1 F. 862 | U.S. Circuit Court for the District of Eastern New York | 1880
This case comes before the court, upon a motion on the part of the defendants, for the stay of a proceeding instituted by the plaintiff in this court, to punish the defendants for contempt, because of a violation by them of a perpetual injunction, whereby they were restrained from making a certain form of bungs for casks, described in a patent issued to this plaintiff, and known as re-issue No. 5937.
Of the many proceedings had in this court between these parties, arising out of this patent, the following must be mentioned, in order to an understanding of the questions presented by this motion.
In April, 1877, the plaintiff filed his bill in this oourt against the above named defendants, in which he set forth the issuing of the,said patent, and the infringement thereof by the defendants, and prayed to be awarded damages for said infringement, and a perpetual injunction to restrain the defendants from using his invention in the future. After issue had been joined in that action, and on the third day of January, 1878, an agreement of compromise was entered into between the plaintiff on the one side, and the defendants on the other, in which it was provided, among other things— First, that the defendants should admit the validity of the plaintiff’s patent, and his exclusive right to the invention therein described, and that the defendants should cease infringing upon his rights as sole owner of the said invention;
The terms of the license were particularly specified in this agreement of compromise, and one of its provisions is that in case of a failure of the defendants to pay the royalty specified therein, or maintain the selling price of the bungs at the agreed rate, the plaintiff should he entitled to revoke the license, by giving written notice of revocation to the defendants. In pursuance of this written contract between the parties a final decree was entered in this action, according to the prayer of the hill, and awarding the plaintiff $2,000 for his damages, and directing the issue of a perpetual injunction forbidding the use of the said invention by the defendants. Upon the entry of such decree the defendants paid the damages and costs, and received from the plaintiff a license to ase the invention as provided in the agreement of compromise.
Under this license the defendants continued to manufacture bungs, of the form described in the plaintiff’s patent, until July 5, 1879, when the plaintiff gave notice of revocation of the license, upon the ground that it had been violated by the defendants by selling bungs at less than the prescribed price. The defendants disgrogarded this notice of revocation of the license and continued to use the plaintiff’s invention. Whereupon the plaintiff applied to this court for an attachment against them to enforce their obedience to the perpetual injunction theretofore issued out of this court, according to the direction in the final decree herein. A reference was thereupon ordered, to take proofs respecting the acts charged upon the defendants, and also respecting the circumstances under which the notice of revocation of the license had been given. Pending that reference the defendants make the present applica
In support of this application it is first contended that the jjerpetual injunction was rendered of no effect by the granting of the license. But it seems plain that the granting of a license by the plaintiff could not deprive of vitality a writ of injunction issued by the court in pursuance of its final decree. In the absence of any order of the court to recall the writ, or suspend its operation, I cannot doubt that it still remains alive, and affords foundation for a commitment of the defendants, if equity requires such action on the part of the court. “Perpetual injunctions are founded on the equity of relieving a man from the necessity of bringing action after action.” Kerr on Injunction, 44. “The operation of such an injunction may be- suspended for a given time by the action of the court.” Kerr, 47. But unless suspended or recalled by the court a perpetual injunction, issued upon final decree, continues in existence, and may be enforced at any time.
The real question raised by the license is not as to the power of the court to compel obedience to the injunction, but whether the plaintiff has not, by granting the license, acquiesced in the breach of the Injunction, and so deprived himself of the right to demand a commitment of the defendants. Mills v. Cobby, 1 Merriville, 3; Kerr on Injunctions, 578.
Upon this question it may be said that if the understanding between the parties had been that the injunction should be superseded, there would be little difficulty in holding that the plaintiff had waived his right to demand a commitment of the defendants, notwithstanding their omission to apply for a suspension of the injunction by the court. But such could not have been the intention of these parties. The license forms part of the agreement of compromise of January 3, 1878, made prior to the entry of the final decree. That agreement provides in express terms, not only for the license, but for a final decree and perpetual injunction. The careful provisions in this contract for the issuing of a perpetual injunction forbid the conclusion that it was intended that the
To suppose such an intention, is to suppose that the provision for a perpetual injunction was intended to he vain words, without meaning or effect. Moreover, the acts of the parties are not in harmony with such an understanding, for not only was a final decree directing a perpetual injunction entered upon notice, without objection, but the writ of injunction was actually issued in pursuance of the decree and served upon the defendants by th& marshal, all without objection or question by the defendants. The only understanding consistent with the terms of the compromise and the acts of the parties is that it was intended that the plaintiff should make no complaint respecting the disobedience of the injunction during the existence of the license, but that in case of a termination of the license the injunction should be available to the plaintiff for the protection of his rights as fixed by the final decree.
The next position taken by the defendants is that the plaintiff himself was the first to break the agreement respecting the price at which the bungs were to be sold, and that the notice of revocation was not given in accordance with the terms of the license, or because of any substantial violation of the license by the defendants, but for the purpose of compelling the defendants to buy the plaintiff’s patent.
