To constitute an action one arising under the patent right laws
of the United States, the plaintiff must setup some right, title or
interest under the patent laws, or at least make it appear that
some right or privilege under those laws will be defeated by one
construction or sustained by the opposite construction of these
laws.
When a state court has jurisdiction both of the parties and the
subject matter as set forth in the declaration, it cannot be ousted
of such jurisdiction by the fact that, incidentally to his defense,
the defendant claims the invalidity of a certain patent.
This was an action in assumpsit upon the common counts by the
persons constituting the firm of Henry Pratt & Co. to recover
of the Paris Gaslight & Coke Company the agreed consideration
of $4,850 for manufacturing and setting up at its works, in the
City of Paris, Edger County, Illinois, an apparatus for the
manufacture of water gas in accordance with certain patents granted
to Pratt and Ryan, April 22, 1884, and April 12, 1887, the
component parts of said apparatus being set forth in the
contract.
Defendant pleaded the general issue, and, in addition thereto,
that the cause of action arose under a written contract, by which
the plaintiffs agreed to keep the defendant harmless against any
suits which might be brought against it for the infringement of any
patents, and, if any such were brought, to defend the same at their
own expense, further averring that the patents to Pratt and Ryan
were void, and an infringement upon certain patents which had been
granted to Springer and Lowe, that plaintiffs had not kept
defendant harmless from suits for infringement, as provided for in
such contract, and had not defended the same at their expense, but
that a suit had been begun against defendant by the National
Gaslight & Fuel Company in the Circuit Court of the United
States for the Southern District of Illinois for
Page 168 U. S. 256
an infringement of the Springer patent, that defendant requested
plaintiffs to defend it, which they had agreed to do, but that they
wholly refused to defend it, and said suit is still pending; that
defendant was compelled to, and did at once, quit using the
apparatus by reason of such suit, and has wholly ceased to use
it.
The third plea averred in substance that the plaintiffs obtained
the contract upon false and fraudulent representations that their
patents were not infringements upon any other patents, which
representations the plaintiffs knew to be untrue; that plaintiffs
further represented that the National Gas Light & Fuel Company
had begun a suit against them for an infringement of the Springer
patent, and had found that they had no claim, and assured
plaintiffs that no suit would be brought against defendant by the
gas light and fuel company, nor by anyone else, and that the
company had abandoned all claim that plaintiffs' patents were an
infringement upon theirs, which representations were false and
fraudulent, to the knowledge of the plaintiffs, who had before that
time been notified by the gas light and fuel company that suit
would be brought against any one who might use the apparatus made
by them.
The fourth plea alleged substantially the same representations
as the third, and that while plaintiffs were about to commence the
construction of the apparatus, the National Gas Light & Fuel
Company notified defendant that the plaintiffs' apparatus was an
infringement upon the patents; that defendant thereupon notified
plaintiffs that it would not accept such apparatus, and thereupon
plaintiffs proposed that, if defendant would permit them to
proceed, they would, before asking payment for the same, furnish
defendant a good and sufficient bond indemnifying it against all
damages that it might suffer by reason of any infringement, and,
upon defendant accepting such offer, plaintiffs refused to give
such bonds as they had agreed, and still neglect to do so.
To these special pleas, a general demurrer was filed by the
plaintiffs, which was overruled by the court, and, by leave of the
court, replications were filed, and, upon the issues thus
Page 168 U. S. 257
joined, a trial was had which resulted in a verdict for the
defendant. A motion for a new trial being overruled and judgment
entered upon the verdict, the case was taken to the appellate court
of Illinois, and from that court to the supreme court, which
affirmed the judgment of the circuit court, whereupon plaintiffs
sued out a writ of error from this Court.
MR. JUSTICE BROWN, after stating the facts in the foregoing
language, delivered the opinion of the court.
The only federal question presented by the record in this case
turns upon the admissibility of evidence tending to show that the
patents issued to the plaintiffs Pratt and Ryan were infringements
upon a prior patent issued to Springer. Plaintiffs contend that the
state court, by admitting such testimony, thereby assumed
jurisdiction of a patent case, in violation of Rev.Stat. §
711, which declares that
"the jurisdiction vested in the courts of the United States in
the cases and proceedings hereinafter mentioned shall be exclusive
of the courts of the several states. . . . Fifth. Of all cases
arising under the patent right or copyright laws of the United
States."
