Slemmer's Appeal

58 Pa. 155, 1868 Pa. LEXIS 167

Opinion

The opinion of the court was delivered, May 7th 1868, by

Sharswood, J.

This bill alleges that a partnership between the plaintiffs and the defendant for the mining for and refining of rock oil or petroleum was formed in the year 1860; that a building was erected with the funds of the firm for the purpose of making experiments in refining oil; that the plaintiffs conveyed to the defendant ideas, information and opinions, obtained and formed in relation thereto; that the plaintiffs, through the defendant, did experiment and reduce to a practical test the ideas and information of all during the latter part of 1860 and beginning of 1861, resulting in the discovery of a process for making a very valuable lubricating oil; that in 1861 the erection of a larger refinery was commenced, and on its completion, about May 1862, the firm entered more extensively into the business of refining, using the new process, improving thereon and perfecting the same; that they have continued in the free and unquestioned use of- this process down to the year 1866; that in the month of January 1866, the defendant, without'the knowledge or consent of the plaintiffs, applied for and procured a patent from the government of the United States for the said process, in his own name. The bill prays that the defendant may be enjoined from any sale or use of the said patent to the detriment of the plaintiffs ; that the patent may be assigned to the firm as their joint property; and for general relief.

The answer, after demurring to the jurisdiction of the court, avers that the agreement of partnership in 1860 was suspended by a new agreement of June 5th 1862; denies that prior to November 1860, the firm was engaged in the business of refining; claims that he was the sole inventor of the patented process; admits that a partnership was formed in the business of refining; insists that by its terms he was to continue his labors in experimenting at his own expense in the purchase of crude oil, and to enjoy the profit arising therefrom, and that “the new and improved method of producing lubricating oil from the heavy distillate of petroleum” was not perfected by him until within a few days of the date of his application for a patent.

The demurrer to the bill was overruled by the court below, and after replication the case was referred to an examiner to take testimony, and subsequently to the same gentleman as master. He reported in favor of the plaintiffs; exceptions filed to his report were dismissed; and the court below entered a decree according to the prayer of the bill.

The first question which naturally arises is as to the jurisdiction of the court.

The Act of Congress of July 4th 1836, § 17 (4 Story 2512), provides “ that all actions, suits, controversies and cases arising under any law of the United States, granting or confirming to inventors the exclusive right to their inventions or discoveries, shall be originally cognisable, as well in equity as at law, by the Circuit Courts of the United States.” It has been settled in the construction of this as well as of former acts on the same subject, that the jurisdiction thus conferred upon the Federal courts is exclusive, so that the state courts have no cognisance of either actions at law or bills in equity, in which the question of the validity of a patent is directly involved: Parsons v. Barnard, 7 Johns. 144; Livingston v. Van Ingen, 9 Johns. 582; Dudley v. Mayhew, 3 Comst. 9; Gibson v. Woodworth, 8 Paige 132; Parkhurst v. Kinsman, 2 Halst. Ch. R. 608. But though patent rights arel peculiarly within the jurisdiction of the courts of the United States, yet it is undoubtedly true that when they come in ques-1 tion collaterally, their validity may become a subject of inquiry ! in the state courts. Thus in a suit upon a promissory note, iff it is set up as a defence that the consideration was the .sale of a patent right, and that the patent is void, so that there, was in fact no consideration, the state courts constantly exercise jurisdiction: Bliss v. Negus, 8 Mass. 46; Cross v. Huntley, 13 Wend. 385; Rich v. Atwater, 16 Conn. 414; Burr v. Gregory, 2 Paine C. C. 429; Rheem v. Holliday, 4 Harris 347. The jurisdiction is not defeated because the subject-matter of the action concerns the use of a patent right, so long as the question of the validity of the patent is not necessarily involved, but arises only incidentally and by way of defence: Sherman v. The Champlain Transportation Company, 31 Vermont 162; Tomlinson v. Ballet, Law’s Dig. 229. Accordingly the courts of the United States refuse to take cognisance of cases between citizens of the same state where they involve not the infringement of the patent, but controversies growing out of .contracts of which it is merely the subject-matter: Goodyear v. Day, 1 Blatchf. 565; Burr v. Gregory, 2 Paine 436; Brooks v. Stotley, 3 McLean 523. The result of the authorities, ; then, appears to be that the state' courts are competent, 'either at ■law or in equity, to enforce a contract or a trust, of which a patent right is the subject-matter, where the validity of the patent is not directly in question, and even to pass on that when it arises ex necessitate, as by way of defence in an action on a contract.

