Meissner v. Standard Railway Equipment Co.

211 Mo. 112 | Mo. | 1908

VALLIANT, P. J.

— Letters-patent No. 626,497 were issued to plaintiff from the United States Patent Office on his application therefor filed December 7, 1898.

The patent purports to cover an “improvement in Pneumatic Hammers.” On the date of the filing of the application plaintiff made a contract with defendant granting to it an exclusive license to manufacture and use the implement set forth in the application and “any future improvements or-modifications thereof,” for royalty of ten per cent of the gross selling price of all the implements sold under the agreement. This is a suit calling for an account of the sales and praying judgment for the royalties.

The petition states that after the issuance to him of the letters-patent No. 626,497, letters-patent No. 637,810 were issued to him “for a further improvement of said invention,” and afterwards he made still another improvement on pnuematic hammers for which he filed an application for letters-patent on November 12,1900; that defendant under the contract above mentioned manufactured and sold pnuematic hammers embodying in their construction the aforesaid invention or inventions of the plaintiff, the gross selling price of which was more than $25,000, but had rendered plaintiff no account thereof and had paid him therefor only $150 at one time and $250 at another time, and plaintiff having made demand therefor and been refused, availed himself of a clause in the contract which authorized him to terminate the license and did so on April 7, 1901. -

Defendant by its answer set up several defenses: First, a general denial. Second, a failure of consideration. Third, a mutual abandonment of the contract in January, 1899. Fourth, after the alleged termination of the license plaintiff sold his patents to a rival concern without reimbursing defendant for the outlays it had made in aid of plaintiff’s experiments. Fifth, plaintiff does not come into court with clean hands, having sold his patents to a rival of defendant and conspired to harass and injure defendant. Sixth, a counterclaim.

Plaintiff demurred to the second, fourth and fifth defenses and the demurrer was sustained. The substance of those defenses will be more specifically stated hereinafter when we come to consider the demurrer. The cause was referred to a referee to try the issues. The second, fourth and fifth defenses having been eliminated by the judgment sustaining the demurrer, the only issues to which the referee gave attention were those raised by the general denial, the alleged mutual abandonment of the contract and the counterclaim; the referee found for the plaintiff on all those issues and recommended judgment for the plaintiff for $2,227.93 and costs. Defendant filed exceptions to the referee’s report, which were overruled and exceptions taken; also motions for new trial'and in arrest, which were also overruled and exceptions taken, and appeal taken to this court. The appeal comes to this court because a Federal question is involved.

I. Before we come to the trial before the referee we should consider the ruling of the court on the demurrer to parts of the answer. Respondent takes the position that as no exceptions were preserved to the ruling of the court in that particular it is not subject to review, but that is not correct. A demurrer and the judgment of the court on the demurrer belong to the record proper and are reviewable without any bill of exceptions; an exception to the judgment of the court either sustaining or overruling a demurrer is out of place either in, the record proper or bill of exceptions. [Mallinckrodt Chem. Works v. Nemnich, 169 Mo. 388; Dysart v. Crow, 170 Mo. 275; McKenzie v. Donnell, 151 Mo. 431.]

We will therefore consider those defenses to which the demurrers were sustained.

The second defense was failure of consideration.

The substance of this plea is that at the beginning of their contractual relations the plaintiff came to the defendant with an invention for an improvement on the pneumatic hammer which he represented as very useful and valuable and for which he desired to obtain letters-patent; the result was the contract sued on whereby plaintiff granted to defendant the exclusive right to use the invention and all improvements that he would make thereon, in consideration of which defendant agreed to defray the expense of obtaining the letters-patent and pay the plaintiff the sums in the contract mentioned; that defendant paid the expenses of obtaining the letters-patent No. 626,497 taken out in plaintiff’s name and in good faith entered upon the performance of the contract and made every reasonable effort to utilize the invention and gave the plaintiff every facility and encouragement to render ' the-invention useful for practical purposes, but all in vain; the implements made, though they were skillfully made, under the direction and personal supervision of the plaintiff himself, were unmarketable and' incapable of use, because they were defective in principle and that the invention described in the contract was never improved so as to render it operative or useful, and neither the invention nor any tool made under it nor under any improvement of it was ever used or sold by the defendant, because it was worthless and incapable of practical use. If those statements were true they constituted a good defense' to the action. The fact that defendant may have made and sold pneumatic hammers, if they were not made pursuant to the design invented by the plaintiff and covered by the letters-patent 626,497 or pursuant to any improvement on that improvement, invented by him, would not render the defendant liable under the contract and. whether they were so or not would be a question of fact in the case.

