Sundstrand Corporation v. American Brake Shoe Company

315 F.2d 273
CourtCourt of Appeals for the Seventh Circuit
DecidedApril 16, 1963
Docket13919
StatusPublished
Cited by12 cases

This text of 315 F.2d 273 (Sundstrand Corporation v. American Brake Shoe Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Seventh Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Sundstrand Corporation v. American Brake Shoe Company, 315 F.2d 273 (7th Cir. 1963).

Opinion

*274 SWYGERT, Circuit Judge.

The principal question is whether a patent owner who has sued a customer of an alleged infringing manufacturer may be required to involuntarily litigate his action against the customer in a subsequently filed declaratory judgment action initiated by the manufacturer against the patent owner by the court, sitting in another district, having jurisdiction of the later filed declaratory judgment action.

To show the facts as succinctly and understandably as possible a diagrammatic presentation may be more helpful than a recital.

This was the posture of the three suits on July 25, 1962, when Sundstrand moved for an injunction restraining the further prosecution of the Maryland suit and enjoining the filing of any additional infringement suits against it or its customers. The District Court for the Northern District of Illinois granted a temporary restraining order contingent on the defendants in the Maryland action filing their voluntary appearance in the Illinois suit. In effect, the order placed in the hands of the defendant customers in the Maryland suit the power to transfer that suit to the Northern District of Illinois without the consent of the patentee-plaintiff or the Maryland District Court.

The United States Supreme Court in Kerotest Mfg. Co. v. C-O-Two Co., 342 U.S. 180, 72 S.Ct. 219, 96 L.Ed. 200 (1952), laid down guidelines for the lower courts in handling the complex multiple suit, multiple party, and forum non conveniens problems that arise in patent actions. While the Supreme Court therein established a broad area of discretion in the District Courts to enable them to properly regulate the course of complicated litigation in these *275 areas, nowhere in the opinion can we find authority for the action of the Illinois District Court in the instant case.

In Kerotest the patent owner filed an action for infringement against a customer of the manufacturer alleged to be infringing. This action was started in Illinois. By amendment the manufacturer was added as a defendant, but prior to the amendment the manufacturer had instituted a Declaratory Judgments Act 1 suit against the patentee in Delaware. The District Court in Delaware enjoined the patentee from proceeding in the Illinois suit against the manufacturer and refused to stay the Delaware action. The Court of Appeals for the Third Circuit reversed and the Supreme Court affirmed.

While the fact situations in Kerotest and the instant ease are not exactly parallel, it is to be noted that in Kerotest, the final disposition permitted the first filed suit to proceed. Moreover, in each of the cases referred to by the Court in its footnote (fn. 3 at 184, 72 S.Ct. at 221) it was the prosecution of a subsequently filed suit that was sought to be enjoined or stayed.

As to the problem which faced the trial judge in the case at bar, we believe the Supreme Court’s language in Kerotest is significant:

“The manufacturer who is charged with infringing a patent cannot stretch the Federal Declaratory Judgments Act to give him a paramount right to choose the forum for trying out questions of infringement and validity. He is given an equal start in the race to the courthouse, not a headstart. If he is forehand-ed subsequent suits against him by the patentee can within the trial court’s discretion be enjoined pending determination of the declaratory judgment suit, and a judgment in his favor bars suits against his customers. If he is anticipated, the court’s discretion is broad enough to protect him from harassment of his customers. If the patentee’s suit against a customer is brought in a district where the manufacturer cannot be joined as a defendant, the manufacturer may be permitted simultaneously to prosecute a declaratory action against the patentee elsewhere. And if the manufacturer is joined as an unwilling defendant in a forum non conveniens, he has available upon an appropriate showing the relief provided by § 1404(a) of the Judiciary Code. 62 Stat. 869, 937, 28 U.S.C. § 1404(a).” (Emphasis supplied.)

The Supreme Court recognized the right of a litigant to initially choose his forum — even where this involves a “race to the courthouse.” American Brake Shoe had a statutory right for which it sought vindication in the Maryland court. Its right was separate and independent from that against the alleged infringing manufacturer, and such, right, sanctioned by statute, ought not be interfered with except for compelling reasons. 35 U.S.C. §§ 271, 281; Birdsell v. Shaliol, 112 U.S. 485, 488, 5 S.Ct. 244, 28 L.Ed. 768 (1884); Minnesota Mining & Mfg. Co. v. Polychrome Corp., 267 F.2d 772 (7th Cir. 1959).

The Supreme Court in Kerotest gave its approval to the normal procedural' safeguards used to protect litigants from-having to do battle in an improper forum. One of these safeguards is the application of the doctrine of forum non-conveniens under the provision of section 1404(a) 2 of the Judicial Code.. Here, the District Court did not enjoin the suit between the patentee and the alleged infringing customer because of frivolousness or because it constituted' harassment of Sundstrand’s customers; rather it ordered the patentee to seek its remedy in the Illinois court should the- *276 customers choose to make an appearance in that court. This was an application of the forum non conveniens doctrine not sanctioned by section 1404(a) of the Judicial Code. A motion for transfer under that doctrine could only be made in the Maryland District Court, and the District Court for the Northern District of Illinois usurped the prerogative of that court. We say this having in mind the restraining order granted contingent on the customers appearing in the Illinois action — an injunction, in effect, against the forum and not against the cause of action between the parties. 3

We believe that “wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation, does not counsel * * * ” 4 the exercise of the Maryland court’s discretion by the court in Illinois. We say this being mindful of the Supreme Court’s acknowledgment that the Declaratory Judgments Act does not place in the manufacturer •or the customer the right to choose his forum by abrogating the traditional race to the courthouse. Sundstrand may move to intervene in the Maryland case and then move for a forum non conveniens

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Bluebook (online)
315 F.2d 273, Counsel Stack Legal Research, https://law.counselstack.com/opinion/sundstrand-corporation-v-american-brake-shoe-company-ca7-1963.