*1 ALARM TIME CORP. PADUA GENERAL v. SYSTEMS, аl. Inc. et 217, Docket 22281.
No. Appeals United States Court of Kenway, Kenway, Jenney, Circuit. Herbert P. Second Hildreth, Boston, Mass., Witter Turner April Argued 8, 1952. Y., Turner, Schneider, Troy, & H. N. John Sept. 17, 1952. Decided Pope, Koenig Louis, Mo., & St. for defend- ant-appellee, N_ Y„ Albanyj Andros & Charles Smith> Andros, Harry Smith, Y„ Albany, H. A. N. counsel, defendant-appellant. ’ CHASE, BIGGS, CLARK, Before Qrcujt Judges tjttp r*rn?TAi\/r PER CURIAM.
Though the in its court is divided there agree- views nonetheless is sufficient Biggs, Judges, Circuit concurred Chase and among permit dis- its members to part. part and dissented position Judge the case without remand. CLARK, though Judge CHASE and of dif opinions ferent as to the the con merits of traversy> agree jurisdic that the court has declde the case on its merits and that tlonto 54(b), Rule Fed.Rules Civ. Provisions judgment Proc-> U-S-C> relatlnS multiple Judge are inapplicable. claims voting Judge while CLARK BIGGS> of the aourt Vlew ^ ments> power appeal *s to entertain be- without pur that a cause he thinks claim within the 54(b)> Rule verted re- view of undisposed positions of. The mams respecBve appear more Judges fully m their °p ini°ns majority result is The net (Judge Judge CLARK) CHASE and court possesses agree power the court controversy. majority adjudicate the A (Judge Judge the court BIGGS CLARK) agree the decision on be in Ac- favor of Parissi. merits should judgment cordingly the is reversed with the judg the court below to enter direction as indicated in favor of Parissi ment in opinion, Judge CLARK’S Judge (concurring), CLARK, Circuit controversy here is between the two Parissi, inventor, defendants, and Padua Inc., original- corporation Systems, Alarm *2 three-way lamp him, now socket ly by which he is an incandescent formed but with for royalties, permit subject so fashioned as of at odds. The matter to of the use Corpora- payable by plaintiff ordinary flashing light Time the for well as as signalling purposes. for sale a “Si- or Parissi claims the and of tion manufacture Parissi, original Clock,” he the patented lent Alarm but offered ideas to them; nothing and which do claimed Padua be sub- to with to covered developed ject co-licensing contract so the and se to the terms of a he devices himself Plaintiff, patents on them and between and a Dela- cured his own time Parissi. expense. corporation, came with the con- at his own But when Parissi ware faced being exploitation flicting patents, defend- to seek the Padua claims of these New York of judg- ants, brought declaratory Specifically made claims to them. in 1939 suit a for .parties arranged the license diversity jurisdiction the a favorable the of Company; with to permission de- the Western Electric as- court below and obtained to court, royalties ar posit good with the sure title to accrued the licensee co-licensor, trial, ranged co- to make Padua a the li After a the court construed the jointly given, licensing contract, cense Elec together with the and Western license paid paid $5,000, agreements plaintiff, giving Padua su- trie an initial which as wa* to September Im perior to Parissi on rights to ordered and moneys deposit court, mediately thereafter Parissi and en- as well directly, September 26, paid tered as those to be turned into contract appeals. 1939, basic in this to Padua. Parissi over now sm*' story goes back to when the incorporated company was as Padua Hold- In contract Parissi recites his owner- up exploit Corporation, Alarm to certain of ship patents specifically de — Parissi’s inventions of that date. Parissi by number, issue, scribed date and sub- incorporator himself was an and owner of ject duly cognizant that he “is —states sixty per stock, cent and from to possible existence or of certain moral president, vicе-president, gen- obligations” financial to Padua because of manager, operations eral its controlled and ai,¿ an(f securing assistance in management. as a director an(f He remained jn subsequent negotia “transactions or active interest from 1938 to an thereto,” specifies pertaining tions corporation his domination of the but “voluntarily desires adrnis he without reduced. 1941he ceased be an officer In legal necessity therefor, fully sion of elsewhere, employee or and went to work liquidate discharge forever any and all stockholdings disposed he He so that semblance, obligations of said nature or longer corpora- has stock control of Therefore, above-expressed for the intent tion; shows, as armed warfare case purpose, ^d both agreed hereto now obtains them. between accept following terms and considera Party herein, tions: of the First Part exploited originally The devices agrees grant grant hereby does systems company holdup alarm for Party herein, right Second Part banks, soon extended use in mercantile for and, privilege, jointly Party From this Parissi's interests establishments. Pаrt, Pirst to consummate and all gen- towards signalling instruments turned agreements relating or contracts any or erally beginning in 1931 worked above recited or claim systems light signals telephone cir- ” (I or claims contained therein have add- 9, 1937,he cuits. On March obtained three emphasis part significance of most 2,073,585-6-7,each patents, Nos. “Tel? fd discussion.) our later light, ephone System” signal and each for telephone system” provided alarm” “in terms “silent Other that all returns or patent sped- claims or many all the in each from sales licenses should to Pa dua, length November he obtained On that it fied. time present corporate Lighting for “Electric Fix- maintain its “shall exist Patent sale, ture,” ence”; upon transfer, switch consisting a combined devolution 'by patent, franchise, earlier Sholden corporate rights were covered all its patent 2,026,070, for an Clock” is- payments “Alarm to cease and all Sholden, Pa- sued E. payable became to one C. December due for the devices *3 application May agreed pay 1933. And Parissi an rissi. to $1,000 upon with an additional penmental as five Western Electric volvmg the trol quent mond, , lawyer ten earlier , _ /. per f apparatus , contract of per % for conditional to whom cent , cent to compensation above work and the execution of , units and further its own . license for recited contract. , he ten fee royalties received, . . was per r arrangement, in , and secretary, patents, cent to his obligated on an , negotiating ® reward for telephone & every subse- to „ * together pay him , McRed- as well ? patent con- the ex- in- , _ July usable with could be ploy an electric circuit that was cams, des¡red; ^ er ,, i94S) T c6, . After „ , tQ gtart ,. , ,, and Patent . one ^ 1948, upon a Clock with Visible and ln/)0 Parissi incorporated . ^ . the bdI to start , , a ^ . necessary , spring . he for a left Padua he . ^ signaL the achieyed , . clock; si , light signal, ,(cid:127) .. m tent on it . and it n ,, , « £ for its an electric wbiIe the device was . m devices ... b it .. deveIoped * granted was did ... August usin , , actuation, . the not em- ,< ... . equally clock, , .. oth him, two 28j ,, n an he working had Alarm Meanwhile Parissi been on Audible Means.” Then the difficul tly development Clock,” presented prior art, Alarm notably of a “Silent ties the and signal patent, a clock which the first a flash- Sholden were discovered and an ing light application and then after interval of a few divisional for a reissue was early minutes the least as made usual bell. At March 1949. was reis trying August 22, 1950, to 23,261 as 1936 he was interest clock com- sued as Re. with the it, panies in the' might and in summer 1939 broader claims which the sin cover gle McRedmond a number such com- cam wrote clock now omitted. bury Clock
