Miami Cycle & Mfg. Co. v. Robinson

245 F. 556, 158 C.C.A. 22, 1917 U.S. App. LEXIS 1524
CourtCourt of Appeals for the Sixth Circuit
DecidedAugust 1, 1917
DocketNo. 3009
StatusPublished
Cited by12 cases

This text of 245 F. 556 (Miami Cycle & Mfg. Co. v. Robinson) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Miami Cycle & Mfg. Co. v. Robinson, 245 F. 556, 158 C.C.A. 22, 1917 U.S. App. LEXIS 1524 (6th Cir. 1917).

Opinions

DENISON, Circuit Judge

(after stating the facts as above). 1. Whether the bill states a case for which there is no adequate remedy at law may be matter of grave doubt. However, it undertakes to rest upon certain established grounds of equitable jurisdiction; and although the defendant challenged that jurisdiction below, it has assigned no error upon the overruling of its objection. Under these circumstances, we find no occasion to look into the question.

[ 1 ] 2. The first defense, in order of presentation, is that Robinson cannot enforce the contract, because he has never granted the exclusive license which he agreed to give. Further statement of facts-here becomes necessary. Robinson was an inventor and patent solicitor of large experience. He had been conducting his own cases. After his original application had been long tied up in interferences, he devised the plan of filing what he called a divisional application, thinking, apparently, that he could thereby proceed, free in some respects from the complications which the interferences had brought about. Accordingly, in June, 1905, he filed this divisional application. It consisted of a copy of the specification and drawing and some of the claims of the original. In July, 1908, the Patent Office had repeatedly refused to give consideration on the merits, such refusal being for the reason that there was nothing truly divisional about it; and Robinson was insisting, both that it did contain claims not allowable under the basic application, and that the claims common to it and the former might eventually be assigned to- one or the other, as the Office-might-direct. The contract of July 6, 1908, included this divisional application among the list of eight patents and applications which were to be assigned to the company. Immediately upon the signing of the contract, an assignment was prepared covering these eight, and the paper was executed and delivered. The contemplated exclusive license under the basic application not being entirely finished that day, it was arranged that Robinson would go home, and this paper would be sent to him the next day, and he would sign and return it. It was so, prepared and sent. He declined to execute it, saying that, the moment the company’s attorneys were in charge of the applications, they could transfer the broad claims from the basic to the divisional, to which the complete title had already passed, and so could defeat the purpose of the contract; he therefore asked that the divisional [560]*560be reassigned to him, whereupon he would include both the original and divisional in his license. This request was neither granted nor refused, but consideration was postponed. During all the years while the application was pending, and after the patent issued, there were occasional references by both parties to their respective positions on 'this subject, but there never was a positive demand for the license made as a condition of continuing the contract in force nor was there an absolute refusal to give it; but the company proceeded with the prosecution of the matter in a manner wholly inconsistent with any intention to claim forfeiture for lack of this instrument.

Robinson’s original refusal to execute the license was unjustified. It amounted to saying that, although he had executed a contract in which there was neither fraud nor mutual mistake, he would not, carry it out because he had later observed that he had left open one possible door by which the other party, if so disposed, might attempt to defraud him. All must agree that to transfer the broad claims to the divisional application, for the purpose and with the effect he feared, would have been to attempt a fraud upon him of which no reputable attorney would have been guilty, which he had no reason to apprehend, and which could not have been successfully carried out. It is true that the attorneys continued Robinson’s efforts to get some broad claims allowed in the divisional case, but there is no reason to think that this was with any fraudulent intention; and it is true, also, that after Robinson ousted them from management of the basic case, in June, 1913, they threatened to misuse their power over the divisional ; but they never tried to do so, and the threat was measurably, if not quite, justified as a matter of self-defense against Robinson’s misconduct. Further, in so far as the divisional application, in July, 1908, supported or could thereafter be made to support details of form rightly separable from the basic claims, it was within the fair intent of the parties that such divisional matter should be included in that which was being absolutely transferred to the company. The substance of the arrangement was that the company presently became absolute owner of all subsidiary inventions 2 and exclusive licensee of the basic one. The company could rightfully have insisted upon the immediate execution of the license as agreed. However, the divisional application then contained nothing which the Patent Office considered properly divisional. Whether it might thereafter be made to do so was wholly contingent and rather improbable, and there is apparently no very substantial reason why the company might not have complied with Robinson’s request. Both parties were content to let the matter of reassignment to Robinson drift along. It was not important while the interference made everything contingent; and later, after the patent issued, there was no possibility that the broad claims could be transferred to the divisional, and the latter was either negligible, because there was nothing left in it, or else it belonged to the company, because containing something rightly separable from the basic appli[561]*561cation. Probably there was nothing left, because it was allowed to die. Certainly since the patent issued, the existence of legal title in the company to the divisional application has not afforded even a plausible pretext for not executing the formal license for the basic invention.

Merely as between the parties, and until the patent issued, there was no particular necessity for the formal license nor any prejudice to the company from its nonexecution. The contract of July 8th fixed the rights of the parties; and not until the patent issued could such a formal instrument have been of any value to the company for the purpose of enabling it to license others. Any such licenses to others could not be effectively granted before the issuing of the patent, and if the company desired to make contracts that it would license others when the patent was obtained, it could' make those contracts as well on the basis of the contract of July 8th as upon a more technical basis. It follows that Robinson’s conduct, in not giving the formal license up to the time when the patent issued, cannot be considered a substantial or material breach which justifies the company in denying its contract liability. After the patent originally issued, the company never took the position that the failure to give the license had ended its rights and liabilities under the contract. When Robinson, in October, 1913, claimed that the company had broken the contract and forfeited all rights, and so demanded a reassignment of everything, the company responded:

“If yon propose to treat the agreement as having been broken, we will be compelled to take proper steps to-put us in the position we both were in prior to the date of the agreement. Has the reissue been granted?”

Robinson then dropped the subject until, in December, 1913, he demanded royalty.

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Bluebook (online)
245 F. 556, 158 C.C.A. 22, 1917 U.S. App. LEXIS 1524, Counsel Stack Legal Research, https://law.counselstack.com/opinion/miami-cycle-mfg-co-v-robinson-ca6-1917.