We do not know on what theory the court sustained the demurrer to this plea, but if, as has been suggested, it was on the theory that the plea assails the validity of the patent and that a State court cannot annul a patent issued by the United States Patent Office, a sufficient answer would be that the plea does not assail the validity of the patent, but only says that the thing made according to the patent is of no practical use and that in fact the defendant never sold an implement made according to it or according to any improvement on it. It would be strange if the State courts had jurisdiction to try a case in which plaintiff was suing to recover royalties on a patent, yet not have jurisdiction to decide that the thing patented could not be made to serve a practical purpose, or that the thing which the defendant did make and put on the market' did not embrace the design covered by the patent. State courts have comparatively few cases involving the intricacies of the patent-law and therefore are perhaps not as familiar with such as the Federal courts, but when a case comes within the jurisdiction of a State court it must decide all questions necessary to the just determination of the case. When a defendant, as here, is sued for a royalty he has a right to prove, if he can, that the thing he made and put on the market did not contain the device protected by the patent and for that purpose he is entitled to show the particular point covered by the patent. The patent did not purport to cover all pneumatic hammers, but only the plaintiff’s invention for an improvement- on pneumatic hammers; defendant in this plea says it never made and sold any pneumatic hammers that contained the alleged improvement covered by this patent. Of course if the defendant made and sold hammers that contained in their mechanism the alleged improvement covered by the plaintiff’s patent, it would be no defense in a suit for the royalties to say that the improvement was impracticable and of no value; the fact that the defendant made and sold them under the license of the patentee would estop the defendant from saying that the improvement was of no value. But that is not the gist of this defense. The plea is that after making the contract the defendant went to work diligently and at great.expense to make use of the invention but finding after trial that it was of no use, that it was impracticable, it never used or sold any of the implements. The amount sued for is ten per cent of the gross price for which the implements were sold less commissions on sales. How could that amount be estimated if there were no sales?

Since under our system of code pleading the defendant may, under a general denial, prove any fact that goes to disprove any averment in the plaintiff’s petition that is essential to the cause of action, we might presume that the court sustained the demurrer to .this part of the answer on the ground that it was redundant, if it were not for the fact that the demurrer is not put on that ground and also for the fact that at the trial the defendant was not allowed to introduce evidence to show that the implements it made and sold did not embrace the alleged improvement covered by the patent or any improvement of the plaintiff’s invention on that improvement. That inquiry might have led. into a wide ranee, but if it were the fact the defendant ought to have been allowed to prove it. Later in this opinion we will return to the subject of the rejected evidence on that point. We hold that the court erred in sustaining the demurrer to that- part of the. answer.

The fourth defense to which the demurrer was sustained admitted the execution of the contract sued on but denied that defendant ever used or sold any pneumatic hammers embodying the invention covered by the patent or any improvement thereof “or any inventions of the plaintiff except as hereinafter admitted. ’ ’

This plea must be considered in connection with the averments in the petition, according to which the contract sued on gave the defendant the exclusive license to manufacture and sell pneumatic hammers “according to plaintiff’s said invention as set forth in said application for letters-patent and according to any future improvements or- modifications thereof made by plaintiff.” The contract as pleaded by the plaintiff did not embrace all improvements in pneumatic hammers that the plaintiff might thereafter invent, but only the improvement contained in the application for letters-patent then pending and “any future improvements and modifications ■ thereof made by plaintiff;” that is, improvements on the design for which the application for the letters-patent was made and modifications thereof. Therefore, an improvement in a pneumatic hammer thereafter invented by plaintiff which was not in the nature of an improvement or modification of the invention set out in the application mentioned, was not covered by the contract, and if plaintiff thereafter invented such improvement and plaintiff made use; of it, defendant’s liability, if liability there was, would not arise out of this contract.

