—This appeal which is presented on the judgment roll alone is from that portion of a judgment rendered in an action by a patentee for an accounting and injunction against his licensee by which the trial court determined that it was without jurisdiction to grant any relief from and after the date of a notice given to him by the defendant cancelling the license.
Prom a recitation in appellant’s opening brief outlining the factual background of the instant litigation—which is not disputed by respondent—it appears that appellant is the inventor of a multiple gear rotary pump used in pumping liquids; that the gears are enclosed in a housing in which the pressures on opposite sides of each pumping gear are equalized. Respondent, an engineer of many years’ experience, has been engaged in various manufacturing enterprises including the manufacture and development of spray guns and rotary meters, and since November, 1938, has conducted his business under the name of “Smith Precision Products Company.” Appellant’s invention is described in and covered by a patent issued to him and dated February 21, 1939. Some time in November of 1939 appellant entered the employ of respondent, who began the manufacture and sale of pumps covered by appellant’s patent. Thereafter, on April 11, 1940, while appellant was employed by respondent, the parties entered into a written agreement, by the terms of which respondent agreed to pay appellant certain royalties under the conditions therein set forth and appellant agreed to assign to respondent the “sole right, title and interest in and to the said patent # 2,147,928, including the right to. make, use and sell pumps or mechanisms made in accordance with the invention as claimed or in accordance with any improvements made by Seagren thereon”; royalty payments to be estimated on the net selling price of pumps only and to be made at stated intervals during the life of the agreement. It was provided that the life of the agreement should extend to the expiration date of the patent and it was also provided that respondent “shall have the right at any time to cancel *735 this agreement provided that he shall be liable for the payment of all royalties to such date of cancellation and shall on such cancellation reassign to Seagren all such rights as have been assigned by Seagren to Smith hereunder.”
The parties operated under the agreement until November, 1941, when appellant either left respondent’s employ or was discharged therefrom, and on December 29, 1941, respondent gave appellant the following Notice of Cancellation of Agreement, to wit:
“Referring to that certain agreement entered into between us on or about the 11th day of April, 1940, and relating to United States Patent No. 2,147,928, dated February 21, 1939, you are notified that pursuant to the terms of that agreement I hereby cancel the agreement and I hereby' transfer and reassign to you all right which you have heretofore assigned to me.”
The court found, in addition to the facts hereinbefore recited, “that the royalties on the pumps which were manufactured and sold prior to December 31, 1941, and not previously accounted for by respondent, and on which royalties have not been paid, but on which royalties should have been paid, is the sum of $1,482.11, which sum is due, owing and unpaid.
“XV. That the defendant continued from and after December 31, 1941, to manufacture and sell the same pumps as he was theretofore manufacturing under the Seagren agreement, and at the trial of this cause on April 12, 1943, said defendant was still continuing to manufacture and sell said pumps. The defendant refused to furnish the plaintiff any statements of the number of pumps manufactured and sold after December 31, 1941, refused to pay to plaintiff any royalties on the pumps thus manufactured and sold and refused to, and still refuses to desist and refrain from manufacturing and selling said pumps. The defendant at no time has stopped the manufacture and sale of the same pumps that he was manufacturing prior to December 31, 1941.
“XVI. That the rates of royalties provided in the agreement of April 11, 1940, and heretofore set forth, are reasonable, and computing royalties at said rates on the pumps manufactured and sold from January 1, 1942 to April 9, 1943, the amount thereof is the sum of $1185.13. No part thereof has been paid.”
*736 From the facts so found, the court decreed the following conclusions of law:
“1. The plaintiff is entitled to judgment against the defendant in the sum of $1,482.11, together with interest thereon at 7% per annum from January 20, 1942, to date of judgment herein, which represents the royalties on pumps manufactured and sold by the defendant up to December 31, 1941, and as to which he has paid no royalties.
“2. The Court is without jurisdiction to render any injunction or any judgment for royalties or other compensation as to pumps manufactured and sold after December 31, 1941, because thé exclusive jurisdiction for the determination of the rights and duties of the parties hereto from and after said date, because of the notice of cancellation given by the defendant and reassignment by him of the patent to the plaintiff, is the District Court of the United States. Were it not for this lack of jurisdiction the plaintiff would be entitled to a judgment of this Court against the defendant in the additional sum of $1185.13 which represents royalties on the pumps manufactured and sold from December 31, 1941 to April 12, 1943, computed at the rates set forth-in the agreement of April 11, 1940.
“3. As this court is lacking jurisdiction to give any relief for .the acts and conduct of the defendant from and after December 31, 1941, the denial to plaintiff of an injunction and of a judgment for reasonable royalties or compensation for pumps manufactured and sold from and after December 31, 1941, is without prejudice to the plaintiff’s right to seek redress and relief in the District Court of the United States, for the acts and conduct of said defendant from- and after December 31, 1941.”
Judgment was accordingly entered, and this appeal is prosecuted from that portion thereof which denies relief to appellant by way of injunction and royalties for pumps manufactured and sold subsequent to December 31, 1941.