If, then, there could be gathered from the proofs in this case a contract or trust of this patent for the benefit of the plaintiffs, the want of jurisdiction of the court would not be in the way. The plaintiffs do not attack the patent: they admit its validity. But the difficulty of the case is that they claim a trust or ownership on grounds which, if true in fact, show that the patent is void in law. The question is directly involved who was the true and original inventor, and necessarily, therefore, the validity of the patent. The .plaintiffs claim that they are joint inventors with the defendant. “Ajoint invention,” says Mr. Curtis, “maybe a good subject-matter of a patent; for the statute supposes the case of a joint invention, and provides for it; but if an invention, which in point of fact was.made by more than one person, is made the subject of a patent by any one of them, he cannot take the oath required by the statute, declaring himself to be the original and first inventor, or if he does take it, his patent will be void.” Curtis on Patents, sect. 112. In this he is sustained by the authorities : Barrett v. Hall, 1 Mason 472; Stearns v. Barret, 1 Pick. 446; Moffat v. Soby, 2 Paine 103; Hotchkiss v. Greenwood, 4 McLean 461; Ransom v. Mayor, &c., of New York, Law’s Dig. 458; Potter v. Wilson, Ibid. 454. It is true that these are all cases, in which a joint patent taken out on the sole invention of one, was held to be void. But the logic, which requires the correlative proposition to be affirmed, is inexorable. The object of the law is to secure to inventors the benefits of their inventions or discoveries. If the invention is as it maybe, joint, that object is as much frustrated, if not more so, in the one case as the other. The patentee is not a trustee for the true inventor, either in whole or in part. The true inventor has never been allowed to claim the benefit of a patent granted to one who, had stolen the invention from him. It would be contrary to the whole policy as well as the express provisions of the system. Whatever might be the case, where there appeared to be a contract or trust resulting from the understanding of the parties or the relation of the original inventor to others, a court of equity cannot decree an assignment of a patent on the ground that the patentee is not, but the plaintiff is the true original inventor, in whole or in part. Besides which, for a state court to decide directly that A. is not the sole original inventor, but that A. and B. are jointly the inventors and so entitled to the patent, and to decree an assignment or grant an injunction accordingly, would be to usurp the jurisdiction which has been exclusively vested, as we have seen, in the courts of the United States.

If, indeed, we had jurisdiction to afford the plaintiffs the specific relief for which they pray, we are by no means satisfied that the allegations of the bill in that aspect are sustained, by the proofs. These allegations are positively denied by the answer, which in this respect is responsive to the bill. The defendant undoubtedly has thñ prima facies in his favor by the grant of the patent. The onus probandi is cast by it on the plaintiffs. All the authorities are'agreed in this: Alden v. Dewey, 1 Story Rep. 841; Pitts v. Hall, 2 Blatchf. 565; Hotchkiss v. Greenwood, 4 McLean 461. Mere suggestions or assistance by others will not invalidate the right of the patentee: Curtis on Patents, §§ 47, 48, 49, 2d ed. Suggestions, to be effectual to that end, must furnish all the information necessary to enable the alleged inventor to construct the improvement or use the new process completely and perfectly. If they merely aided him in arriving at the useful result, but fell short of suggesting an arrangement that would constitute a complete machine or a perfect process, and if, after all the suggestions, there was something left for him to devise and work out by his own skill or ingenuity in order to complete the arrangement, then he is in contemplation of law to be regarded as the first and original discoverer: Nelson, J., in Pitts v. Hall, 2 Blatchf. 229. It must appear that the invention was substantially communicated to the patentee, so that without more inventive power, he could have applied it, in practice. It is not enough that a hint is given, nor on the other hand is it necessary that every minute thing about the invention should be communicated, but the substance must be: Story, J., in Alden v. Dewey, 1 Story’s Rep. 338. It seems necessarily to follow from these principles that in a joint invention, each party should invent or discover something essential to the whole result. In the case before us it is conceded that the defendant was the actual experimenter. In all the correspondence he is spoken of as conducting the experiments. There is no direct evidence of any important suggestion made by either of the plaintiffs, bearing upon “ the new and improved method of producing lubricating oil from the heavy distillate of petroleum.” Indeed, the circular issued by the firm, the manuscript of which, according to the testimony of the printer, was brought to him by one of the plaintiffs in September 1863, seems to be very persuasive, if not conclusive, evidence on this point. It says to the public: “ Our oils are manufactured under the eye of our experienced chemist, by a process of his own.”

