1. In a suit in the district court for infringement of patents,
an order granting a motion to dismiss, for want of jurisdiction, a
counterclaim alleging infringement by plaintiffs of a patent of the
defendants and praying for an injunction and an accounting
held an interlocutory order refusing an injunction, and
appealable to the Circuit Court of Appeals under Judicial Code, §
129; U.S.C. Tit. 28, § 227. P.
287 U. S.
432.
2. Section 48 of the Judicial Code (U.S.C. Tit. 28, § 227)
relates to venue, and the privilege conferred by it upon defendants
in patent cases, in respect of the places in which suits may be
maintained against them, may be waived. P.
287 U. S.
434.
3. In a suit in the district court for infringement of patents,
a counterclaim alleging infringement by plaintiffs of a patent of
the defendants and praying for an injunction and accounting may be
maintained against the plaintiffs (Equity Rule 30) though it does
not contain allegations showing that plaintiffs are inhabitants of,
or committed acts of infringement and have a regular place of
business within, the district in which they commenced their suit.
Section 48 of the Judicial Code (U.S.C. Tit. 28, § 227) does not
prevent. P.
287 U. S. 435.
56 F.2d 823 affirmed.
Certiorari, 286 U.S. 541, to review a judgment which, upon
appeal from an order dismissing a counterclaim in a suit brought by
the petitioners for patent infringement, denied a motion to dismiss
the appeal and reversed the order.
Page 287 U. S. 431
MR. JUSTICE BUTLER delivered the opinion of the Court.
Petitioners, New York corporations having their principal
offices in that state, brought this suit in the northern district
of Ohio against defendants, two corporations having regular and
established places of business in that district and two individuals
residing there. The complaint alleges that the defendants infringed
plaintiffs' rights under certain patents relating to the
manufacture of hard-metal products by making, using, and selling
tools and parts thereof embodying such inventions. The answer avers
that the patents are invalid and denies infringement, alleging that
all manufacture by defendants has been under one or more of five
patents granted defendant Gebauer. And the answer sets up a
counterclaim against plaintiffs for the infringement of one of
these patents and prays injunction against such infringement and an
accounting. But it does not allege that plaintiffs are inhabitants
of the district, or that they infringed defendants' patent and have
a regular and established place of business there. The plaintiffs
moved to dismiss the counterclaim for want of jurisdiction. The
District Court granted their motion. Defendants appealed.
Plaintiffs moved to dismiss the appeal on the ground that the
dismissal of the counterclaim does not amount to the refusal of an
injunction under § 129, Judicial Code, and was not appealable under
that section. The Circuit Court of Appeals denied the motion and
reversed the order appealed from. 56 F.2d 823.
Plaintiffs insist that the court erred in refusing to dismiss
the appeal. Equity Rule 30 declares:
"The defendant by his answer shall set out . . . his defense to
each claim asserted in the bill. . . . 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
Page 287 U. S. 432
may, without cross-bill, set up any set-off or counterclaim
against the plaintiff which might be the subject of an independent
suit in equity against him, and 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 decree in the same suit on both the
original and the cross-claims."
268 U.S. 709. It is clear that in this suit the court in a
single decree may finally determine the merits of the cause of
action alleged in the complaint and the counterclaim set up in the
answer. The order dismissing the counterclaim is interlocutory.
Winters v. Ethell, 132 U. S. 207,
132 U. S. 210;
Ex Parte Railroad Co., 95 U. S. 221,
95 U. S. 225;
Ayres v.
Carver, 17 How. 591,
58 U. S. 595.
The general rule is that review of interlocutory orders must await
appeal from the final decree. But, in proceedings for injunctions
and receivers, exceptions have been made by § 129, Judicial
Code:
"Where, upon a hearing in a district court, or by a judge
thereof in vacation, an injunction is granted, continued, modified,
refused, or dissolved by an interlocutory order or decree, or an
application to dissolve or modify an injunction is refused, or an
interlocutory order or decree is made appointing a receiver, or
refusing an order to wind up a pending receivership or to take the
appropriate steps to accomplish the purposes thereof, such as
directing a sale or other disposal of property held thereunder, an
appeal may be taken from such interlocutory order or decree to the
circuit court of appeals. . . . The appeal . . . must be applied
for within thirty days from the entry of such order or decree, and
shall take precedence in the appellate court, and the proceedings
in other respects in the district court shall not be stayed during
the pendency of such appeal unless otherwise ordered by the court,
or the appellate court, or a judge thereof. . . ."
