Opposition Brief — Pangborn Corp. v. American Foundry Equipment Co.

CHARLES £

IN THE Ae

Supreme Court of the United States

OcrosBer TERM, 1948

No. 480

PANGBORN CORPORATION,

Petitioner,

against

THE AMERICAN FOUNDRY EQUIPMENT

COMPANY,

Respondent.

BRIEF FOR THE AMERICAN FOUNDRY EQUIPMENT

COMPANY IN OPPOSITION

Hucu M. Morris,

Y 3018 duPont Building

Wilmington 41, Delaware

J THomas TuRNER Cooke,

120 Broadway

New York 5, N. Y.

Counsel for Respondent.

Lioyp F. THANHOUSER,

49 Wall Street

New York 5, N. Y.

GrorcE T. Coutson,

3018 duPont Building

Wilmington 41, Delaware

Of Counsel

January 27, 1949.

es

INDEX

The only question properly presented is whether Pang-

born’s amended complaint states a valid claim... ...

The charge of fraud in connection with the Peik re-

vival is concededly moot.......................

The charge of fraud in connection with the Hollings-

worth-Grocholl situation is barred by Res Judicata

The question as to the jurisdiction of the District

Court over Patent Office matters is now moot, and

there is no other jurisdictional question presented. .

Pangborn has pleaded no valid claim...............

w scsapaaaipig EEE ER Te ORT SOR oe

CITATIONS

CasEs:

American Foundry Equipment Co. vy. Pittsburgh

Forgings Co. and Pangborn Corporation, 67 Fed.

Supp. 911; aff'd 102 Fed. 2d 964...............

STATUTES AND OTHER AUTHORITIES:

om Wes BC hare ory ee es

28 American Jurisprudence, Injunctions, Sec. 282. .

Journal of the Patent Office Society, 1947, Vol. 29,

No. 12, p. 909

PAGE

4

an

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IN THE

Supreme Court of the United States

Octoser TERM, 1948

PANGBORN CORPORATION,

Petitioner,

VS.

No. 480

THE AMERICAN FounpRry EQUIPMENT

Company,

Respondent.

BRIEF FOR THE AMERICAN FOUNDRY EQUIPMENT

COMPANY IN OPPOSITION

The only question properly presented is whether Pangborn’s

amended complaint states a valid claim.

Pangborn seeks a writ of certiorari to review a judg-

ment of the Court of Appeals for the Third Circuit (R.

400), dismissing Pangborn’s amended complaint* for

ee

*In stating the question presented, both in its “Summary

Statement” and in its “Questions Involved”’, Pangborn refers

to its “pleadings”. The courts below, however, refused, in the

exercise of the discretion accorded them by Rule 15(a) F.R.C. P.,

to permit further amendment of the amended complaint (R.

a). Hence the sufficiency of the amended complaint, as at-

tempted to be further amended, was not and is not in issue. In

Its petition, nevertheless, Pangborn assumes the contrary, or treats

the matter ambiguously by employing the term “pleadings”. Ap-

Parently Pangborn even includes among its “pleadings” what it

calls an answer (R. 370a-391la) to American’s amended and sup-

plemented counterclaim which was dismissed. Manifestly allega-

ons in an answer (properly a reply) cannot remedy defects in a

complaint.

aa

failure to state a claim entitling Pangborn to relief (Pet., p.

2, para. 1; p. 11, last para.).

The amended complaint makes two charges of fraud

against American, to wit, that American: (1) fraudulently

obtained the revival in the Patent Office of an abandoned

application, filed by one Peik on August 14, 1933, for an

invention relating to a centrifugal blasting machine (R.

15la-166a); (2) acquired from one Hollingsworth his

rights in another invention relating to a different type of

centrifugal blasting machine, and prosecuted Patent Office

applications based thereon, as well as an interference pro-

ceeding with the application of one Grocholl, in an improper

and fraudulent manner (R. 166a-189a).

