242 F. 642 | 6th Cir. | 1917
The bill below alleges in the usual form infringement of patent No. 1,058,281, relating to improvements in waste-paper presses, issued to Percy Wareham, appellee, April 8, 1913. The. original answer does not in terms deny the charge of infringement, though, after admitting that the articles manufactured by defendant embody “certain ideas and constructions which are illustrated and described” in the letters patent, the answer alleges that some of these “constructions” are “so old and well known in the art as to be public property, available to any one, while other features therein shown are properly the invention of another or others, which said Percy Wareham wrongfully appropriated and falsely claimed as his own in presenting his application for patent,” and the names and addresses of four persons are set out from whom it is alleged such appropriation was made. These allegations are made the basis of a charge that “the issuance of said letters patent Avas wholly void.” The answer is otherwise in ordinary form, and prays dismissal of the bill. Eater, an amendment was made to the answer, in effect averring anticipation and invalidity of the patent in suit through references to a number of earlier patents, and, by separate paragraph, alleging further:
“That previous to, during, said after the time during which said Percy Wareliam’s application for said letters patent was made and pending, Ms relations to defendant were such that defendant was and is now entitled to the outright ownership of any letters patent for which he may have made ¡Application, or which may have been issued to him, or to an irrevocable license or shop right therein and thereunder, without cost-to defendant or its privies in interest, other than the regular payments to which his contract of hiring entitled him. Wherefore, if for no other reason, though others exist, as stated, this cause is wholly without merit, and defendant prays relief accordingly as though the matters herein set up had been made the subject of a cross-bill or of a separate suit in the premises.”
It is said in behalf of the company that its evidence was offered “in the nature of a plea in bar under the old equity rules,” and on the basis of a claimed “irrevocable shop right” in the company. This at once presents the question whether Wareham’s relation to the company, and the course he pursued in respect of his invention, amounted to a consent on his part that the company should have the shop right claimed. The company had been engaged in the manufacture of paper balers and other articles since 1906. About that time Wareham at his own request became a small stockholder in the company, and its shipping clerk; his position was subsequently changed on like request to that of a traveling salesman of wooden paper balers, the only kind of balers the company was then manufacturing. This change in position involved a change in his compensation from a fixed weekly sum to a commission basis, and required him to pay his traveling expenses. While so engaged, and in February, 1912, Wareham conceived the idea of a steel paper baler. Fie prepared drawings showing his proposed device, and upon securing from the president of the defendant company, Mr. Hazen, and the factory superintendent, Mr. Callender, a conditional pledge of secrecy, presently to be shown, he disclosed his idea and showed his drawings to them. This resulted in the development of Wareham’s plan and the construction of the baler in question. The company furnished the materials; some of its employés, particularly its tool maker, worked with Wareham and under his guidance in producing the baler; in working out Wareham’s plan it was found necessary to make some changes, and to send him at the expense of the company on several trips to secure patterns and the like; j'et all these things appear to have been done under a distinct arrangement made between Wareham and the company that their rights in respect of the baler, in the event of a successful result, should be made the subject of a written contract. Wareham’s testimony as to the arrangement was that, when he explained his idea and showed his plans for the baler to Hazen and Callender, as before stated, it was verbally agreed:
“That they would not disclose what I showed them, or make such a baler unless under contract with me, later on. That was the only contract there was, the understanding being that the company was to furnish the material and*645 back the experimental work on this baler; if it proved a success, we were to have a written contract.”
Hazen testified that the verbal agreement required the company to—
“stand the experimental expense of putting the baler on the market, cost of materials, the time of the best workmen in the shop at his (Wareham’s) disposal or under his direction, and he on his part agreeing to give the company the exclusive sale of the invention during the life of whatever patent might be taken out on it, if it proved satisfactory. After talking with him along this line, and there were other things, we also discussed at that time the commission that Wareham should have as a salesman of these balers, and I think that we then agreed on the royalty of $1 per machine.”
Wareham and Hazen were the only witnesses who testified on the subject of the verbal understanding. The baler so produced proved to be a success; and Wareham, after calling the subject of the contract to the attention of Hazen, prepared a form with Hazen’s assent, and,, Hazen having made some change in the draft, the instrument as thus changed was executed by the company and Wareham on June 22, 1912. A copy appears in the margin.
