Shrauger v. Phillip Bernard Co.

240 F. 131, 1917 U.S. Dist. LEXIS 1365
CourtDistrict Court, N.D. Iowa
DecidedMarch 8, 1917
StatusPublished
Cited by2 cases

This text of 240 F. 131 (Shrauger v. Phillip Bernard Co.) is published on Counsel Stack Legal Research, covering District Court, N.D. Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Shrauger v. Phillip Bernard Co., 240 F. 131, 1917 U.S. Dist. LEXIS 1365 (N.D. Iowa 1917).

Opinion

WADE, District Judge.

The application for temporary injunction in this case, was heard upon request of Judge Reed. Proof was offered which satisfies me that in some respects the defendant was guilty of unfair competition.

There was no proof offered as to the validity of the patent, though numerous affidavits in opposition thereto were presented. At the close of the hearing, I submitted to counsel the question as to whether temporary injunction restraining unfair competition should be granted without any proof as to the patent, the controversy as to which alone gives the court jurisdiction.

[ 1 ] Briefs have been furnished, and I have made a careful investigation of the authorities, which I find to be apparently very much in conflict, though, upon a careful study, I think it will be found that the conflict is more apparent then real.

“It must be observed in the outset, and never forgotten, that the jurisdiction of the courts of the United States, depending on the subject-matter or character of the case, whether exercised directly as original jurisdiction, or indirectly in the form of appellate jurisdiction over final judgments of the state courts, extends to, and is limited by, the class of cases specified in the Constitution, in which the jurisdiction depends upon the character of the case.” Nashville Ry. v. Taylor (C. C.) 86 Fed. 168.
“As regards all courts of the United States inferior to this tribunal, two things are necessary to create jurisdiction, whether original or appellate. The Constitution must have given to the court the capacity to take it, and an act of Congress .must have supplied it. Their concurrence is necessary to vest it.” Mayor v. Cooper, 6 Wall. 252, 18 L. Ed. 851.

[132]*132Upon the averments of the bill charging infringement of a patent, • there is no question but that the court has jurisdiction of the case; at least in so far as the case seeks relief, based upon the patent, and of other things incidental thereto.

[2] Counsel for plaintiff insist that, the court having jurisdiction as to the controversy over the patent, it also has jurisdiction upon the matter of unfair trade, even though such matter has no connection whatsoever with the patent, and they rely for this claim, upon the rule of equity that:

“Having taken cognizance of tlie case upon any ground upon which jurisdiction is given, the court will proceed to dispose of the whole controversy between the parties.”

Broadly stated, I do not agree with this proposition. I do agree with the proposition, if the word “controversy” is limited to include only the questions arising directly or indirectly out of the subject-matter which gives the court jurisdiction. I cannot agree that a suit may be brought upon a patent.in the United States court in a controversy as to which the court would have jurisdiction, and that plaintiff can join therewith a suit for specific performance of a contract to convey real estate in no manner connected with the patent controversy, or an action to enjoin the defendant from trespassing upon the plaintiff’s homestead. I believe that the court would be compelled to strike out these two causes of action upon motion, or upon its own motion; but if this were not done, and the parties proceeded to trial, and the court held that the defendant was entitled to recover in the controversy over the patent, I do not believe that the court would have jurisdiction to retain the other two causes of action and decide them, the parties being residents of the same state, and the cases involving no questions arising under the laws of the United States.

So far as the question is before this court, the cause of action for unfair competition is entirely independent of the cause of action based upon the patent, and of such proceeding by itself it has been repeatedly held that, where the parties are residents of the same state, as in this case, the United States court has no jurisdiction.

In many cases the element of unfair competition has been included with the charge of infringement of a patent, or a trade-mark, and, where the court held that there was infringement, the court properly retained jurisdiction upon the question of unfair competition, because it was an element that entered into the damages caused by the wrong.

In certain cases where there was combined the charge of infringement, and also unfair competition, courts have held that, even though the claim of infringement was decided in favor of the defendant, the court still could retain jurisdiction upon the question of unfair competition ; but the large majority of the cases are the other way.

I think the rule is properly stated in Ross v. Geer (C. C.) 188 Fed. 731, where it is said:

“If having jurisdiction for one purpose, the court may retain and exercise jurisdiction for every purpose, still that purpose, or those purposes, must be to enjoin or restrain some act or acts done in connection with the acts creating the cause of action which gave the court jurisdiction.”

[133]*133This principle is applied by Judge McPherson in People’s Sav. Bank v. Layman (C. C.) 134 Fed. 635.

In Louisville Trust Co. v. Stone, 107 Fed. 305, 46 C. C. A. 299, it is said:

“When the jurisdiction has properly attached, it extends to the whole case, and to all the issues involved, whether of a federal or non-federal character, and the court has power to decide upont all questions involved.”

This broad statement is somewhat doubtful in view of the attitude of the Supreme Court of the United States in Warner v. Searle, 191 U. S. 195, 24 Sup. Ct. 79, 48 L. Ed. 145, in which it is said:

“The courts of the United States cannot take cognizance of an action on the case or a suit in equity between citizens of the same state, ‘unless the trade-mark in controversy is used on goods intended to he transported to a foreign country, or in lawful commercial intercourse with an 'Indian tribe.’ ”

In A. Leschen Co. v. Bascom Co., 201 U. S. 166, 26 Sup. Ct. 425, 50 L. Ed. 710, in which a trade-mark was involved, but where the decision on this point was against the plaintiff, it is said:

. “Nor can we assume jurisdiction of this case as one wherein the defendant has made use of plaintiff’s device for the purpose of defrauding the plaintiff and palming off its goods upon the public as of the plaintiff’s manufacture. Our jurisdiction depends solely upon the question of whether plaintiff has a registered trade-mark,- valid under the act of Congress, and, for the reasons above given, wé think it has not.”

In Standard Paint Co. v. Trinidad Asphalt Co., 220 U. S. 446, 31 Sup. Ct. 456, 55 L. Ed. 536, the court says:

“The case at bar is within the letter of the statute.

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Related

Stark v. Stark Bros. Nurseries & Orchards Co.
257 F. 9 (Eighth Circuit, 1919)
Shrauger & Johnson v. Phillip Bernard Co.
247 F. 547 (N.D. Iowa, 1917)

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Bluebook (online)
240 F. 131, 1917 U.S. Dist. LEXIS 1365, Counsel Stack Legal Research, https://law.counselstack.com/opinion/shrauger-v-phillip-bernard-co-iand-1917.