Curtiss v. United States

75 Ct. Cl. 286, 1932 U.S. Ct. Cl. LEXIS 348, 1932 WL 2228
CourtUnited States Court of Claims
DecidedJune 6, 1932
DocketNo. D-837
StatusPublished
Cited by4 cases

This text of 75 Ct. Cl. 286 (Curtiss v. United States) is published on Counsel Stack Legal Research, covering United States Court of Claims primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Curtiss v. United States, 75 Ct. Cl. 286, 1932 U.S. Ct. Cl. LEXIS 348, 1932 WL 2228 (cc 1932).

Opinion

Booth, Chief Justice,

delivered the opinion:

This is a patent case. The suit is for the recovery o,f just compensation alleged to be due the plaintiffs because of the infringement by the defendant of Letters Patent #1329038, granted January 27, 1920. The acts involved are the act of June 25, 1910 (36 Stat. 851), as amended by the act of July 1, 1918 (40 Stat. 705), and the act of October 6, 1917 (40 Stat. 394). We refer to the above acts in detail hereafter..

The defendant contests the right of the plaintiffs to sue, alleging that the facts disclose that on the date the suit was instituted the plaintiffs were no,t the owners of the patent or the patent monopoly. The defense interposed is predi[306]*306cated upon section 4898, Revised Statutes, which reads as follows:

“ Sec. 4898. Every patent or any interest therein shall be assignable in law, by an instrument in writing; and the patentee or his assigns or legal representatives may, in like manner, grant and convey an exclusive right under his patent to the whole or any specified part of the United States. An assignment, grant, or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is recorded in the Patent Office within three months from the date thereof.”

and the following undisputed facts.

Glenn H. Curtiss on December 11, 1914, filed his application, serial number 876716, for the patent in suit. On December 24, 1915, Curtiss assigned the exclusive rights to the invention, as set forth in his application, to the Curtiss Motor Company, a New York corporation. On October 9, 1916, the Curtiss Motor Company assigned all its right, title, and interest in the invention to the Curtiss Aeroplane and Motor Corporation, a New York corporation, and from that date to the date of issue of letters patent to it on January 27, 1920, the latter corporation was the applicant for letters patent for the invention set forth in the Curtiss application. On August 19, 1920, and on August 20, 1920, the Curtiss Aeroplane & Motor Corporation executed two separate mortgages to the United States to secure the payment of $1,568,800 then due and unpaid. Each of these instruments covered all the property of the corporation, including the United States letters patent to Curtiss #1329038, and it was recited in the mortgages that “the corporation granted, bargained, sold, assigned, transferred, and conveyed to the United States ” all the property mentioned therein. In addition to the foregoing provisions of the habendvim clause of the mortgages the instruments recited that “ The Government shall suffer the corporation to possess, control, and manage all the property aforesaid, and to receive and use the income, revenue, and profits of any such property in the same manner and with the same effect as if this mortgage had not been made, so long as the corporation shall discharge the indebtedness secured by this mortgage and shall observe and perform all and singular [307]*307the covenants and agreements by it to be observed or performed in this mortgage contained.” The United States did not file the mortgages in the Patent Office, and on July 28, 1926, both mortgages were released by the United States as satisfied.

The petition in this case was filed November 5, 1924, at a time when the mortgages were in force, and of course some two years prior to their release. The plaintiffs seek no compensation for alleged infringing devices subsequent to June 30, 1923, and while some differences appear as to the extent of infringement prior to August, 1920, we think it unnecessary to attempt to reconcile them in view of opinion of the effect of the mortgages upon ownership of the patent."

The cases establish the rule that under the patent laws the giving of a mortgage by the patentee, “ unless otherwise provided in the mortgage,” effects an assignment of the patent to the mortgagee. To the extent noted, the cases cited by the defendant are apposite, and, of course, the subject matter of the conveyance must determine its character. If this case involved no more than the rights of the parties growing out of mortgages free from reservations and restrictions it would be one of easy solution upon this point, but the terms and provisions of the mortgages clearly evidence an intent to give an effect to the mortgages quite different from the usual and customary transaction which ordinarily obtains.

In this case the mortgages grant to the patentee a right equivalent in extent to ownership of the patent; true, it is a right subject to defeat upon failure to perform a condition subsequent, but in its essence a right to not only possess but use and receive the revenues derived from such use in the same manner as if the mortgages had not been made. Whatever else may be said, it seems clear that the right reserved by the mortgagor is a granted license extending generally and conferring upon it all the legal incidents of a licensee. We say this for the granted license was granted without-the payment of royalties and with a clear intent to permit the mortgagor to exercise the precise degree of ownership over the patent it had exercised prior to the execution of the mortgages, so that we have here a controversy, grant[308]*308ing arguendo ownership of the patent to the mortgagee, wherein the owner of a patent is charged with infringement of the same by the owner’s licensee. The owner of the patent can not himself sue, and the courts, we think, have uniformly established the rule that where this situation exists the licensee may sue the owner as an infringer in his own name.

In the case of Littlefield v. Perry, 21 Wall. 205, a leading and controlling case, the Supreme Court said (p. 223) :

A mere licensee can not sue strangers who infringe. In such case redress is obtained through or in the name of the patentee or his assignee. Here, however, the patentee is the infringer, and as he can not sue himself, the licensee is powerless, so far as the courts of the United States are concerned, unless he can sue in his own name. A court of equity looks to substance rather than form. When it has jurisdiction of parties it grants the appropriate relief without regard to whether they come as plaintiff or defendant. In this case the person who should have protected the plaintiff against all infringements has become himself the in-fringer. He held the legal title to his patent in trust for his licensees. He has been faithless to his trust, and courts of equity are always open for the redress of such a wrong. This wrong is an infringement. Its redress involves a suit, therefore, arising under the patent laws, and of that suit the Circuit Court has jurisdiction.”

In Waterman v. Mackenzie, 138 U. S. 252, 255, it was said:

“ In equity, as at law, when the transfer amounts to a license onty, the title remains in the owner of the patent; and suit must be brought in his name, and never in the name of the licensee alone, unless that is necessary to prevent an absolute failure of justice, as where the patentee is the infringer, and can not sue himself. Any rights of the licensee must be enforced through or in the name of the owner of the patent, and perhaps, if necessary to protect the rights of all parties, joining the licensee with him as a plaintiff.' Rev. Stat. § 4921. Littlefield v. Perry, 21 Wall. 205, 223; Paper Bag cases,

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Cite This Page — Counsel Stack

Bluebook (online)
75 Ct. Cl. 286, 1932 U.S. Ct. Cl. LEXIS 348, 1932 WL 2228, Counsel Stack Legal Research, https://law.counselstack.com/opinion/curtiss-v-united-states-cc-1932.