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Zip Mfg. Co. v. Pep Mfg. Co.

District Court, D. Delaware

October 24, 1930

No. 815


 [*184]  NIELDS, District Judge.

This is a motion by the defendant for an injunction staying the trial of this suit until arbitration of the issues involved has been had.

The bill of complaint charges the defendant with infringement of United States letters patent No. 1,353,197, for the manufacture and sale of a certain grinding compound, and prays the usual relief. On the filing of the bill the plaintiff filed a motion for a preliminary injunction with supporting affidavits.Before the hearing on this motion the defendant moved the court that proceedings in the suit be stayed pending arbitration of the issues involved, in accordance with the terms of a certain agreement in writing between the parties to this suit. This agreement embodies the terms of settlement of another and earlier patent suit involving the infringement by the defendant of the same patent which is the basis of the suit brought in this court. The arbitration provisions of the agreement are as follows:

"(10) It is expressly stipulated and agreed that Second Parties [plaintiffs in this suit] do not regard the grinding compound which First Party [defendant in this suit] is at present manufacturing [**2]  and selling (a specmen of such compound in a sealed container to be at once furnished Second Parties by First Party) to be an infringement of the aforesaid Letters Patent No. 1,353,197, or any Letters Patent owned by Second Parties, or any of them, and that Second Parties will make no objection to the continued manufacture  [*185]  and sale of such compound; furthermore, in case First Party should hereafter change its present non-infringing compound to one which Second Parties regard to be an infringement of a patent owned by them, or any of them, the question of validity and infringement shall be determined by arbitration, as hereinafter provided, and at the same time should infringement be held to have occurred, it shall be determined by the same arbitration what royalty shall be paid by First Party in lieu of profits or damages for the manufacture and sale of such compound, and First Party shall have the right to continue such manufacture upon condition that it account for and pay such royalty monthly thereafter."

"(11) In the event the parties hereto shall disagree as to any of the terms or the interpretation thereof, or the respective obligations of the parties hereunder,  [**3]  then such question shall, at the request of either party, be submitted to arbitration in accordance with the provisions of the now existing Statutes of the State of New York in such case made and provided."

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44 F.2d 184 *; 1930 U.S. Dist. LEXIS 1399 **

ZIP MFG. CO. et al. v. PEP MFG. CO.


arbitration, parties, commerce, infringement, maritime, provisions, compound, patent, transactions, manufacture, settle

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