The fourth defense starts out admitting the contract as pleaded, denying that defendant ever used or sold any implements embodying tbe plaintiff’s invention covered by bis application then pending, that is, the application on .which letters-patent No. 626,497 subsequently issued, or any improvement or modification thereof, and then it proceeds to state that in the winter of 1898 defendant employed the plaintiff at a given salary as a mechanical engineer , for the purpose of devising and inventing- improvements on pneumatic hammers, the plaintiff promising to devote his entire time and shill to devising and inventing such improvements ; that plaintiff entered upon the work for which he was employed in which he was aided by advice and suggestions of the officers of. defendant, and, with money of defendant used in making trials and experiments, plaintiff invented certain other improvements in pneumatic hammers and thereupon letters-patent No. 637,810 were issued in his name for the same and in like manner other improvements were invented by -plaintiff (as he claims) for which he.filed an application. for letters-patent, all of which inventions were made at defendant’s expense. That in the - experimental work of plaintiff which led to- these inventions the defendant paid out, in addition to the salary of .plaintiff, as much as $30,000, for materials, work, etc., and other -large sums in equipping its factory with machinery and tools for this purpose, all of which was done at the request and under the supervision and direction of the plaintiff.; that defendant also paid the expense in obtaining the letters-patent; that defendant understood it was to have the benefit of all this experimental work and the result that would come of it; that the plaintiff knew that defendant so understood and was expending the money with that understanding and plaintiff encouraged the defendant in that belief, yet in .the winter- of .190.0., .while he. was still in defendant’s employ, the plaintiff. .entered into secret negotiations with a rival of defendant ■ in. the raanufacture of such implements for the transfer to him of the patent rights thus acquired, and afterwards, did execute instruments in writing purporting to so trans.fer the same; that it was not until sometime in 19Q1, after he had entered into negotiations with a rival in the business of defendant, that plaintiff made any demand on defendant for royalties for. the implements made under the letters-patent 637,810 or the invention covered by the application filed November 12, 190.0; that plaintiff has never reimbursed defendant for. the expenditures made in the- experimental work which led to these inventions or made any. offer to do so ; that plaintiff is insolvent and defendant could obtain no satisfaction at .law; that the assignment by plaintiff to defendant’s rival would ruin the defendant’s business, etc. • ■ .

If, as stated in this .plea, the invention covered by the letters-patent 637,810 and-by the application of November 12, 1900, are not in the nature of improvements or. modifications of the invention covered by letters-patent 626,497, and if .they were invented .by the plaintiff while he was in the service of the defendant, under a salary employed for that purpose, and at defendant’s expense, he has no right to recover of defendant for any use defendant may have made of those inventions. This subject is fully discussed and the law as just above stated .is laid down in Grill v. U. S., 160 U. S. 426, In the discussion of the subject, the court in that case said,:

“The fact that he (the plaintiff) made use of the. time and tools of his employer, put at his service for the purpose, raises either an inference that the work was done for the benefit .of such employer, or an implication of bad faith, on the patentee’s part in claiming the fruits of. labor which technically he had no right to enlist in his service.”. The court after saying, that the mere.fact that a person is in the employ of another does not preclude him from making improvements in the machines with which he is connected, and obtaining patents therefor as his individual property,'adds: “On the other hand it is equally clear that, if the patentee be employed to invent or devise such implements his patents obtained therefor belong to his employer, since in making such improvements he is merely doing what he was hired to do.” This fourth defense is bottomed on the law there stated and we think it is sound.