The action, however, was not brought to test the validity of
plaintiffs' patents, to recover damage for their infringement, or
to enjoin their use by the defendant. The suit was an ordinary
action of assumpsit upon the common counts for the price of a
machine -- a patented machine, it is true -- but, nonetheless,
subject to a common law action to recover its value. No mention is
made of a patent in the declaration, and, the contract having been
executed, the action was properly brought upon the common courts
notwithstanding the machine was sold under a written agreement. 2
Greenleaf's Ev. § 104. Defendant, in its plea, sets up the
contract under
Page 168 U. S. 258
which the plaintiffs agreed to save the defendant harmless
against any suit which might be brought against it for
infringement, and to defend such suits at their own expense, and
averred, among other things, that the patents were void and an
infringement upon prior patents, that plaintiffs had not kept the
defendant harmless against suits, but had refused to defend it
against a suit brought by the National Gas Light & Fuel
Company, by reason of which the consideration had wholly failed,
and defendant had rightfully rescinded the contract. Manifestly if
the defendant had no right to use the machine, it was of no value
to it, and the whole purpose of its purchase was frustrated.
Had the action been in the circuit court of the United States,
defendant would obviously have had the right to show that the
plaintiffs' patents were void, and an infringement upon prior
patents, as an excuse for rescinding the contract.
Hayne v.
Maltby, 3 T.R. 438;
Nye v. Raymond, 16 Ill. 153. Why
should it not have the same right in a state court? It is evident
that unless it can prove the invalidity of the plaintiffs' patents,
it might be completely at their mercy. It cannot, under our
decisions, remove the case to a federal court as one arising under
the Constitution or laws of the United States, since no claim was
made by the plaintiffs in their declaration under such Constitution
or laws.
Chappell v. Waterworth, 155 U.
S. 102;
Walker v. Collins, 167 U. S.
57;
Tennessee v. Union & Planters' Bank,
152 U. S. 454. It
could not file a bill against the National Gas Light & Fuel
Company to test the validity of the patents, since the defendant,
and not the fuel company, was the offending party. Nor could it
have compelled the fuel company to sue it for an infringement had
that company not chosen to do so. The fuel company did, however,
elect to bring such suit, which the plaintiffs were promptly
notified by the defendant to defend, but they refused to do this,
and now claim that defendant is incapacitated from contesting the
validity of their patents, which contest they were bound under
their contract to make in the suit brought against the defendant by
the fuel company. It is possible a bill would lie in the
Page 168 U. S. 259
circuit court of the United States to rescind the contract, but,
having the right to rescind without suit, it ought not to be driven
to this circuitous remedy.
The action under consideration is not one arising under the
patent right laws of the United States in any proper sense of the
term. To constitute such a cause, the plaintiff must set up some
right, title, or interest under the patent laws, or at least make
it appear that some right or privilege will be defeated by one
construction or sustained by the opposite construction of these
laws.
Starin v. New York, 115 U.
S. 248;
Germania Ins. Co. v. Wisconsin,
119 U. S. 473.
The state court had jurisdiction both of the parties and the
subject matter, as set forth in the declaration, and it could not
be ousted of such jurisdiction by the fact that, incidentally to
one of these defenses, the defendant claimed the invalidity of a
certain patent. To hold that it has no right to introduce evidence
upon this subject is to do it a wrong and deny it a remedy. Section
711 does not deprive the state courts of the power to determine
questions arising under the patent laws, but only of
assuming jurisdiction of
"cases" arising under those laws.
There is a clear distinction between a cases and a question arising
under the patent laws. The former arises when the plaintiff, in his
opening pleading -- be it a bill, complaint, or declaration -- sets
up a right under the patent laws as ground for a recovery. Of such,
the state courts have no jurisdiction. The latter may appear in the
plea or answer or in the testimony. The determination of such
question is not beyond the competency of the state tribunals.
The jurisdiction of state courts over patent cases is not more
exclusive than that of the district courts over cases of admiralty
and maritime jurisdiction. Yet when vessels have passed into the
hands of an assignee or receiver, it had been the constant practice
of courts of bankruptcy and equity to respect the liens given by
the maritime law, to marshal such liens, and direct their payment,
precisely as a court of admiralty would have done.
Scott's
Case, 1 Abbott U.S. 336;
In re Kirkland, 14 Fed.Cas.
677;
In re People's Mail Steamship Co., 3 Ben. 226; High
on Receivers § 138.
Page 168 U. S. 260
While the question has never arisen in this Court in the exact
form presented in this case, we have repeatedly held that the
federal courts have no right, irrespective of citizenship, to
entertain suits for the amount of an agreed license or royalty, or
for the specific execution of a contract for the use of a patent,
or of other suits where a subsisting contract is show governing the
rights of the party in the use of an invention, and that such suits
not only may, but must, be brought in the state courts.
