Free Opening Brief in Support - District Court of Delaware - Delaware

Case 1:04-cv—01436-JJF Document 31-11 Filed 05/19/2005 Page 1 014

Case 1:04-cv—01436-JJF Document 31-11 Filed 05/19/2005 Pagegaggilj OH6
Westlaw
1987 Wl,. i9882 Fage 1
l987 Wl.- 19882 (E..D..Pa.)
(Cite as: 1987 WL 19882 (E.D.Pa.))
I-! breach of his employment agreement with the
Only the Westlaw citation is currently available company, rnisappropriated trade secrets and
technological information of his former employer to
invent an improved drain valve for use in the
United States District Court, E..D.. Pennsylvania. railroad industry and to market it for his own
Fred F. PZRKLH and ”l`herrn—Omega Tech, Inc. benefit. As relief Ogontz sought a declaratory
v. judgment that the patents obtained by Pirlcle for the
OGONTZ CONTROLS COMPANY and Thomas invention were really the property of Ogontz and a
M. Kenny. preliminary injunction against }’irlde's marketing of
Civ. A. N0, 86-;33’/4. the drain valve
Nov. 12, 1987. After extensive litigation in state court at both the
Thomas B. Kenworthy, Morgan, iwis & Bockius, trial and appellate levels, plaintiffs initiated this
Philadelphia, i’a., for plaintiffs. action against Ogontz in federal court on June 9,
1986, seeking both monetary and declaratory relief.
Dale M. Heist, Norman L, Norris, Woodcock, in the complaint, plaintiffs assert eight separate
Washburn, Kurtz, Maclriewicz & Norris, David H. causes of action. The first three counts are federal
Marlon, Montgomery, McCracken, Walker & law claims for patent infringement, monopolization
Rhoads, Philadelphia, Pa., for Ogontz Controls of sales of railroad mechanical heeze protection
Company andT Kenny. valves and attempted rnonopolization of repairs to
such valves, and unlawful combination in restraint
MEMORANDUM of trade. Counts four through seven consist of
claims based on state law. Finally, the eighth count
CLll*FORlD SCOTT GREEN, District Judge. seeks a declaratory judgment in favor ot Pirlrle with
regard to the ownership of the patents.
*1 In light of the October 30, 1987 decree nisi
issued by Judge Sugarman in the parallel state On October 30, l987, Judge Sugannan, ruling on
action Ogonrz Controls Company v Pitt/de, Court an extensive state record, decided in Ogontz' favor.
of Common Pleas of Chester County, Pennsylvania, I-le stated:
Equity Action No. 152 (l983), defendants Ogontz
Controls Company ("Ogontz") and Tliomas M. [W§e have, as the result of our assessment ofthe
Kenny have moved this court to stay the present credibility of the witnesses who appeared before us,
action until a final determination is reached with determined that the devices which are the subjects
respect to the ownership of the patents in dispute ofthe United States Patents hereinbefore referred to
between Ogontz and plaintiffs. Upon consideration [nos. 4,438,777 and 4,460,007] were and remain the
of defendants motion and plaintiffs' response in property of the Plaintiff §Ogontz§ and therefore
opposition thereto, and following oral argument, a must be assigned to the Plaintiff by the Defendant
stay of this federal action shall be granted for the {Pirkle].
reasons stated below.
(Decree nisi, October 30, 1987, p 3).
On September 6, l983, defendant Ogonm
commenced litigation in state court against former Counsel for Pirkle at oral argument has made clear
employee Fred F. Pirkle, alleging that Pirltle, in his intention to tile exceptions to the decree nisi and
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Case 1 :04-cv—O1436-JJF Document 31-11 Filed 05/19/2005 Pagegdgg {,2 of 26
1987 WL 19882 Page .2
1987 WL 19882 (E. D Pa.)
(Cite as: 187 WL 19882 (E.DiPa,))
to appeal the decision if necessary. Consequently, it decision governing the issues in dispute. 460 US.
appears that the issue of ownership, despite Judge at 16.
