Becher v. Contoure Laboratories

• Decision Date: 12 November 1928
• Docket Number: No. 123.,123.
• Citation: 29 F.2d 31
• Parties: BECHER v. CONTOURE LABORATORIES, Inc., et al.
• Court: U.S. Court of Appeals — Second Circuit

29 F.2d 31 (1928)

BECHER v. CONTOURE LABORATORIES, Inc., et al.^*

No. 123.

Circuit Court of Appeals, Second Circuit.

November 12, 1928.

O Ellery Edwards, of New York City, for appellant.

Moers & Rosenschein, of New York City (Charles S. Rosenschein, of New York City, of counsel), for appellees.

Before MANTON, L. HAND, and SWAN, Circuit Judges.

SWAN, Circuit Judge.

The relief sought on the motion for a preliminary injunction was twofold: (1) To prevent infringement of Becher's patent; and (2) to prevent the further prosecution by defendants of a suit pending between the same parties in the Supreme Court of the state of New York, wherein judgment had been entered directing Becher to assign his said patent to Herbert Oppenheimer, one of the plaintiffs in that litigation and a defendant in this. But the whole argument centers upon the refusal of the District Court to enjoin prosecution of the state suit; if the state court had jurisdiction, its judgment precludes plaintiff from claiming infringement by the defendants. The appellant contends that that court had no jurisdiction of the litigation, because it was a case arising under the patent laws of the United States, and so within the exclusive jurisdiction of federal tribunals. Section 256 of the Judicial Code (USCA, tit. 28, § 371).

In the state suit, Oppenheimer and his assignee, Contoure Laboratories, were plaintiffs. They allege that Oppenheimer was the proprietor of an invention for a certain massaging instrument, and was engaged in devising improvements thereof; that he employed Becher to make mechanical parts of said instrument, and Becher agreed to keep secret and confidential such information as he should obtain from Oppenheimer in the course of doing such work; that Oppenheimer disclosed to Becher his said invention, and modifications and improvements thereof, in order that Becher might perform the agreed work, and that Becher appropriated Oppenheimer's ideas and invention, and in violation of his aforesaid agreement made application for a patent upon said instrument, and obtained upon said application the issuance of letters patent No. 1,634,316; that in said application Becher falsely stated that he was the inventor, although in fact, as Becher knew, Oppenheimer was the inventor of said instrument; that Oppenheimer had assigned his interest in said invention and instrument to Contoure Laboratories; that, upon learning of the patent issued to Becher, Oppenheimer and his assignee demanded that Becher discontinue making instruments pursuant to said letters patent, and assign the patent to them; that they have established a substantial trade in such instruments, and that Becher's sale of instruments such as are described in said letters patent causes them irreparable injury. The prayer for relief is (1) that Becher be declared a trustee ex maleficio for Oppenheimer's assignee of said invention and the letters patent; (2) that he be restrained from using or disposing of said instruments; (3) that he be enjoined from granting any rights under said letters patent; (4) that he deliver up to the plaintiffs all instruments in his possession; and (5) for damages and other appropriate relief. Becher's answer denied the allegations of the complaint; alleged the issuance to himself on July 5, 1927, of said letters patent, and that subsequently thereto Oppenheimer had amended a patent application which he had filed on June 26, 1926, and an interference had been declared between Becher's letters patent and Oppenheimer's amended application, which interference remained pending and undetermined in the Patent Office; and denied the jurisdiction of the state court. The state court sustained its own jurisdiction, and trial was had before a referee, who made a finding of facts supporting all of the allegations of the bill. Judgment was thereupon entered, adjudging Becher a trustee ex maleficio for the benefit of Oppenheimer of the invention and letters patent, and directing him to execute an assignment of the patent. Injunctive relief was also granted in accordance with the prayer of the bill. Becher then filed the present suit, to obtain an adjudication of the validity of his patent, and to enjoin the enforcement of the state court judgment.

