Under the Federal Declaratory Judgments Act, a Pennsylvania
manufacturer, whose customer was already being sued in Illinois by
a Delaware corporation for patent infringement, sued in a federal
court in Delaware for a declaratory judgment that the patents were
invalid and that devices which the manufacturer supplies to its
customers did not infringe them. Subsequently, the manufacturer was
joined as a defendant in the Illinois infringement suit. The
District Court in Delaware denied a stay of the Delaware suit and
enjoined the patentee from proceeding against the manufacturer in
the Illinois suit. The Court of Appeals reversed on the ground that
all interests would be best served by prosecution of the suit in
Illinois.
Held: the judgment of the Court of Appeals is affirmed.
Pp.
342 U. S.
181-186.
(a) Ample discretion must be left to the lower courts for the
wise judicial administration of the Federal Declaratory Judgments
Act, which has created complicated problems for coordinate courts
by facilitating the initiation of litigation by different parties
to many-sided transactions. Pp.
342 U. S.
183-184.
(b) It is not to be assumed that the lower courts will permit
owners of weak patents to avoid real tests of their patents'
validity by successive suits against customers in forums
inconvenient to the manufacturers or selected because of greater
hospitality to patents. Pp.
342 U. S.
184-185.
(c) A manufacturer who is charged with infringing a patent
cannot stretch the Federal Declaratory Judgments Act to give him a
paramount right to choose the forum for trying out questions of
infringement and validity. Pp.
342 U. S.
185-186.
189 F.2d 31, affirmed.
A federal district court in Delaware temporarily stayed a
declaratory judgment proceeding against respondent to test the
validity of its patents and denied an injunction against respondent
proceeding against petitioner in a
Page 342 U. S. 181
pending infringement suit in Illinois against petitioner's
customer. 85 U.S.P.Q. 185. The Court of Appeals affirmed. 182 F.2d
773. After petitioner had been joined as a defendant in the
Illinois proceedings, the District Court in Delaware denied a stay
of the declaratory judgment proceeding and enjoined respondent from
proceeding against petitioner in the Illinois suit. 92 F. Supp.
943. The Court of Appeals reversed. 88 U.S.P.Q. 335. On rehearing,
the Court of Appeals, sitting
en banc, adhered to the
reversal. 189 F.2d 31. This Court granted certiorari. 342 U.S. 810.
Affirmed, p.
342 U. S.
186.
MR. JUSTICE FRANKFURTER delivered the opinion of the Court.
The C-O-Two Fire Equipment Company, the respondent here, owns
two patents, one issued on November 23, 1948, and the other
reissued on August 23, 1949, for squeeze-grip values and discharge
heads for portable fire extinguishers. C-O-Two, incorporated in
Delaware, has offices in Newark, New Jersey. On January 17, 1950,
it commenced in the District Court for the Northern District of
Illinois an action against the Acme Equipment Company for "making
and causing to be made and selling and using" devices which were
charged with infringing C-O-Two's patents.
On March 9, 1950, the petitioner Kerotest began in the District
Court of Delaware this proceeding against C-O-Two for a declaration
that the two patents sued on in the Illinois action are invalid,
and that the devices which Kerotest manufactures and supplies to
Acme, the
Page 342 U. S. 182
Illinois defendant, do not infringe the C-O-Two patents.
Kerotest, a Pennsylvania corporation, has its offices in
Pittsburgh, but was subject to service of process in Illinois.
C-O-Two, on March 22, 1950, filed an amendment to its complaint
joining Kerotest as a defendant in the Illinois action.
In Delaware, C-O-Two moved for a stay of the declaratory
judgment action, and Kerotest sought to enjoin C-O-Two from
prosecuting the Illinois suit "either as against Kerotest alone, or
generally, as [the Delaware District Court might] deem just and
proper." The District Court stayed the Delaware proceeding and
refused to enjoin that, in Illinois, subject to reexamination of
the questions after 90 days. 85 U.S.P.Q. 185. On appeal by
Kerotest, the Court of Appeals for the Third Circuit affirmed,
holding that the District Court had not abused its discretion in
staying the Delaware action for 90 days to permit it to get "more
information concerning the controverted status of Kerotest in the
Illinois suit." 182 F.2d 773, 775.
