Case Name: KLEINMAN v. BETTY DAIN CREATIONS, Inc.
Court: United States Court of Appeals for the Second Circuit
Jurisdiction: United States
Decision Date: 1951-05-17
Citations: 189 F.2d 546
Docket Number: No. 228, Docket 21965
Parties: KLEINMAN v. BETTY DAIN CREATIONS, Inc.
Judges: 
Reporter: Federal Reporter 2d Series
Volume: 189
Pages: 546–555

Head Matter:
KLEINMAN v. BETTY DAIN CREATIONS, Inc.
No. 228, Docket 21965.
United States Court of Appeals Second Circuit.
Argued April 2, 1951.
Decided May 17, 1951.
Clark, Circuit Judge, dissented in part.
Martin J. Walzer, New York City, for appellant.
Irving Seidman, New York City, for appellee.
Before L. HAND, Chief Judge, and AUGUSTUS N. HAND and CLARK, Circuit Judges.

Opinion:
AUGUSTUS N. HAND, Circuit Judge.
The complaint herein sets forth two causes of action, one for infringement of Patent No. 2,422,834 issued to the plaintiff on an application filed in January 1947, and one for breach of a contract to pay the plaintiff for use of the patented article. Judge Rif-kind dismissed the complaint, finding the patent not infringed and invalid for want of invention and finding no jurisdiction over the second cause of action, there being no diversity of citizenship between the parties.
The appeal from the decision holding the patent void for lack of invention and not infringed need not delay us long. The patent suit covered a removable shoulder pad for use with women's dresses. The pad was bifurcated so that it could be put on by passing the shoulder strap of a slip or brassiere between its jaws which were then snapped together around the strap holding it in place on the shoulder without the necessity of attaching it to the dress. The lower part of the pad also, served to cushion the skin against any chafing by the shoulder strap and the tipper part preserved the dress line by concealing the depression that the weight of the strap made in the lower or cushioning element of the pad. The infringing article was not bifurcated and therefore would not preserve the dress line but had two tabs on its upper surface which were fitted with snaps so that the pad could be slipped under a shoulder strap and held in position by passing the tabs over the strap and snapping them to the pad.
We need not go extensively into the prior art. Plaintiff conceded that shoulder pads removably attached to the shoulder straps of undergarments were well known in the trade and admitted that his claim to patentability rested on the cushioning effect of his pad which he claimed was unknown to the prior art in which all pads were placed on top of the undergarment shoulder strap rather than partly beneath. Even were this the case, the reversal of position of strap and pad would hardly render the device patentable but in any event the patented device seems substantially anticipated by Kerrigan No. 2,440,548 (filed April 1946), and Stehlik No. 2,416,415 (filed September 1945). Stehlik had a thin casing between shoulder strap and skin, the greater part of the pad being above the strap. Kerrigan's pad was positioned between shoulder strap and skin. True, the plaintiff claimed a date of conception in 1941 and swore to an invention earlier than that of Kerrigan and Stehlik. See Rule 75, Rules U. S. Patent Office, 35 U.S.C.A.Appendix. But the undisputed evidence indicated that the plaintiff's 1941 invention was very different from the one in suit. It was not bifurcated and admittedly not commercially practicable. Having failed to show just when his invention was conceived, plaintiff must rest upon his application date. The brief outline above is sufficient to indicate that his asserted advance over the then existing art was obviously so far below the present exacting standard of patentability that the patent in suit was properly found invalid for want of invention as well as not infringed. Jungersen v. Ostby & Barton Co., 335 U.S. 560, 69 S.Ct. 269, 93 L.Ed. 235; Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 71 S.Ct. 127; Crest Specialty Co. v. Trager, 71 S.Ct. 733; Merit Manufacturing Co. v. Hero Mfg. Co., 2 Cir., 185 F.2d 350; Paramount Industries, Inc., v. Solar Products Corp., 2 Cir., 186 F.2d 999; Youngs Rubber Co. v. Allied Latex Co., 2 Cir., 188 F.2d 945; Killian & Co. v. Allied Latex Co., 2 Cir., 188 F.2d 940; Lenox v. Landers, 2 Cir., 188 F.2d 744.