? panies. By July, 1939, (cid:127)bility, was never used produced model, mond claimed that mony gersoll-Waterbury under oped But flashes and done, ly on demonstrations cam this McRedmond n n rissi testified that single rotating a1 ^ -r> est *ivir below; the device was due although necessary. so solved, low. (cid:127) (cid:127) : long « m clock . nothing resulting , .. to He which j ^ study, Ias ^ also difficulty companies which the earlier work had been j idea, to « point .1 ^Company it appeared to then came ^ thus shall deprive made whatever said that the is clear that intervals cam to ^ sharp ringing developed asserted point division .... by carefully filing success; to the war thereafter . it apparently clock trip demonstration the commitments of , conflict commercially. overcome; operate .between out f ,1r least failure t utility. both expressed eventual need was not courtroom be- be the same as it . project. in the one, more detail the Parissi and device ,, employed signals effort, successful- ,. bell ®. . were not McRed- i, „r Water- the In- , exploit opera- devel- be re- inter- . to it. . testi- light then then And Pa- , , he ., . , pay Parissi tional nificance whereby and a All hereof manufactured license.” the constructions- terestmg velopments” field under addm£ emPhasis into court velopments including plaintiff’s use of irrevocable able Parissi “a matter further each r . . , . ,, Meanwhile might Al of these .. clock or other device , developments relating SlIent sum, represented ., in his . ... - he m our make Plaintiff said royalty . * future, which is the $5,000, as advance the four plus .. license gave plaintiff plaintiff AIarm a°ck” n A< undoubtedly to become license patents, ¿ later entered substantial additions to matter of , , licensed been also the silent of Five Cents . plaintiff ^ . ~ ... a Nurses Call . further i. had succeeded m m m his device . and sold under these discussion.) . , -r agreed said additional de paid, however, < «1 j ,. . he . into a has made agreed to to the , improvements non-telephone additional de , non-exclusive of 1937. He incorporating Paragraph alarm royalties. $ _ special sig ,7 prize . , am (and , „ _ (5^) contract , . , System subject - . (cid:127) (cid:127) . clock, a-aln addi here, , pay- did) , this , TT . , It f any devices under made fact, concededly Plaintiff has never aware then seems suggested improvi the four and no issue arises that the contract seems of 1937 part. was, those dent on Parissi’s if case Of course it susceptible expansion ^ ls indefinite supplemental A agreement between Pa- now claimed thé and allowed plaintiff July rissi and face, trial court. But on its and with the present impor- some corrections noof expressed, limitations there fair suggests supplemental agree- tance. But a second complete adjustment release, ness a. of March into in entered payments lump royalty will1 sum and order to make the first “moré Parissi and satisfaction of his counsel s con- definite”; specified and it the additional claim, tingent speculative with main patents included, three, among *4 referring g°in£ return t0 Padua. Parissi’s own So which was Patent on the silent up- claim lack of cannot consideration .be complaint alarm clock. In its here held; obviously adequate there was consid plaintiff agree- embodied the three license eration. ments, together with the Parissi-Padua con-' September 26, 1939, tract of and asked a just point Seсond. While the discussed parties declaration rights as to the to case, seems me I to decisive of the now turn royalties from it. Parissi Pa- due ^o the agreements license been have answered, only dua cross- made s,uch given operative effect I below. As against claims other. The district each it, interpretation understand I upheld cross-claim, court ruling Padua’s suggested above of the 1939 contract be- plain- agreement Parissi s license with accepted tween Parissi and Padua would be royalty tiff had drawing effect of by except language form and for the payments within the terms earlier Pa- license, supplement particularly the 1945 September 26, rissi-Padua contract of 1939. by amplification. ed the 1949 How those my In discussion I shall first deal in turn agreements, party iater with another can agreements these so essential Pa- to expand serve to the definite earlier contract dua’s claim and I thereafter shall turn to j submit, never made Seemingly clear. the collateral issues in the case. ¡s thought that Parissi has added his later single pool invention to a indivisible my view, only proper ques- First. In and that because this willful act he can tion here is whеther or not the Parissi-Pa- ions'®1,separate the new contribution September 26, 1939, dua contract of in- ^rom the °id and has lost all. is a coil- This eludes in fair developments intent such later analogous apparently somewhat cePt question as the hele in relate to. as, instance, fungible goods, wheat quite And to me it is reasonably clear that it intentionally commingled grain in a eleva does not. The is contract in terms limited compelled wrongdoer tor where the is patents specifically to the four named and suffer because his contribution cannot be described, as additionally by is made clear judge phrased identified. The district emphasized above, the words I namely, “any licensing contem -^e all of the above recited plates priv consideration for a total total claitmor claims contained therein.” There split by Xt either not now ma7 ileSe- hardly could language be clearer of limita- But or the Court. it is believed Parties that such a conclusion cannot be sustained tion than this. background and sur- rounding support circumstances also authority, on reason or dispute view. A having arisen as Pa- possible obligations, rissi’s partially at lеast difficulty found essential court moral, he desires to settle it for all time appears from the fact to stem that the adjustments payments outlined under which Padua now claims the license silent, Nothing above. at all is said as to the in form to related several clock, although parties alarm been —eventually a total seven—but consti tinkering with it for than years, more agreement. three only single tuted There is no The whole is payment instinct pro- transaction with the ground holding understanding parties that the They settling certainly indivisible. visions take their differences permanently. It ap- questions now of all care conceivable pat- to make the cents true statement pay five and obvious plaintiff portionment; license, part of a transfer ent in produced under on each clock To specifically N.E. earlier described Corbin, Ming 142 N.Y. v. See below, it anticipate discussed here a matter general law nothing There is 105. relinquishment of specific e., (i. con- is far from the so-called indivisible contracts in 1946 applies as claim such as consideration where the tracts by Parissi answering a state court suit quite different situation govern this unit) to attempt- Finally Padua’s raising an earlier this issue. party’s