Ransburg Electro-Coating Corp. v. Lansdale Finishers, Inc.

345 F. Supp. 299, 174 U.S.P.Q. (BNA) 407, 1972 U.S. Dist. LEXIS 13144
CourtDistrict Court, E.D. Pennsylvania
DecidedJune 21, 1972
DocketCiv. A. No. 68-1320
StatusPublished
Cited by2 cases

This text of 345 F. Supp. 299 (Ransburg Electro-Coating Corp. v. Lansdale Finishers, Inc.) is published on Counsel Stack Legal Research, covering District Court, E.D. Pennsylvania primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ransburg Electro-Coating Corp. v. Lansdale Finishers, Inc., 345 F. Supp. 299, 174 U.S.P.Q. (BNA) 407, 1972 U.S. Dist. LEXIS 13144 (E.D. Pa. 1972).

Opinion

OPINION

DITTER, District Judge.

This is a patent infringement matter which comes before the court on cross motions for summary judgment. The principal question is whether one of the defendants in this case, although not a party to a prior suit, exercised sufficient control over the way it was handled to be bound by an adverse judgment under the res judicata doctrine.

[301]*301Plaintiff, Ransburg Electro-Coating Corp., brought this action to enjoin the infringement of four patents which cover methods and apparatus using electrostatic forces in a spray-painting device. It is charged that Automatic Finishing Systems, Inc., hereafter AFS, manufactured the accused system and sold one of them, or at least the essential components, to Lansdale Finishers, Inc. Plaintiff contends that AFS should be bound by the findings of fact, conclusions of law, and judgments entered in Ransburg Electro-Coating Corp. v. Standard Container Co., 167 U.S.P.Q. 426 (M.D.Ga.1970), because:

(1) AFS controlled the defense in Standard and is therefore bound by that decision;

(2) Lansdale has completely delegated all matters of defense in the instant action to AFS;

(3) The court in Standard adjudged valid and infringed the same patents involved in the instant ease;

(4) The accused electrostatic spray painting system in Standard and in this action are the same in all material respects.

The first matter for consideration is whether the participation of AFS in Standard amounted to a control of the defense in that case. If so, and if the accused systems are the same, AFS will be bound here by that decision: Schnell v. Peter Eckrich & Sons, Inc., 365 U.S. 260, 262, 81 S.Ct. 557, 559, 5 L.Ed.2d 546 (1961); Caterpillar Tractor Co. v. International Harvester Co., 120 F.2d 82 (3rd Cir. 1941).

The Honorable William A. Bootle, Chief Judge, before whom Standard was tried, was aware of the present suit against AFS. Accordingly, he made certain specific findings concerning the participation by AFS in the suit against Standard, including the following:

(1) AFS had “actively and openly assisted in the defense of this action” ;
(2) AFS agreed with Standard that AFS would pay all litigation costs in the present action including the fees of an expert witness, Dr. Kosko, and any damages which may be assessed against defendant;
(3) Standard’s trial counsel, Dana Raymond, had also been retained by AFS to defend an action brought by Ransburg against AFS in Philadelphia [the instant action], and AFS had agreed to pay his fee in both cases;
(4) No officer or employee of Standard appeared as a witness or attended the trial of the case, but the president of AFS, Gallen, and one of its key employees, Munroe, were daily present in court, while an AFS vice president, Lanchak, attended portions of the trial;
(5) The tests used to develop much of Standard’s evidence were conducted at Lanchak’s place of business in New Jersey, and no employee or officer of Standard was present at the tests;
(6) Ransburg’s interrogatories and requests for admissions were never submitted to Standard for consideration because Standard’s counsel knew that Standard had no information relating to them; rather draft responses were prepared by trial counsel and submitted to Gallen and Munroe for their opinion, after which they were signed by trial counsel; and
(7) The accused system, which was purchased from AFS in 1965, was used by Standard in New Jersey for approximately three months and in Homerville, Georgia, for one, possibly two, seasons. Standard’s stake in this action is less than that of AFS. At one time defendant Standard’s counsel indicated that AFS might attempt to intervene, but such attempt did not materialize.

Chief Judge Bootle refrained from concluding that the defense in Standard was actually controlled by AFS. He reasoned such a finding would not be binding upon any other court which might be faced with the question and stated, “It is better to leave such court [302]*302untrammeled. Such court before whom res judicata or collateral estoppel is urged may be in a better position then this court to make a correct finding on this question because it may have the benefit of additional facts.”

As he foresaw, more information has become available about the participation of AFS in Standard’s defense. In deposition, Standard’s president, William M. Vogel, Jr., testified his company did not want to be involved in the litigation with Ransburg (page 16). The matter was not of great interest to Standard (page 20), which was no longer using the equipment in question and had no intention of doing so (page 30). There was no day-to-day effort to be advised about the litigation (page 10). After Chief Judge Bootle’s decision was rendered, Vogel was not sufficiently concerned to study it or really look it over, and was uncertain as to whether he had received a copy or not (page 9). Vogel said, however, that he and his company had no objection to the suit’s being defended by AFS so long as it was understood that Standard would not pay any of the costs involved. None of the invoices rendered by defense counsel were sent to Standard nor was the bill of an expert who appeared on Standard’s behalf. Apparently these were sent directly to AFS. Vogel’s deposition and that of Gerald Kaye, Standard’s executive vice president, show that Standard’s only contact with the litigation was to seek counsel and then direct settlement when AFS no longer would pay the necessary expenses. Vogel was even somewhat vague about whether Dana Raymond, Esquire, the attorney in question, represented Standard or AFS. At one point he said that Raymond represented AFS, but then said that since the suit was against Standard, “I guess he was representing us.” (page 16)

Mr. Raymond, a New York patent attorney, was trial counsel for Standard in Ransburg’s suit. He had previously represented Standard in another patent case. Although he considered himself to be Standard’s attorney, his consultations were with AFS, AFS helped him with the preparation of the defense, and AFS was the source of funds for all payments.

Lansdale’s position in the instant ease is much like Standard’s was in the suit against it. Lansdale has no interest in the litigation and expects AFS to pay for all matters of defense including any damages assessed against it.

The degree of effective dominion exercised by AFS in the Standard case is demonstrated by the fact that no appeal was perfected because AFS was unable or unwilling to provide the necessary funds. When this became apparent to Standard and Mr. Raymond, the litigation abruptly terminated. Far more than any single factor, this shows that absolute control and command rested with AFS.

In Troy Company v. Products Research Company, 339 F.2d 364 (9th Cir. 1964), consideration is given to the elements that indicate the exercise of control in a patent infringement ease.

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Bluebook (online)
345 F. Supp. 299, 174 U.S.P.Q. (BNA) 407, 1972 U.S. Dist. LEXIS 13144, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ransburg-electro-coating-corp-v-lansdale-finishers-inc-paed-1972.