DUEBER WATCH-CASE MANUF'G CO. V. DALZELL.
697
DUEBER WATCH-CASE MANUF'G
Co. v.
DALZELL
et al.
(Oircuit (Jo'urt, 8. D.
York.
May 14, 1889.)
1.
PATENTS FOR INVENTIONS-,-AssIGNMENT-NoTICE.
Where it was agreed that certain inventions should be complaltlatlt's prop· erty, and be patented for its benefit, and where defendant knew that the in, ventions were in use in complainant's factory, and that the inventor made them while an employe of complainant, and defendant made no inquiries as to whether complainant claimed any right to nse the inventions, but took an exclusive license from the inventor. defendant is chargeable with constructive notice of the rights of complainant. D. stated that certain inventions of his were made before he 'was employed for complainant, alld the first products for complainant were made witll.hiS own appliances. He wail: employed by complainant to with ref· erenceto the subject of the inventions, was given several months time. and furnished with appliances, and accomplished the desired object by devices wbich ba,d been previQl:1sly used for analogous purposes., Complainant) ident testified that D.Buggested the patenting of the inventions for ant's benefit,saying that if complainant would pay the expense be (I).) wanted not):lingfor:bimself.P,teetified that he suggested that the inventions were worthy off,la\en ta, and he would obtain patents. but could not, then sparet):le mOlley, and that the president said that he (D.) could have 'what money he wanted. Bnd should be protected as if he had used his own money'! Though D. remained in complainant's employment several months after the principal patents were obtained, no attempt to agree. definitely as to the,ir respective rights was made. The expense of procnriug the patents was not charged by complainant to D. Complainant's allegations as to the agreementin,dilferent snits were somewhat at variance. and its president respOnded evasively to some of the Interrogatories. Held, that complainant was etltitled to the pat· ents. ',. '
S.
SAME.
InEquity. ' , ' ., ' Manufacturing Company against pal';' Bill by the Dueber :zell and the Fahys Watch-Case Company. , John H. V. Arnold and Jamea Moore, for complainant. Bowman « Bowman, (Edmund Wetmore, of counsel,) for the Fahys Watch-Case Company. WALLACE,
J. The defendant Dalzell and the Fahys Watch-Case Com-
,
'
pany having filed a bill against the complainant for infringementoftwo patents granted to Dalzell for inventions in apparatus for manufacturing {Joresfor watch-crowns, the complainant interposed a plea a.verring in SJ;lhstflDce that prior to the making application for the patents it was ,agreed between Dalzell and the complainant that the inventions should be the property of the complainant, and be patented for its .after the complainant filed this bill against Dalzell and the fahys Watch'Case Company, the exclusive licensee under the patents,to compel a conyeyanceofthe patents to it, together other patentssJ,lbseql.lently wanted' for other improvements in apparatusfol',u1akjng parts .of watch"cases. The case presents the of factwhet)ler,f!Uch:fln bet'Yeenpalzell and the u:!ikwas
598 made, whether the Fahys Watch-Case Company had knowledge of the agreement, or of :facts SUfficient to charge it with notice. ' The question whether such an agreement was made between Dalzell and the complainant depends.whollyuponoraUestimony, and primarily upon that of Mr. Dueber, the president and principal stockholder of the complainant, on the one side, and Mr. Dalzell upon tne other. DuelJer testifies that1n the spring of 1885 Dalzell suggested the advisability of patenting the'inventions for the benefit the c<;lmplainant, stating that if the company would pay the expense of getting the patents he would not want anything for himself. Dalzell testifies that he suggested to Dueber that his inventions were worthy of patents, and he was going to patent them, but that he could not spare the money for doing so at that time; whereupon, Dueber, in ,substance, told him togo on, that he could have what money he wanted, and should be protected as though he had used his own money to obtain the patents. The theories of the respective parties are such that one or the other of these statements must be acCElpted as substantially true, and there is no middle ground upon which the testimony of these t",o· witnesses can be reconciled with a different contract. Either there was a distinct understanding that the patents were to be obtained exc]usivelyforthe benefit oLthe' Dueber Company, or there was one that they were to be obtained exclusively for the benefit of Mr. Dalzell. ', In the endeavor to arrive at the trUth the record has been thoroughly studied, and it would: seem: to be quite useless to discuss the testimony of the various witnesses in detail. Not only the main issue, but all the collateral issues, and theleadiilg facts which bear upon theIn, are involved in a sharp conflict of testimony. The conclusion is reached that the version of Mr. Dueber is the true one. The more rational version o.f .the facts is that the inventions were made by while he 'Yas in the employ o.f the Dueber Company, after he. had working for Sl:lVeral months upon as ,a tool-maker, pursuant instructions ot the company, and a(it8 :expense,in the effort to perfect what its mechanical supel-iiltend'ent'had begun, brit had 'for a more con. venient time. It must be assumed that until Da1zell had perfectlld the dies and forces for making watch cores they had not pl'evious!y been used for that purpose. Neverthelet:1s, the use of such devices fot' analogous purposes was so well known as to be a matter of judicial notice; and it is not unreasonable to sUppose thatanirHellig!mt ,mechanic like Dalzell, skilled in the particular calling, who was directed to experiment with that specific end in view, supplied with the necessary appliances, and given several months in which to do it, wOllld:succeed, as he did, in adapting dies and forees to the neW occasion in#hich they were to be employed. Dalzell accomplished \'I'hat he was exp:ected to accomplish,' and what he was paidto'Elh, By this it is not meant to suggest that what he did was no.t invention, but it is of some significance ing :why, when DalzeU ,suggested patenting the he did 'riot mftkeany claim for cbnipensation;: Why the corn!>1.J.uj, although willing t6 incur the expense of ,obtaining patents, did not' expect to pay him
or
DUEBER ,WATCH-CASE .MANUF'G CO. t'. DALZELL.
