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Chapman Performance Products v. Producers Sales

OCTOBER 17, 1973.

CHAPMAN PERFORMANCE PRODUCTS, INC. ET AL., PLAINTIFFS-APPELLEES,

v.

PRODUCERS SALES, INC. ET AL., DEFENDANTS-APPELLANTS.



APPEAL from the Circuit Court of Cook County; the Hon. DANIEL A. COVELLI, Judge, presiding.

MR. JUSTICE DIERINGER DELIVERED THE OPINION OF THE COURT:

Rehearing denied January 9, 1974.

This is an appeal by the defendants, Producers Sales, Inc., an Illinois corporation, Louis F. Guenther and Charles P. Barcik and C.F.C. Enterprises, from an order of the Circuit Court of Cook County denying a motion to dissolve a temporary injunction enjoining them from using the name "Kar-Lok" and from manufacturing and distributing or selling an anti-theft device bearing the trade name "Kar-Lok" and from violating or using the specifications under United States Patent No. 3,538,725.

The plaintiffs are Chapman Performance Products, Inc., an Illinois corporation, David F. Arlasky and Joyce Arlasky.

The issue for review is whether the complaint states a cause of action for patent infringement which is in the exclusive jurisdiction of the United States District Court.

The defendants assigned their interest in patent No. 3,538,725 to the plaintiffs, and on January 29, 1973, the plaintiffs filed a verified complaint alleging the defendants breached and violated that assignment by manufacturing, distributing, and selling a certain anti-theft device, thereby usurping their rights. The complaint sought relief by way of an accounting, $200,000 damages, and a temporary restraining order or temporary injunction.

On March 14, 1973, defendants presented a motion to strike plaintiffs' complaint on the grounds the complaint stated a cause of action for patent infringement, which is in the exclusive jurisdiction of the United States District Court. This motion was denied. On March 30, 1973, defendants presented a motion to dissolve the temporary injunction granted by the court. This motion was denied, and the defendants appeal from that order.

The defendants contend jurisdiction lies in the United States District Court because the cause of action brought by the plaintiffs cannot be decided without reference to federal patent laws. Sections 1338 (a) and (b) of Chapter 28 of the United States Code provide:

"(a) The district courts shall have original jurisdiction of any civil action arising under any Act of Congress relating to patents, copyrights and trade-marks. Such jurisdiction shall be exclusive of the courts of the states in patent and copyright cases.

(b) The district courts shall have original jurisdiction of any civil action asserting a claim of unfair competition when joined with a substantial and related claim under the copyright or trademark laws."

The plaintiffs maintain the patent matters are not substantial and are "incidental to the overriding issue of unfair competition and deceptive trade practices on the part of the defendants," and that the injunction is only concerned with the use of the name "Kar-Lok." However, the injunction is broader than merely prohibiting the use of the name. The Petition for Temporary Injunction contains the following language:

"9. That all the defendants herein be restrained and enjoined from using in any manner or form the name Kar-Lok and restrained and enjoined from manufacturing and selling the product Kar-Lok and also restrained and enjoined from using and violating upon the rights granted to Chapman Performance Products, Inc. by said Patent No. 3,538,725 * * *."

The order of the court states the defendants are enjoined and restrained from "manufacturing, distributing or selling in any manner an anti-theft automobile device bearing the trade name Kar-Lok," and "from violating or using the specifications in substance of those existent under United States Patent No. 3,538,725 until further order of this Court."

• 1 Thus, it appears that the temporary injunction does not merely proscribe unfair competition, but extends to preventing the use of the "specifications in substance of those existent" under the patent in question. In the case of Ideal Toy ...


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