the Patent. Accordingly, in exchange for identification of the party that did so utilize the message systems, Naxon stipulated to a dismissal without prejudice of the Sylvania action September 21, 1979. On that same date Naxon filed this action against GTE.

Naxon now asks this Court to treat the filing date of this action as retroactive to April 2, 1979 and to vacate the stipulation of dismissal entered in the Sylvania action. Naxon maintains that it entered into the stipulated dismissal only because it received misleading and incomplete information from Sylvania and Ultronic and their attorneys, who also represent GTE. Specifically, Naxon asserts that:

(1) Those defendants were obligated to disclose (in response to certain interrogatories) that they were subsidiaries of GTE and that GTE was the party against whom it would have been proper to file suit.
(2) That information was not revealed until Naxon received GTE’s answers to certain interrogatories in the present action.

Because the statute of limitations in patent cases bars recovery for any infringement committed more than six years before the complaint is filed, Naxon’s motion is critical to recovery for nearly six months of claimed infringements (between April 2, 1973 and September 21, 1973).

Naxon’s initial brief cited no authority for the requested relief.1 In response to this Court’s order for a statement of such authority, Naxon’s supplemental brief asserted that the “provisions of Rule 60(b) of the Federal Rules of Civil Procedure appear to provide some court in this district with the authority to vacate the stipulated dismissal in civil action No. 79 C 1289.” However, on the other prong of its motion Naxon advanced only the unsupported statement that this Court is authorized to change the filing date “in its discretion and in order to do substantial justice . . . under its broad equity powers.” On Naxon’s own theory then, granting the latter relief is contingent on vacating the stipulated dismissal in Sylvania under the authority of Fed.R.Civ.P. (“Rule”) 60(b).

But the Sylvania action is not properly before this Court—it was assigned to Judge McMillen’s calendar at the time of its dismissal and has never been reassigned. Moreover, Naxon has already moved in Sylvania for, and Judge McMillen denied, the identical relief: vacating the stipulation of dismissal. This alone would justify denial of Naxon’s motion, for this Court clearly cannot in this action enter an order in the Sylvania action. Naxon was free to appeal Judge McMillen’s order denying its motion in Sylvania. In the absence of such an appeal, the matter is really foreclosed here by res judicata.

Lest Naxon nonetheless view itself as somehow involved in a Catch-22 situation,2 [337]*337the Court will also review on its merits the motion to vacate dismissal. Before Judge McMillen, in Naxon’s brief to which it referred in the supplemental brief filed in this action, it relied on three subparagraphs of Rule 60(b):

On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise, or excusable neglect; ... (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse party; ... or (6) any other reason justifying relief from the operation of the judgment.

1. As for Rule 60(b)(1), Naxon essentially contends that (a) because of its reasonable belief that it had sued the proper parties in Sylvania, it was “surprised” to learn that it had not, and (b) its error was due to its “inadvertence, mistake or excusable neglect.” That argument will not wash. Once defendants’ attorney in Sylvania informed Naxon that it had sued improper parties, Naxon could no longer claim that it was mistaken or surprised. Moreover, Naxon’s attorney agreed to enter into the stipulated dismissal if defendants’ attorney would provide him with the name of the proper defendant. It is well established that affirmative tactical decisions of counsel cannot constitute “excusable neglect or mistake” under Rule 60(b)(1). Federal’s, Inc. v. Edmonton Investment Co., 555 F.2d 577, 583 (6th Cir. 1977); United States v. 1,550.44 Acres of Land, 369 F.Supp. 1078, 1079 (D.N.D.1974).

2. Under Rule 60(b)(3) Naxon argues that Sylvania and Ultronic and their attorneys, who also represent GTE, “misrepresented or concealed” the name of the proper corporate defendant in response to Naxon’s interrogatories in Sylvania. That contention is equally unpersuasive for a number of reasons. First, none of the interrogatories can be fairly read to have requested the name of the correct defendant. Judgment cannot be vacated under Rule 60(b) on grounds of alleged fraud or misconduct unless the production of certain evidence is clearly called for by any fair reading of the discovery order. Montgomery v. Hail, 592 F.2d 278, 279 (5th Cir. 1979). Second, even had Naxon sought discovery of the name of the proper defendant in Sylvania, it is questionable whether the wrong defendants would have been required to provide it, for such information would not be “reasonably calculated to lead to the discovery of admissible evidence.” See Oppenheimer Fund, Inc. v. Sanders,

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Bluebook (online)
89 F.R.D. 333, 213 U.S.P.Q. (BNA) 40, Counsel Stack Legal Research, https://law.counselstack.com/opinion/naxon-telesign-corp-v-gte-information-systems-inc-ilnd-1980.