The opinion of the court was delivered by: Kevin Thomas Duffy, District Judge:
Plaintiff Maruzen International Co., Ltd. ("Maruzen") brings
this action against, inter alia, defendants Hyman Products,
Inc. ("Hyman"), Fascinations Toys Gifts Inc. ("Fascinations"),
and Kay-Bee Toy Hobby Shops, Inc. ("Kay-Bee") for violations of
copyright, trademark, trade dress, unfair competition, and
other rights in connection with a product known as the "Art
Bank."*fn1 The Art Bank was apparently created by a Japanese
company, Tenyo Co., Ltd. ("Tenyo"), that purportedly assigned
its rights to Maruzen's Japanese parent company ("Maruzen
Japan"). Maruzen was eventually assigned rights in the product
for the United States market. On October 10, 1990, I
enjoined Hyman from the "sale or distribution or attempted sale
or distribution of its Bank product or any version thereof. .
. ." Its Bank was called "the Magic Bank." Soon thereafter,
Hyman apparently made certain shipments of its Magic Bank and
Maruzen moved by Order to Show Cause to hold Hyman in contempt
of court. After a hearing conducted on January 25, 1991, I
ordered that Hyman be fined $100,000.00 for its contempt in
shipping the Magic Bank after Hyman had previously been
A Patent ("953 Patent") was obtained for the Art Bank on
November 6, 1990 in Tenyo's name. Shigeru Sugawara, a Tenyo
employee, designed and created the first version of the Art
Bank. Maruzen then moved to amend its complaint, adding a
patent infringement claim.*fn2 On February 14, 1991, I granted
Maruzen's motion for leave to amend, but denied any motion for
a preliminary injunction as against Fascinations and held in
abeyance its cross-motion to dismiss. Hyman cross-moves
pursuant to Fed.R.Civ.P. 12(b)(5) and 12(b)(2) to dismiss the
complaint for insufficiency of service of process and lack of
personal jurisdiction. In addition, Hyman moves for
reconsideration of the contempt order, seeking a stay of
execution pending reconsideration or appeal of the contempt
order. Fascinations withdraws its original motion to dismiss
and by a substituted motion, Fascinations and Kay-Bee now
jointly move pursuant to Fed.R.Civ.P. 12(b)(7) and 19 for an
order dismissing the amended complaint because of failure to
join an indispensable party.
Maruzen is the United States subsidiary of Maruzen Co, Ltd.
("Maruzen Japan") a Japanese publisher and retailer of
stationary products and gift items. As part of its retail
activities, Maruzen Japan searches for novel stationary and
gift products. In October 1989, it entered into an agreement
with Tenyo, which had designed the Art Bank, and was prepared
to manufacture the Art Bank for distribution by Maruzen in the
United States. Mizutani Declaration ("Decl.") ¶ 4. Maruzen
Japan thereupon sublicensed its United States rights in the Art
Bank to its subsidiary Maruzen to sell and protect the product
in the United States.
Since entering the United States market with the Art Bank,
Maruzen has undertaken to register its intellectual property
rights in all of its versions of and improvements in the Art
Bank. All of Tenyo's rights in the copyright and trademark in
the United States market were assigned exclusively to Maruzen.
Even though Tenyo had already applied for patent and trademark
protection, Maruzen independently applied for registration for
the illustrations and sculptures in the interior of the Art
Bank ("the designs").
In February 1990, Maruzen discovered that defendant Hyman was
soliciting orders for a coin box similar to the Art Bank, which
was called the "Magic Bank." Apparently, Hyman was attending
various gift conventions in the United States and soliciting
orders for its Magic Bank. Using the Art Bank as a sample,
Hyman has sold its Magic Bank claiming origination of the Art
Bank. On March 6, 1990, Maruzen obtained a copyright
registration VA 388421. Maruzen has since registered other
copyrights and trademarks for the Art Bank. Sometime later,
Maruzen discovered that Fascinations created a toy bank known
as the "Mystery Bank." The Mystery Bank was modelled after
Hyman's Magic Bank, resembling Maruzen's Art Bank design.
Status as an assignee or patentee is a crucial prerequisite
to bringing suit on infringement grounds. "In order to sue for
infringement under 35 U.S.C. § 281, the plaintiff must be the
owner of the patents, i.e., the patentee or assignee of the
patent." Afros S.p.A. v. Krauss-Maffei Corp., 671 F. Supp. 1402,
1444 (D.Del. 1987), aff'd without opinion, 848 F.2d 1244 (Fed.
Cir. 1988). Annexed to Maruzen's reply papers, are certain
letters apparently originating from Tenyo and Maruzen Japan and
purporting to transfer rights in the Art Bank to Maruzen.
Maruzen's Reply Declarations and Exhibits in Support of
Maruzen's Motion for a Preliminary Injunction and to Amend the
Complaint ("Maruzen's Reply"), Exh. B. Specifically, the Tenyo
Tenyo Co., Ltd. is the owner worldwide of all of
the interectual (sic) property rights, including
copyrights associated with the Art Bank product,
which was first made on April 1, 1989. In return
for valuable consideration, receipt of which is
hereby acknowledged, Tenyo Co., Ltd. hereby
assigns and transfers to Maruzen Co., Ltd.
[Maruzen Japan], all of Tenyo Co., Ltd.'s
intellectual property interests for the Art Bank
product in the United States of America, including
any patent, trademark. . . . This assignment is
effective as of October 1, 1989.
In Addition, Maruzen Japan, by letter substantially tracking
the above letter's language, assigned all of its rights in the
Art Bank to Maruzen with regard to the United States
"Agreements transferring patent rights must be either
assignments or licenses. Whether an agreement be one or the
other is governed by its substance, not its label." CMS
Industries, Inc. v. L.P.S. International, Ltd., 643 F.2d 289,
294 (5th Cir. 1981) (citing Waterman v. Mackenzie,
138 U.S. 252, 255, 11 S.Ct. 334, 335, 34 L.Ed. 923 (1891)). "Where an
agreement effectively transfers the entire bundle of rights
residing in a patent, that agreement is an assignment." CMS
Industries, Inc. v. L.P.S. International, Ltd., 643 F.2d at 294
(citing Etherington v. Hardee, 290 F.2d 28, 29 (5th Cir.
1961)). Even Fascinations and Kay-Bee admit that an assignee of
a patent is considered to be a successor in title to ownership
of the patent, and may sue independently without being required
to join his assignor as an indispensable party under
Maruzen is the exclusive licensee of the Tenyo novelty bank
product. Although Tenyo is the originator, creator, developer,
and manufacturer of the Art Bank, it has assigned to Maruzen
all United States intellectual property rights in the Art Bank.
Amended Complaint ¶ 6. The letters annexed to Maruzen's reply
papers are indicative of an effective assignment of patent,
trademark, and copyrights in the Art Bank which were ultimately
assigned from Tenyo to Maruzen Japan, and then from Maruzen
Japan to its domestic subsidiary Maruzen for the United States
market. See Koyanagi Decl.; Maruzen's Reply, Exh. B. Because
the United States market is the only market relevant to this
action, there is no need to join Tenyo or Maruzen Japan.
Neither party appears necessary to the ...