Staley Elevator Co. v. Otis Elevator Co.

35 F. Supp. 778, 1940 U.S. Dist. LEXIS 2364
CourtDistrict Court, D. New Jersey
DecidedOctober 31, 1940
DocketCivil No. 769
StatusPublished
Cited by5 cases

This text of 35 F. Supp. 778 (Staley Elevator Co. v. Otis Elevator Co.) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Staley Elevator Co. v. Otis Elevator Co., 35 F. Supp. 778, 1940 U.S. Dist. LEXIS 2364 (D.N.J. 1940).

Opinion

WALKER, District Judge.

Staley Elevator Company, Inc. (hereinafter referred to as “Staley”), filed its complaint herein against Otis Elevator Company (hereinafter referred to as “Otis”), and invokes the jurisdiction of this court under and by virtue of the Declaratory Judgment Act (Section 274d of the Judicial Code, 28 U.S.C.A. § 400), the Patent Laws of the United States and the diversity of citizenship of the parties.

Staley, it appears, manufactured, serviced and repaired a type of automatic push button elevator employing “selective, collective” control and is now manufacturing, servicing and repairing a type of automatic push button elevator which it identifies as “single interceptive’.’.

Otis is the assignee and present owner of United States Letters Patent No. 1,-694,823 (D. C. Larson for “Collective” sys-, tern of automatic electric elevator control) No. 1,904,647 (D. L. Lindquist, et al. for “Selective, collective” system of automatic electric elevator control) and Re-Issue Patent No. 16,297 (Parker for control of electric elevators).

Staley, in its complaint, alleges that Otis charges it with infringing the patent rights it acquired by reason of the aforesaid, that it and those who use its elevators are threatened with suit because of said alleged infringement, when, in fact, the “single interceptive” system used by it does not infringe Letters Patent No. 1,694,823, No. 1.904.647 and Re-Issue No. 16,297; that said letters and re-issue letters patent do not amount to invention and are invalid and void because the claims in each of them do not particularly point out or distinctly claim the alleged improvement or combination sought thereby to be covered, as prescribed by Section 4888 of the Revised Statutes (35 U.S.C. Section 33, 35 U.S.C.A. § 33), further, Letters Patent No. 1.904.647 are invalid and void by reason of unreasonable neglect and delay in entering a disclaimer with respect to claims, 6, 9, [779]*77914 and 76 thereof and the failure of Otis to file suit on Letters Patent No. 1,694,823 prevents it from asserting same against Staley’s “single interceptive” automatic electric elevator control system.

Therefore, its rights and the questions aforesaid should be determined by a declaratory judgment and protected by a permanent injunction.

This is not the first time certain of the aforesaid matters have been litigated, in fact, the litigation between the parties has been extensive and the review hereinafter set forth, is necessary, in order to rule upon the motion of Otis to dismiss said complaint. The grounds of said motion are: No actual controversy; Larson, Lindquist, et al. and Parker Re-Issue Patents have been passed upon by a court of competent jurisdiction; the “single interceptive” system is only a colorable evasion of the injunction obtained by Otis against Staley et al., and all matters in the complaint are now before a court of competent jurisdiction for adjudication.

The record of previous litigation is:

(a) On or about June 19, 1936, Otis instituted an action in the United States District Court for the Southern District of New York and therein it charged Staley with infringing Letters Patent No. 1,694,-823 and No. 1,904,647.

(b) On or about July 3, 1936, Otis instituted an action in the United States District Court for the Eastern District of New York on the aforesaid patents against certain customers of Staley and when Staley intervened therein, the complaint in the United States District Court for the Southern District of New York was dismissed without prejudice.

(c) The defense of Staley in the action in the Eastern District was lack of invention and non-infringement. The District Court (35 U.S.Pat.Q. 420) and thereafter the Circuit Court of Appeals for the Second Circuit (Otis Elevator Co. v. 570 Bldg. Corp., 98 F.2d 699, certiorari denied, 305 U.S. 640, 59 S.Ct. 107, 83 L.Ed. 412 and rehearing refused 305 U.S. 673, 59 S.Ct. 228, 83 L.Ed. 436), held Letters Patent No. 1,694,823 and No. 1,904,647 valid ’and infringed.

(d) An injunction issued restraining Staley from directly or indirectly practicing the inventions described in the Larson and Lindquist et als., patents and claimed in certain specific claims thereof and an accounting was ordered and hearings thereon commenced,

(e) Prior to the issuance of said injunction, Staley allegedly changed over all of its previously installed elevators which it was servicing, to what it identifies as “single interceptive” type of control, and be-' gan selling new elevators of said type. Otis believing that said system . infringes claims 6, 9, 14 and 76 of the Lindquist et al. Patent, obtained an order to show cause, D.C., 26 F.Supp. 900, why Staley should not be held in contempt for violating the injunction. The matter was referred to a special master, who was required to determine whether or not Staley was guilty of a mere colorable evasion of the injunction and therefore guilty of contempt or did the “single interceptive” automatic electric elevator control present a triable issue on the question of alleged infringement. Hartford-Empire Company v. Obear-Nester Glass Co., 8 Cir., 95 F.2d 414.

(f) The master filed his report and both Staley and Otis ent.ered objections thereto. The court, on July 3, 1940, filed its memorandum with respect to said report and objections, and therein said:

“The Master in a very lengthy and well-prepared report, consisting of 35 pages, has recommended that the defendant (Staley) be punished for contempt as to claims 9' and 14 and not as to claims 6 and 76.

“An examination of the Master’s report indicates that he made a very thorough and comprehensive study of the testimony and exhibits and that he knew the rulings made by the courts in passing upon questions involving ‘colorable evasion.’

s= * *

“If the only issue before the Special Master was infringement, I should, unhesitatingly, hold that his decision, which is scholarly and well-prepared, was correct insofar as it goes, that claims 9 and 14 of the Lindquist Patent are infringed. I should also hold that claims 6 and 76 are likewise infringed.

“A motion for contempt cannot be substituted for an action for infringement of a patent. If a record indicates that there is a triable issue, the parties should be relegated to an action. Contempt proceedings are a drastic remedy which cannot be used as a substitute for a trial.

“It is unfortunate that such issue of infringement cannot be disposed of here and now, as the trial will be based upon the [780]*780same evidence as is before this court on this motion to punish for contempt.

“Motion to punish for contempt denied.”

(g) Otis subsequently applied to the United States District Court for the Eastern District of New York for an order granting it leave to file a supplemental complaint in the action wherein the aforesaid injunction was entered and in said supplemental complaint it charges Staley with infringing claims 6, 9, 14 and 76 of the Lindquist et al. Patent.

The Court granted the application, 35 F.Supp. 348, holding:

“The accounting proceeding is still pending before the Special Master.

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35 F. Supp. 778, 1940 U.S. Dist. LEXIS 2364, Counsel Stack Legal Research, https://law.counselstack.com/opinion/staley-elevator-co-v-otis-elevator-co-njd-1940.