During the 90-day period, the Illinois District Court allowed
the joinder of Kerotest as a defendant, denying a motion by Acme to
stay the Illinois proceeding pending disposition of the Delaware
suit, and Kerotest made a general appearance. After 90 days, both
parties renewed their motions in Delaware, with Kerotest this time
asking that C-O-Two be enjoined from prosecuting the Illinois suit
only as to Kerotest. The District Court, a different judge sitting,
enjoined C-O-Two from proceeding in the Illinois suit against
Kerotest, and denied the stay of the Delaware action, largely
acting on the assumption that rulings by its own and other Courts
of Appeals required such a result except in "exceptional cases,"
since the Delaware action between C-O-Two and Kerotest was
commenced before Kerotest was made a defendant in the
Page 342 U. S. 183
Illinois suit. 92 F. Supp. 943. On appeal, the Court of Appeals
for the Third Circuit reversed, saying in part:
". . . the whole of the war and all the parties to it are in the
Chicago theater, and there only can it be fought to a finish as the
litigations are now cast. On the other hand if the battle is waged
in the Delaware arena, there is a strong probability that the
Chicago suit nonetheless would have to be proceeded with, for Acme
is not and cannot be made a party to the Delaware litigation. The
Chicago suit, when adjudicated, will bind all the parties in both
cases. Why, under the circumstances, should there be two
litigations where one will suffice? We can find no adequate reason.
We assume, of course, that there will be prompt action in the
Chicago theater."
88 U.S.P.Q. 335, 337. A petition for rehearing was granted, and
the Court of Appeals, the seven circuit judges sitting en banc, in
an expanded opinion from which two judges dissented, adhered to the
views of the court of three judges. 189 F.2d 31. Inasmuch as a
question of importance to the conduct of multiple litigation in the
federal judicial system was involved, we granted certiorari. 342
U.S. 810.
The Federal Declaratory Judgments Act, [
Footnote 1] facilitating as it does the initiation of
litigation by different parties to many-sided transactions, has
created complicated problems for coordinate courts. [
Footnote 2] Wise judicial administration,
giving regard to conservation of judicial resources and
comprehensive disposition of litigation, does not counsel rigid
mechanical solution of such problems. The factors relevant to wise
administration here are equitable in nature. Necessarily, an ample
degree of
Page 342 U. S. 184
discretion, appropriate for disciplined and experienced judges,
must be left to the lower courts. The conclusion which we are asked
to upset derives from an extended and careful study of the
circumstances of this litigation. Such an estimate has led the
Court of Appeals twice to conclude that all interests will be best
served by prosecution of the single suit in Illinois. Even if we
had more doubts than we do about the analysis made by the Court of
Appeals, we would not feel justified in displacing its judgment
with ours. [
Footnote 3]
It was strongly pressed upon us that the result below may
encourage owners of weak patents to avoid real
Page 342 U. S. 185
tests of their patents' validity by successive suits against
customers in forums inconvenient for the manufacturers, or selected
because of greater hospitality to patents. Such apprehension
implies a lack of discipline and of disinterestedness on the part
of the lower courts, hardly a worthy or wise basis for fashioning
rules of procedure. It reflects an attitude against which we were
warned by Mr. Justice Holmes, speaking for the whole Court,
likewise in regard to a question of procedure: "Universal distrust
creates universal incompetence."
Graham v. United States,
231 U. S. 474,
231 U. S. 480.
If, in a rare instance, a district judge abuses the discretionary
authority the want of which precludes an effective, independent
judiciary, there is always the opportunity for corrective review by
a Court of Appeals, and ultimately by this Court.