rights under a third license, Contracts, adoption of the ed ratification agreement. See 3 Corbin on §§ herein, seems specifical- by stating answer 694-697, Certainly so in its the case quite meaningless. Co. v. on, Mfg. me ly Automatic Radio relied Research, S.Ct. U.S. Hazeltine in the license Hence .find no basis hold- contains no such L.Ed. extension of agreements for a substantial entirely different ing. That dealt justify the result be- the 1939 contract agree- validity licensing matter —the passed upon low. These all the issues are large number covering a ments judge argued the trial *5 precedents barring “tie- antitrust under appeal. But some has on this holding that such arrangements. in” possibil- as to the arisen within court licensings per aggregate are se misuse beyond ity claim Padua outside 0f a says, most, grant at that a the contracts. To this I now turn. , , patentee may pool patents, his at least some- . ... , question just answer to the (cid:127) .... Third. The ft i „ what; affirming any compul- . it far from ... is . ~ 1 , him to do possible L claim Padua . raised of further Jr that, too, upon so, .... sion at ^ to seems, me, clear; is most no such claim parties. j behest of third ^ -n 1 justified the facts and pressed, seem analogies, surprised less еven Other be indeed at made it and would hope hardly far-fetched. Padua can more suggestion. its beneficiary, third-party since claim as claim, IrreSpective the lack of of Pariss¡ (even law otherwise if New York possibility might be considered permit) intent licenses not show no thig developed &trustee of invention as one benefit are instinct or desire to on its time and for benefit seems not at its contrary purpose. Nor can the with permissible all on this record. As we have developments m reference future seen, complete made a settlement 1945 license-in the words have italicized at a time wdl after considerable 1939> as an a basis above-be taken admission or given development had been attention t0 estoppel m the to include this device back_ Against of a süent alarm dock. point Passing earlier transfer. whether Qn ground) new and further burden relinquishment fundamental such a parissi Qn very must be based dther properly m an could be discovered rights defin¡te dear and new contract or dse such agreement collateral to the mam trans- so extensive of Padua use faciiities as t0 lead fer, clear that the statement is it is at оnce directly t0 the fruition of the inventive colorless to have effect too innocent and idea> For an inventor’s ideas are his own crowded field of inven- suggested. In this disposes of them unkss require tion, crowded as division so Qr by justify may shop conduct whidl patent as recounted Parissi’s and reissue of rights employer. He bis is not bound to party above, one not a to the a statement up yidd Ws invention the mere fact of he had made transfer additional initial employment though may have con- —even subject developments matter relating to the tinued, here, as it did not until invention patents seems innocuous in- of his earlier was achieved. United States v. Dubilier additional These several deed. 178, Corp., Condenser 289 U.S. 53 S.Ct. to Parissi’s tele- “related” were earlier 554, 1114, 1488, 85 L.Ed. A.L.R. 77 signal as these phonic in turn 1512; Heywood-Wakefield annotation sig- holdup still earlier Parissi’s alarm Cir., 716, Small, Co. v. 87 F.2d certiorari nothing But 925, nals. this perfectly there U.S. denied 301 57 S.Ct. 81 L.Ed. 1353; American Loom v. Circular consistent- Co. record in court below Wilson, 133; ly 198 Mass. N.E. Mc bears out view. cross-daim In its Powell, App.Div. Namara preliminary v. Padua made allegations 491; relationship White Heat Products Co. N.Y.S.2d Parissi’s interconnections Thomas, 685; Dy v. 266 Pa. 109 A. alleged it and then the 1939 contract D.C.Conn., Rand, Inc., Remington ordering sart v. prayed first for a decree Here, 40 F.Supp assign whether we take As Parissi to it. five testimony Parissi’s that the work un prayer, second alternative it asked successful or McRedmond’s that eventu for a decree holding the 1939 contract ally produced clock, wholly a workable it is full force pay- and effect and requiring clear finally that this was not the clock it of all ment to under the Gen- used nor licenses, was the idea which it was Time also an in- eral eventually employed plaintiff’s junction based entering prohibiting Parissi from products. any agreement persons into with third re- specting patents, specifically of the five substantially in its This Padua concedes prayers, described their numbers. Final True, upon the contracts. it does reliance eve11^neither of the first two were allegations make Parissi abused his granted, $5,000 asked for the return of the fiduciary But that these position with it. September Parissi on Paid atmospheric, are rather than supporting usua^ such other and relief that further ultimate, allegations made clear time ’ may proper. ^be Court seem At the of the asser- again. The uttermost reach ^ial Padua s counsel took the unusual appears carefully tion Padua’s prayers course amending for relief *6 brief framed final statement in its shrewdly patent, a11 strike out reference to the last properly de- “While the case was us: here, important only one —the by Judge the on the basis termined District ^°; highlighted by is This the court s state- contracts, and while we feel that the two ment: So that affect the [iic] unnecessary depart from it is the particular amendment is to eliminate those the contracts in order to reach corners of patents 244748 from the [$¿c] law suit?” decision, always proper borne the it must response: “We and counsel’s 'have asked of- in that Parissi was mind they assign here that to us. We are re- ficer of Padua but was director linquishing colloquies that.” in And many Consequently, years ego. its it alter at the the the court trial counsel end that Parissi un- respectfully is submitted is position amplified his that Padua further obligation der a much heavier toward Padua one ordinarily party making any the ccese under the them is was not claim new (Emphasis supplied.) itself, directly But patent a contract.” or Parissi what party employ; contract it is as a to a that hе left its it still after he had invented contract, held, only— and for that-—and under claiming is to be that its was instead fairly contemplated abundantly in from the the which the is made That clear margin.1 quoted the contract. making extracts you say about as do far Court: What 1945 until 1948 1. “The From patent was proposition is concerned it that this clock which the clock was the original by patented solely represented Parissi after he left and the now being manufactured, patent apparently in application. issued The is first now patent being least, there used it until 1950 that or and wasn’t product application The re Time his for patent re-issue. was an occurring skill, both, in in it issued or after his that suit mind company that reads ex- from a claim and not there was severance agree part contemplation actly The fact that that there. within instru Time the General 1945 when from ment? say agreement signed Kenway: until To I first that “Mr. that they they applied claiming re-issue interest in is not when Padua anything asserting there he left under the shield he invented after the em- patent corporation. in itself read ploy second claim the