The amended complaint further alleges that on April

3, 1934, before the first Peik application became abandoned,

a patent issued upon a subsequent application filed by Peik

for a centrifugal blasing machine* (R. 153a, 155a), and

that the courts held (American Foundry Equipment Co.

v. Pittsburgh Forgings Co. and Pangborn Corporation, 67

Fed. Supp. 911; aff'd 102 Fed. 2d 964) this Peik Patent,

owned by American, to be valid and infringed by a Pang-

born machine (R. 155a). As appears from Pangborn’s

present petition (pp. 4-5, 21-22), this Court denied certiorari

(308 U.S. 566), and thereafter the District Court denied a

petition for leave to file a complaint, based on fraud, in the

nature of a bill of review and for a re-hearing (41 Fed.

Supp. 841), whereupon Pangborn settled with American

because of what Pangborn calls the compulsion of “economic

duress” (Pet., p. 22).

2

*Obviously, therefore, the validly of this Peik Patent could

not possibly be affected by anything which may have occurred in

the proceedings for the revival of the first Peik application 2

year later.

-

The relief prayed for in Pangborn’s amended complaint

was as follows (R. 193a-195a) : (1) that American be re-

quired to restore the first Peik application, which had been

revived, to its former abandoned Status, and that American

be enjoined from prosecuting any interference based there-

on; (2) that it be decreed that American's intent in obtain-

ing such revival was to monopolize in contravention the

Sherman Act, and that Pangborn be awarded triple dam-

ages by reason thereof; ( 3) that certain matter, claimed to

have been improperly interpolated in one of the Hollings-

worth applications, be eliminated therefrom, and that

American be enjoined from prosecuting such application as

thus amended; (4) that Pangborn be awarded triple dam-

ages under the Sherman Act by reason of American’s ac-

tions in the Patent Office in prosecuting two Hollingsworth

applications and American’s procurement of the infringe-

ment decree in the Pittsburgh suit.

3

From the foregoing it distinctly appears that the relief

relied on in “Questions Involved” numbered “(4)” and

“(5)” (Pet., p. 15) was not prayed for in the amended com-

plaint, and hence should be ignored in determining whether

or not the amended complaint states a valid claim, i.e.,

whether in addition to alleging a fraud which may now be

considered by the courts, it alleges the invasion of some

legal right of Pangborn (R. 102a; 28 American Juris-

prudence, Injunctions, Sec. 282).

The charge of fraud in connection with the Peik revival is

concededly moot.

Pangborn’s petition for a writ states (p. 5) that the

revival of the first Peik application was ordered on May 21,

1935, by Assistant Commissioner of Patents Frazer. Mr.

—

4

Frazer remained in the Patent Office until September 16,

1947, when he died (Journal of the Patent Office Society,

1947, Vol. 29, No. 12, p. 909). While he was alive and in

the Patent Office, five successive applications over a period

of ten years were made to predecessors of the present Com-

missioner to vacate the revival for fraud. All were denied,

and in one of such decisions Assistant Commissioner Henry

affirmatively found that there was no evidence of fraud in

the revival (159 F. 2d, at pp. 99-100; R. 310a-31lla). The

sixth application, reciting no new evidence,* and with the

evidence regarding the revival 13 years old, succeeded. The

present Commissioner elected to disbelieve the affidavits of

certain of American’s witnesses, without finding that Amer-

ican had any knowledge of the falsity which he held to exist

therein, and found that matters which he deemed to be ma-

terial, but which American claims were immaterial, had not

been submitted to Mr. Frazer.

Pangborn concedes that, by reason of the Commission-

er’s decision, the whole matter of the Peik revival is now

moot (Pet., p. 13, last para, p. 20, p. 24).

The charge of fraud in connection with the Hollingsworth

Grocholl situation is barred by Res Judicata.

The only remaining charge of fraud in the amended

complaint concerns the Hollingsworth-Grocholl situation.

This was finally passed on adversely to Pangborn by the

District Court in Pittsburgh (41 Fed. Supp. 841), and the

same contentions were thereafter thrice rejected by the

*Patent Office Rule 147 provides: “Cases which have been

decided by one Commissioner will not be reconsidered by his suc-

cessor except in accordance with the principles which govern the

granting of new trials.”