599
for them; why no. formal agreement was made at the time it was concluded to patent the inventions; and why, during the several months he remained in the employ of the company Sifter the principal patents were obtained, no atteinptwasmade on his part or on the part of the campany to come to a definite understanding about their respective rights. The company paid. out about $500 to the patent ,solicitor for his fees and expenses, alid the fees of the patent-office, in patenting the inveutions. These items were not charged to Dalzell, but went into the general expense account of the company. Dalzell was irresponsible, and it is altogether unlikely that· the company would have incurred this expense without any attempt to make terms with him if its officers had not understood that the· patents were to belong to the company.. This view of the facts of course discredits the integrity of Dalzell as a witness. His honesty would not necessarily be impeached because his testimony as to what took plaoe between Dueber -and himself in respect to the arrangement for patenting the inventions iB not accepted as correot. Circum.suggest that when he found the company was willing to incur the expense of patenting the inventions, or soon after, he began to tqinkhe o1.!ghtto be remunerated for what he had done, and subsequently pursuaded himself that the complainant was treating him unfairly in this respect... It would be quite consonant with experience if' lie' therii'convihtled himself that the company had promised him compensation, and came honestly to believe that some such conversation had:oceur].JeIHls that which he has detailed. But he asserts that he had .which are t4e subject the first two patents beforE! he thl) service of the complainant; and he testifies that the ·first wateh.crowncores produced by him for the Duebel' werem,ade dies;, forces,. and other tools, pr,ought hrto,the brother, Rudolph Da,h:ell, whp',eame there to work in the fall of :L883. ' There is no satisfactory testimony in the s\ibataniilltes and the circumstantial evidence, 'M well· as. the. !iirectevidence, seems comrincing .to the. con· trary. "His conduet,at the,'titne of leaving the service of the company was disingenuous and disloyal; militates. against his own belief in his pretensions. If at .the· he .had .distinctly. claimed. that the patents were his property, or he was entitled to be paid for his inven. tiol';ls, arid. had taken the :position that he would not remain unless, some :was ;J:Oadew,lth' him'Qy the company, there would be less reason for suspecting his integrity and good faith. The circumstance has notbeeaoverlooked tha,tthe terms of: the agree- , ment,.:as,alleged in the':.bill,.Q.Elpaxt somewhat ii-om those,allegedJn the plea of the complainant to the bill of Dabell a.nd the Fahya WatchCase Company; nor have the evasive an8Wel'S been overlooked of Dueber himself, tQ .ljloro,e of.· the JNbich:were propounded to l1\Jll. These :well, as the many defendmatters; ants .:to. facts, have. Peen duly eousidere!i.,:: The:case i,!! ·which,· differentmindljl J;l1ay well rcacha eonU:a.ry. Qi the originlllly
6CO
FEDERAL' REPORTER,
vol. 38.
derived at the hearing of the cause, adverse to the theory that the inventions were patented for the benefit of Dalzell, has ripened into a conviction after a critical examination of the record. When the Fahys Watch.Case Company employed Dalzell, and acquired a license under the patents, its officers knew that the inventions were in use at the factory of the complainant, and that Dalzell had made the apparatus there for making the crown cores while an employe of the complainant. Its officers entertained the negotiations with Dalzellata time when they supposed he was still an employe of the Dueber Company. They made no inquiries of the Dueber Company, nor even of Dalzell himself, to ascertain Whether the complainant had or claimed to have any right to use'the'inventions. Under these circumstances, upon the authority of Prime v. ManujacturingCo., 16 BIlltchf. 453, (deCided 'in this circuit,) the Fahys Watch-Case Company is chargeable with constructive notice of the complainarlt's rights, and must be held responsible to the extent of the knowledge which its officers might have obtained by making inquiry. A decree is ordered for the complainant.
BEmERT CYLINDER
OIL-CuP Co.
t1. THE WILLIAlf POWELL
Co.
(Oircuie Oourt,
s.
D.01l.io, W; D.
May 4, 1889.)
. , . The Seibert Oil-Cup Company; as owner of certain patents. Including pat· ent No. 138,243, granted to John Gates, and the Detroit Lubricator Company entered into an agreement that neither should sue the other or its agents under any of the patents then or thereafter to be owned by it. and that neither should imitatli the styles or shapes of lubricators made by the other. and that in consideration of the payment of certain royalties by the Detroit Company the Seibert Company would not prosecute the Detroit Company. its agents or vendees, for any infringement of the Nicholas Seibert patent, which was owned by the Seibert Company, and which it alleged the Detroit Company bad been.and was infringing. Held. that the contract did not give the Detroit Company an exclusive licenllll to use the Gates '8. SAME-ACTION FOR INFRINGEMENT---EvIDENCE.· / In an action by the' Seibert Company against a licensee of the Detroit Com· pany fer an infringementof the Gates patent. a contract by which the Seibert -Company had released certain purchasers from the Detroit Company from all claims on account of their use of lubricators. to which contract neither the Detroit Company nor the licensee defendant was a party, is inadmissible.
1.:PATlllNTS FOR lNvENTlON8-LICBNSas-CoNSTRUCTION.
In Equity.
GeOrgeJ.Murray, for defendant.
Edmund Wetmore, J. H.Rayrrwnd, and Peck « Rector, for complainant.
Action for infringement of patent;
Sa-GE, J. The complainant sUes as llesignee for infringement of patent No. 138,243, granted to John Gates, 29th of April, 1873, for improvements iIi lubricators for ·steam-engines. The validity of the patent, altDotighdenied in the. answer, ,is not contested.· The lubricators manufactured and sold by the defendant contain the complainant'sin-