exactly thing say- there. That is what in on the clock answer is this: referrеd contracts, above and the evidence makes background which under- It is this invalidity, to, in the absence of fraud rec- developments in. the standable other dis And he thereon.” so bearing ord, opening statement such as the upholds agree cusses contracts and agree- the two relying on Padua’s counsel li ments, ratified the that Padua has finds here are concluding that “We ments and a decree en- plaintiff, and directs honestly cense to we per cent that eighty to collect roy ordering the forcing the contracts and to,” not—be are believe we entitled judgment over to Padua. alties figure per hundred or some noted—one cent provi in its further goes even figure. in its entered So other than the contract moneys received sion that on the con- again it relied final brief below by it in ac- be distributed under it “shall stressing Parissi’s tracts and ended conditions of the terms and cordance with “desperate attempts fulfillment avoid Sep Parissi” of with said agreement to the terms up to live obligation his clear re- Padua was to 1939. Thus And its tember Padua.” of his per eighty nothing agreed over its ceive only contention forth as its brief to us sets lawyer cent, while Parissi and his took obviously correct judge “was me twenty per This seems to cent. contracts were not sever- holding that the wanted quite as to what Padua conclusive payments made royalty able and that bearing on the gave. and the court Its consideration by General Time are total appealability discussed below privilege.” for a total obvious, seems also judge accepted The trial and acted approach. opinion: lie states his I add that even on Padua’s own conten tions, “The considerable evidence received relat- some incoherence there seems ing development apparently the alarm clock what it At one time claims. flashing which contains and audible both claim to this intended no kind as signals, its status at the time plaintiff Parissi ceased invention. For in after Padua-, employment with efforts question upon finding his the 1939 con- raised exploit perfect device, office, made to tract on file not been findings overlooked. No are against started a state court *7 suit thereon, made no declaratory judg based discussion attempting to obtain necessary thereof is deemed for the claim on reason ment from Padua’s releasing him rights obligations par- that the president invention and Padua’s sep saying ties are included within the terms of the “a an answer as verified Consequently Kenway: he he Yes. had before left. we “Mr. you certainly Well, still do that are entitled to col- then feel we “The Court: royalties right period. to recover lect for that the claim then patent? “The reason I struck from com- of that the for the use plaint original Kenway: patent of that Not for the use the reference to the “Mr. right alone, patent still claim was it has been re-issued and in but we the because process royalties in- under the license the of the re-issue the claims to receive volving which have four have been narrowed down to what in- the other he employ. expired. vented after he left the not longer prayed original patent original pleadings we no exists. That “In our assign pat- us of that clock was surrendered to the Commissioner the Court that was filed then the re- and all is is re-issue After the suit Patents there the ent. very along no and we felt had and that has claims that we are issue came we That does not af He did that after he left to the re-issue. clear about. claim trying employ may situation. We are not for whatever worth it be. feet the the royalties any patent. application We are came But until that re-issue claim trying agree- production claim on two afforded Parissi was out the Supreme ments, describing said it and the Court the same clock before he left. they import get any if made difference I full wouldn’t have “The Court: Did the prae say your you made a clock or had never never statement there? Did of agreement. patent issued, in this Ex- ticed they invention that now which is the .If only you and decided to made locomotives hibit 20 contains claims which say I to eol then we are entitled after concede were invented lect.” he left? á58 any payments to defense,” the De- termination “That
arate affirmative being the date claim, November that nor has fendant does not now original expiration so- of the last of the claimed, any in the time interest reason, see no invention to Parissi. can ‘silent alarm clock’ or called equity, for except perhaps some paragraphs general thereof referred to in roy terminating Either the 3, 4, 5, such a complaint 7 or date. numbered not; they Padua's go alties Padua or do may made in contract the Plaintiff up hardly propped on the basis right can- be basis of therewith.” On the connection applicable other, thereby, presently, some suit, his this Parissi withdrew oddity requiring apart else, I realize the providing all the ele- from all patents in payments Padua after all estoppel Padua from mak- against ments of interest have ex- any formal present on the which ing claim. McRedmond submit, re- pired. suggests, I away But that explain this answer stand tried to réquir interpretation examination just what saying he did not know Paris- conclusion, than a re ing so rather claiming, odd si contention was a dubious shaped only equities surely suit used un- light language chancellor’s foot. fraud. of some For availing absence very Padua for the suit itself called pMrá ap A as final was Padua s bus:- answer and it definite pealab;lity has. been raised judgment and how it was answer- ness know what Qnly court; wMlin the wiu ln^‘ surprised litigants often find are to questions jurisdiction they arising long some doubt how Again Padua shows imagined. had never But to me the answer colloquy to continue. In its claim is clear. above, issue is also most On quoted Padua’s coun- in footnote one analysis above, judge decided the trial period from 1945 to 1950 sel refers to decision, only question him for before with its more first when Parissi’s Consequently the was most def- judgment with a existence extensive claims initely judge’s final. No occasion exactly” clock that “read claim further it final under Fed. action to render by Parissi be- to have been claimed presented, 54(b) Rule Civ.Proc. since adds, left in 1941. Then fore Parissi applies only that to an order “which ad certain- “Consequently we feel we are judicates than claims.” all the less period.” ly Not to collect for entitled statement, implication of this jn my position be mis order that clearly argument his logic add think the re- understood I sujj. that I same there be suggest event should would follow asserted *8 any Padua after after payment to pressed an alternative claim to Paris- hold affecting Padua was no claim which time sj patent, trustee for it of this and had Parissi device. But being utilized judge made this same decision. For the jj. question period in the conten- even for that, by wholly very would be this clear unacceptable. appears General Time tion act,.the judge rejecting was the alternative accept pay, nor did Parissi did use or not one based claim favor of the according made royalties, for a device grant not (Indeed, contract. could them he admittedly parts of and invalid the broader once; eighty per this cent both patent grant. Since no original one prevented.) feature