5

courts below (R. 100a-102a, 159 Fed. 2nd 88, 170 Fed. 2nd

339).

After this Court denied certiorari in 1939 (308 U. S.

566) in the Pittsburgh infringement suit (from which

denial Pangborn still attempts to appeal, Pet., pp. 3, 4, and

10), Pangborn sought by petition, on the ground of what

it alleged to be newly-discovered evidence of fraud, to file

a complaint in the nature of a bill to review and for a re-

hearing. The District Court for the Western District of

Pennsylvania denied the petition (41 Fed. Supp. 841). In

so doing it recited that the alleged newly-discovered evidence

consisted of : (1) the Grocholl patent, issued December 10,

1940, with claimed effective date of May 1, 1931; and (2)

the Hollingsworth “directional control” centrifugal blast-

ing machine claimed to have been successfully used in 1929

and prior thereto. The Court held that the German counter-

part of the Grocholl patent had been before it at the trial,

that such patent had been pleaded in defendant’s answer,

that evidence in relation thereto had been offered and con-

sidered by the Court, and that when asked for its “best

reference”, Pangborn had not relied on the Grocholl patent

but on other references. The District Court pointed out

that the Court of Appeals had held that there was evidence

to support the finding that neither Hollingsworth nor Gro-

choll had anticipated Peik. It further pointed out that Pang-

born had deliberately abstained from Pressing pending

Letters Rogatory to examine witnesses in Germany relative

to the Grocholl patent. It held that if the Grocholl U. S.

patent had been granted prior to the trial, the result thereof

would have been no different. It discussed and rejected

Pangborn’s claims (now so much harped upon, Pet., pp. 2,

10, 13, 14, 18, 19, 24, 26) with respect to “antithetical” rep-

resentations claimed to have been made in the Patent Office

6

and in the trial Court. Finally it pointed out that Grocholl

had visited the Pangborn plant in September, 1934, where he

had discussed his machine and patent with Pangborn’s Chief

Engineer, Rosenberger, and that in August, 1935, Pangborn

had copies of both the Grocholl and Hollingsworth applica-

tions. The evidence, it held, was therefore not newly-dis-

covered. It denied the petition for a bill of review and

re-hearing, and held that such petition was simply an attempt

to go over the same ground covered at the trial.

The amended complaint, here under consideration,

represents a still further attempt to go over the same ground.

The question as to the jurisdiction of the District Court over

Patent Office matters is now moot, and there is no other juris

dictional question presented.

Despite the contrary suggestion made dy Pangborn in

“Reasons Relied on for the Allowance of the Writ” (Pet.,

p. 15), but omitted from “Questions Involved” (Pet., pp.

13-15), no question of jurisdiction which has not become

moot is here involved. The Court of Appeals construed

the amended complaint (R. 314a) as being an attempt

to have the “District Court of Delaware determine questions

relating to the issuance of patents confided by statute to the

Commissioner of Patents and to the Patent Office”, and

held that no cause of action was stated (R. 314a). In its

second opinion (R. 399) it reiterated that for this reason

the amended complaint states ‘no controversy cognizable

in the District Court of Delaware”. The Commissioner of

Patents has restored the first Peik application to the aban-

doned files, and both Hollingsworth applications have been

7

abandoned.* Hence the prayers to restrain action in the

Patent Office are unquestionably obsolete.

Pangborn has pleaded no valid claim.

All that remains of Pangborn’s prayers for relief in the

amended complaint are therefore the triple damage claims

under the Sherman Act. These the Court of Appeals re-

garded as “mere color” (R. 313a, note 10), and Pangborn

evidently agrees, for in its Response to American’s Reply

Brief in the court below, at page 19, Pangborn said: “True,

this amended complaint asserted also a violation of the anti-

trust laws and a right to recover therefor. But the circum-

stance that this claim for relief may not be well founded

should not deprive the plaintiff, etc.” (Emphasis ours). Jn

its present petition for a writ Pangborn does not mention

these prayers or rely in any way upon the Sherman Act.