“The parties operated under the oral agreement for a time. The oral agreement was reduced to writing on June 22, 1912, and that contract * * * was the agreement between the parties under which the work was done in the shop of the defendant company and materials were furnished by the defendant company, and the other things were done by the defendant company to develop this machine. It was a definite agreement and the compensation passing to each of the parties was fixed by it. I find that it was the oral agreement made by the parties, except that it was made more definite and more tangible, by being placed in writing. * * * ”
With a like view the trial court admitted proofs relative to the dealings of the parties under the contract. These proofs for the most part concerned the observance, and in a number of instances charges of nonobservance, of the contract by the respective parties. Here again the impressions that the witnesses made upon the court below are to be .found in a statement in the opinion of the learned trial judge that he believed Mr. Wareham. The demeanor of the witnesses and their opportunities to know at first hand the facts about which they testified of course had much to do with their credibility; and it is observable that defendant’s factory superintendent, who was present at the time Ware-ham states the oral agreement was made, was not called to testify. We feel bound to conclude that the written contract was intended to
•‘No implied contract of license, arising from the circumstances under which the patent was taken out and the relations of the parties, can he set up in the face of a pro\ed special contract of license.”
The very condition under which Wareham consented to disclose his invention to the company’s representatives resulted in the execution and observance of the written contract; and it plainly is not open to the company now to insist that Wareham ever consented, either impliedly or otherwise, to the gratuitous use of his invention (Talbert v. United States, 25 Ct. Cl. 141, 156); such insistence is contradictory alike of Wareham’s conduct and the contract itself (McAleer v. United States, supra, 150 U. S. 424, 432, 14 Sup. Ct. 160, 37 L. Ed. 1130). Ever since McClurg v. Kingsland (1843) 1 How. (42 U. S.) 202, 11 L. Ed. 102, the rule has prevailed that an implied license such as is claimed here under the customary name of a “shop right” is to be founded upon condtfct of the inventor which gives rise to an estoppel in pais; such cases must of necessity depend at last upon the intention of the parties; and such intention is of course to be ascertained in every case according; to the particular facts and circumstances involved. Gill v. United States, 160 U. S. 426, 430, 16 Sup. Ct. 322, 40 L. Ed. 480; Withington-Cooley Manufg. Co. v. Kinney, 68 Fed. 500, 506, 15 C. C. A. 531 (C. C. A. 6); Blauvelt v. Interior Conduit & Insulation Co., 80 Fed. 906, 908, 26 C. C. A. 243 (C. C. A. 2); Barber v. National Carbon Co., 129 Fed. 370, 374, 64 C. C. A. 40, 5 L. R. A. (N. S.) 1154 (C. C. A. 6). These cases are but illustrative of many decisions, and it is not to be doubted that they state the settled rule.
The difficulty with the defense made in the instant case is
One of the assignments is to the effect that the court erred in failing to consider defendant’s testimony “as in the nature of a plea in bar under the old equity rules,” and in stating in the opinion that defendant would not be -permitted thereafter to raise “the question of validity and infringement * * * of the patent in suit, which was expressly abstained from by defendant at the hearing.” Although in pursuance of equity rule 29 (198 Fed. xxvi, 115 C. C. A. xxvi) defendant presented this defense by answei', it is not shown that any effort was made in accordance with the same rule to have this portion of the answer separately heard and disposed of before trial of the principal case. It would seem that the case was brought to trial upon all the issues. Plaintiff opened his case at the trial in the usual way, and, in view of the preliminary proofs, we think sufficiently to entitle him to relief. Defendant met the case so made by endeavoring to establish its claimed shop right, and it certainly had a full hearing upon this feature of the answer. It voluntarily refrained from offering evidence in support of the portions of its answer and amendment thereto alleging invalidity of the patent, though, as already pointed out, admission of infringement distinctly appeared. „
We therefore see no sufficient reason for disturbing the decree simply because of an expression contained in the opinion that defendant would be denied a trial upon its other defense. The court perhaps had in mind the question whether defendant could split the case into as many parts as there were defenses, and try each of them separately, not only in the court of first instance, but through the appellate courts; hut, whatever may have led to the expression to which the assignment of error relates, it seems certain that no application had been made to present evidence under the defense of invalidity, and hence we cannot rightfully pass upon the question.
The decree must be affirmed.