the contract Cer injured, ap- no reason was defrauded prevented tainly a from judgment is not accepted part parties why pears being judge final if the does in words from normal effect not have its should every presented theory elaborate on Padua, original why license or time judge a thinks he has When counsel. profit the harmless stranger, should a case, £na.lly adjudicated a and a renders illegal claim. assertion may complete judgment, that is final. He theory error in the he re- committed termination of Padua’s have This theory accepted; he as in the my jected well royalty troubled alleged claims also appeal— on be corrected suggests but that should CHASE, as a date who brother 9th, and March appeal. The Nos. purpose that indeed is System,” “Telephone a judgment each for very not render error should rule, 9th, and on No. 2098631for an judgment November unappealable. The final many Lighting “Electric Fixture.” practice, has traditional in federal form and appeals on preventing merits in t¡me At ^ the inventions procedure to the limiting m review issued) Parissi was whi<± these ts pressed to the merits. It not be should employed heiped or which he had Padua> , pomt r . . an mstru- . becomes where itself ... lrvon- 1920, ganize majority of stock . m a owned . technicality, preventing review ment of management. dominant in its West- (cid:127) judge and the matters which the . t Inc. became -l ,, , been Co., interested v em Electric . ,, ,, thought propriety f entire —with —had patents obtaining right m jn use these ...... f ontativey ispose aut o jn tbg dejd andj telephone WOrdsof Parissi, conclude, therefore, that I djstrict court, plainly apparent £be “it is Padua, in is- is entitled to the expedient became obtain sue, respect pat- to the clock payable with consent of both Parissi Padua to 2,444,748, pay- ented Patent No. agreement execution of a license with in^ respect this device are not ments with Consequently, September Western.” by the Parissi-Padua contract of covered agreement Parissi made an 26, 1939, September judg- giving right to Padua the to li ment the district court should so de- Co., Inc., jointly cense Western Electric judgment is reversed clare. The therefore ex_ with Parissi and this Hcense was judg- action is remanded for a and the Sep about week 0n ecuted a later. opinion. in accordance with this tember Parissi and Padua en tered agreement, into another the recited CHASE, (dissenting Judge Circuit m possible consideration for being which “the Par^' existence certain moral or financial obli agree Judge CLARK that we have .gations any accrued to (Padua), because of jurisdiction appeal on the to decide aid any or assistance of nature whatsoever but, reversing judg- merits instead of (Parissi) pursuit rendered to his ment, modify respect I would it in one * * * achievement in acquiring then affirm it as modified. above any recited or in subsequent negotiations per- transactions or Corporation, The General Time Dela- *¥ ¥” taining thereto In agree- corporation, brought ware this action ment, “agrees grant and does declaratory judgment against Padua Alarm hereby grant (Padua) right priv Systems, Inc., corporation New York jointly with (Parissi), to consum Parissi, called and one ile£e> hereinafter agreements mate and all or contracts York, resident New determine relating or all of the above recited royalty the defendants was entitled to claim or claims contained payments plaintiff which the obligat- therein.” The patents” “recited ed to as licensee under a li- forth, the four hereinabove set cense entered into between Gen- *9 The contract provided further “that eral and Parissi. After trial Time with- and monies or other valuable consider- jury, out a the court that PadUa held was accruing sales, ations from leases, licenses, royalties judg- entitled to the and entered contracts, etc. as above referred to shall effect. ment to that Defendant Parissi has paid in full (Padua)” and appealed. Decision here turns' that the per “ten interpretation pay cent proper given (10%) to be to two of all mon contracts, ies or agreement the valuable mentioned license considerations re- agreement and an royalties, above between Padua ceived sales or other trans- disposition royalty and Parissi for involving actions above recited patents. certain pаyments on of them” to Parissi. Padua also agreed granted that to Parissi “the
The facts are Parissi was sum of One patents in as ($1000) upon four follows: On Thousand Dollars the execu- 360 each, ap patents and con- sion every above listed delivery tion and May plication agreement in hereto, shall which subsequent tract dated 1945.” manufacture, use, lease or
license others to units.” apparatus telephone control sell plain parties 'From this it U. S. agreement This was recorded to, did, it certain that make intended 11, 1945. May Patent on Office clock, 2,444,748, Patent No. was patents, ters irrevocable license * * * any improvements By this Parissi has or hereafter make or ented or same red executed another cense above mentioned in said additional forth, follows: relating states ents, Corporation Call General Time Instruments sented _ . “1. On March ^ On *, , to that subject ^ Patent said System , four-patents m . ,* , May T Letters had “made , license, applications, the above developments unpatented, , £ n ** ia m\aí! following matter he May , may hereafter , .p, Patent are included m the subject , General 1945 Parissi J was the developments granted “a develop, Application agreement a Silent Alarm Clock." A 1- additional under said thereon thereof, ’ , identified 1945 and which United matter further a Nurses’ including these same Time . owner of which and/or . , Corporation li- inventions . non-exclusive, whether , j developments which refer- executed the acquire title, Parissi of said Instruments patents and States Let- (cid:127) £ for United provided represented agreement: and under relating , ° he to which [1] . , t t .j . repre- these may pat- pat- _c , i. set parties, men^ license. with an ment , tured or position incorporating royalties payable and been 'which were to be * * * sold clocks covered ered license cense. granted in ceive, able to five cents “for each Corporation , The licensee T It . Parissi $5000 which - agreement, telephone . was held ’ , by . 1° (cid:127) in this under its on granted where t> Padua the other l36 sold, ¿ order , - manufactured and additional j credited subject accordance .. consideration Parissi, upon action. ^ L that (cid:127) they and electric has made on since as agreement yet, any of into General May under patents grouped A \ since matter ,, by Patent payable are held against constructions clock or it was entitled to re court, advance T, It has not manufac with the final a license manufactured and , Time Instruments , . stipulation payment £ the execution of the devices cov included in the future socket sold in accordance subject No. other device royalty pay- the rate of , . , under This 2,444,748 in the li . covering / royalties payment licensed accrued . a1 $5000 judg , . pay dis- - o o aaa >~ta 2,444,748 Patent No 1-11-49 7-6-48 n r Issued ao y^QSiris Clock r*i 0C 6 . * .... Audible Title Visible Alarm A1 Lamp “ui terest, mumty aparate Time were not Even any and ented devices * though from claims all of royalties payable by the license J them. but were apportioned which for the included other Padua had no in- payable infringement , between * _ for im- pat- Although granted this license uni- Application laterally, privilege exercised No. Filed Title co-licensor the. t0 act as 705,068 Signalling Device 10-23-46 by ratifying it had an interest and, consequently, it is now to be present shall license “2. *10 though originally any agree- given of effect as been modify of the terms the way provision by both. There was no May granted shall it exclude of nor ment computation royalties which for which past, present, or future invention any solely agreement May 14, payable for manufacture would be included is patented particular present any purpose of and sale of device sole The computed were royalties but were be to make is definite inclu- agreement
