By-Products Recovery Co. v. Mabee

288 F. 401, 2 Ohio Law. Abs. 434, 1923 U.S. Dist. LEXIS 1663
CourtDistrict Court, N.D. Ohio
DecidedJanuary 11, 1923
DocketNo. 218
StatusPublished
Cited by8 cases

This text of 288 F. 401 (By-Products Recovery Co. v. Mabee) is published on Counsel Stack Legal Research, covering District Court, N.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
By-Products Recovery Co. v. Mabee, 288 F. 401, 2 Ohio Law. Abs. 434, 1923 U.S. Dist. LEXIS 1663 (N.D. Ohio 1923).

Opinion

PECK, District Judge

(sitting by designation). On the first defense set forth in the amended answer. This sets up, in effect, two defenses: (1) That there is no jurisdiction: and (2) res adjudicata, resulting from the proceedings in the state court.

1. The ground for challenging the jurisdiction seems to be that the defendant, who is averred by the bill to be a British subject, a citizen of the Dominion of Canada is in fact an .American citizen and an inhabitant of New York or of Illinois, and, on the jurisdictional ground of diversity of citizenship, only to be sued in the state of his residence. The objection goes to venue, not jurisdiction. Defendant has long since waived this objection by answering to the merits. It is now for the first time presented by an amended answer. General Investment Co. v. Lake Shore & M. S. Ry., 43 Sup. Ct. 106, 67 L. Ed. -, decided by the Supreme Court, November 27, 1922.

2. In order to determine whether the state court proceeding shall bar or abate the trial of the issues here presented, or any of them, it is necessary to compare that proceeding with this.

In the state court case the present plaintiff sued Mabee and his as-signee, the Long Point Creamery Company, and set up that by assignment it was the owner of Mabee’s applications for American patents; that Mabee fraudulently made subsequent assignments of his American applications to- the Long Point Creamery Company and others, for the purpose of having the patents issued to himself as inventor, and of throwing the question of title between the rival assignees into litigation, and that he threatened to make other assignments. The prayer was for an injunction against the making or recording of further assignments, for the setting aside of the assignments to the Long Point Creamery Company and others, and for an injunction against making^ using, or granting licenses upon the inventions.

The answer and cross-bill averred that the assignment was conditioned that plaintiff should perfect foreign patents in certain countries (not including Canada), that the condition had been broken, and that the [403]*403assignments were void for that reason, and for false representations and failure of consideration. The prayer of the answer and cross-petition was for reformation of the instruments of assignment, for cancellation thereof, and for an injunction against making or using the things invented, or licensing the use thereof.

The court of common pleas found generally that the plaintiff was the owner of the applications and inventions, enjoined Mabee from assigning, making, using, or licensing the inventions, and ordered him to assign the same to the plaintiff. Mabee appealed, but his appeal did not vacate the injunction. Section 12234, General Code. The record does not show that the injunction has ever been suspended by the Court of Appeals, and therefore it is still in force, and is a bar to all matters within the jurisdiction of the state court therein determined, and this is so despite the appeal, because it does not supersede the injunction. Collier v. Alexander, 142 Ala. 422, 38 South. 244. The Court of Appeals has handed down its opinion on the merits, indicating that, conditionally upon plaintiff’s performing, within a time to be fixed, not less than a year, its contract to develop the patents, it may take a decree for injunction as prayed. But no decree has as yet been entered by the Court of Appeals, and so the bar, if any, is that of the decree of the court of common pleas. Oklahoma City v. McMaster, 196 U. S. 529, 25 Sup. Ct. 324, 49 L. Ed. 587.

Both actions were brought on the same day. Service was first had in the state court case. Contrasting this case with that one. the plaintiff here, by its bill, claims the entire title to Mabee’s American applications, by various assignments, and charges the making and threatened making of fraudulent assignments subsequent to those to plaintiff. But, in addition to the foregoing allegations common to both bills, the plaintiff here alleges that Canadian patents upon the inventions were issued to it, that Mabee agreed to assist in forming a corporation there for exploiting the same, but that he has wrongfully assisted others in the organization of such corporation for the use of the Canadian patents, which corporations are now so doing. It also alleges here, but not in the state court, that Mabee agreed to assist it in procuring the issuance of patents, the development of the inventions, and the forwarding of the business, but has failed to do so. It prays for ah injunction against further assignments, and against the making, vending, or licensing the use of the inventions, as in the other case. The added prayers are for injunction against making, using, or licensing others to make or use the inventions covered by the Canadian patents, and for specific performance of the contract to assist in the precurement and development of the patents. In the state courts, the National Dairy Company was added as a party defendant; it being among the alleged subsequent assignees.

It is claimed that the judgment of the court of common pleas is res ad judicata; furthermore, that the action in the state court is one for the possession of personal property, viz. the inventions which are the subject-matter of the patent applications, and that the state court acquired jurisdiction first, and so has exclusive jurisdiction to deal with them. It is claimed, on the other hand, that the present action [404]*404deals with additional subject-matters, viz. the Canadian rights and the agreement to assist, of which.latter specific performance is asked. The rejoinder is that defendant disclaims and disavows on the record any Canadian rights, and that the prayer for specific performance deals with matters so general and indefinite as to be beyond equity jurisdiction. The further questions arise whether the state court had jurisdiction of the subject-matter in view of the exclusive jurisdiction of federal courts over cases arising under the patent laws (Judicial Code, § 256 [Comp. St. § 1233]), and whether the state court’s jurisdiction can here be drawn in question. It is also to be considered whether this court has any jurisdiction over the subject of the Canadian rights or the infringement of the Canadian rights.

Want of jurisdiction of the subject-matter is, if true, a good reply to the plea of the bar of the former judgment. Reynolds v. Stockton, 140 U. S. 254, 11 Sup. Ct. 773, 35 L. Ed. 464; Swift v. Meyers et al. (C. C.) 37 Fed. 37; 23 Cyc. 1576. But did the state court lack jurisdiction?

As there is no common-law right of monopoly in an invention, that which was transferred to plaintiff, according to the bill, was the inchoate right to procure letters patent (Gayler v. Wilder, 10 How. at page 492, 13 L. Ed. 504), of which an assignment conveys the legal title to the patent when issued (Wende v. Horine [C. C.] 191 Fed. 620; Hildreth v. Auerbach [D. C.] 200 Fed. 972; Individual Drinking Cup. Co. v. Osmun-Cook Co. [D. C.] 220 Fed. 335). But prior to the date of his patent the inventor had no exclusive right to make, use, or sell his invention. Brill v. St. Louis Car Co. (C. C.) 80 Fed. 909, 910. Therefore the action in the state court was not one for the infringement of a patent, but to enforce a contract establishing title to an invention, drawing with it right to obtain a patent and to enjoin violation of that contract.

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Cite This Page — Counsel Stack

Bluebook (online)
288 F. 401, 2 Ohio Law. Abs. 434, 1923 U.S. Dist. LEXIS 1663, Counsel Stack Legal Research, https://law.counselstack.com/opinion/by-products-recovery-co-v-mabee-ohnd-1923.