Appellant contends. that the court fell into error in not distinguishing between a case under the patent-laws, and an action arising out of a contractual relationship. “This is not a case where the plaintiff, either before or after the notice of cancellation, sets ‘up a right under the patent laws as ground for a recovery’, which is the test to be applied.
(Deakins
v.
Superior Court,
On the question of jurisdiction, it was held by .our Supreme Court in
Pendleton
v.
Ferguson,
“As we understand the issues in this ease, they simply involve a contract relating to the title to certain patents, A determination of whether or not the relief prayed for should be granted must be. arrived at by the application of rules and principles of equity cognizable in the courts of this state and in no degree whatever upon any act of Congress concerning patent rights.
“In the ease of
Luckett
v.
Delpark, Inc.,
“ ‘In Wilson v. Sandford, supra, a bill in equity was filed in a federal circuit court setting forth complainant’s owner: ship of a patent, an assignment to defendants of a license in consideration of five promissory notes, with a condition of reversion to complainant on failure to pay any note. The bill averred that the first two notes were not paid, insisted that the license was forfeited by the failure and the licensor was fully reinvested at law and in equity with all his original rights, that the defendants were using the patented machine and were infringing the patent, prayed an account of profits since forfeiture, a temporary and permanent injunction, and a reinvestiture of title in the complainant. On demurrer, the bill was dismissed for lack of jurisdiction as not arising *738 under the patent laws. Chief Justice Taney, speaking for the Court, said:
“ ‘ “The rights of the parties depend altogether upon common law and equity principles. The object of the bill is to have the contract set aside and declared to be forfeited; and the prayer is, ‘that the appellant’s reinvestiture of title to the license granted to appellees, by reason of the forfeiture of the contract, may be sanctioned by the Court’, and for an injunction. But the injunction he asks for is in consequence of the decree of the Court sanctioning the forfeiture. He alleges no ground for an injunction unless the contract is set aside. And if the case made in the bill was a fit one for relief in equity, it is very clear that whether the contract ought to be declared forfeited or not, in a court of chancery, depended altogether upon rules and principles of equity, and in no degree whatever upon any act of Congress concerning patent rights.” ’ ”
Again, in
Davis
v.
Kittle Mfg. Co.,
“ ‘. . . where an action or suit is brought on a contract of which a patent is the subject-matter, either to enforce the contract or annul it, the case arises on the contract and not under the patent laws, and a state court has jurisdiction. Accordingly, an action may be maintained in a state court to enforce the payments of royalties or license fees— and while it is elementary that a state court has no jurisdiction with respect to a ease arising under the patent laws, it is equally well settled that a case involving patent rights does not necessarily ‘arise under the patent laws’, and that a state court has jurisdiction to determine questions relating to patent rights whenever such questions arise incidentally or collaterally to a main cause of action over which a state court has jurisdiction. ‘. . . The cause of action is based upon contract, and the matter of patent rights is incidental to the main issue. It therefore follows that our state courts have jurisdiction over the subject matter of this controversy.”
Respondent urges—and it was apparently upon this theory that the trial court declined to take jurisdiction of that part of appellant’s cause of action which arose after the cancellation of the contract—that the contractual relation between the parties was terminated by the cancellation and therefore *739 appellant’s only redress is by an action for infringement in the federal courts.
However, in the case of
In re Michigan Motor Specialties Co.,
In the case of
In re Norcor Mfg. Co.,
In upholding the special master’s decision, the Circuit ■Court of Appeals for the Seventh Circuit in the instant proceeding held (p. 409): “. . . we are" satisfied the Master reached the proper conclusion. We do not think the opposing contention is sustained by any authorities to which our attention has been called, and certainly it is not sustained by logic or equitable consideration. When the receivers were .appointed in the State Court . . . they had knowledge of the contract—in fact, worked and complied with its terms until its expiration. Prior thereto, Schmitt had been enjoined .from ■taking any action looking toward the protection of his rights; The receivers continued, after the expiration of the contract, to manufacture the product the same as they had before.-We see no reason why he should not be entitled to reasonable compensation for the use of his- property, his invention. No question of infringement was involved—the estate is'liable •under the circumstances by reason of an implied contract.”
Respondent cites the case of
Fageol & Tate
v.
Baird-Bailhache Co.,
Such holding is not controlling in the instant case, where the licensee saw fit to cancel the contract and continued to manufacture and sell the pumps to the detriment of licensor.
From what has heretofore been said in this opinion, it is clear that respondent is liable to appellant upon the theory of implied contract based upon the well-recognized and settled principle that a person shall not be permitted to enrich himself unjustly at the expense of another. (17 C.J.S., pp. 322, 323.)
Clearly, the trial court had jurisdiction of that portion of appellant’s cause of action which arose after the cancellation of the agreement, upon the theory of implied contract. Moreover, it also had jurisdiction to grant an injunction, and upon the authority of
Holley
v.
Hunt,
For the reasons stated, that portion of the judgment appealed from is reversed, and the lower court is directed to enter judgment for plaintiff in accordance with its finding of fact numbered XVI, for the additional amount as set forth in said finding.
Doran, J., and White, J., concurred.
Respondent’s petition for a hearing by the Supreme Court was denied June 8, 1944, Edmonds, J., voted for a hearing.