361 may have advantage that protection, whatever payable secured the entire license with General given negotiations him in his unit, per at five for the manufacture cents up execution leading to the every which, for the Time but and sale device what- license, the burden he should bear license, any of the infringed would have his contract flows from pro disadvantage ever In the absence of such royalties Padua. vision for the the with allocation of being to failure of the licensee for the time however, judgment respect, in 0ne anything more ma.ke sell covered payments provides It that all too broad. patent than does not the fact that one alter subsequent under the Time license royalties paid only for the tó court shall be made those into protection presently needed for the as patents of the four cov Padua. latest protection surance of the to the other agreement with Parissi will ex- ered patents might whenever licensee need date, p¡re on November 1954. After agreed price It it. it did to ob agreement apply the license will m tain freedo to do business for the life patents covering so-called additional de infringing license without of the velopments and in Padua has no in- which patents and, by it it would covered whether Consequently, pro- failure to terest. price anything less is royalties vide for the allocation of between conjecture. privi
but matter of a groups patents the two will then no lege patents group covered the as a longer controlling judgment and the price whole and to measure the for that should, accordingly, be modified to make privilege per entire a flat rate cents royalties accruing after November product unit of a part as to which of payable to Parissi. 94,L.Ed. borough, Cir., Rappaport, Cir., Research, Inc., any judicial payable. Cf. Cosden Oil alties covered Cf. cense Any seeming apparen privilege Automatic Radio basis of whether one to a devices on 1312. Their that intent controls to particular patent was exercised was division rom t 339 U.S. harshness 55 F.2d 41 F.2d e Mfg. intent anguage allocation of 634; Co. resulting Co. 70 S.Ct. v. Hazeltine permissible. Traiman v. o v. or more prevent respect A.L.R. i et Scar from Parissi severed his connection with Padua roy are «tolling made certam mventl0ns and n,ectlons the dent> £eneral manaSer> patents covering these inventions. After the Course entered mt0 before he had severed his con' merd As so -dtTBIGGS, Parlssi- t status of modified) dissenting Circuit stockholder a tbe comPany> hls co-licensor with him under number T would emP,oyment Judge (concurring part). policy-maker, and affirm 7ears Padua, by contract, &ave b7 tbe during Presi" judg_ m this construction of the license he entered into a series of contracts with follows not anything from inherent in such General Time for the manufacture of an construction, itself, or in the license but “Electric Clock with Visible and Audible prior because of between contract Alarm Means.” proceeded General Time Padua and Parissi. On the facts of this to manufacture and sell the kind of clocks record that seems to have been an im- arid, dispute referred to having arisen provident part one on the though, Parissi and between Padua as to who is en- to, if all appeared, they the circumstances royalties, Time, titled from General might show that it was not. However that brought General Time a declaratory judg may be, require did Parissi to tie action pursuant court below Declaratory Judgments Act, into a license of those in which the 28 U.S.C. 2201, paying the interest, amount of Padua had an due § from it into court. did, however, which it had none. He tie part them in as of the inducement to Gen- Parissi answered General Time’s com Time to Having take the license. plaint eral as did Parissi asserting (1) *11 362 “* * * patents that he is the al pay true 'Time to Parissi owner should * * * thereby during
and of the device covered agree- terms of [the] *** royalties, royalty therefore is entitled to all the and ment a Five Cents ” * * * (2) that under the instant circumstances for each clock or device Padua is not incorporating benefit from constructions entitled licensed granted paragraph designates licenses to him Paragraph General “1” 1, patents supra. Time. Padua then filed an and a four answer named in note This paid by it at entitled and the nothing. paying it under the contracts and that for Padua for the cross-claim in which , ternative, r . The court below held that Padua was May ... , some r> .. count , , (cid:127) . -d Parissi preceding paragraph to the length ,, , must be that Parissi to Parissi. Parissi has ™ The therefore (cid:127) ° , .1 . divided m ,, -r, matters ianf 10% r , ,, , hereinafter. paid by .. (cid:127) (cid:127) , patents thereof, ., _ Parissi (cid:127) referred is but a mere trustee . , referred opinion , . , . asserted that all r less General Time to r ~ , . and the device and, . ...... are discussed to, , t 10% , entitled to . m the al- appealed. . (cid:127) it m turn ,... appears. m n n , to be , . . , . issue view of Exhibit subject 1950) for a Visible and Audible Alarm troversy. No. .... .1 Patent bocket, „ (Exhibit .. B is not . The ... , ) ' 258,724, u> Patent No> ’ J V Signalling Device, contract of , No. t0 its which reference was made . l945¡ and an The C , ~ 2,444,748 -A A, [1] pertinent for an ) and made the latter royalty provisions. A Re contract of 23,261, specifically Application . . July 12, T , „ 7, Incandescent for granted the contract ... . the instant con- within March Means, a , “Clock with ,T No. incorporated . August , . (cid:127) (Exhibit „ , 705,068, patents during Patent ’ Lamp T . pur .... 1949 . , , , It is more I believe deal trial, convenient the course re- of the divisional first with status under 2,444,748, 6, 1948, Padua and Parissi’s July issue of No. issued subject 613,070, the contracts since this is the matter Application August S. N. filed respective opinions my 28, dealt with in the patent 1945. The reissue also was for CHASE and brothers CLARK. a “Clock with Visible and Audible Alarm , , -p, By ,, .