It must follow that the decree below is erroneous. The master indeed reported as a conclusion of fact “ that the discoveries in refining oil, made by defendant at the experimental refinery, together with the whole process of manufacturing the refined oils as afterwards used by them, were the property of the company.” He failed to make, however, what is a very important distinction between a right or property in the use of a discovery and a right to a patent or exclusive monopoly. The patent right is the reward granted by the public for the skill and ingenuity of- the inventor. By the Constitution of the United States (art. 1, § 8, ¶ 8), power is granted to Congress “ to promote the progress of science and useful arts by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” No one but the inventor can have this exclusive right. He may assign it after the patent has been issued, or perhaps bind himself by contract before to execute such an assignment, which equity would specifically enforce. ' But against the express oath of the defendant we see no sufficient proof of any such contract, express or implied. He may have been present on one or more occasions when it was spoken of as a secret of trade possessed by the firm: that is the amount of the evidence at most. The inventor may however grant the use of his invention, within the limits prescribed by the law before the patent is issued, provided he does not thereby forfeit his right or abandon his discovery to the public. This we conceive to be the extent of the equity of the plaintiffs as made out by the evidence. The defendant indeed admits in his answer that the plaintiffs were by his own permission and acquiescence to share as copartners with him in the profits arising from the manufacture of oil by the said process — he adds, “so long as the copartnership continued.” The whole of this allegation is irresponsive. While there is ample evidence to sustain the equity of the plaintiffs to the use of the discovery, there is nothing to restrict it to the period of the existence of the partnership. The case indeed falls entirely within the principle established in McClurg v. Kingsland, 1 How. (S. C.) 202), in which it was held that if a person employed in the manufactory of another, while receiving wages, makes experiments at the expense of his employer, constructs the article invented and permits his employer to use it, no compensation for the use being paid or demanded, and then obtains a patent, these facts will justify the presumption of a license to use the invention. No limitation to the license was implied in that case, confining it to the period of time that the inventor continued in the employment of the other; neither can any be implied here.

Under the prayer for general relief, the plaintiffs are entitled to such relief as is agreeable to the case made in the bill, though different from the specific relief prayed for: Hiera v. Mill, 13 Ves. 119. By accepting a license from the defendant the plaintiffs will be estopped from contesting the validity of his patent. They have not, however, alleged the invalidity of the patent, and it is therefore not inconsistent with the frame of the bill to decree that the defendant shall grant them a license.

Decree of the Court of Common Pleas of Montgomery county reversed, and now it is ordered and decreed that the defendant Henry T. Slemmer do execute and deliver to the plaintiffs jointly and severally a license to use the improvement in the manufacture of lubricating oil, the exclusive right to which was granted to him by letters patent from the United States, under the seal of the Patent Office, bearing date February 27th 1866, for the term of years therein described, and for any extension or continuation of the said term, which may be procured by or for the benefit of the said Henry T. Slemmer, his heirs, executors, administrators and assigns, and that the assignment of the patent, executed by the said Henry T. Slemmer and filed in the office of the prothonotary of the. court below, be delivered up to him to be cancelled. Each party to pay his own costs of the suit below and of the appeal.