Klauder-Weldon Dyeing Machine Co. v. Weldon

87 Misc. 95, 150 N.Y.S. 273
New York Supreme Court·Decided September 15, 1914·Published·Cited by 2 cases

Opinion

Van Kirk, J.

These actions are brought to require the execution of assignments of two patents, in order to complete the record title in plaintiff.

In 1890 the Weldon Company was doing business in Amsterdam, N. Y., and the Klauder Company in Pennsylvania. The two interests united and the Klauder-Weldon Machine Company was incorporated in Pennsylvania, one-half of the stock of the new corporation going to the stockholders in the Weldon Company and one-half to the stockholders in the Klauder Company. The basis of the stock holdings of Leonard A. Weldon was his ownership of his patents. Weldon was one of the large holders. In 1910 the plaintiff, a New York corporation, was organized by those in the Pennsylvania company for the purpose of taking over the assets and property of the Pennsylvania company. The said New York corporation is the plaintiff here. The defendants in the first action are the executors of Leonard A. Weldon. The defendant in the second action claims to be the owner of one of the patents in issue here by assignment from the executors of Leonard A. Weldon.

At the organization of the Pennsylvania company in 1890 Leonard Weldon, who was an inventor and had had long experience in the manufacture of machinery was chosen the business manager and vice-president, which positions he occupied until his death in February, 1901. On January 3, 1893, at a regular meeting of the directors of said company, the salary of the [97] general manager was fixed at $5,000 per annum and thirty per cent, of all net profits made in America over and above $25,000. In the minutes of the annual meeting of stockholders on the same day is the following resolution: Mr. J. H. Giles moved that the company purchase from Mr. Leonard Weldon for the sum of $3,000.00' all patents that have been granted him in this & other countries since the organization of the company and for all applications pending, inventions now made or made in the future and the Treasurer be directed to pay him this sum on the completion of assignment papers. Unanimously adopted 1740 shares voting.” This resolution was offered by the defendant John H. Giles, who was then a director of the corporation. Leonard A. Weldon was present at both of said meetings. The $3,000 mentioned in the latter resolution was paid by the company’s note February 2,1893, which note was on April twenty-second paid by check of the company. On February 21, 1893, Leonard A. Weldon executed to the company an assignment of five applications for patents, which applications were dated respectively November 21, 1892, November 28, 1892, January 23, 1898 (two), and February 10, 1893. In each case a patent was later issued upon these applications and became the property of the company. He also assigned at some later date to the company an application, dated March 21,1893, upon which a patent issued November 20, 1894.

There were issued to Leonard Weldon patents dated December 25,1894, August 18,1896, March 20,1900, and October 16,1900, which have never been assigned to the company; the last two being the patents in question in this suit. Each patent above mentioned was intended to be used in connection with the machines manufactured by the company. In each case the invention was made and tested in the shops where the [98] plaintiff’s machines were being constructed, from materials belonging to the company and by its employees. The inventions were made by Leonard A. Weldon while in the employ of the company, upon the company’s time, and in each case, when the invention was perfected, the improvement was embodied in the company’s machinery and sold in the market.

The more valuable invention in question in this action, an improvement for adjusting parts of the rack in the dyeing machine (the patent number of which is 659906), was made in 1897; the first machine embodying this invention was sold in January, 1898. Letters patent upon this invention were taken out in England, and the dyeing machines made by the company in England embodied this invention. Constantly from 1898 to the present day, the company has made its dyeing machines with this improvement on each. Since 1902 or 1903, the patent plate on these machines contained those two patents set forth in the usual form. When the New York company was organized, the Pennsylvania company executed an assignment of these two patents in the usual form to the New York company and said assignment was duly recorded in the patent office. The drawing furnished by Mr. Weldon,- from which to make patterns of this patent, when presented to the pattern maker, had on it the name, ‘ Klauder-Weldon Dyeing Machine Company. ’ ’ During the three years from January, 1898, to February, 1901, Leonard A. Weldon, made no claims for royalty or any other demand for the use by the company of this patent. No question as to the ownership of this patent arose in the lifetime of Leonard A. Weldon.

Mrs. Weldon testifies that she paid the patent fee after the death of Mr. Weldon; also that the patents were given to her by Mark Dewey. Again she says: I sent a draftsman up there to explain everything to [99] Mark Dewey and it was through this draftsman that the patent was granted to me and the hill was sent to me.” But the patent fee must be paid within six months after notice of the allowance of the patent, and the patent must issue within three months after the fee is paid (30 Cyc. 892); a patent is not issued until the fee is paid. These patents were issued before Mr. Weldon’s death. Mrs. Weldon is evidently mistaken in her testimony in this respect. It does not appear in the evidence by whom the fee was paid; it does appear that Mr. Weldon was from time to time paid by the company his expenses and disbursements. Mrs. Weldon testified, in connection with the payment of the fee, that she knew the patent was very valuable and had not been assigned. But no question ever arose between her and the plaintiff as to the assignment of this patent until 1913. She testifies that she did not know that the plaintiff was using this patent; but, knowing that it was very valuable and knowing that it had not been assigned, if she thought the patent belonged to her as executrix of Mr. Weldon it is strange that she never made any claim upon the company. And it is to me quite inconceivable that she knew the patent was valuable, that it was not assigned to the company, but was the property of Mr. Weldon, and yet should never try to use it for profit during twelve of its seventeen years of life. During all the time until 1913 she has been a stockholder of the company, receiving her share of the dividends.

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Klauder-Weldon Dyeing Machine Co. v. Weldon, 87 Misc. 95, 150 N.Y.S. 273 (N.Y. Super. Ct. 1914).

87 Misc. 95 (Klauder-Weldon Dyeing Machine Co. v. Weldon) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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