«or, Means.” There seems to be no doubt that _ (cid:127) , September 6, , , , contract of . j manufacturing - (cid:127) Time is an alarm /t- I r> Parissi nPadua, (Exhibit ) gave , , . D we . . r n - , , , clock with a visible audible means of . . . . _ stated, , , , , , co-licensor for . . the status of a . . . . have, , , , purview . alarm which is withm the of Re- r r i _ ... m the footnote.1 . the four named . ^ . nr o _ Parissi 23,261 2,- . issue Patent No. . Patent No. ’ agreed . license fees accru- ... . that all ... n ., 444,748 purview . and within the and cov „ „ ... these should ing under x i i o era£e thereof Padua in turn to 10% May But By contract of trial Padua moved to strike to Parissi. paragraphs out of one “A”) gave Parissi General Time and two (Exhibit prayers cross-complaint license in the irrevocable refer- a non-exclusive 2,444,748. ence to Patent No. The reason non-telephone under the field specified the amendment was that Re- note 1 in return stated for designated in 23,261 contract, however, granted Patent No. had been con issue royalties. represented been and Patent No. sur whereby tained clauses developments Patent Office. Padua did additional rendered to the he had complaint subject pat matter not move to amend assert relating to 23,261, Reissue Patent rights No. Alarm Clock.” under ents, including “Silent position that the claims of phrase suрplies taking comes Then represented discoveries made in the view of the reissue contention bone sole he left Padua’s my employ- after Brethren of this below court striking the provided The amendment refer- ment. “A” Gener Exhibit court. 2,098,631, 2,073,585, November March No. No. follows: 1. As Lighting System,” 2,- “Telephone Fixtures.” “Electric No. date, was entered into 073,586, for the same same Company, 2,073,587, matter, Electric subject Western of the same because licensee, No. questions “Telephone System,” settle all re desired to date, for a also lating to to the title *12 ties, paid to to granted was be 2,444,748 of which was- enees to Patent No. 10% Parissi, by "D.” specified as Exhibit by the court below. of Padua respective ad- statuses in Padua As to the the court below At trial hereinbe separate and the contracts on two Parissi under theories based vanced two ex- to, opinion, fore am the first referred claims. Under and distinct give CLARK, that to by by my that virtue brother pressed these Padua asserted from royalties contracts, it entitled the benefits standing was Padua under the is Time by General paid into court because royalties General Time to recover the required to clocks selling alarm manufacturing in was Time turn General 23,261, 2,444,748,and By the second pay to Parissi. Patents Nos. thereof under’ 10% De upon was Padua. claim, asserted it a windfall Padua is to confer alternate “A” Parissi Exhibit spite it the status in the fact that entitled have conferred non-telephone patents the four in the recites that disclosures of beneficial owner patents designated supra, by and therefore the four field covered designated in note deduction, to General without be licensed royalties were to entitled all note claim, of Exhibit paragraphs is clear that' it 1 and 2 As to the first' it Time and paid by royalties Padua. Padua are hotly pressed provide “A” that and is was claim, figure by single Time stated the second at not abandon General did developments desig patents in- pursued vaguely if nonetheless by employed General decisively does not nated thereunder be court below particular specifies dis- and Exhibit “C” it in this court. This matter Time assert developments were length patents hereinafter. on which greater cussed based, profit can the license Padua from that it entitled Padua first contended “A” agreements embodied in Exhibits paid by Time royalties Gеneral because third-party beneficiary only some “c” required pay General Time is theory recognized by the law of New incorporat each or other device clock “for ” or, aware, by * I am * * insofar as that Yol'k sig audible ing the visual and any other State.3 “A” required by Exhibit nal device as patents simply “D” Exhibit makes Padua co- original four covered whether therein, patents employed “D” by are or are not licensor of four named Exhibit words, by contains Time. In other That contract no reference what- General Padua developments own soever to future that Parissi his volun contends in the fields tary coverage act included within covered the four patents patents given rights named in and Padua is Exhibit “A” the four there- True, opinion developments Parissi by and the under. Exhibits “A” and note to this patents, non-telephone “C” two field and the included the additional thereof 23,261, covering “A” designated Exhibits and Nos. later developments, course, 2,444,748; “C,” save, pool, thereby in the Patent No. therefore, compelled pay in royal fit to General Time to since saw pool prescribed ties if patents in kind of in the clude the pool were used General Time. originally embraced the other But royal this case we patents, entitled to the are concerned belowissue to whether or by General Time. The court not General Time ties pay must but with the (as Judge does Chase of ncluded2 co whom, Parissi or must court) that view was correct and General royalties. Time Padua is this reason entitled to Time pay royalties if any must royalties in accordance with of the six share under which is licensed “D.” court concluded that are used it. Exhibit royal- by parties. So much is conceded entitled 100% publication. opinion reported the contracts entered where were into 2. No they bat bttle t0 pre- problem of laws is in conflicts 3. No per o e orme despite the fact the record be- sented gives no information as this court fore *13 B6á Parissi, 54(b), General Civ.Proc., . licensed Rule provides But the fact that Fed.Rules “A” that that
Time and
in Exhibit
recited
United States District Court can ad-
judicate
first
developments
multiple
made under
one of
only upon
claims
licensed
and were
express
were also
an
that such an ad-
determination
a ben-
make Padua
judication
cannot
justice
Time
serve the ends of
will
General
efiсiary
agreement.
upon
express
the license
judg
of
an
to enter
direction
ment on
claim.
an
an
that
Such
order is
mov-
no valid consideration
There was.
appealable
purview
one within the
the con-
under
from Parissi to Padua
ing
U.S.C. 1291.4
§
“A” or
Exhibits
“C.”
tracts embodied in.
beneficiary
to or
party
Padua
not a
Padua
the instant suit has
two
.
in
asserted
contracts,
legally cog-
which,
no
under these
claims
causes of action
and two
in-,
therein,
First,
was not
nizable interest
have been
to.
hereinbefore referred
that Padua
fact
to have such.
tended
that it is
to the sta
entitled
claims
The
statements
agreements
ratified these
tus of a co-licensor
under.
in-
unavailing
pleading is
in its
designated
.hereinbefore
and as such
not-acquire
receive,
con--
roy
One does
irrelevant.
is.
deed
co-licensor
entitled
all
rights by ratifying
Time,
an
paid by
in turn
alties
General
tracf
apd
party
under which
one is not a
The
paying
thereof.
second
_
Parissi 10%
,
It is not
a benefit.
one is not to receive
in effect that
claim and
asserted
cause
sensibly.
nor
suggested by
declaring
even
decree
Padua is entitled to a
profit
be,
presently
Padua can
could it
that
of the
If
to bе the true owner
unheard
the-
prevail
theory
new
hitherto
-some
Padua were
it.
under
Judge
As
ory
third-party
get
beneficiaries.
all
from General
complete
pointed
get nothing.
out there is
CLARK has
Time and Parissi would
legal
connection
logical
in both
contract claim were
hiatus
contract action and
between disposed
Padua and the contracts
below
an or-
between
the court
in
and Parissi as embodied
Time
The cause of action and the
der entered.
agree
'with the
“A” and “C.”
trust thesis have never
Exhibits
claim based on the
expressed
regard to
adjudicated by
he has
below. The
conclusions
the court
been
pass upon
under the con-
expressly
of the
did not
the statuses
court below
Padua. See
tracts.