According to this plea the contract of employment was subsequent to the written contract sued on, and although itself not in writing, yet if it was made as stated in the plea it would entitle the defendant to the benefit of the inventions even if it varied from the written contract, but the validity of the plea does not depend on that fact because it states that these inventions were in fact not improvements or modifications of the invention covered by letters-patent 626,497 named in the written contract, thereby tendering ah issue of fact. The defendant was entitled to introduce evidence on that point and to a judgment in its favor, if the proof sustained the averment and sustained also the averment that the inventions were made while the plaintiff was in the employ and pay of defendant for that purpose and at the defendant’s expense. The court perhaps sustained the demurrer on the theory that the contract as pleaded in the petition and admitted in the answer' covered all inventions plaintiff might make in improvements in pnuematic hammers, which we think was a misunderstanding of the contract; it covered only the improvement contained in letters-patent 626,497 and improvements or modifications on that improvement. We hold that the court erred in sustaining the demurrer to the fourth defense in the answer.

The court also sustained a demurrer to the defendant’s fifth defense which in effect was as follows: It set ont the contractual relations that existed between the plaintiff and defendant as indicated in the ■other paragraphs of the answer above mentioned, referred to the fact that during the time covered defendant had paid plaintiff as salary for his services $2,955, besides the large sums consumed in experimenting and -developing his inventions, and stated that by virtue of his employment the plaintiff became possessed in confidence of knowledge of the secrets of defendant’s business and, while he was so in defendant’s employ, a rival concern in the business, claiming to own patents covering the devices which defendant was using in the manufacturing of pneumatic hammers, brought suit against defendant charging infringements of his patents, and while that suit was pending the plaintiff entered into secret negotiations with the rival looking to a sale to- him of the plaintiff’s patent and betrayed the secrets of defendant’s business for the purpose ■of aiding defendant’s rival in that suit and afterwards ■did sell to him the patents No. 626,497 and 637,810 and instigated a suit, by the rival against this defendant for an infringement of those patents, which suit ivas pending when this answer was filed. It concludes with the averment that the plaintiff has acted in bad faith, does not come into court “with clean hands’.’ and the court should not entertain his suit.

The plaintiff’s theory of this case is that the written contract covered the improvements in pneumatic .hammers patented under letters 637,810 and the application for further patent November 12, 1900, whereas defendant’s theory is that the contract does not embrace those inventions. According to the petition the ■defendant was to render to the plaintiff quarterly statements each year of its manufacture and sale of these Implements and in default thereof the plaintiff was entitled to rescind the contract, and the petition says that defendant refused to give plaintiff such statements and for that reason he .rescinded the contract in April, 1901. According to this fifth paragraph in the answer during all that time, covering a period of about two and a half years, the plaintiff was in the employ of the defendant, receiving his salary and working with the understanding that the inventions would inure to the benefit of defendant, making no complaint, asserting no claim adverse to defendants, yet he was in secret negotiations with the defendant’s rival in business, betraying defendant’s business secrets, and instigating a suit against defendant as for an infringement of the rival’s patents, and finally a sale by plaintiff to the rival of the inventions made at the expense of defendant and while he was in defendant’s employ. If those averments are true a court of equity should close its doors against the plaintiff. Even if the plaintiff’s interpretation of the contract is correct, if he continued for two and a half years in defendant’s'employ while defendant was all the time refusing to give him a statement of the machines made and sold, receiving his salary regularly and making the experiments at the expense of the defendant out of which’ these inventions came, yet while so employed he was secretly negotiating- to sell the inventions to defendant’s rival, betraying- defendant’s business secrets and instigating a suit against him for using- these very inventions, if all this was true he is not entitled to maintain this suit. The court erred in sustaining the demurrer to the fifth defense in the answer.

II. - After the referee’s report carné in the defendant in-due time filed exceptions to it which were, overruled and exceptions preserved and thereafter in due time filed also motions for. a new trial and in arrest of judgment which were also overruled and exceptions duly preserved.