28 U.S.C. § 227.
Page 287 U. S. 433
The reasons suggested by plaintiffs in support of the contention
that the order is not appealable are that there was no hearing upon
any application for an injunction, and that the dismissal of the
counterclaim was not the refusal of an injunction. But, by their
motion to dismiss, plaintiffs themselves brought on for hearing the
very question that, among others, would have been presented to the
court upon formal application for an interlocutory injunction. That
is, whether the allegations of the answer are sufficient to
constitute a cause of action for injunction. And the court
necessarily decided that, upon the facts alleged in the
counterclaim, defendants were not entitled to an injunction. It
cannot be said, indeed plaintiffs do not claim, that the dismissal
did not deny to defendants the protection of the injunction prayed
in their answer. The ruling of the Circuit Court of Appeals that an
injunction has been denied by an interlocutory order which is
reviewable under § 129 is sustained by reason and supported by the
weight of judicial opinion.
Emery v. Central Trust & Safe
Deposit Co., 204 F. 965, 968;
Ward Baking Co. v. Weber
Bros., 230 F. 142.
Historical Pub. Co. v. Jones Bros.Pub.
Co., 231 F. 638, 643.
Naivette v. Philad Co., 54 F.2d
623.
Cf. Banco Mercantil v. Taggart Coal Co., 276 F. 388,
390.
* Plaintiffs'
motion to dismiss the appeal was rightly denied.
Plaintiffs maintain that the Circuit Court of Appeals erred in
sustaining the counterclaim.
They call attention to Equity Rule 30, and cite § 48 of the
Judicial Code:
"In suits brought for the infringement of letters patent, the
district courts . . . shall have jurisdiction, in law or in equity,
in the district of which the defendant is an inhabitant, or in any
district in which
Page 287 U. S. 434
the defendant . . . shall have committed acts of infringement
and have a regular and established place of business. . . ."
28 U.S.C. § 109. They argue that a counterclaim for patent
infringement cannot be maintained over plaintiffs' objection if it
does not contain allegations showing that plaintiffs are
inhabitants of or committed acts of infringement and have a regular
place of business within the district in which they commenced their
suit. And they insist that to construe the rule more broadly would
make it repugnant to the statute.
Rule 30 is without force as against conflicting statutory
provisions.
Washington-Southern Co. v. Baltimore Co.,
263 U. S. 629. It
deals with counterclaims of two classes. The first includes every
counterclaim arising out of the transaction which is the subject
matter of the suit and which must be set up in the answer. The
second class includes counterclaims not so arising, but which might
be the subject of an independent suit in equity and which may but
need not be so set up.
American Mills Co. v. Amer. Surety
Co., 260 U. S. 360,
260 U. S. 364.
We may assume that the counterclaim in question does not arise out
of the subject matter of plaintiffs' suit. But, unless § 48
prevents, it may be set up in the answer.
Marconi Wireless
Telegraph Co. v. National E.S. Co., 206 F. 295;
Electric
Boat Co. v. Lake Torpedo Boat Co., 215 F. 377;
United
States Expansion Bolt Co. v. Kroncke Co., 216 F. 186; 234 F.
868;
Buffalo Specialty Co. v. Vancleef, 217 F. 91;
Champion Spark Plug Co. v. Champion Ignition Co., 247 F.
200;
Victor Talking March. Co. v. Brunswick-Balke-Collender
Co., 279 F. 758.
Section 24(7) of the Judicial Code is the source from which
District Courts derive jurisdiction of cases arising under the
patent laws. Under that clause and until the enactment of § 48, a
suit for infringement might have been maintained in any district in
which jurisdiction of defendant could be obtained.
In re
Hohorst, 150 U. S. 653,
Page 287 U. S. 435
150 U. S. 661.
And see In re Keasbey & Mattison Co., 160 U.
S. 221-230. Section 48 relates to venue. It confers upon
defendants in patent cases a privilege in respect of the places in
which suits may be maintained against them. And that privilege may
be waived.
Lee v. Chesapeake & Ohio Ry. Co.,
260 U. S. 653;
Gulf Smokeless Coal Co. v. Sutton, Steele & Steele, 35
F.2d 433, 438. The section does not, as to counterclaims, purport
to modify the rule prevailing prior to its enactment. The setting
up of a counterclaim against one already in a court of his own
choosing is very different, in respect to venue, from hailing him
into that court. Section 48, taken according to the meaning
ordinarily given to the words used, applies only to the latter, and
we find no warrant for a construction that would make it include
the former. This Court has recently declared that one who sues in a
federal court of equity to enjoin the infringement of his patent
thereby submits himself to the jurisdiction of the court with
respect to all the issues of the case, including those pertaining
to a counterclaim praying that he be restrained from infringing a
patent of the defendant.
Leman v. Krentler-Arnold Co.,
284 U. S. 448,
284 U. S. 451.
And that rule applies here.
Affirmed.
*
Contra: Radio Corp. v. J. H. Bunnell & Co., 298
F. 62;
Allied Metal Stamping Co. v. Standard Electric Equipment
Corp., 55 F.2d 221.