10 F. Cas. 674 | U.S. Circuit Court for the District of Southern New York | 1856
The- bill shows that the plaintiff was the inventor of “a new and useful improvement in the processes for the manufacture of India-rubber,” which was secured to him by a patent; that, subsequently thereto, he entered into a contract with the defendant Day, under seal, by which he licensed Day to use the improvement patented, for manufacturing shirred or corrugated goods, in consideration of the sum of 810,090, although but $5,000 were actually paid, and also in consideration of a covenant on the part of Day, that, so long as the plaintiff should protect Day in the
By the agreement entered into between the plaintiff and Day, by which Day was licensed to manufacture and sell shirred or corrugated goods under the plaintiff's patent, upon the terms therein expressed, and which agreement is made a part of the bill, Day had a right to sell and assign to whom he pleased the rights vested in him by that agreement.
The object contemplated by the bill is, to deprive Day and his assigns, the Congress Rubber Company, of all benefit from the license to manufacture shirred or corrugated goods under the license granted by the plaintiff to Day, unless or until they pay the-' amount of damages which Day owes to the plaintiff for the breach of his covenant and the violation of the plaintiff’s rights, and to be recovered in the suit in New Jersey, and' unless or until they pay the amount of tariffs due to the plaintiff for the manufacture of shirred or corrugated goods under the agreement entered into between the plaintiff and Day, when the plaintiff licensed Day and his assigns to manufacture and sell such goods. The question raised by the demurrer to the bill is, whether the bill is sufficient for this object, either wholly or in part. It appears by the bill, that the subject matter of complaint in the suit in New Jersey was, that Day had manufactured and was manufacturing large quantities of India-rubber goods, which were composed of rubber and sulphur, and white lead and its oxides, and which were completed and finished by the application of a high degree of artificial heat, according to the process patented by the plaintiff, and which were other goods than such goods as, by the license. Day might lawfully make, to the great injury of the plaintiff, and that the plaintiff sought redress in that suit for that injury. It also appears, that it was decided, in that suit, that Day should be permitted to retain his agreement with the plaintiff, and should be bound by its conditions, and that it was ordered that an account be taken of the damages which, the plaintiff had sustained by reason of the violations of his tights by Day, and that Day should pay over whatever might be found duo to the plaintiff
At a previous term of this court, the plaintiff made a motion for a preliminary injunction, in pursuance of the prayer of the bill.The motion was founded on the bill, and on certain affidavits, and was denied. In disposing of that motion, the court decided certain points, which have a controlling bearing upon the questions presented by the demurrer. It decided, first, that Goodyear had no lien on the agreement between him and Day, to secure the tariffs stipulated therein, and that, therefore, no title or equity was set up in the bill, against the Congress Rubber Company, as it respected the amount due' from .Day, under the agreement, at the time of the assignment; second, that the unpaid tariffs due from Day to Goodyear, afforded no ground for enjoining the Congress Rubber Company from acting under the contract, and, that whether the assignment from Day to the Congress Rubber Company was fraudulent or not, was not material, as it respected Goodyear; third, that, as it respected the alleged attempt to evade the decree of the circuit court of the United States for New Jersey, the question could not arise until that decree became final, and that, till then, no one could assert, legally speaking, what it had been, or what steps might be necessary to enforce it It would follow, therefore, from the opinion given by this court in disposing of the motion for a preliminary injunction, and which opinion must govern the question now presented, that the bill cannot be sustained against the Congress Rubber Company, either, for the purpose of aiding in the enforcement of the decree which, at some future time, may be passed against Day by the circuit court iu New Jersey, or for the purpose of collecting from Day the amount of the tariff which was due from him to Goodyear at the time of the assignment from Day to the Congress Rubber Company. If, therefore, it cannot be sustained for any other purpose, it must be adjudged to be insufficient.
The bill alleges, not only that Day, prior to the assignment by him to the Congress Rubber Company, manufactured shirred goods under the license, and refuses to pay tlie tariff agreed to be paid, but, also, that the Congress Rubber Company, since said assignment, “pretend that they hare acquired the right to use the complainants invention, for the purpose of manufacturing shirred goods, and, under such pretence, the said company, and others confederated with them, have continually, since the said transfer, been engaged in manufacturing shirred goods, and selling the same, and refuse to pay the complainant not only the damages which Day owes for the violation of his agreement, but refuse, also, to account with the complainant for the amount due him by Day for tariff under said agreement.” And the prayer of the bill is, among other things, that the Congress Rubber Company be permitted to retain such agreement granting a license, and which they have by assignment from Day, only' on condition, among other things, that they pay the amounts of tariff due to the plaintiff under said agreement, that’ is, only on condition that they, among other things, pay the amounts of tariff due to the plaintiff for the manufacturing of shirred goods by them under said license, since the same was assigned by Day to them. The question involved in this part of tire case, as thus presented, does not appear to have been decided by the court in disposing of the motion for a preliminary injunction.
When the Congress Rubber Company took, by assignment from Day, the license granted by the plaintiff to Day and his assigns, to manufacture shirred goods under the plaintiff’s patent, they took it with the incumbrance attached to it That incumbrance was a duty and obligation to pay to the plaintiff three cents for every square yard of shirred goods manufactured by them by virtue of the license. When, therefore, after the assignment, the Congress Rubber Company manufactured, by virtue of the license, a quantity of shirred goods, there was a duty and obligation resting upon them, to pay to the plaintiff a tariff of three cents for every square yard of such goods manufactured. It appears, by the bill, that they have, since such assignment, manufactured, and that they continue to manufacture, such shirred goods, and that they refuse to perform such duty and obligation.
When a license is granted to any one, to-use a patent in the manufacture of goods, which license is accompanied with an obligation in favor of the patentee, on the part of the one to whom it is granted, to do or not to do a particular thing, and which obligation is the consideration upon which the license is granted, he upon whom the obligation rests, must perform it, and, if he will not perform it, an injunction will be granted, to restrain him from any further right to use the patent under the license. Woodworth v. Weed [Case. No. 18,022]; Wilson v. Sherman [Id. 17,833]. The bill is,, therefore, sufficient for the purpose of compelling the Congress Rubber Company to pay the tariffs due to the-plaintift since the assignment by Day to them. With this view of the case, the demurrer-must be overruled.
NELSON, Circuit Justice. I have examined the opinion prei>ared by my Brother INGER-SOLL, and am inclined to think that there is enough in the bill and prayer to sustain the ground taken by him. The bill may bear the-construction of a charge that the Congress Rubber Company refuse to pay the tariffs accruing under their use of the patent, with a corresponding prayer. The present case is,, on principle, somewhat stronger than Wood-worth v. Weed and Wilson v. Sherman [supra], as it stands upon general equitable prin
[Patent No. 3.633 was granted to C. Goodyear, June 15, 1-44; reissued December 25, 1849 (No. 156). For other cases involving this ■ patent, see note to Goodyear v. Central R. Co., Case No. 5,563.]