The exclusive jurisdiction of federal courts in cases arising under the patent laws does not preclude state courts from exercising their customary common-law and equity jurisdiction merely because a patent is involved in the litigation. It is well settled that a state court may try questions of title, and may construe, enforce, or annul contracts relating to patents. Marsh v. Nichols, 140 U. S. 344, 11 S. Ct. 798, 35 L. Ed. 413; New Marshall Engine Co. v. Marshall Engine Co., 223 U. S. 473, 32 S. Ct. 238, 56 L. Ed. 513; Luckett v. Delpark, 270 U. S. 496, 46 S. Ct. 397, 70 L. Ed. 703; Binney v. Annan, 107 Mass. 94, 9 Am. Rep. 10; see also Wittemann Bros. v. Wittemann Co., 88 Misc. Rep. 266, 151 N. Y. S. 813; Hanson v. Hall Mfg. Co., 194 Iowa, 1213, 190 N. W. 967. This applies as well when a contract to assign is implied from the relationship of the parties as when it is express. Air Reduction Co. v. Walker, 118 Misc. Rep. 827, 195 N. Y. S. 120; Annin v. Wren, 44 Hun (N. Y.) 352, 353; Fuller & Johnson Mfg. Co. v. Bartlett, 68 Wis. 73, 31 N. W. 747, 60 Am. Rep. 838. In such cases, of course, the plaintiff asserts nothing which questions the validity of the defendant's patent.

In the case at bar, the plaintiff in the state suit charged that the defendant got from him the ideas which were embodied in the patent. This fact, if true, would mean that the patent issued to defendant was null and void. Kennedy v. Hazelton, 128 U. S. 667, 9 S. Ct. 202, 32 L. Ed. 576. Merely to get an idea from another is not a tort; the inventor may have freely communicated it. In that event the inventor has no recourse, except to an interference in the Patent Office, if the borrower files an application for a patent embodying his idea. But the idea may have been obtained under circumstances which forbid the borrower to make use of it for his own benefit. The complaint in the state suit alleged, and the court found, that Becher had agreed to keep secret and confidential such information as Oppenheimer gave him concerning his massaging instrument, and that, in violation of this agreement and of the confidential relationship between the parties, Becher embodied this information in his application for a patent. If the invention had been merely a trade secret, Oppenheimer could have enjoined Becher from using it for his own benefit, and could have compelled him to account for anything of value which he had obtained by wrongful use of it. Morison v. Moat, 9 Hare, 241; Du Pont de Nemours Powder Co. v. Masland, 244 U. S. 100, 37 S. Ct. 575, 61 L. Ed. 1016. This should be equally true when the secret is an invention.

The only question is whether the undoubted jurisdiction of the state court to compel a wrongdoer to account is divested because the incidental result will be to establish a fact between the parties which affects the validity of a patent. The exclusive jurisdiction of the federal courts in patent cases does not, we think, go so far. In Pratt v. Paris Gaslight & Coke Co., 168 U. S. 255, 259, 18 S. Ct. 62, 64 (42 L. Ed. 458), Mr. Justice Brown says:

"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. * * * There is a clear distinction between a case 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."

That case held that a state court is not ousted of jurisdiction by the fact that, incidentally to his defense, the defendant claims the invalidity of a certain patent. True, there the defendant set up the patent's invalidity, while here it appears on the face of the complaint, as it did in Middlebrook v. Broadbent, 47 N. Y. 443, 7 Am. Rep. 457. But it appears only incidentally and as an element of plaintiff's proof. Oppenheimer's complaint sets up no "right under the patent laws as ground for a recovery," to repeat Justice Brown's phrase. His cause of action is based on equitable principles applicable to any wrongful use of confidential information which the defendant had agreed to keep secret. It is true that a question of fact was decided, which determines the invalidity of Becher's patent as between the parties, and estops him upon that issue whenever it arises again between him and Oppenheimer. But, if the jurisdiction of state courts were limited by such incidental consequences, they would be unable to adjudicate all sorts of cases. For example, an action of replevin might involve the question whether the plaintiff had made a machine in defendant's possession. That machine might be a prior use of an invention which defendant had patented. Surely it cannot be that the state court would have no jurisdiction of the replevin suit, because the judgment therein would establish that the machine was of plaintiff's construction and so anticipated the patent. Yet the appellant must go so far to succeed in the case at bar.

The appellant has cited no authority which clearly sustains his position, and none has been found by independent research. In Cheatham Elec., etc., Co. v. Kentucky S. & S. Co., 213 Ky. 23, 280 S. W. 469, chiefly relied upon, plaintiff sought a...