Opinion · Court of Appeals for the Second Circuit
Raylite Electric Corp. v. Noma Electric Corp.
Raylite Elec. Corp. v. Noma Elec. Corp., 170 F.2d 914 (2d Cir. 1948)
- Type
- Opinion
- Court
- Court of Appeals for the Second Circuit
- Jurisdiction
- Federal
- Date
- 1948-11-29
- Topic
- litigation
SWAN, Circuit Judge. This action for. a declaratory judgment was brought by the plaintiff (Raylite) against the defendant (Noma) because of a controversy between them with respect to three patents of which Noma was an exclusive licensee. 1 Raylite was manufacturing and offering for sale “ornamental illuminated bubbling devices” which Noma had claimed by letters to Raylite and its customers to be infringements of each of the three Otis patents. Raylite disputed infringement and asserted that the patents were invalid. By its amended complaint it sought judicial declarations to this effect and an injunction to restrain Noma from claiming infringement. Noma 'filed an answer and a counterclaim.
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RAYLITE ELECTRIC CORP. v. NOMA ELECTRIC CORP.,170 F.2d 914(2nd Cir. 1948)
RAYLITE ELECTRIC CORPORATION v. NOMA ELECTRIC CORPORATION (OTIS,
Intervener).
No. 45, Docket 21067.
United States Court of Appeals, Second Circuit.
November 29, 1948.
Action by Raylite Electric Corporation against Noma Electric Corporation for a declaratory judgment with respect to three patents under which the defendant held an exclusive license from the patent owner, Carl W. Otis, who intervened and filed an answer to the amended complaint and a counterclaim charging infringement by the plaintiff of only one of the patents. From an order denying plaintiff's motion for summary judgment with respect to the other two patents, and for an injunction restraining the intervener from asserting that the plaintiff was infringing them, the plaintiff appeals.
Order affirmed.
See also 7 F.R.D. 239.
Byerly, Townsend Watson, of New York City (Ralph M. Watson, of New York City, of counsel), for appellee.
Before L. HAND, Chief Judge, and SWAN and CHASE, Circuit Judges.
Meanwhile, on July 25, 1947, the patent owner, Otis, was allowed to intervene "without prejudice to the proceedings which have previously been had herein," and to file an answer and counterclaim. His answer denied the plaintiff's allegations of invalidity and non-infringement but his counterclaim asserted infringement by the plaintiff's device of only patent No. 2,383,941. Upon the pleadings and the consent judgment against Noma, the plaintiff moved for a summary judgment against the intervener with respect to the two patents other than 2,383,941 and for an injunction restraining him from asserting that the plaintiff is infringing them. This motion was denied by an order entered May 5, 1948, from which the plaintiff has appealed.
The order on appeal, although interlocutory, is within our appellate jurisdiction because it denied the plaintiff an injunction. 28 U.S.C.A. § 227 [now § 1292].
It seems obvious that the plaintiff's case as against the intervener cannot be aided by the consent judgment obtained against the original defendant. In Kneeland v. Luce,141 U.S. 437, 12 S.Ct. 39, 35 L.Ed. 808, it was held that a stipulation between the original parties to the action could not bind interveners who did not sign it and came into the case afterwards. A fortiori a stipulation signed after an intervener has entered cannot affect his rights, for an intervener comes into the case in the condition in which it stands at the time of intervention. A consent judgment binds only the parties consenting to it. Botz v. Helvering, 8 Cir.,134 F.2d 538, 545; Labarre v. Burton-Swartz Cypress Co.,126 La. 982, 53 So. 113. In the latter case the court said 53 So. at page 117:
"As relates to the compromise made between plaintiff and defendant terminating the litigation between them: The intervener having a standing in court, as we have decided, it follows that no compromise can be entered into between plaintiff and defendant affecting his rights."
Raylite's rights as against the intervener must be determined without regard to the consent judgment.
When Otis was granted intervention, the district court had already decided by its order of June 19, 1947, that Raylite was not entitled to a summary judgment against Noma with respect to the two patents which Noma's answer had admitted were not infringed by Raylite's product. Possibly that admission would have justified the court in enjoining Noma from again making claims of infringement. See Caterpillar Tractor Co. v. International Harvester Co., 9 Cir.,106 F.2d 769, 775; Allegheny Steel Brass Corp. v. Elting, 7 Cir.,141 F.2d 148, 149. But whether the order of June 19th was right or wrong, we cannot see how Noma's admission of non-infringement can be used to bolster the plaintiff's case against Otis. The right to intervene under Federal Rules of Civil Procedure rule 24(b)(2), 28 U.S.C.A. presupposes that the intervener has a right to protect which is not subject to the disposition of the parties already in the case. The plaintiff's right to summary relief against the intervener must turn on whether his answer to the complaint raises any disputed issue of fact. We think it does. The answer denied that the three patents are invalid, as alleged in paragraph 7 of the complaint, and denied the allegations of paragraph 14 as to non-infringement. The fact that his counterclaim sought an affirmative judgment of infringement as to only one of the three patents, does not, in our opinion, eliminate his denial of the allegations of invalidity and non-infringement as to the other two.
Order affirmed.Page 916