The plaintiff also asserts that the District Court had jurisdiction to try the second cause of action for breach of contract. There being no diversity of citizenship between the parties, it is clear that a federal court would lack jurisdiction to pass on that cause of action standing alone. It is equally clear that it had jurisdiction to decide the first cause of action for infringement of a patent. The extent to which admitted jurisdiction over the first cause of action involves dependent jurisdiction over the second is the final question before us.
We have had frequent occasion to interpret and apply the case of Hurn v. Oursler, 289 U.S. 238, 53 S.Ct. 586, 77 L.Ed. 1148, wherein the Supreme Court set forth the tests for determining the situations in which dependent jurisdiction exists. It was there held that dependent jurisdiction existed to decide a single cause of action upon a non-federal ground recovery on the federal ground having failed, but that jurisdiction did not exist to adjudicate a non-federal claim merely because it was joined with a federal one unless there was substantial identity in the facts to be proved to support each of the two. Although efforts on the part of this court to apply this rule have at times been criticised, the Supreme Court has never seen fit to review them, and the other circuits which have passed on the question appear to have been in accord with our views.
It is true that the failure to invoke dependent jurisdiction may often be uneconomical because a further trial in a state court may become necessary, nevertheless considerations of judicial economy cannot extend the jurisdiction of the federal courts at the expense of those of the states.
The complaint before us sounds primarily in contract. It alleges that defendant's president, "after examining said model [of the shoulder pad] agreed that should the use of the device be practicable after it had been duly tried, the plaintiff would be compensated" and that although the defendant made and sold many of the pads it had not paid royalties for them. Then followed an allegation that the disclosure of the device was made in confidence. The relief sought was damages for breach of the agreement.
Thus the complaint by the facts alleged and the relief sought sets forth the essentials of a license agreement and the failure to make payments thereunder. It is not a case where a defendant has wrongfully appropriated to himself the fruits of plaintiff's labors and passed them off as his own, for it is alleged that it was agreed that plaintiff should have a right to receive compensation for the use of his device and that the defendant should have the right to use it. General Motors Corp. v. Rubsam Corp., supra, n. 3. A failure to make payments under a licensing agreement does not constitute the tort of unfair competition and is actionable only in contract.
There being no allegation or proof of unfair competition we need not discuss the extent, if any, by which the recent revision of the Judicial Code, 28 U.S.C.A. § 1338(b) has broadened the rule of Hurn v. Oursler, supra, in cases where actions for unfair competition and infringement are joined, or what would be the result if the plaintiff had alleged a good claim for unfair competition and only proved a claim in contract.
To recover on his second claim, the plaintiff must prove (1) the existence of the contract, (2) that the goods were of use to the defendant, (3) that the defendant sold the goods, (4) that it failed to pay for them, and (5) the fair compensation due. The proof in the action for infringement of the patent would cover point 3 above and possibly point 2 by implication. It would certainly not involve points 1 (the existence and terms of the alleged oral contract) 4 or 5 (for damages for infringement would include the infringer's entire profit from its infringement, whereas the license agreement set forth in the contract would clearly contemplate a sharing of the profits arising from the sale of the licensed article. Furthermore, such a contract could exist independently of the validity or invalidity of a patent on the licensed device. The decisions are unanimous that jurisdiction does not exist in such circumstances and those cited in the footnote are particularly apposit, where claims almost identical with the second claim of the plaintiff were under consideration and were rejected.
In view of the foregoing authorities and what we 'believe is satisfactory reasoning the judgment of the court below is affirmed.
. E. g., Foster D. Snell, Inc., v. Potters, 88 F.2d 611; Lewis v. Vendome Bags, Inc., 2 Cir., 108 F.2d 16, certiorari denied 309 U.S. 660, 60 S.Ct. 514, 84 L.Ed. 1008; Treasure Imports, Inc. v. Henry Amdur & Sons, Inc., 2 Cir., 127 F.2d 3; Musher Foundation, Inc. v. Alba Trading Co., 2 Cir., 127 F.2d 9, certiorari denied 317 U.S. 641, 63 S.Ct. 33, 87 L.Ed. 517; Zalkind v. Scheinman, 2 Cir., 139 F.2d 895, certiorari denied 322 U.S. 738, 64 S.Ct. 1055, 88 L.Ed. 1572; Kaplan v. Helenhart Novelty Co., 2 Cir., 182 F.2d 311; Cutting Room Appliances Corp. v. Empire Cutting Machine Co., 2 Cir., 186 F.2d 997; Markert v. Swift & Co., 2 Cir., 187 F.2d 104.