Sugarmarfs ruling, cannot be taken as settled until
plaintiffs have had a fuii opportunity to exhaust The second factor cited by the Court clearly
their remedies in state court. militates in favor of staying this federal actiont
First it is a waste of judicial resources for this court
Although plaintiffs are correct in asserting that to rehear extensive evidence and arguments already
"[a]bstention from the exercise of federal presented before the stare court with regard to the
jurisdiction is the exception, not tire rule," Colomrlo issue of ownership. Second, it is unfair to impose
River Water Ccnserwrrioiz District v. United States, on either party the burden of Eitigating the identical
424 US. 800, 813 (1976), I find that the issue of ownership in two forums. The eighth
exceptional circumstances of the instant case calls count of ?irk1e's complaint unquestionably
for judicial deference to tire pending state duplicates the issue being litigated in the state court
proceeding. proceedings. ln addition, this court cannot
disregard the aimost symbiotic relationship between
*2 ln Colorado River, the Supreme Court the remaining federal causes of action of plaintiffs
recognized that compiaint and the resolution of the issue oi
ownership. [ENE] Indeed, the very foundation of
diet are prrincipies unrelated to considerations of piaintiffs' patent infringement claim requires the
proper constitutional adjudication and regard for determination of ownership of the patents which
{Cd€I`l·1l—SE21¥€ relations which govern in situations defendants allegedly infringed. If Ogontz is the
involving the contemporaneous exercise of owner as determined by the state court, plaintiffs
concurrent jurisdictions, either `oy federal courts or have no standing to assert a claim of patent
by state and federal courts. Tiiese principles rest intringement in federal court Wirere as here, a
on considerations of "[w]ise indicia} administration, state court has decided that the patents were to the
giving regard to conservation of judicial resources contrary owned by the alleged infringer it would be
and comprehensive disposition of litigation." both injudicious as weil as contrary to principies oi
comity for this court to proceed on the infringement
424 U.S. at 817 (quoting Kemrest Mfg. Co v claim in the absence of a final riding from the state
C—O—Twn Fire Equipment C0, 342 U.S. 180, 18.3 court. With regard to the monopolization claim,
(1952)). in accordance with this recognition, the the issue of ownership is very pertinent to plaintift`s'
Court determined that circumstances permitting the ability to satisfy the antitrust injury requirement of
dismissal of a federal suit in response to parallel Clayton Act § 4. Tire remaining claims of
state proceedings for reasons of wise judicial plaintift`s’ compiaint arrive in federal court by way
administration, "tliough exceptional, do of pendent jurisdiction, The clear nexus between
nevertheless exist,"424 U.S.atSlS. the federal and state actions weighs in favor of
staying the present proceeding since it avoids the
The "exceptional circun·rstances" test as formulated evil of piecemeal litigation. As Justice Cardoza
by the Court in Colomrlo River and restated in its observed in Landis v Norrlt American Co, 299
subsequent decision in Moses H Cone Memorial US, 248,25465 {1936),
Hospital v Mercuijy Construction Corp, 460 U.S.
E (1983), requires a consideration of the *3 the power to stay proceedings is incidental to
inconvenience of the federal forum, the desirability the power inherent in every court to control the
of avoiding piecemeal litigation and the order in disposition of the causes on its docket with
which jurisdiction was obtained by 15, Two economy of time and effort for itself, for counsel,
additional factors lrigirlighted in Moses H Cone are and for litigants. How this can best be clone calls
the comparative progress made in each proceeding for the exercise of judgment, which must weigh
and wlietlier federal or state law provides the rule of competing interests and maintain an even balance,.
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Case 1:04-cv—01436-JJF Document 31-11 Filed 05/19/2005 Pageptagt 43 gf 26
1987 WL 19882 Page 3
1987 WL 19882. (E.D.Pa.)
(Cite as: 1987 WL t9882 (E.l).Pa.))
Another factor warranting a stay is the substantial END OF DOCUMENT
time lag of this federal action behind the state
proceedings. White this courts jurisdiction was
not invoked until June of 1986, the state trial and
appellate courts have had jurisdiction over the
dispute on the ownership oi` the patents since as
September of 1983.
Finally, where as here, the ruies of decision with
regard to the ownership ofthe patents are governed
by state law, and the state court has substantially
progressed with the task of deciding issues of state
law of` critical importance to a parallel action in
federal court, principles of comity in addition to
those of wise judicial adrninistration strongly
counset deference to the state court determination
by staying the federal action.
in accordance with this courts eonciusion that
exceptional circumstances warrant a stay and that
the current iitigation in the Pennsyivania courts is
"an adequate vehicle for the complete and prompt
resolution ofthe issues between the parties," Moses
H Cone, 460 U.S. at 2.8, dei’endants' motion for a
stay of the entire federal proceeding wiil be granted,
and the Clerk of the Court directed to place the
abovecaptioned action on this courts suspense
docket.
An appropriate order follows.
ORDER
AND NOW, this 12th day of November, 1987,
upon consideration of det`endar1ts' motion for a stay
and plaintiffs response in opposition thereto, and
following ora} argument, ET IS ORDERED that
defendants motion for a stay is GRANTED, and the
Cierk ofthe Court shaii piace the above—captioned
action on this courts suspense docket.
FN1. This court also notes the
aeknowiedgment rnade by counsel tor
Pirkie during oral argument on the stay
that a counterciaim containing certain
claims similar to those asserted in Piritle's
federai cornpiaint was tiled in state courtby
Pirkle, but was subsequently withdrawn.
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