Source: https://supreme.justia.com/cases/federal/us/365/260/
Timestamp: 2019-04-22 08:10:12+00:00

Document:
Justia › US Law › US Case Law › US Supreme Court › Volume 365 › Schnell v. Peter Eckrich & Sons, Inc.
In this patent infringement suit in a Federal District Court in Indiana, an Illinois manufacturer which had no place of business in Indiana was named as a party defendant after it had openly assumed and controlled the defense of its customer, an Indiana corporation which had used the patented device in Indiana.
Held: by so doing, the Illinois manufacturer did not, as a matter of law, subject itself to the jurisdiction of the Court in Indiana or waive the statutory venue requirements of 28 U.S.C. § 1400(b). Pp. 365 U. S. 260-264.
Allbright-Nell to dismiss as to it because venue in the Northern District of Indiana was improper was sustained without opinion. The Court of Appeals affirmed, 279 F.2d 594. [Footnote 2] We granted certiorari, 364 U.S. 813. We affirm the judgment.
the presence of Allbright-Nell through the attorneys, openly defending and controlling the suit against Eckrich, gave the court jurisdiction over the former. [Footnote 4] In effect, petitioners argue, Allbright-Nell was, in fact, before the court protecting its own interests, was acting only as a "puppeteer" of Eckrich, and was seeking all the benefits of litigation but attempting to avoid all of its responsibilities, save the ultimate application of res judicata. It therefore should be deemed to have entered a general appearance and waived its objection to venue. In the face of § 1400(b), however, we think not.
"may be lost by failure to assert it seasonably, by formal submission in a cause, or by submission through conduct, . . . courts affix to conduct [such] consequences as to place of suit consistent with the policy behind"
practice complained of here was not at all unusual at the time of this statute's passage, [Footnote 5] and for us to enlarge upon the mandate of the Congress as to venue in such patent actions would be an intrusion into the legislative field.
weakness of appellant's position, which, upon analysis, is found to be this: that, upon the theory that Ogilvie would be estopped by a final decree if and when made, it sought to bring him into the suit, before final decree, as if he were already estopped. However convenient this might be to a complainant in appellant's position, it is inconsistent with elementary principles."
At. pp. 241 U. S. 28-29.
Petitioners stress that here the conduct of Allbright-Nell continued after it was named a party. We are not persuaded that this has any bearing upon the issue to be decided. The conduct which will amount to a waiver of venue is that of the defendant alone, and nothing a plaintiff might do can change the legal consequences which attach to that conduct. Cf. Olberding v. Illinois Central R. Co., 346 U. S. 338. Certainly the point in time at which petitioners sought to join Allbright-Nell will control the amount of its total activities which will be considered in determining whether venue has been waived; but this cannot alter the conclusions to be drawn from that conduct. Therefore, whether Allbright-Nell's actions took place before or after being named a party is immaterial to the question of waiver under the special venue provisions of § 1400(b).
Petitioners insist that this result exalts form over substance. We think not.
"The requirement of venue is specific and unambiguous; it is not one of those vague principles which, in the interest of some overriding policy, is to be given a 'liberal' construction."
Olberding v. Illinois Central R. Co., supra, at 346 U. S. 340.
The appeal was allowed under 28 U.S.C. § 1292(b) on the certificate of the District Court that the order dismissing Allbright-Nell involved a controlling question of law and that immediate appeal would materially advance the termination of the litigation.
Subsequently, a second suit involving a different patent was filed in the same court, naming both of the respondents here as defendants. The court entered similar orders in it, and the cases were consolidated on appeal.
It is conceded that Allbright-Nell, by openly controlling the defense of this suit, in which it has an interest, will be bound by the final judgment and precluded by res judicata from relitigating the same issues. Souffront v. La Compagnie Des Sucreries De Porto Rico, 217 U. S. 475; Lovejoy v. Murray, 3 Wall. 1.
Some 30 years prior to that time, this Court had occasion to pass on the effect of such conduct with relation to res judicata in Lovejoy v. Murray, 3 Wall. 1, 70 U. S. 19 (1866), which held that one who controlled the defense in a suit was precluded from relitigating in a second action the issues adjudicated in the first.
Peter Eckrich & Sons, Inc.

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