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

Case 1:04-cv—01436-JJF Document 31-10 Filed 05/19/2005 Page1 013

Case 1:04-cv—01436-JJF Document 31-10 Filed 05/19/2005 Page Eagéiio of,26
Westlaw
Not Reported in F.Supp. Page l
1990 WL 312778 (E.D.N..C ), 19 U.S..P.Q.2d l396
(Cite as: 1990 WL 312778 (E.D.N.C.))
H misappropriation of technical information. in that
United States District Court, ED. North Carolina, action, General Electric asks that a constructive
Wilmington Division. trust be imposed upon patents 4,450,0i6 and
SANTRADE, LTD., et al., Plaintiffs 4,450,020 and that Santrade and Sandvik be
v. required to convey them to General Electric.
GENERAL ELECTRIC COMFANY, Defendant
No. 90—107—CIV··7·~D. Sandvik is the named assignee of these two patents
at this time. In the Washington action, however,
Dec.6, 1990.. General Electric contends that the technical
George Rountree, IH, Rountree, Seagie & Brawley, inforniatioh upon which the patents are based was
Wilmington, NC., for Santrade, Ltd. and Sandivk misappropriated from General Electric in 1974 in
Special Metals Corporation. violation of a technical exchange agreement.
Therefore, it claims that it is the rightful owner ot
Michael Murchison, Murchison, Taylor, Kendrick, the patents.
Gibson & Davenport, Wilmington, NC., for
General Electric Co. ANALYSIS
ORDER A district court exercises its discretion in
determining whether to grant a stay.
DUPREE, District Judge.
{T]he power to stay proceedings is incidental to the
*1 Plaintiffs, Santrade, Ltd. (Santrade), and power inherent in every court to control the
Sandvik Speciai Metals Corporation {Sandvik), disposition of the cases on its docket with economy
sued defendant, General Electric Company, alleging of time and effort for itself, for counsel, and for
patent infringement pursuant to 35 USC. ᤤ 271 litigants. How this can best be done calls for the
and 28i~85. Plaintiffs request an injunction exercise of judgment, which must weigh competing
preventing further infringement. The action is now interests and maintain an even balance.
before the court upon defendants motion to stay the
proceedings until the disposition of a related case Iu.ternatio.·zrzI Nickel Compmry, Inc. v. Martin J
involving the same patents and the same parties Bcrriy, Inc., 204 F.2d 583, 586 (4th Cir.1953),
currentiy pending inaWashington state court. quoting Landis v. North American Ccmpmry, 299
U.S. 248, 254-55 (1936). There is no "rigid
FACTS rnechanicai soiution," rather the court must apply
"an ample degree of discretion" and give "regard to
This action was tiled on August 16, 1990. conservation of judicial resources and
Plaintiffs ciaim infringement of United States coniprehensive disposition of litigation." ld.
Letters Patents 4,450,016 and 4,450,020 which quoting Kerorest Maier;/?zcrr¢r·iizg Company v.
define processes for manufacturing zirconiumfbased C—O—Twc Fire Eqzeipmcnr Compmry, 342 US 180,
cladding tubs for tue} rods used in nuclear reactors. 183 (1952).
Prior to this fiiing, on January .3, 1990, General
Electric tiled suit against Santrade and Sandvik, Courts have considered a number of factors in
among others, in a Washington state court for deciding whether to stay an action pending
breach of iiduciary obligations and determination of a prior case involving the same
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Case 1:04-cv—01436-JJF Document 31-10 Filed 05/19/2005 Page Bagi:37 of 26
Not Reported in F.Supp. Page 2
1990 WL .3i2?T·'S (E.D.N.C.), 19 US P.Q,2d 1396
(Cite as: i990 WL 312778 (E,D.N.C.)}
patent. ln Irrtcrrrrrrioual Nickel, szrprrz, the Fourth On the other hand, Santrade and Sandvik will not
Circuit affirmed a Maryland district court's decision be unduly prejudiced by the granting of the stay. if
to stay an infringement action until the outcome of a they prevail in Washington, they are still entitled to
suit involving the same patent in the Southern continue the patent infringement case in this court,
District of New York The action in New York with any damages accruing during tire time that the
was instituted first and that court was the rnost stay is in effect. The stay will allow the ownership
convenient to the parties, counsel and witnesses it issue to be determined by the Washington court and
was also not judicially economical to try the action necessitate this court's involvement only if needed
inapiecerneal fashion. to rule upon the federal issue. This will occur if
Santrade and Sandvik prevail in the state court
*2 A like result was reached by the Federal Circuit action.
in infemredics Iimisoiri, [irc. v Regents of i/le
Urrivcrrsiry of Miiruzerom, 804 F.2d 129 CONCLUSION
(Fed.Cir.i9S6). That court affirmed the grant of a
stay in a patent validity case, pending the Accordingly, defendants motion to stay the
disposition of a previously filed state action which proceedings in this suit is granted,. It will remain in
would determine whether a licensee held a royalty effect pending disposition of Genera! Electric
free license under the same patent. The state action Company v .S`m·m'vik Special Metals Corporation,
was filed first and was well advanced at the time No. 90—2—00013—l, in the Washington state court.
that the stay was sought. Additionally, if the state
court held that the license was royalty free, the SO ORDERED.
federal suit would he moot. Lastly, patent validity
was not an issue in thc state court action, and so the 1990 WL 3i2778 (E.D.N.C.), 19 U.S.P.Q.2d 1396
state court would not be called upon to apply
federal law. END Oli DOCUMENT
in evaluating the facts in the present case, the
balance weighs in favor of staying the proceedings.
Therefore, for the reasons set forth below,
defendants motion will be granted.
The Washington action was instituted first and has
progressed further than the action here. Discovery
lias commenced in the state case, while none has
'oegun in the federal case.
A second and important factor is that a disposition
in General Electrics favor in the Washington action
will moot the infringement action here. lf General
Electric is held to be the rightful owner of United
States Letters Patents 4,450,0% and 4,450,020, it
could not he liable for infringement Therefore, a
stay conserves the time and resources of the parties,
counsel, and the courts should that be the outcome
of that case. Lastly, all of the issues in Washington
will be disposed oi by the application of state
substantive law, rather than the interpretation of any
federal patent statutes.
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