Rice & Adams Corp. v. Lathrop

Background

A company (the respondent) sued another company (the petitioner) in federal court in western New York, claiming repeated and continuing patent infringement and asking for both an injunction and an accounting of profits and damages. The bill said a prior infringement suit had upheld the patent and that the petitioner had defended and paid that earlier judgment. When this new suit began, only about 41 or 42 days remained on the patent. The respondent moved for a preliminary injunction two days after filing, but the district court denied that motion and later refused the petitioner’s requests to transfer the case to the law docket. After the patent expired, the case went to trial and the court entered a decree finding the patent valid and infringed; that decree was affirmed on appeal.

Reasoning

The Court’s question was whether the district court could keep the case as one in equity after it had denied the preliminary injunction and the patent later expired. Relying on prior decisions such as Clark v. Wooster, the Court said jurisdiction attached when the bill was filed while the patent still ran, and denying a preliminary injunction in the court’s discretion did not prevent the court from retaining equitable jurisdiction. The expiration of the patent after filing did not strip the equity court of power to provide the full, incidental relief appropriate in such cases, including an accounting.

Real world impact

The decision affirms that when a patent suit is properly filed while a patent remains in force, a federal equity court may keep the case and provide complete equitable relief even if a preliminary injunction was denied or the patent later expires. This affects how parties seek injunctions and motions to transfer between law and equity dockets, and it upholds the trial court’s ability to resolve infringement and award an accounting.