Ball & Socket Fastener Co. v. Ball Glove Fastening Co.

58 F. 818, 7 C.C.A. 498, 1893 U.S. App. LEXIS 2310
CourtCourt of Appeals for the First Circuit
DecidedOctober 27, 1893
DocketNo. 57
StatusPublished
Cited by27 cases

This text of 58 F. 818 (Ball & Socket Fastener Co. v. Ball Glove Fastening Co.) is published on Counsel Stack Legal Research, covering Court of Appeals for the First Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Ball & Socket Fastener Co. v. Ball Glove Fastening Co., 58 F. 818, 7 C.C.A. 498, 1893 U.S. App. LEXIS 2310 (1st Cir. 1893).

Opinion

PUTNAM, Circuit Judge.

The appellant (respondent below) contends that there- is no jurisdiction in equity over the subject-matter of this bill. If, it is a bill for infringement, as the complainant below seems to regard it, the parties are properly made, and the jurisdiction is, of course, not to be questioned. If it is to be taken as a bill for a specific enforcement of rights under the contract set up in it, the court is yet of the clear opinion that for that purpose we have here the proper parties, and full jurisdiction in equity over the merits of the controversy.

The prayersDof the bill are sufficient in either aspect, as they include discovery and an account, a decree for payment, injunctions [821]*821to prevent the violation of the provisions of the agreement, and “such other relief as the equity of the case may require.” So far as the relief desired is a mere account of stipulated royalties, counsel are not able to point out any decision of the supreme court clearly sustaining the bill. On the other hand, it is claimed that Root v. Railway Co., 105 U. S. 189, defeats jurisdiction in the case at bar. Rut that was a case of a mere tortious infringement of a patent expired before the bill was brought, while this suit, in one view, relates to patents still in life, and, in another, to agreed royalties.

The contract stipulated that the respondent below should render semiannual accounts; and as it was exclusively to conduct the manufacture and sale of the goods in question, and as the knowledge of the facts necessary to make an account was therefore peculiarly, and, indeed, wholly, its own, there is a strong equity in favor of enforcing specifically this portion of the agreement. But the matter before the court is one especially the subject of equity jurisdiction and relief. This will appear from an examination of the terms of the contract between the parties. This stated that they were desirous of malting a business arrangement for the manufacture of the Kraetzer fasteners for common advantage. It made the respondent below the exclusive licensee under the Kraetzer patents, so that the complainant below withdrew from all active part whatsoever. It provided that the complainant should transfer to the respondent the dies and tools, and that the latter should issue to the trade samples of the goods, and offer the same in the same manner as other goods of its own manufacture. It stated that its object was that the Kraetzer and Richardson fasteners should be offered by the respondent to the trade on equal footing and terms, so that the public might select between them on their merits; also, it provided that, in disposing of the litigation then existing, it should be stated that a compromise had been made for the mutual benefit of the parties interested. It was agreed that the contract should continue during the life of the various patents referred to in it.

We find, then, an arrangement by which, for a period of years, the complainant below unreservedly intrusted itself, its interests, and property related to the subject-matter of this suit, to the hands of the respondent below; and the latter undertook to carry on the resultant enterprise for the common interest. Perhaps this did not create a trust, in the technical sense of the word; but it did create a joint interest, an agency, and fiduciary relations, with all the duties resting on the respondent which the word “fiduciary” implies. The adjustment and protection of rights and interests growing out of such joint and fiduciary relations are the peculiar privileges of equity jurisprudence, by the consent of all the authorities.

Having determined that the circuit court had jurisdiction to pass on the merits of the case at bar, it remains to be considered what they are. First of all, it must be admitted that a contract of this character, establishing fiduciary relations, must be liberally con[822]*822strued to maintain its purpose, secure good faith in its execution, and prevent unjust evasions. Nevertheless, if a complainant has mistaken his remedy, or if his bill is not properly framed to meet truly the breach of the agreement, if there is a breach, the court ought not to attempt to make the law elastic, beyond what the law permits, even though the result may temporarily delay justice.

The appellee, while at times insisting that the case presents only, or mainly, questions of infringement, at other times urges upon the court that the specified royalty was to be paid on all fasteners “embodying the contrivances and improvements shown in the said Kraetzer letters patent.” What we put in quotation marks is, indeed, an extract from the contract in controversy; but the appellee apparently dwells on the word “shown,” as though all contrivances and improvements exhibited by the Kraetzer patents were to be regarded by the court, rather than only those which are technically claimed in them. But the bill was not framed to raise this proposition. While its allegations are limited to the inventions which were patented, and in accordance therewith, the decrees in the circuit court were specifically based upon the second claim of Kraetzer’s first patent, and the fourth claim of his second. Therefore, we are to deal, not with what is shown in either the Richardson or Kraetzer patents, in any general sense of the word, but with what was covered by the respective claims thereof, and we are to deal with them on the principles which we will now set out:

The question of the validity of the Kraetzer patents stands, so far as this case is concerned, upon the agreement between the parties, which, for all present purposes, assumes that both the Kraetzer and Richardson patents are valid. We start, therefore, with the proposition that all the patents referred to in the agreement are to be taken to be valid according to their respective claims. We also start with the further- proposition that the Kraetzer patents are in no way affected, for the purposes of this cause, by the one issued to Richardson, September 8, 1885, No. 325,699, because that was obtained on his application shown in the indorsement on the contract, and was thereby provided for. The case is to stand as though it had never been applied for or issued, and as though none of its claims had ever been conceived by his brain. Much testimony will be found in the record touching this indorsement; but it is not necessary to dwell on it, as its effect is too clear to be misunderstood. Indeed, independently of it, the result would be the same. To permit any undisclosed improvements controlled by either party to be set up for the purpose of limiting the rights of the other under the contract at bar, and especially for diminishing the apparent extent or validity of its patents, would effect an unjust evasion of the stipulated terms. To sum up: So far as this suit is concerned, the various patents referred to in the agreement are to be held valid, and the claims in each to be fully sustained according to their fair intent, as such claims are usually construed under the rules of the patent laws; and, so far as the validity and extent of the claims are concerned, neither is to be diminished by any prior patents or inventions, known or unknown, disclosed or undisclosed, although [823]*823■they may come in, to some extent, for tbe purposes which we will state.

Tbe record contains very muck touching tbe state of the a.rt, and prior patents.

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Bluebook (online)
58 F. 818, 7 C.C.A. 498, 1893 U.S. App. LEXIS 2310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/ball-socket-fastener-co-v-ball-glove-fastening-co-ca1-1893.