In the motion it is not assigned as a ground for a new trial in toticlem verbis that the court erred in overruling the exceptions to the referee’s report, and respondent contends that there is therefore nothing in the record for this court to review, and in support of that contention the following cases are cited: Bosley v. Cook, 85 Mo. App. 422; Arkansas Land Co. v. Ladd, 103 Mo. App. l. c. 89; Maloney v. Railroad, 122 Mo. l. c. 115. We do not understand those decisions to go farther in the direction of respondent’s contention than to lay down the doctrine that if the appellant would have the appellate court review the action of the trial court in overruling exceptions to the referee’s report he must, in his motion for a new trial, give the trial court an opportunity to review its own ruling on that point and correct its own errors. This motion for a new trial affords the trial court ample opportunity for that purpose; it points out in detail the reasons why the court should have sustained the exceptions to the report and that is equivalent to saying that the court ought to have sustained instead of overruling the exceptions and that it erred in so ruling.

III. When the case came into the hands of the referee it had been shorn of all the defenses pleaded except the general denial, the abandonment of the contract and the counter-claim. The plea of abandonment of the contract was in effect that after faithful trial and experimental tests the device patented in letters 626,497 was found to be of no practical utility and the contract was abandoned, and thereafter the defendant employed the plaintiff at a salary of $90 a month, to be increased as the business might develop, for .which plaintiff was to devote his whole time and skill to the purpose of inventing experiments in pneumatic hammers, for which defendant was to furnish materials, tools, etc., and defray all expenses and was to have the use and benefit of the inventions that might be made; that in pursuance to that agreement the invention covered by letters 637,810 was made. The answer in this connection denies that the invention claimed in plaintiff’s application of November 12, 1900, was made by him. The answer denies that any of the implements made and sold by defendant contained the invention covered by the letters-patent 626,497 or any improvement or modifications thereof.

The referee found as a fact that both parties treated the subject as if all the hammers that defendant made and sold came under the contract. He says: “I find that defendant did not call this in question .until April, 1901, or possibly a week or two before that time. The contract seems readily susceptible of the construction thus put on it, and I see no occasion for weighing its words and phrases, as we might perhaps have to do without the light shed on it by the parties’ conduct. In this view I think the ‘riviters’ -come under the contract as well as the ‘chipping hammers.’ ” Again the referee says: “I am asked by defendant for a detailed interpretation of the contract in suit. But I see no propriety in dealing with theoretical questions, such as whether any one of the particular hammers manufactured would come under the terms of the contract if we had not a ray of light on the matter from the conduct of the parties. As I view it the parties have said that all these hammers are under the contract. That is the whole practical question in the case. I think the court is not called on to extinguish the light offered by the conduct of the parties and build up in the dark a system of interpretation for this contract based on rules of grammar and logic.” Under that ruling the referee rejected nearly all the evidence, particularly that of a technical character, that defendant offered to show that the hammers it made did not embrace the “improvement” patented in letters 626,497 or any improvement or modification thereof. The effect of the referee’s ruling was that whether the implements made and sold by defendant came under the contract or not, the parties treated them as such and therefore defendant is shut off from showing the contrary.

