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3M v. Eco Chem, Inc.

United States Court of Appeals for the Federal Circuit

March 15, 1985

Nos. 83-1329, 84-1378

Opinion

 [***350]   [*1258]  DAVIS, Circuit Judge.

This appeal discloses a continued series of efforts to avoid compliance with a default judgment of patent infringement against appellant Eco-Chem Inc. (ECI). In the court below (the United States District Court for the District of Minnesota) these attempts were unsuccessful. Nor do they prevail in this court. After fully appraising appellants' points, we hold that the district court reached the right result in rejecting those efforts at avoidance or evasion that are now before us, and therefore we affirm the decisions below.

The undisputed (or undisputable) facts are these:

Appellant Stephanie Rynne, her parents and her sister owned Conversion Chemical Co. (Conversion), which engaged [**2]  in the development, manufacture and sale of chemicals to the electroplating industry. Appellant George Rynne, Stephanie's husband, was a Conversion employee. Initially a development chemist, he rose through the ranks of Conversion and became vice president in charge of sales. He was familiar with all of Conversion's trade secrets and patented processes.

In 1974, appellee Minnesota Mining and Manufacturing Co. (3M) purchased Conversion in order to acquire its patented electroplating technology. As part of the sale, 3M [***351]  acquired Conversion's United States Patent Nos. 3,171,765, 3,729,394, and 3,769,182, and Conversion's application for what later became patent 4,070,165, each relating to methods of electroplating or refinishing metals. After the sale, George Rynne worked for 3M as a general sales manager in 3M's electroplating operation.

George Rynne left 3M in February 1977. The next month, George and Stephanie Rynne established appellant Eco-Chem, Inc. (ECI), a Minnesota corporation. Stephanie Rynne became president of ECI, George Rynne became Secretary-Treasurer. Stephanie owned 80% of ECI's stock; two salesmen each owned 10%. ECI entered the electroplating business, selling [**3]  chemicals produced according to formulae developed by George Rynne while he worked at Conversion. In 1978, prior to the current suit, the Rynnes left Minnesota and moved to Georgia.

In January 1979, 3M filed this action against ECI, in the Minnesota district court, alleging that ECI had infringed the patents 3M acquired in the purchase of Conversion. After seven extensions of time, ECI finally answered, admitting jurisdiction and venue. 3M then served ECI with interrogatories and a request for production of documents. In the interim, the Rynnes decided to disband ECI. ECI's response to the discovery request then was (in full text):

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757 F.2d 1256 *; 1985 U.S. App. LEXIS 14749 **; 225 U.S.P.Q. (BNA) 350 ***; 1 Fed. R. Serv. 3d (Callaghan) 15

MINNESOTA MINING & MANUFACTURING COMPANY, a corporation of Delaware, Appellee v. ECO CHEM, INC., a corporation of Minnesota, George B. Rynne, an individual, et al., Appellants

Prior History:  [**1]   Appealed from U.S. District Court for the District of Minnesota.

CORE TERMS

district court, venue, patent, parties, substitution, egos, default judgment, joinder, successor in interest, interrogatories, infringement, stockholders, joined, personam jurisdiction, cases, courts, electroplating, appellants', discovery, damages, stock

Civil Procedure, Discovery, Misconduct During Discovery, Motions to Compel, Copyright Law, Civil Infringement Actions, Jurisdiction, General Overview, Patent Law, Jurisdiction & Review, Personal Jurisdiction & Venue, Parties, Substitution, Motions for Substitution, In Rem & Personal Jurisdiction, In Personam Actions, Challenges, Death of Party, Preliminary Considerations, Venue, Multiparty Litigation, Business & Corporate Law, Shareholder Duties & Liabilities, Piercing the Corporate Veil