The manufacturer who is charged with infringing a patent cannot
stretch the Federal Declaratory Judgments Act to give him a
paramount right to choose the forum for trying out questions of
infringement and validity. He is given an equal start in the race
to the courthouse, not a head-start. If he is forehanded,
subsequent suits against him by the patentee can, within the trial
court's discretion, be enjoined pending determination of the
declaratory judgment suit, [
Footnote 4] and a judgment in his favor bars
Page 342 U. S. 186
suits against his customers. [
Footnote 5] If he is anticipated, the court's discretion
is broad enough to protect him from harassment of his customers. If
the patentee's suit against a customer is brought in a district
where the manufacturer cannot be joined as a defendant, the
manufacturer may be permitted simultaneously to prosecute a
declaratory action against the patentee elsewhere. And if the
manufacturer is joined as an unwilling defendant in a
forum non
conveniens, he has available upon an appropriate showing the
relief provided by § 1404(a) of the Judicial Code. 62 Stat. 869,
937, 28 U.S.C. § 1404(a). [
Footnote
6]
The judgment below must be
Affirmed.
THE CHIEF JUSTICE and MR. JUSTICE BLACK dissent.
[
Footnote 1]
48 Stat. 955, 28 U.S.C. §§ 2201-2202.
[
Footnote 2]
See Developments in the Law-Declaratory Judgments,
1941-1949, 62 Harv.L.Rev. 787, 814-815, 866 (1949).
[
Footnote 3]
Other cases in Courts of Appeals which present at all comparable
situations do not show any rigid rule such as that under which the
District Court felt constrained. In view of the basis of our
decision, it would not be profitable to discuss these cases in
detail. It will suffice to indicate the concurrent controversies
for which adjustment was sought.
Triangle Conduit & Cable
Co. v. National Electric Products Corp., 125 F.2d 1008 (suit 1
-- declaratory action by manufacturer against patentee; suit 2 --
patentee sues manufacturer and customer for infringement: suit 2
enjoined as to manufacturer);
Cresta Blanca Wine Co. v. Eastern
Wine Corp., 143 F.2d 1012 (suit 1 -- declaratory action by
manufacturer against trademark owner; suit 2 -- trademark owner
sues manufacturer and distributor for infringement; thereafter,
distributor seeks to intervene as plaintiff in suit 1: intervention
denied and suit 2 enjoined as to manufacturer);
Speed Products
Co. v. Tinnerman Products, Inc., 83 U.S.App.D.C. 243, 171 F.2d
727 (suit 1 -- A sues Commissioner of Patents in District of
Columbia for registration of trademark; suit 2 -- suit by A in N.Y.
against B alone for registration of trademark and for declaration
of noninfringement of B's mark; thereafter, B joins as defendant in
suit 1 and files counterclaim for infringement of B's mark: suit 2
not enjoined, and suit 1 not advanced for trial);
Hammett v.
Warner Bros. Pictures, Inc., 176 F.2d 145 (suit 1 -- alleged
copyright owner sues broadcaster for infringement; suit 2 --
declaratory action by writer for broadcaster against alleged
copyright owner; thereafter, writer joined as defendant in suit 1:
suit 2 dismissed);
Remington Prod. Corp. v. American Aerovap,
Inc., 192 F.2d 872 (1951) (suit 1 -- manufacturer and customer
A bring declaratory action against patentee; suit 2 -- patentee
sues customers A, B, C, and D for infringement; thereafter,
customer B joins as plaintiff in suit 1: suit 2 enjoined). By
endorsing what was in effect an exercise of discretion by the Court
of Appeals below upon consideration of the specific circumstances
here, we neither approve nor throw doubt upon decisions by it or
other Courts of Appeals.
[
Footnote 4]
See, e.g., Crosley Corp. v. Westinghouse Electric & Mfg.
Co., 130 F.2d 474;
Carbide & Carbon Chemicals Corp. v.
United States Industrial Chemicals, Inc., 140 F.2d 47;
Independent Pneumatic Tool Co. v. Chicago Pneumatic Tool
Co., 167 F.2d 1002.
[
Footnote 5]
Kessler v. Eldred, 206 U. S. 285.
[
Footnote 6]
It is suggested that Rule 15(c) of the Federal Rules of Civil
Procedure makes the joinder of Kerotest take the date, as it were,
of the original action against Acme, which, of course, preceded the
Delaware action. The equities of the situation do not depend on
this argument.