.
the trust claim asserted
n
(cid:127) n
,,
My difficulty
,,
,
,
(cid:127)
(cid:127)
,,
j-
particular
v
paragraphs
the first and fourth
i-rn
r
r
disposing
„
,
of the instant
.
.
.
,
,
,,
.
opinion
heading
.
.
Discus-
.
under the
-o
L,
„
,
,
,
,,
on the merits on
.
case m favor of
.
,
,
-
.
court below did
make
.
sion. The
£
present
,
,
, ,
the assertion
stems from
record
.-
...
,,
,
by
,
required by
or
direction
L
Padua
-
determination
,
theory,
,
of the trust
second
™
The
,-
,
,
,
,
,
-
54(b).
not,
.
. .
.
hereinbefore referred
.
made was
Rule
order
'v -
n .
to, whereby
,
,
.
.
. .
.
claim _
,.
therefore,
pur
within the
a final-decision
...
’
upon
have conferred
seeks
Padüa
1291.,
view of U.S.C. §
r .-i x
°
pat-
the four
beneficial owner of
status
1, supra,'
majority opinion of the court in this
claiming
'in nóte
designated
e'nts
position that even if Padua
regard
Parissi is a mere trustee de
takes the
in effect
may
two-alternative'claims,-accept-
it,
pressed
Padua. This claim
tort
son
my view
claim the court
is
possess merit but
it is
of one
may not
anee
below
since,
rejection
jurisdiction,
power,
necessarily
our
to ad-
our
beyond
view,
appeal
majority
the claims are alter-
instant
because of it.
judicate the
judgment,
entry
54(b),
Civ.Proc., pro-
press
direction
tbe
Fed.Rules
4. Rule
absence of sucb determination
follows:
tbe
In
vides
direction,
any order or other
form
than
claim for relief
more
one
“When
decision,
designated,
action,
however
which ad
presented
an
whether as
is
judieates
counter-claim, cross-claim,
all the claims shall not
daim,
less than
third-
may
claim,
party
as to
the action
the court
direct
the en-
terminate
judgment upon
claims,
try
and the order or other
form of
final
one or more
aof
subject
upon
revision
claims
time
than
decision
less
entry
judgment
adjudiсat
express
determination
there
before
an
upon
delay
ing
just
claims.”
ex-
all the
reason
no
Padua’s
speculate
meaning
court
as to the
But the
mutually exclusive.
nate or
for the con-
apparent
conduct at the
based
trial is
claim
adjudicated the
below, if it had
can be
elusion
that there was abandonment
held
theory,
could
the trust
rec-
sustained in
other fashion on this
royalties,
all the
entitled to
Padua was
*14
argument,
nothing
ord.5 There is
in the
trial court
that a
The fact
them.
of
90%
decides that a
counsel, or
colloquy
between court and
of
party is entitled
90%
royal-
parties
of
of the
in the court be-
claim
briefs
royalties, when a
for 100%
6
action,
cause of
an alternate
made in
the issue. What
ties is
low
is decisive of
recovery
possibility
does
exclude the
by
par-
said
and the
done
counsel
not ad-
the latter was
on a
claim if
ambiguous.7
ties was
This is one of
100%
mutually
judicated.
where two
It is
54(b)
precisely
Rule
situations which
adjudicated that
exclusive
are both
meet,
claims
framed to
operates.
In
principle of exclusiveness
presents
finely
The case at
no
drawn
bar
trial
made- ex-
the instant case the
court
*ssues suсb as were before
court in
this
claim in
press
the trust
reference
Mills, Cir.,
Flegenheimer
2
191
v. General
that it
opinion and stated in effect
would
237, 241; Lopinsky
F.2d
v. Hertz Drive-
it. The trial court seems
not determine
Systems, 2 Cir.,
Ur-Self
194 F.2d
the view that
claims and
have been
both
Telechron, Inc.,
Parissi, Cir.,
v.
F.2d
2
197
purview
action were within the
causes of
Appeals
before the Court
of the
This was
contracts.
erroneous.
,,
...
for the Third Circuit
Bendix Aviati
majority opinion
say
does not
n
o
,,
j-j-.j.v
Corp. Glass,
(cid:127)
195
...
v.
F.2d 267. The 1
adjudicated
trial
court
the issue or
IS a
one-
that 1
slmPle
Presented
must dlffer
reSret
presented by
theory.
claim
-The
trust
Brethren who have
from
majority view is
Padua
abandoned the
distinguished
application
themselves m the
theory
trust
claim and that the
trial
and creation
the Federal Rules of Civil
liberty
court was therefore at
not to ad-
my
Procedure. It is
view
we are with
judicate
majority pitches
it. The
its de-
dispose
out
of the instant case
P°wer
squarely
complete
cision
on the issue of
Though
point
the merits.
has not
relinquishment
claim,
spelling
trust
jurisdic
record,
pf
raised the issue
hitherto been
out
cloudy
this inference from a
Maurer,
always open.
tion is
Mitchell v.
The trial court seemingly
a con-
reached
This is an
judg-
from a
of the United
in a
States
suit
employee
government
to recover
*15
compensation
balance of
claimed to be due
him.
entry
Prior to the
the judgment ap-
pealed
1952,
from on
Congress had
June
act,
Public
248 of
Law
the 82nd
^passed
UPTON v. UNITED STATES.
Congress,
Stat.
28 U.S.C.A. §
No. 6501.
depriving the District
jurisdiction
Court of
Appeals
this class of
cases. Bruner v. United
Court
United States
Fourth Circuit.
States,
U.S.
Judgment vacated and case remanded with directions. v. UNITED STATES.
HOWELL No. 6451. Appeals States Court United Fourth Circuit. Argued 6, 1952. Oct. 8, 1952. Decided Oct. Dalton, Jr., R. Asst. Atty., Charles U. S.
Norfolk, Whitehead, (A. Va. Carter S.U. Richmond, Va.,
Atty., William P.
Arnold, Atty., Dept, Justice, Washington, C., motion, motion) support
D.
United States.