Hartell
v. Tilghman, 99 U. S. 547;
Wilson v.
Sandford, 10 How. 99;
Albright v. Texas,
106 U. S. 613;
Goodyear v. Day, 1 Blatchford 565;
Blanchard v.
Sprague, 1 Cliff. 288;
Dale Tile Mfg. Co. v. Hyatt,
125 U. S. 46;
Wade v.Lawder, 165 U. S. 624,
although, in an action for royalties, if the validity and
infringement of the patent are controverted, the case is considered
as one "touching patent right" for the purposes of an appeal to
this Court under Rev.Stat. § 699.
St. Paul Plough Works v.
Starling, 127 U. S. 376. In
this case, the court expressly reserved the question whether the
action should be considered as one arising under the patent laws of
the United States within the meaning of section 711.
We are referred to but one case directly in point which favors
plaintiffs' contention --
Elmer v. Pennel, 40 Me. 430, in
which, in a suit upon a note given for a patent right, proof that
the patent was void as an infringement upon a prior one was held
not to be admissible without that fact having been determined by a
court of competent jurisdiction.
There is, however, an overwhelming weight of authority to the
contrary. Beginning with the case of
Bliss v. Negus, 8
Mass. 46, in which, in a similar action upon a note, it was held
the defendant might show that the patent had been obtained by fraud
and perjury, the Supreme Judicial Court of Massachusetts has held
steadily to the doctrine that where the question of the validity of
a patent arises collaterally, it will take jurisdiction of it. In
Dickinson v. Hall, 14 Pick. 217, evidence that the patent
was void was held to be pertinent to show a total want of
consideration for the defendant's note. The principal case,
however, is that of
Nash v. Lull, 102 Mass. 60, in which
the opinion of the court was delivered by
Page 168 U. S. 261
MR. JUSTICE GRAY, to the effect that any degree of utility or
practical value in a patent will support the consideration paid for
it, but that if it be wholly void, a note given for it is without
consideration, and such issue may be tried in the state court as
well as in the circuit court of the United States.
See
also, to the same effect,
Bierce v. Stocking, 11 Gray
174;
Lester v. Palmer, 4 Allen 145.
Like opinions have been pronounced in the courts of New
Hampshire, Connecticut, New York, Pennsylvania, Indiana, Wisconsin,
Illinois, and Missouri, and in all these states the principle seems
well established that any defense which goes to the validity of the
patent is available in the state courts. In these cases, the
validity of the patent was attacked upon different grounds, but we
perceive no distinction in the principle involved. The patent may
be void because the invention was well known before, or because it
is useless or immoral, or because it is an infringement upon other
prior patents, and it is no objection to the jurisdiction of the
state court that the question of validity may involve the
examination of conflicting patents, or the testimony of experts. It
is the fact of its invalidity, and not the reasons for it, that is
material. The cases are so numerous and uniform that a bare
reference to them is all that is necessary.
Dunbar v.
Marden, 13 N.H. 311;
Rich v. Atwater, 16 Conn. 409;
Sherman v. Champlain Transportation Co., 31 Vt. 162;
Clought v. Patrick, 37 Vt. 421;
Burrall v.
Jewett, 2 Paige 134;
Middlebrook v. Broadbent, 47
N.Y. 443;
Continental Store Service Co. v. Clark, 100 N.Y.
365;
Head v. Stevens, 19 Wend. 411;
Harmon v.
Bird, 22 Wend. 113;
Cross v. Huntly, 13 Wend. 385;
Saxton v. Dodge, 57 Barb. 84, 115;
Geiger v.
Cook, 3 W. & S. 266;
Slemmer's Appeal, 58
Penn.St. 155, 163;
McClure v. Jeffrey, 8 Ind. 79;
Nye
v. Raymond, 16 Ill. 153;
Page v. Dickerson, 28 Wis.
694;
Rice v. Garnhart, 34 Wis. 453;
Billings v.
Ames, 32 Mo. 265.
The claim made by the plaintiffs in error, that there was no
competent evidence to show that their patents were an infringement
upon the prior patents, was not specially assigned
Page 168 U. S. 262
as error either in the appellate court or in the supreme court
of the state, and is not noticed in either of the opinions of those
courts. Under these circumstances, it cannot be assigned as error
here.
The judgment of the Supreme Court of Illinois is therefore
Affirmed.