Instead it attempts (1) to interpolate prayers from its

attempted further amendment of the Amended Complaint

(R. 202, prayers 10 and 11), which the courts below, in the

exercise of the discretion conferred by Rule 15(a) F. R.

C. P., refused to permit; and (2) to add an entirely new

prayer for the recovery of damages and expenses incident

to the interference proceedings involving the revived Peik

application.

Even, however, if prayers numbered (10) and (11) of

the proposed amendment to the amended complaint are prop-

erly to be considered here (as is clearly not the case), it is

evident that no valid claim is stated because: (1) the fact

that there was no fraud in the procurement of the Pitts-

burgh judgment has become res judicata** (41 F. Supp.

*S. N. 570,782, filed October 24, 1931, became abandoned

April 16, 1942. S. N. 742,365, filed September 1, 1934, became

abandoned May 7, 1941.

**Not only did the Pittsburgh court reject all of Pangborn’s

charges of fraud in connection with the Hollingsworth-Grocholl

Situation, but Pangborn was then in a position to assert the fraud

which it now claims in connection with the revival of the aban-

8

841); and (2) the parties, as Pangborn concedes ( Pet., p.

22), entered into a settlement contract after which Pangborn

consented to the judgment in the Pittsburgh case (R. 19-20

in No. 481).

It will be noted that neither in the “Summary Statement”

contained in Pangborn’s petition for certiorari (pp. 2-13)

nor in its brief are there any record references to show that

the “facts” contained in the numerous factual statements

relied on were pleaded. The only record references are to

actions taken by the courts below, to patent applications and

drawings in an “Exhibit Book”, and to the pleadings in the

most general way (e.g., Pet., p. 12). This, despite the fact

that the amended complaint (R. 15la-195a) is forty-five

pages long, and appears to be an attempt to allege every

“fact” which could conceivably have any bearing on the

situation—and many which could not. This procedure is

attempted to be justified upon the theory that if Pangborn

“would be entitled to relief under any state of facts which

might be proved in support” of its pleadings, a valid claim

is stated (Pet., p. 2).

Manifestly this method of procedure represents a studied

attempt to confuse the issue and lead the courts to believe

that some valid claim, however dimly apprehended, lurks in

the pleadings. It is plain that any attempt on our part to

segregate the true from the false* in the “facts” which are

stated would serve no useful purpose, and we therefore con-

tent ourselves with a caveat as to the integrity of Pangborn’s

factual statements.

doned Peik application. Having failed to present this latter claim

at that time, Pangborn may not do so now (Baltimore S. S. Co.

v. Phillips, 274 U.S. 316).

*As an example of falsity there is the statement( Pet., pp. 5,

6 and 7) that Pangborn’s assignors were adjudged prior inventors

to Peik, whereas it was merely held that the Peik application did

not disclose the issue of the interference (Peik v. Rosenberger,

113 F. 2d 129). Such a holding does not constitute an award of

priority (/n re Hoover, 134 F. 2d 624).

—

9

CONCLUSION

No important question of Federal law is involved in

respect of the validity of the amended complaint. There is

indeed nothing for any court to decide which has not already

been decided either by the Patent Office or the Pittsburgh

Federal Court. If there were anything to decide, the ques-

tion as to the validity of the amended complaint would be

a narrow one to be decided on the facts peculiar to this mani-

festly unusual case, and of no general interest. Although

Pangborn seeks to endow this case with importance by

reference to the public interest (Pet., pp. 21-23) it specifi-

cally says (Pet., p. 25) “no attempt was made to set aside

the decree and judgment in the ‘Pittsburgh suit’ * * * relief

was sought only from the suitor”’—and of course only in

favor of Pangborn, not the public.

Respectfully submitted,

Hucu M. Morris,

3018 duPont Building

Wilmington 41, Delaware

Tuomas TURNER COOKE,

120 Broadway

New York 5, N. Y.

Counsel for Respondent,

The American Foundry

Equipment Company.

Lioyp F. THANHOUSER,

49 Wall Street

New York 5, N. Y.

Grorce T. Coutson,

3018 duPont Building

Wilmington 41, Delaware

Of Counsel

January 27, 1949.