We think the learned referee carried the doctrine of practical interpretation too far. The construction put on a contract by the parties thereto in the course of its performance, as evidenced by their acts, is an aid to the court in determining the meaning of the contract if it is expressed in ambiguous language, but such construction is not conclusive. “Where the parties to a contract have given it a particular construction, such construction will generally be adopted by the court in giving effect to its provisions. And the subsequent acts of the parties, showing the construction they have put upon the agreement themselves, are to be looked to by the court, and in some cases may be controlling.....The rule above stated does not apply, however, where the meaning of the terms used is clear. In such a case the fact that the parties have themselves, by their subsequent conduct or otherwise, placed an erroneous construction upon them will not prevent the court from giving the true construction.” [9 Cyc. 588, 589, 590.] The same author, at page 591-2, says: “The question of the meaning of a written contract is ordinarily one of law for the court and not one of fact for the jury. But where the construction of a written contract depends on extrinsic facts as to which there is a dispute, its construction is a mixed question of law and fact, and is for the jury under proper instructions from the court.” This court has never applied the doctrine of contemporaneous construction by the parties as evidenced by their acts as controlling the judicial interpretation of a contract except in cases where the language of the contract is uncertain in its meaning. In St. Louis v. Laclede Gas Lt. Co., 155 Mo. l. c. 19, the court said: “The views expressed find support in the contemporaneous interpretation of the parties, which, when the language of the contract is ambiguous, is entitled to great, if not controlling influence.” In Wetmore v. Crouch, 150 Mo. l. c. 682, the court, after stating the doctrine as above, said: “But when the terms of the contract are certain and its meaning is clear, the conduct of the parties under it indicating that they put a construction upon it at variance with its true meaning, will not control the court in construing it, nor in adjudging the rights of the parties under it, unless the conduct of the one has been such as to mislead the other to his disadvantage.” The doctrine has never been carried so far by this court as to give a meaning to a contract at variance with its clearly expressed purpose.

The meaning of this contract is not expressed in ambiguous terms and there is no necessity for resorting to the acts of the parties under it to ascertain its meaning. The petition itself states that the right granted to the defendant by the contract was “to manufacture, sell and use pneumatic hammers under and according to plaintiff’s said invention as set forth in said application for letters patent and according to any future improvements or modifications thereof made by plaintiff. ’ ’

It is not claimed by plaintiff that he was the inventor of pneumatic hammers or that his application for a patent covered pneumatic hammers, but his invention was an improvement on pneumatic hammers and whát he granted to defendant was the right to use his invention and any improvement or modification of his invention. Defendant’s proposition is that the implements made and sold by it did not embrace the plaintiff’s invention covered by patent 626,497 or any improvement or modification thereof, but that they embodied improvements, in pneumatic hammers, on a different principle invented by plaintiff while he was in the employ of the defendant, under an express oral contract subsequent to the written contract, employed for that purpose, and made at the exclusive expense of the defendant. If that is true then the inventions belonged to the defendant, although both plaintiff and defendant may at the time the implements were being made and sold have thought otherwise.

The question of difficulty here is not of the construction of the contract, but of understanding the facts to which the contract is sought to be applied. Are the mechanical principles which are covered by the letters-patent 637,810 and those covered by the application filed November 12, 1900, improvements on the invention covered by letters-patent 626,497, and do the tools made and sold by defendant embrace the mechanical principle contained in plaintiff’s patent 626,497 or improvements or modifications thereof?

In a suit in a Federal court in Illinois by the Chicago Pneumatic Tool Company against this defendant .for infringement of patents, the defendant filed an answer, under the oath of its president, pleading this contract as its defense and asserting that under this contract it had the right to make the implements, and in a suit by this plaintiff in a Federal court in St. Louis for the same royalty the plaintiff is now seekr ing to recover, the defendant filed a plea in equity, not denying or admitting its liability for royalties, but averring that it had paid the plaintiff $400 on account of the royalty and thereby that the amount in dispute was reduced to less than $.2,000, the minimum of that court’s jurisdiction. The answer in the suit in Illinois was legitimate evidence in this case tending to show that the defendant at that time and up to that time thought that the product of. its factory was covered by the contract, and it was proper for the referee to consider it, but he was not to be controlled by it, nor was defendant to be shut off from introducing evidence to the contrary. Perhaps also the plea in equity in the suit of the plaintiff in the Federal court was admissible, although that stands on a different footing.

