206 F. 295 | E.D.N.Y | 1913
This action is based upon a charge by the complainant of infringement of United States letters patent No. 837,616, issued to Henry H. C. Dunwoody December 4, 1906, on an, application filed March 23, 1906. The answer seeks to interpose a 'counterclaim in addition to the other defenses by which the defendants charge infringement on the part of the complainant of letters patent No. 706,744, August 12,1902, No. 727,331, May 5, 1903 (reissued May
The pleadings in this action have been interposed since the equity rules (adopted by the Supreme Court of the United States in 1912) have been in force, and under rule 33 (198 Fed. xxvii, 115 C. C. A. xxvii) the complainant has made a motion to “strike out” the counterclaim, alleging that the paragraphs of the counterclaim fail to set forth facts sufficient to enable them to maintain the same, and that the allegations are insufficient in law to entitle them to the relief asked. The defendants have stated their alleged counterclaim in the following words:
“As a matter of set-off or counterclaim, arming out of tlie transaction which is the subject-matter of the complainant’s complaint. * * * ”
An objection which was raised on this wording (to the effect that the suggested counterclaim on the face of the answer showed that it did not arise from that transaction) having been disposed of upon the argument of the motion, and the defendants having asked leave to modify this language so as to charge the affirmative defense, “either as a counterclaim arising out of the transaction which is the subject-matter of the suit, or as a set-off or counterclaim against the complainant, and which might he the .subject o,f an independent suit in equity against him,” it is only necessary to state the grounds upon which the amendment was asked and allowed.
Rule 30 (198 Fed. xxvi, 115 C. C. A. xxvi) requires the defendant to set out his defense to each claim of the bill, and allows as many defenses as may be deemed essential. The second paragraph of this rule then says:
“The answer must state in short and simple form any counterclaim arising out of the transaction which is the subject-matter of the suit, and may, without cross-bill, set out any set-off or counterclaim against the plaintiff which might be the subject of an independent suit in equity against him, and*298 such set-off or counterclaim, so set up, shall have the same effect as a cross-suit, so as to enable the court to pronounce a final judgment in the same suit both on the original and cross-claims.”.
It will be noted that a counterclaim “arising out of the transaction which is the subject-matter of the suit” must be included in the answer. Consideration of the rule and of the subject-matter of the present action indicates that in a suit for infringement of patent the transaction which is the subject-matter of the suit does not mean, on the one hand, the patent rights alone, nor, on the other hand, the particular act of infringement alleged. Either of these might be the transaction in question, but the word “transaction” is broader in scope, yet narrower when applied to the particular set of circumstances from which the relations and rights of the parties have resulted. The same patent might have to do with entirely separate transactions, or the same infringement might result in establishing various rights, contract or otherwise. But the test of determining the transaction from which the suit arose would require a determination of the precise right (and its breach) about which the parties were litigating, and the attendant circumstances which were involved therein.
Rule 30 plainly requires that as between the parties to an equity action involving the steps to such a transaction, and the determination of rights between the parties growing out of the transaction, all claims shall be litigated in one suit, and that thus the matter shall be rendered res adjudicata and future litigation avoided. For this purpose the rule says that such counterclaims must be made a part of the answer in the first suit which calls into question this transaction. On the other hand, the ordinary relations of persons in business and society, whether with respect to a contract, a tort, or, for illustration, a patent, may give a defendant in his opinion a cause of action against the same party who is bringing a bill in equity against this defendant upon some transaction with which the defendant’s claim has no point of contact beyond the identity of the parties to the suit.
The words of rule 30 provide that every and any such cause of action may be set off or counterclaimed by the defendant; that is, used by him, if successful, as a subtraction of diminution against the plaintiff’s claim if the plaintiff be successful therein, and also available to the defendant for. his own relief in case the plaintiff be unsuccessful. The inclusion of such a set-off or counterclaim without the use of a cross-bill is said to have the same effect as a cross-suit, and is made discretionary, or even optional, under the rule. The purpose of uniting independent suits is plainly to facilitate adjustments and to ■diminish litigation. But the doctrine of res adjudicata should not be invoked against a man, nor should he be charged with laches, for failing to insist upon prosecuting an independent action against some one who might happen to be suing him, if nothing were to be gained, and not even the convenience of witnesses were furthered by so doing.
For this reason, therefore, as has been stated, upon the present motion the defendants have amended their answer, and we have to consider the general objections presented to the combination of four or more patent suits between the same individuals, and in this particular instance related to the same general subject-matter of wireless telegraphy, or some of the devices used in that art, but not upon their face seeming to arise from the same transaction. It may be that the alleged act of infringement by the defendants will prove upon the hearing to have to do necessarily with the very transactions by which the plaintiff is setting up its own rights, and possibly thereby infringing the patent rights of the defendant. But upon the language of the pleadings it would not seem that the motion can be disposed of upon this ground.
The plaintiff points out that between large manufacturers hundreds of infringement actions might be pending upon different patents in widely divergent fields and impossible of classification so as to base thereon any suggestion that the causes of action arose from the same transaction, or even that they had any similarity to one another, beyond being patent cases and being litigation between the same parties. But, under the language of the section, any of these subjects of litigation, if the suit could be brought in equity and could have the same effect as a cross-suit, may be united in one set of pleadings and disposed of at one trial, resulting in but one judgment in favor of the party who
At this point we should consider the language of rule 26 (198 Fed. xxv, 115 C. C. A. xxv), which provides that the plaintiff may join in one bill as many causes of action cognizable in equity as he may have against the defendant. This language is also broad enough to unite a bill to set aside a transfer of real estate as fraudulent, with an action for injunction to prevent the breach of some theatrical contract, and also with an action upon a patent right for damages and an injunction as'well. If under rule 26 three such causes of action or 300 if they existed could legally and properly be united, it is difficult to see why, under the provisions of rule 30, any of these 3 or 300 actions could not be united in a bill. Any such cross-suits or counterclaims could be disposed of in the same litigation, inasmuch as the parties were the same, and as to a certain extent the witnesses might have their convenience furthered, even if the convenience of -the court be exceedingly strained.
