Chadeloid Chemical Co. v. H. B. Chalmers Co.

243 F. 606 | 2d Cir. | 1917

HOUGH, Circuit Judge

(after stating the facts as as above). Of the very numerous objections to recovery made by defendants, we notice the following: (1) Plaintiffs demand is barred by laches; (2) it is based on a contract unlawful because unconscionable in its scope, and avoided by its failure to limit a, time after which Chalmers et al. would be free to keep their own inventions; (3) Chalmers was discharged by plaintiff’s new or further agreement with Filis; (4) plaintiff is not entitled to such an injunction as was granted, nor (5) to any accounting.

[ 1 ] (1) The facts as we have found them do not rest on undisputed evidence. On several points Chalmers himself has testified' at variance with our findings. We are, however, satisfied (as was the court below) that the material occurrences were as given above, and that by every means in his power Chalmers, well remembering and fearing his agreements of 1905, sought to keep plaintiff in puzzled uncertainty as to who had devised his new removers, and whether lie or his company owned the patents covering them—if they really were the removers of the patents.

This view of the facts completely exonerates plaintiff from thu charge of laches. Defendants, after fullest notice, proceeded to create and expand a business which they knew to be obnoxious both to an ordinary patent suit and such action as the present; never have they been lulled into security or changed their position in reliance on plaintiff’s inaction. A party who compels one inquiring for facts to play hide and seek for them is not in a position to claim laches, at least alter the passage of so short a time as is here relied on. Whether any, or what, length of years would suffice, is not now presented for decision.

[2, 3J (2) The agreements of 1905 did not lack formality or consideration. Nor did they constitute that mortgage upon the future operation of a man’s brain which has often been viewed with disfavor. Aspinwall v. Gill (C. C.) 32 Fed. 697. Their plain intent was to safeguard the future of one particular business, that of paint removers. This is not unconscionable, nor in unreasonable restraint of trade. Westinghouse, etc., Co. v. Chicago, etc., Co. (C. C.) 85 Fed. 786; Dick v. Fuller (D. C.) 198 Fed. 404, and cases cited. Nor does failure to limit the time during which the agreeing parties were to surrender inventions vitiate the contract. Thibodeau v. Hildreth, 124 Fed. 892, 60 C. C. A. 78, 63 L. R. A. 480. Thd case cited is of an agreement between employed and employer, and the contract was upheld as a reasonable protection of the master’s business. The contract in this case was for the protection of what was in effect the business of the four men who bound themselves, and the same result is reached by the same reasoning.

[4] (3) There was no new agreement with Ellis in the sense of an annulment of that of 1905. None of the contracting parties was bound to invent or attempt so to do; they only agreed that, if they did make inventions of a certain kind, they would disclose and assign the same. Ellis was employed to work as an experimenting chemist, which is quite a different matter. But even if Chadeloid Company had discharged Ellis from his contract, Chalmers had no right to complain. He had severally contracted, and remained bound, even though Ellis had been released. If the conduct of Chadeloid Company in giving such release was injurious to Chalmers as a shareholder, his remedy plainly did not consist in breaking his own agreement.

[5] (4) Defendants seem to think that the injunction issued is such as is usually granted in an action on a patent. This is only true in the sense that, having been compelled to surrender patents that do not belong to them, they are forbidden to manufacture what the patents disclose. This last is what does happen to some rare infringers who have an erroneously issued patent covering absolutely nothing not already patented. But Chalmers and his company (which took with ample notice, and is but another name for Chalmers himself) should have disclosed and assigned these very inventions; therefore they are contractually excluded from any use of them, and the injunction was in proper form.

[6] (5) The court below granted an accounting as against a trustee ex maleficio. Whether this was within the rules of equity is not now before us. The decree appealed from is interlocutory. We can review it only by force of the statute now contained in section 129, Jud. Code. An appeal under this section brings up nothing but the propriety of granting or refusing an injunction or receivership, as the case may be. Procedure not specifically covered by the statute remains unchanged thereby. The question of accounting must await final decree and is unaffected by this appeal. Kilmer v. Griswold, 67 Fed. 1017, 15 C. C. A. 161; Howe v. Dayton, 210 Fed. 801, 127 C. C. A. 351, and cases cited; Lederer v. Garage, etc., Co., 235 Fed. 527, 149 C. C. A. 73.

Decree affirmed, with costs.