If the defendants were now insisting upon their right to the license there might be a question whether it would be competent for the court to pass on the effect of the notice of revocation upon a motion to attach the defendants for contempt. Although in this instance the license is in writing, and no controversy exists as to its terms, the remarks of the supreme court in Hartell v. Tilghman, (99 U. S. R. 556,) are calculated to render it doubtful whether, in the absence of a termination of the license by mutual agreement or final decree, a revocation of the license could be held to have been effected by the notice given. But the difficulty with the defendants’ position is that they now deny the plaintiff’s power to grant
So long as the defendants maintain their present attitude in regard to the plaintiff’s patent, the circumstances attending the notice of revocation of the license, as well as the effect of that notice, are wholly immaterial.
The next position taken by the defendants is tjia-t they have become entitled to have the agreement of compromise set aside, because of the discovery of a fact of which they were ignorant at the time of entering into that agreement, viz.: that there was in existence, prior to the date of the plaintiff’s invention, an English patent, issued to one Taylor, for the same invention described in the plaintiff’s patent; that the Taylor patent has expired, and all persons are now at liberty to use the invention therein described; that they have presented those facts to the supreme court of this state by a suit against this plaintiff, which they were compelled to bring in a state court, because all the parties are citizens of this state, in which suit they have prayed that the agreement of compromise made between them and the plaintiff may be set aside, •and the plaintiff perpetually enjoined from enforcing said agreement, or in any way availing himself thereof.
In support of this position the defendants have exhibited to this court the complaint filed in the state court, as well as a provisional injunction issued by the state court, directing the plaintiff, among other things, to refrain in any manner from interfering with or disturbing these defendants in making, using and selling the bungs which the defendants were licensed to sell by the license already referred to, and from interfering with the defendants’ dealings with other persons respecting said bungs by intimidating or preventing the customers of the defendants from dealing with them for said bungs. Notwithstanding the scope of this injunction issued out of the state court, the question whether the pending proceeding to punish the defendants for contempt shall go on or be stayed is to be decided by this court, and not by the state
To this position taken by the defendants I have given careful attention, and with a sincere desire not to deprive the plaintiff of any right that he may have to ask an adjudication of this question at the hands of this court, and my conclusion is that the plaintiff will be deprived of no right by staying, for the present, the proceeding to punish the defendants for contempt; and that the action taken by the state court renders it proper that such proceedings should be stayed until the state court shall have determined the questions of which it has become possessed by the suit there instituted. That the state court has jurisdiction to entertain that suit, and to determine whether the license has or has not been lawfully revoked, and whether the agreement of compromise shall be set aside or upheld, must be deemed to be settled by authority. Hartell v. Tilghman, (and cases cited,) 99 U. S. R. 574. It is true that a determination respecting the validity of the agreement of compromise may be made to depend upon the construction to be given to the two patents in question, and so a question arising under the patent laws be determined by a state court; but such a question is not necessarily to be decided by the state court, for it may he held that ignorance of the existence of the Taylor patent, whatever may bo its terms, affords no ground upon which to set aside the agreement of compromise.
It seems, therefore, that the jurisdiction of the state court to entertain the action there brought is not open to be questioned. Thus much being conceded, it is impossible to deny the competency of the state court to determine whether in equity the plaintiff should be allowed to derive advantages from the agreement of compromise, or to treat the license as
It has been strongly insisted on behalf of the plaintiff that his rights in this court rest upon the final decree of this court, and cannot be affected by any action of the state court in the suit referred to. But the fact that the final decree of this court was made by consent, and not upon a determination of the court, and that such consent is contained in the agreement of compromise, cannot be disregarded. In a certain modified sense the decree is part of the contract now before
These considerations have impelled me to the conclusion that the defendants aro entitled to the relief they now seek. In coming to the conclusion reached, after full advisement, I have not been unmindful of the consideration pressed upon me so earnestly, that, unless the permanent injunction of this court be now enforced, the plaintiff, although he has a most formal admission from the defendants of the validity of his patent, and, in addition, has the decree of this court, obtained upon a compromise and without fraud, sustaining his patent in all respects, and although infringement of his patent is admitted, is in no better position than he would be if the agreement of compromise had been declared void, the decree against the defendants in this action set aside, and a decree adverse to his patent rendered.
But this consideration, strong as it is, is one to be addressed to the state court, which has acquired jurisdiction over the agreements of compromise upon which the plaintiff’s decree is founded, and where full power exists to relieve any hardships that have arisen from its action. An order must accordingly be entered staying the further prosecution of the ponding proceeding -to punish the defendants’ contempt until the hearing and determination by the state court of the action there instituted by these defendants, or the further order of this court. But in making such order I do not intend to express any opinion as to the plaintiff’s right to proceed with any formal action already brought in this court, or by a formal action in this or any other court of the United States to seek such relief as it may be competent for those courts to grant upon the bill filed. The reasons I have now