We must therefore go a step fürther before determining what limitation there is upon either rule 26 or rule 30. It is provided'in rule 26 that:
“If it appear that any such causes of action cannot be conveniently disposed of together, the court may order separate trials.”
Under rule SO1 no such provision for the convenience of the court is inserted. But it may be assumed that entirely distinct or separable controversies; even if contained in one set of pleadings, could be separated upon the trial, and would result in a succession of trials, and, if nec-. essary, in a succession of judgments or decrees, which could be set off or counterclaimed against one another in the issuance of execution or the satisfaction of the judgment.
There is nothing inherently impossible, therefore, and nothing forbidden by the language of the rule; but, on the contrary, the rule would seem to require and direct the union of various litigations existing in equity up to the time of pleading, or, by amendment, up to the time of trial, between the parties to the litigation, and we have to consider what limitations must be observed in this particular application.
It has been uniformly held in this circuit and in many other courts of the United States, that an action brought under the patent laws cannot be made to carry with it violations of other rights, of which the court does not have jurisdiction through diversity of citizenship, or under some other statute of the United States. National Casket Co. v. New York & Brooklyn Casket Co. (C. C.) 185 Red. 533. The new equity rules do not enlarge this limit. Rule 26, except as modified by the necessities of convenience, allows the joinder of as many causes of action as can be properly disposed of ami covered by “a final judgment.” But these are only such actions as could be brought separately, and rule 26 does not compel the union of dissimilar actions, nor the inclusion in one decree of a number of various kinds of equitable relief, with various sets of accountings.
This seems to be in accord with the present English practice as shown in the stated case of the Chameleon Patents Manufacturing Co., Ltd., v. Marshalls, Ltd., Reports of Patent, Design, Vol. XVII, No. 19. decided June 13, 1900, in the High Court of Justice, Chancery Division, in which an action for infringement and a counterclaim based upon copyright were disposed of in one trial. A case decided by Judge Dodge, in the District of Massachusetts, March 15, 1913 (Terry Steam Turbine Co. v. B. F. Sturtevant Co., 204 Fed. 103), has to do with an application, under rule 34 (198 Fed. xxviii, 115 C. C. A. xxviii), to set up in a supplemental answer, a counterclaim which the defendant had not included in his original answer. The counterclaim there offered was a so-called equitable tort, and the application might have been denied in the court’s own discretion, or on jurisdictional grounds, even though we do not go so far as to repeat the statement that the second part of the language of rule 30, viz., the defendant “may, without cross-bill, set out any set-off or counterclaim,” applies only to such counterclaim as is described in the mandatory portion of
Under'the former practice, a cross-bill was for discovery or to give “full and complete relief to all parties as to the matters charged in the original bill.” Stonemetz Printers’ Machinery Co. v. Brown Folding-Mach. Co. (C. C.) 46 Fed. 851, citing Story’s Eq. Pl. § 389, and numerous cases. This ruling was- followed in Stuart v. Hayden, 72 Fed. 402, 18 C. C. A. 618 (affirmed 169 U. S. 14, 18 Sup. Ct. 274, 42 L. Ed. 639), and in Jackson v. Simmons, 98 Fed. 768, at page 774, 39 C. C. A. 514, and is correct in stating the scope of a “cross-bill” under the old rules. The new rule 30 not only thus does away with a cross-bill, but says that “without cross-bill” any claim which could be the subject of an independent equity suit shall be set out in the answer with the same effect as a “cross-suit,” so as to allow a “final judgment” "on the “original” and “cross-claims.” Here we have a deliberate use of new terms-covering any “independent suit in equity,” to have the result of a “cross-suit,” and yet to be pleaded “without cross-bill” (which is seem-, ingly recognized as the old way of pleading). In the case of the Terry Steam- Turbine Co., supra, the court seems to hold that the permissive way of pleading is no broader than the mandatory. If so, it is impossible to give any purposeful meaning to the greater part'of the para-. graph. However, to go to the other extreme, and hold that all causes of action in equity between the parties and within the court’s jurisdiction can be brought in and tried, is evidently not practicable, although the rule seems to be broad enough for this construction. Some, restriction should be adopted (under rule 79, 198 Fed. xli, 115 C. C. A. xli) for general limitation, and in each case the court must ultimately determine what issues can be properly disposed of in “a final judgment” in the suit, and order'severance accordingly.
In the present case, while difficulty is suggested by the nature of the subject-matter and the number of claims, it-does not seem .that for a trial without a jury greater difficulty would be found than in disposing of four suits in what might be termed a series, and there seems to be no reason, beyond the court’s natural desire to simplify its work, for striking out the counterclaim in the present action. If it should appear that some connection of events brings this counterclaim or the cause of action upon the defendant’s patents into the category of matters arising “from the same transaction” as the plaintiff’s own cause of action, then assuredly the court should not force the parties into' the possible position of having their rights in the future shut off by the mandatory language of the first part of the. section.
For all these reasons, therefore, the motion will he denied.