Newburgh Moire Company, Inc. v. Superior Moire Company, Inc

218 F.2d 580, 104 U.S.P.Q. (BNA) 132, 1955 U.S. App. LEXIS 5354
CourtCourt of Appeals for the Third Circuit
DecidedJanuary 17, 1955
Docket11340
StatusPublished
Cited by10 cases

This text of 218 F.2d 580 (Newburgh Moire Company, Inc. v. Superior Moire Company, Inc) is published on Counsel Stack Legal Research, covering Court of Appeals for the Third Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Newburgh Moire Company, Inc. v. Superior Moire Company, Inc, 218 F.2d 580, 104 U.S.P.Q. (BNA) 132, 1955 U.S. App. LEXIS 5354 (3d Cir. 1955).

Opinion

BIGGS, Chief Judge.

Newburgh Moire Company, Inc. (Newburgh) sued Superior Moire Company, Inc. (Superior) stating two causes of action in its complaint. As its first cause of action Newburgh alleged that Superior infringed, without specification of particular claims, two United States patents, Nos. 2,448,145 and 2,-513,646, both being for processes to produce moiré pattern effects, issued to Holterhoff who assigned to Newburgh. Newburgh seeks an injunction and an accounting under this cause of action.

As a part of this first cause of action, Newburgh also alleged that in 1950 Hol-terhoff as owner of Patent — 145 and Newburgh as the exclusive licensee thereunder filed suit in the court below against Superior charging the latter with infringement of that patent, that prior to answer the suit was settled and discontinued by Superior paying $1,000 to Holterhoff and Newburgh, and that as part of the settlement Holter-hoff and Newburgh released Superior from any claim for past infringement but reserved the right to sue Superior for any future infringement. This portion of the complaint, devoted, as we have said, to the first cause of action, also alleged that the parties to the earlier suit agreed that no announcement of the settlement of the action should be made to customers of the moiré trade, that simultaneously with the settlement of the suit Superior gave assurances to Holterhoff and Newburgh that it would not infringe Patent —145 or Patent —646, the patent last designated having been issued to Holter-hoff shortly prior to the time of settlement, and that negotiations for a license for Superior were commenced by the parties but that negotiations never culminated in the issuance of a license to Superior.

As its second cause of action, New-burgh alleged in substance that Superior is one of its competitors and that Superior has adopted without Newburgh's consent certain patented processes and trade-names and symbols for moiré designs, which are in fact Newburgh’s, thereby causing confusion in the moiré industry and trade, Superior’s products being inferior to Newburgh’s, to New-burgh’s damage and detriment. New-burgh alleges that by reason of the foregoing Superior has been guilty of unfair competition. Newburgh prayed also for an injunction and an accounting under this portion of its complaint.

In answer to Newburgh’s first cause of action Superior alleged that the patents were invalid. As to the second cause of action Superior again asserted *582 that' the patents were invalid, alleged that it has been using the designs identified by Newburgh in its complaint for many years with the actual or implied knowledge of Newburgh, and asserted that Newburgh has no special right in these designs or in the symbols employed to identify them.

Superior also filed two counterclaims. The first was based on the Declaratory Judgments Act, 28 U.S.C. § 2201, and in it Superior again alleged that the patents were invalid and sought a declaration to that effect. Superior in its first counterclaim also asserted that by charges of patent infringement New-burgh- had attempted to intimidate Superior’s customers and that by acting in combination with its licensees New-burgh controlled the production and sale prices of its moiré products in violation of the Sherman Act, 15 U.S.C.A. §§ 1 and 2. Superior prayed for a judgment declaring the patents to be invalid and for treble damages, costs and counsel fees.

In its second counterclaim Superior asserted that Newburgh had breached the agréement not to announce to the trade the settlement of the first patent infringement suit by divulging the settlement in the complaint in the instant suit and sought damages for that breach and the return of the $1,000 paid by it to Holterhoff and Newburgh.

Newburgh filed a reply denying the material allegations of the counterclaims. Superior then moved to dismiss the complaint alleging that Newburgh had violated the antitrust laws and had misused its patents by setting up price-fixing provisos in the licenses issued by it. Superior based its motion upon the deposition of Holterhoff as New-burgh’s Treasurer. On June 5, 1952 the court below filed an opinion, D.C., 105 F.Supp. 372, holding that New-burgh's license agreements did constitute a violation of the antitrust laws. On December 12, 1952, the court below ordered the first cause of action dismissed but by that very order reinstated the first cause of action “as of June 25, 1952” because of the renegotiation by Newburgh of its license agreements, the new agreements having omitted the clauses incompatible with the antitrust laws. In its opinion of June 5, 1952, the court had stated: “The second cause of action which is based upon alleged trade mark infringement still stands.” The court also pointed out in the opinion that there remained for disposition Superior’s first counterclaim under the Declaratory Judgments Act seeking an adjudication that Newburgh’s patents were invalid and an accounting and, under the second counterclaim, damages for alleged breach of contract.

Thereafter the remaining issues were moved for trial. The court below held, D.C., 116 F.Supp. 759 that the first claim of each patent was invalid for lack of invention and that Superior had not been guilty of unfair competition. The court held also that Superior could not, because of its own conduct in using Newburgh’s processes, recover for New-burgh’s disclosure of the settlement contract.

The judgment, entered February 5, 1954, reads as follows: “1. The First Cause of Action for infringement of Claim 1 of Patent No. 2,448,145 dated August 31, 1948, and Claim 1 of Patent No. 2,513,646 dated July 4, 1950, as alleged in the Complaint, be and the same is hereby dismissed for invalidity of said claims.

“2. The Second Cause of Action for unfair competition, as alleged in the Complaint, be and the same is hereby dismissed.

“3. The defendant’s counterclaims for return of the consideration for settlement of a previous suit between the parties, and for damages for plaintiff’s violation of the anti-trust laws, be and the same are hereby dismissed.”

Newburgh has appealed. The notice of appeal reads as follows: “ * * * Newburgh * * * appeals * * * from the final judgment dated February 5, 1954, the appeal to be limited to the first paragraph of * * * [the] judg *583 ment relating to the first cause of action in the complaint, and from the order * * * dated December 12, 1952 dismissing and reinstating the first cause of action of the complaint.”

At the end of the first paragraph of its opinion, 116 F.Supp. at page 760, the court below stated: “The plaintiff [Newburgh] has limited its case to the first claim of each patent.” The judgment of invalidity was also so limited. At p. 43 of the transcript of the trial the plaintiff’s attorney stated that “the plaintiff has limited its case to Claim 1 of each of the two patents in suit.” That statement and the statement in the opinion of the court below, acquiesced in by Newburgh and Superior here, is, we think, sufficient to sustain a finding of abandonment of litigation of the other claims of the patents, viz., one in Patent —145 and four in Patent —646. But Superior’s cause of action set up in its first counterclaim also put in issue every claim of each patent and still stands un-adjudicated.

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Bluebook (online)
218 F.2d 580, 104 U.S.P.Q. (BNA) 132, 1955 U.S. App. LEXIS 5354, Counsel Stack Legal Research, https://law.counselstack.com/opinion/newburgh-moire-company-inc-v-superior-moire-company-inc-ca3-1955.