DUKE 'V. GRA.HAM.
(District Oourt, N. D. Mississippi. March iiI 1884.)
1. Where it was mutually agreed between a patentee and the inventor of an improvement upon his device that the patentee should surrender his individual .right, and a new patent for the ilJ,lproved device should be applied for by the . tw,o parties jointly, held that in equity they were joint owners of the patent 88 . ·improved by the subsequent invention, and that the inventor of the improve. mentcould restrain the patentee from using his patent, except for their joint benefit. within the jurisdiction of the circuit court, without respect to diversity of citi. zenship.
CONTRACT TO ASSIGN PATlllNT-RIGlI'l'-I::\Pjl;CIFIC PERFORMANCE-INJUNCTION.
2. SAME-JURISDICTION OF FEDERAL COURT. Held,alsQ, that the controversy related to the patent-right itself, and was
In Equity· . Lamar, Mayes & Branham, for complainant. H. A. Barr, for defendant. . HILL, J. This cause is submitted upon bill, answer, exhibit, a.nd proofs, from which the following facts appear:
In 1876thedefeItdant, being the sole owner of the patent of what is known as the Swift cott()fi press, employed complainant.as his agent to sell the right to erect and use said cotton press, and to manufacture and put the same up in the state of Texas. During that time complainant invented and made certain val· uable improvements on said press, rendering it much more valuable. An agreement was entered into between complainant and defendant, by which it was mutually agreed that the defendant should surrender his. individual right under the Swift patent, and that a new patent should be, applied for, for the same invention, with the improvement of complainant-in other words, of the Swift invention as imprOVed by complainant; the application to be made and the patent to be issued in the joint names of complainant and defendant; complainant before that time having assigned the one-half interest in his said invention to defendant.
The bill charges that defendant fraudulently represented to complainant that he could not use his in vention without an infraction ·of the Swift patent, and that if he used it he would charge him as a royalty upon each press the sum of five dollars; and to induce complainant to transfer to him the one-half interest in his invention, he promised that the new patent named be extended for 21 years, instead of 17 years; and further charges that the defendant did not comply with his contract by the surrender of the Swift patent, but, upon the contrary, continuEld to manufacture and sell presses under it, to the injury of complainant. The allegation that defendant continued to manufacture presses under the Swift patent alone and in his own name is denied in the answer; and denies that he has abandoned its use since said contra<!t, but does not know whether his solicitors, as they were authorized to do, made a formal surrender of "all rights under the Swift patent. The proof on this point is not sufficient to overcome this denial in the answer. The contract was evidently a mutual
one between the parties. Complainant could not rightfully make his invention available without the benefit of that secured by the Swift patent, unless he procured a to do so, for which he would have had to pay a royalty such as might be demanded by defendant; and defendant could not rightfully avail himself of the advantages of the invention and improvement made by complainant, without a license, and such royalty by way of compensation as complainant might demand. '1'0 obtain the benefit of the Swift invention, and to prevent its being used in any other way than in connection with his improvement ana. invention, was the consideration moving complainant to make the assignment, and was a good and valid consideration upon complainant's part; and to get the benefit of complainant's invention and improvement was the consideration moving defendant to agree to surrender his individual right under the Swift patent, and was a good and valid con. sideration, and estopped defendant from using the invention for his individual benefit, or, aside from its use, under the invention and improvement of complainant. The result is that the complainant is entitled to a decree enjoining and restraining defendant from all right under the Swift patent, or of transferring the right to make and use presses according to that invention only in connection with and as part of the invention of complainant, secured by the letters patent of November 16, 1880: provided, however, that this court has jnrisdiction to maintain the bill and grant the relief prayed for, or any part thereof, which it is denied that this court has conferred upon it. If this had been a transaction accruing after the issuance of the letters patent, the parties both being citizens of this state, it is clear that this court would have no jurisdiction of the subject-matter of the suit, but it is a question involving the property rights, so to speak, of the defendant in the letters patent themselves, and as between the copartners themselves. The bill seeks to set aside the rights conferred upon defendant as one of th<:l partners, and to vest the entire right in complainant. This, it seems to me, affects the patent, and also seeks to restrain the defendant from using in any way the rights conferred under the Swift patent, and which, by the understanding of the parties, was to become, in connection with complainant's improvement thereon, the joint property of complainant and defendant,-the rights secured by the letters patent issued by the government November 16, 1880,-and is essentially different from rights growing out of contracts between the patentees and third parties. I am of opinion that this conrt has jurisdiction to determine the question as to the right of the parties to the rights and benefits conferred by the patent issued to them by the government, and enforce their rights by a proper decree. I am further of opinion that the complainant and defendant are in equity the joint <1wners of the Swift patent, or the rights secured under it as improved by the invention of complainant, and that the complainant has a right to have defendant, and all persons claiming under or through him, tlnjoined
MA.TTHEWS 'V. GREEN.
lind restrained from making or using cotton or hay presses as in· vented and made, and secured by the letters patent known as the Swift invention and patent, except as in connection with complainant's improvement, and under tho rights conferred under the patent last, issued. A decree will be entered accordingly, and that each party pay one·half the costs of this cause.
and others v.
ICircuit Court. E. D. Penn8ylvania. February 11, 1884.)
PATENT-LtcENSE-8ALE OF, TO SATISFY JUDGMENT DEBT.
A license to use a patented invention may, by a bill in equity, be subjected to sale for the payment of a judgment debt.
Hearing on Bill, Answer, and Proofs. This was a bill in equity by John Matthews and others, citizens of New York, against Robert M. Green, a citizen of Pennsylvania, setting forth that by an agreement under seal, dated the thirteenth of February, 1874, complainants, in consideration of one dollar, granted to defendant the exclusive right to use Matthews, patent steel fountains for aerated beverages, patent dated June 25, 1872, No. 182,411, and "Mathews' patent wagons for transporting soda-water fountains," patent dated April 9, 1872, No. 125,592, for the term of the patents, within the city of Philadelphia, provided that defendant should purchase from complain'ant within four years a number of fountains, equal to one for each 500 inhabitants of the territory; and the defendant agreed to purchase from complainant all the fountains he might need in his business, and not to sell or dispose of the fountains to go outside of the territory without the written consent of the owner of the territory in which he might desire to send them, nor to continue to use the same, except within the territory granted after notice given by complainants. In pursuance of this agreement,a large number of fountains, to the value of about $24,000, were furnished to defendant, and for a balance of the price he gave certain promissory notes, upon which the complainants had obtained judgments, in the court of common pleas of Philadelphia, for $4,709.99, $1,117.17, and $1,203.16, respectively, and upon the first judgment a writ of fieri facias had been returned, "no goods." That the defendant had neglected and refused to perform the covenants of said agreement by "ailing to pay the notes, and by using the fountains without the limIta of Philadelphia, after notice. It was provided in the agreement that, upon the failure of the defendant to perform the covenants, the
lReported by Albert B. Guilbert, Esq., of the Philadelphia bar.