. See dissenting opinions of Judge Clark in Lewis v. Vendome Bags, supra; Treasure Imports, Inc. v. Henry Amdur & Sons, Inc., supra; Musher Foundation, Inc., v. Alba Trading Co., supra; Zalkind v. Scheinman, supra; Note, 52 Yale L.J. 922; 3 Moore, Federal Practice (2d Ed.). 1817.
. Loew's Drive-In Theatres, Inc. v. Park-In Theatres, Inc., 1 Cir., 174 F.2d 547, certiorari denied 338 U.S. 822, 70 S.Ct. 68. (However, although affirming a judgment which rejected dependent jurisdiction the First Circuit seems to have at times treated the question of that jurisdiction as involving only the exercise of discretion on the part of the trial court and as founded on a doctrine resembling that of forum conveniens, Massachusetts Universalist Convention v. Hildreth & Rogers Co., 1 Cir., 183 F.2d 497. Such an interpretation of the rule in Hurn v. Oursler, supra, would seem to leave the solution even more difficult than it has often proved to be and has not we believe been adopted in any other circuit); Jordine v. Walling, 3 Cir., 185 F.2d 662, (en banc); Pearce v. Penna. R. Co., 3 Cir., 162 F.2d 524, certiorari denied 332 U.S. 765, 68 S.Ct. 71, 92 L.Ed. 350; New Orleans Public Belt. R. Co. v. Wallace, 5 Cir., 173 F.2d 145; Newport Industries, Inc., v. Crosby Naval Stores, Inc., 5 Cir., 139 F.2d 611; French Renovating Co. v. Ray Renovating Co., 6 Cir., 170 F.2d 945; General Motors Corp. v. Rubsam Corp., 6 Cir., 65 F.2d 217, certiorari denied 290 U.S. 688, 54 S.Ct. 123, 78 L.Ed. 593; Crabb v. Welden Bros., 8 Cir., 164 F.2d 797; Dubil v. Rayford Camp & Co., 9 Cir., 184 F.2d 899; Strachman v. Palmer, 1 Cir., 177 F.2d 427, 12 A.L.R.2d 695, 701; cf. United Lens Corp. v. Doray Lamp Co., 7 Cir., 93 F.2d 969.
. See e. g., Geneva Furniture Mfg. Co. v. S. Karpen & Bros., 238 U.S. 254, 259, 35 S.Ct. 788, 59 L.Ed. 1295; Zalkind v. Scheinman, supra, n. 1, 139 F.2d at page 902; Schulman and Jaegerman, Some Jurisdictional Limitations on Federal Procedure, 45 Yale L.J. 393, 398; Note, 64 Harv.L.Rev., 968, 976.
. Of course the mere fact that a plaintiff has made a formal error in his pleadings by setting forth two grounds of recovery on a single cause of action as two separate causes of action would not alone prevent the existence of dependent jurisdiction. Warner Publications, Inc., v. Popular Publications, 2 Cir., 87 F.2d 913, 914.
. Cf. Kaplan v. Helenhart Novelty Co., supra, n. 1; Cutting Room Appliances Corp. v. Empire Cutting Machine Co., id.; Markert v. Swift & Co., id.
. Cf. Lewis v. Vendome Bags, Inc., supra, n. 1.
. See French Renovating Co. v. Ray Renovating Co., supra, n. 3, 170 F.2d at page 947; United Lens Corp. v. Doray Lamp Co., id., 93 F.2d at page 971.
. Foster D. Snell, Inc. v. Potters, supra, n. 1; Loew's Drive-In Theatres, Inc. v. Park-In Theatres, Inc., supra, n. 3; French Renovating Co. v. Ray Renovating Co., id.; General Motors Corp. v. Rubsam Corp., id.