We have nothing in our system of code pleading-that is exactly of the character and office of a plea in equity. A plea in equity is different in principle from an answer in equity, and different in principle from an answer under our code pleading; it is not directly responsive to the bill of complaint in equity or to the petition under the code. It is not the same as a demurrer, yet it partakes more of the nature of a demurrer than of an answer to the merits. A demurrer admits the facts that are well pleaded in the pleading to which it is addressed, but it admits them only for the purpose of the demurrer, and, if the demurrer be overruled, it cannot be read in evidence against the party on the theory that he thereby admitted the facts. The same principle is applied to a plea in equity in courts adhering to the ancient chancery procedure. In 1 Greenleaf on Evidence (16 Ed.), section 551, after saying that the defendant’s answer in equity may be read in evidence against him, the author says: “But a demurrer in chancery does not admit the facts; for if it is overruled the defendant may still answer. So it is-as to pleas in chancery; these, as well as demurrers,, being merely hypothetical statements, that, supposing-the facts to be alleged, the defendant is not bound to answer.”

In the case at bar the office of the plea in equity which the defendant filed in the Federal court, when sued there by plaintiff on this same demand, was to show that, admitting for the purpose of the plea the facts to be as stated in the bill of complaint, still the plaintiff could not maintain that suit in that court, because the defendant had already paid plaintiff $400 on his claim which payment reduced the sum in dispute to less than $2,000, the' minimum sum of which that court had jurisdiction. A man may make a part payment on a demand which he at the time thinks he is obligated to pay, but the payment will not preclude him from afterwards disputing the demand if on further information or advice as to his legal rights he thinks he is not so obligated.

Assuming the answer filed by the defendant in the Federal court in Illinois and the plea in equity filed by him in the Federal court here were both admissible in evidence neither was conclusive of the facts in this case.

A patent covers only what is claimed in the application as .a new invention and allowed as such in the letters-patent. That is sometimes a very abstruse point. The Act of Congress directing what the applicant shall set out in his application for a patent says: “and he shall particularly point out and distinctly claim the part, improvement or combination which he claims as. his invention or discovery.” [R. S. U. S. 1878, sec. 4888.] In construing that statute, the United States Supreme Court has said: “It is necessary, therefore, for him, in his application to the Patent Office, to describe that upon which he engrafts his invention, as well as the invention itself. ... It thus occurs that, in every application for a patent, the descriptive part is necessarily largely occupied with what is not new, in order to an understanding of what is new.” [Merrill v. Yeomans, 94 U. S. l. c. 570.]

An infringement may be made by one who having studied the patent honestly concludes that his work is not an. infringement, and likewise one may believe that his act is covered by a patent when it is not. It often requires great skill to decide such a point. Men may honestly form at one time and as honestly change at another time their opinions on such subjects. The trier of the fact must decide what is the ' new point in the invention and he must decide whether the implement manufactured contains that new point. Here, we have the application of date December 7, 1898, the letters-patent 626,497, issued on that application, the application for and the letters-patent 637,-810 issued thereon, and the application of date November 12, 1900, and we have the tools manufactured and sold by defendant. It is for the trier of the fact to find whether or not the inventions covered by letters 637,-810 and the application of November 12, 1900, are either improvements on or modifications of the improvement covered by letters-patent 626,497, and whether or not the tools made and sold by defendant contain in their mechanism the invention contained in the letters-patent 626,497 or an improvement on that invention or a modification thereof. The trial of those issues may be tedious but they must be tried before the.court can pronounce judgment in this case. Those issues have not yet been tried, because the ruling of the referee on the “practical interpretation” doctrine, shut out all, or the greater part, of the evidence defendant offered on its side of those questions.

There is a discussion in the briefs as to the admissibility of the evidence offered by defendant to prove “the state of the art” at the time the letters-patent' were issued. Evidence of that condition may be competent in this case if it serves to explain anything in the applications or letters-patent that is otherwise obscure, but it is not competent to impeach the validity of the patents. The question of the admissibility of evidence of that kind- is not exactly the same in a suit to recover royalties under a contract that it is in a suit for infringement of a patent.

The judgment is reversed and the cause remanded to be retried according to the law as herein expressed.

All concur.