Washburn & Moen Manuf'g Co. v. Freeman Wire Co.

41 F. 410 | U.S. Circuit Court for the District of Eastern Missouri | 1890

Tiiayer, J.,

(after stating the facts as above.) On the case made by the hill, the complainant is not entitled to equitable relief. It cannot maintain a suit in equity, merely to have an account taken of the royalties due to it, and a decree for their payment, as it is now settled that courts of equity, eyen in patent cases, will not entertain bills merely to obtain an account of profits or damages realized or sustained by the infringement of letters patent. To authorize a decree for an accounting, either as to profits or damages, to which a complainant is entitled under the patent laws,the court must first acquire jurisdiction of the cause, on some well-defined equitable ground. A case does not become one of equitable cognizance merely because an accounting is prayed for, or because it is proper or even necessary to take an account, as courts of law are competent to deal with suits of that character. Though it is usual, in many equitable proceedings where the bill is sustained, to order an accounting, yet in most, if not all, cases where such relief is afforded it is regarded as relief that is incidental to the main purposes of the suit, and an order for an accounting is almost invariably granted in obedience to the well-known rule that a court of equity, when it acquires jurisdiction, should administer full and complete relief. Root v. Railway Co., 105 U. S. 189, and cases cited; Purifier Co. v. Wolf, 28 Fed. Rep. 814; Crandall v. Manufacturing Co., 24 Fed. Rep. 738. .It is not claimed in the present case (nor could it be successfully claimed) that complainant is entitled to the injunctive relief prayed for, and hence that an account may be taken of the royalties that have accrued under the license, as an incident of such injunctive relief. An injunction cannot he granted to restrain the defendant from manufacturing and selling barbed wire, because defendant is confessedly operating under a license granted to it by the plaintiff, which is as yet unrevoked. So long as the license remains in force, complainant is not entitled to an injunction to restrain the manufacture and sale of'the patented article, but must content itself with such remedies as it has under the license. Purifier Co. v. Wolf, supra; Densmore v. Tanite Co., 82 Fed. Rep. 544. While complainant’s counsel impliedly concedes that an injunction as prayed for cannot be awarded, and therefore concedes that an accounting cannot be ordered as an incident to such equitable relief, yet it is strenuously urged that in the present case complainant has an independent right to an accounting in equity, and that such right grows out of the peculiar relations existing between the parties, under the provisions of the license. It is said that complainant is itself a manufacturer of barbed wire; that it needs the information which defendant covenanted to furnish by its monthly reports, both for the proper management of its own business as a manufacturer, and for the defense of its rights under its patents; and that, in view of this fact, it has a right to call for a discovery and an accounting, and to invoke the aid of a court of equity in that behalf. The answer to this contention is that the relation between complainant and defendant, so far as the bill shows, does not differ essentially from that existing between any licensor and licensee, where royalties are paid for the use of an invention. If complainant is entitled to a discovery and an accounting in equity, and to maintain a bill solely for that purpose, and entirely independent of other equitable considerations, no reason is perceived why any other licensor might not maintain a bill on the same pretence. The position taken is-therefore untenable, and cannot be maintained consistently with the authorities above cited, holding that a bill in equity for an accounting merely is not the proper remedy to recover profits realized by an infringement of letters patent, or to recover royalties due under a license. Furthermore, under the practice which now prevails at law, under the provisions of section 724, Rev. St. U. S., the complainant may obtain as full information for the protection of its interests by a suit at law to recover the royalties in question as it could possibly obtain by a proceeding in chancery. There seems to be no occasion, therefore, for resorting to equity merely to obtain a discovery and an accounting. The equitable powers of the court cannot be called into requisition on the plea of necessity, because the authority of a court of law is ample, if an accounting and a decree for the payment of royalties is all the relief complainant is entitled to.

But it is further insisted that the bill may properly be entertained as a bill for specific performance. There are, however, insuperable objections to retaining it on that ground. No court, so far as I am advised, has eyer undertaken to enforce the specific performance of covenants such as the license existing between the parties to this suit contains. For a breach of the main covenants contained in the license, — those, for instance, whereby defendant binds itself to render monthly reports and to pay royalties, — the complainant can, as before shown, obtain adequate redress in a suit at law. Another covenant in the license — that whereby the defendant bound itself “to give its co-operation in maintaining the barbed-wire business, and the patents under which the license is granted” — -is altogether too vague and indefinite to warrant any court in attempting to specifically enforce it by judicial order or decree. The license also calls for the performance of personal duties that are continuous during the existence of the license, and it seems to he the better opinion that it is inexpedient for courts of equity to attempt to enforce the specific performance of covenants of that nature. Marble Co.v. Ripley, 10 Wall. 358; Port Clinton R. Co. v. Cleveland, etc., R. Co., 13 Ohio St., 544. At all events, this court does not feol inclined to undertake to supervise the performance of all the duties assumed by the defendant under the provisions of the license, and for tho full term of the license, without some stronger assurance than the present hill affords that the complainant wiil suffer irreparable injury, if left to enforce its rights in a legal proceeding. And, lastly, it may be observed, as an additional reason for refusing specific performance, that the complainant lias the power to revoke the license in question at any time, if the remedy at law for the enforcement of the covenants therein contained is in any respect, or for any cause, incomplete or inadequate. For tho reasons given I conclude that the bill does not state a case for equitable relief of any sort, and the demurrer thereto is accordingly sustained.